Ethan Haas Journals

Chicken Little would have a field day in the current state of affairs surrounding the U.S. markets. Indeed one could conjure many quaint colloquialisms to describe the fall of institutions such as, Lehman Brother, IndyMac, AIG and Merrill Lynch, but the truth is much harsher than that. The forecast says that this is just the beginning and the future is bleak for the American middle class.

How long can we continue to create something from nothing, how long can Wall Street continue to pull rabbits out of hats and how long will the government allow this to continue? Speculation is the great American tradition which has created billions in profits for wealthy investors, but more importantly has contributed to the downfall and disappearance of the middle class. I don’t presume to understand the ins and outs of every aspect of the market, but it doesn’t take a rocket scientist to understand that the market is performing a ritual bloodletting and placing a strain on the U.S. economy.

If the S.E.C. and Congress don’t implement strict rules and enforce those rules then market anarchy is just around the corner. It’s as if we have a Super Bowl without any officiating, there are rules but no one is there to carry out their enforcement. The only thing the players have to worry about is beating the other team at any cost and that’s exactly what the market is doing.

Does this playing field affect everyone? Of course! Does it effect the wealthy? Somewhat! Does it affect the middle class? Absolutely! Let’s get real here for a few minutes, if the price of gasoline goes to $10 a gallon in the next three months, do you think millionaire investor A is going to stop driving his Maybach, Porsche or Land Rover because he can’t afford it? Do you think Investor A will stop flying because the cost of airfare doubles? Do you really think that any of these issues will affect investor A if he or she retains most of their portfolio? However, this same scenario affects the middle class investor much more dramatically.

The markets around the world are geared to benefit the wealthy. Their fundamental structure is designed to attract accredited investors with capital to spare, not the average investor. The problem with this type of structure is that it eliminates the participation of the vast majority of middle class investors and segregates our country into a class structure of the rich and poor. Nevermind that the middle class perform ninety percent of the labor and services provided in this country and nevermind that the middle class invest seventy-five to ninety percent of their income back into the economy each year.

Forty years ago my parents bought their first home for $12,000.00 and financed it at three percent. Neither of them had credit cards because they didn’t need them. We lived a happy middle class lifestyle in a suburban neighborhood where everyone knew each other and offered to lend a hand when someone was down and out.

They would buy a new car every three to four years costing around $3,000.00. The average cost of new house was $14,950.00 and the average income was $7,850.00 per year. The average wage in 2006 was $38,651.00 and the average cost of a new house was $257,000.00. Add to that the abuse of credit cards and higher interest rates, sky rocketing fuel and daily living expenses and it’s easy to see why the middle class is an endangered species.

Our government can no longer sit quietly and allow this to continue. The days of waiting for the markets to correct and heal the ills of a nation are not a reality. In the past I have always maintained that the government should stay out of business as a rule, but that perception is changing now that the weight of Wall Street is falling on the middle class.

So what’s the answer? Vote-Vote-Vote! I don’t care what party affiliation you have or which doctrine you subscribe to. Don’t sit at home on your ass and complain about the state of affairs and the crumbling of the American dream. The only way the middle class can set America on a positive track for the future is to become involved, involved in local, regional and national politics. Let your voice be heard, know your representatives, call your congressman, call your senator, you can even call the White House.

Don’t be disillusioned because the change doesn’t happen overnight. We as Americans are so impatient and demand change with a capital “C”, but we didn’t get into this shape overnight and we won’t get out overnight either. Above all be patient, if you make your voice known then the government will eventually listen and always remember this, there are many more of us, then there are of them and there is strength in numbers.

“I’m wondering how some of you perceive the stock market now? Are you in the market, either in funds or stocks? Are you running to sell as most people seem to be? Invariably sellers and reactors seem to buy when the market is doing good (prices are high), and panic and sell when the market gets so low. It seems to be a self fulfilling prophecy.

I called my money manager today to have a chat and see what he is experiencing and how he is faring with his clientele. What they are doing and what his approach is.  We had a nice rambling conversation. My money manager is a CPA. He doesn’t work for anyone else, but has his own investment firm. He’s a number cruncher.

I think that more people would do well to have someone to talk to during these times to prevent joining the panic stricken and adding to the mayhem. Not just a salesman, but someone who they trust, who is honest, and it’s good to be armed with good questions. I had a nice long dialogue, covered all my bases. (or at least  all I could cover today) If I have more questions, I’ll call again.

I have held firm over the years, and I regret not selling when stocks were completely over valued in 2000. This was the 10th worst devastating crash in our history. (very close to the crash of 1932)

(Date Started: 1/15/2000 Date Ended: 10/9/2002  Total Days: 999

Starting DJIA: 11,792.98
Ending DJIA: 7,286.27

Total Loss: -37.8%)

But most people weren’t selling even then because of over valuation, but for the same reason they are selling today, simply fear. It was the great dot com crash.”In the year 1999, there were 457 IPOs, most of which were internet and technology related. Of those 457 IPOs, 117 doubled in price on the first day of trading. In 2001 the number of IPOs dwindled to 76, and none of them doubled on the first day of trading.

Many argue that the dotcom boom and bust was a case of too much too fast. Companies that couldn’t decide on their corporate creed were given millions of dollars and told to grow to Microsoft size by tomorrow.

People are in fear of a depression and we haven’t even had a recession yet.

I’m not selling, and I think studies show that those who do panic and sell eventually buy in once the market is looking very good at high prices, after a long hiatus with stocks. I know I’ll take a beating, but I’ll still be in and things will recover. I’ll just hold tight. It isn’t that I have money to burn, that is simply not my case at all. I’m just like any regular man on the streets trying to have enough to live, and hoping I make good decisions for my future.

I don’t join those who panic usually, my pulse stays constant, connected to my rational thinking. I stay calm and I wish others would, but the fact they sell, makes buying in for less profitable for others.

Things will get better, we aren’t in a depression, elections have people feeling uncertain about the future, but we’ll have our election, and we’ll make at least half the population happy with the outcome. We’ll accept what we have to deal with, and we’ll go on.

Try to Remember, “Life goes on, long after the thrill of living is gone..”

You could call it the pain effect, or fear factor.

What kind of charge do people get from Palin? I mean what does she appeal to in people really? Usually we don’t know exactly what is going on in ourselves, we reach for something familiar, and safe. Something reminiscent of days gone by, because the future is unknown. But we can’t go backwards, most people have had a dose of that, and realize it doesn’t work very well. Have you ever gone back to an old job, and it never quite fit? Or tried to go back to an old partner, and it never felt the ’same.’ Square peg in a round hole mentality.

Well I was thinking about this and Deepak Chopra was on PBS. I visited his site and found some interesting ideas about the shadow side of us, and how we cling to it, and how Sarah Palin represents that shadow side in this election. In fact, he says, “The Republicans have won multiple national elections by raising shadow issues based on fear, rejection, hostility to change, and narrow-mindedness.”

This explains why so much is about Palin and not McCain I feel, because she is talking more about these negative aspects:

Look at what she stands for:

–Small town values — a nostaligic return to simpler times disguises a denial of America’s global role, a return to petty, small-minded parochialism.

–Ignorance of world affairs — a repudiation of the need to repair America’s image abroad.

–Family values — a code for walling out anybody who makes a claim for social justice. Such strangers, being outside the family, don’t need to be heeded.

–Rigid stands on guns and abortion — a scornful repudiation that these issues can be negotiated with those who disagree.

–Patriotism — the usual fallback in a failed war.

–”Reform” — an italicized term, since in addition to cleaning out corruption and excessive spending, one also throws out anyone who doesn’t fit your ideology.

Palin reinforces the overall message of the reactionary right, which has been in play since 1980, that social justice is liberal-radical, that minorities and immigrants, being different from “us” pure American types, can be ignored, that progressivism takes too much effort and globalism is a foreign threat. The radical right marches under the banners of “I’m all right, Jack,” and “Why change? Everything’s OK as it is.” The irony, of course, is that Gov. Palin is a woman and a reactionary at the same time. She can add mom to apple pie on her resume, while blithely reversing forty years of feminist progress. The irony is superficial; there are millions of women who stand on the side of conservatism, however obviously they are voting against their own good. The Republicans have won multiple national elections by raising shadow issues based on fear, rejection, hostility to change, and narrow-mindedness.”
Palin Effect, Chopra here

Deepak Chopra was raised in a multi cultural home, with parents who were from different religions, and he went to a Catholic school. He played with children of many different religions he said in his PBS interview. It seems he had a more or less shift of consciousness, is how I would say it, when studying about Jesus. This shift in consciousness seemed to have a great influence on his life, and he felt there is just something about Jesus.
Deepak “has written more than 50 books translated in to 35 languages, including numerous New York Times bestsellers in both the fiction and nonfiction categories..Time magazine heralds Deepak Chopra as one of the top 100 heroes and icons of the century and credits him as “the poet-prophet of alternative medicine.”

There is more to that article on his website. I think he has at least part of the mystery explained in this article. Certainly there is a fear factor with Fundamentalists. I think that when a person has a shift in consciousness, they are very vulnerable to dogma; fear, ideas, etc. This is the perfect time for cultish beliefs to take hold. Certainly there are scriptural references for these occurrences, but the history of man has been lost so much due to banning books, etc, that we might never know the truth. I would never want to see this happen again. And of course we may be seeing history repeat itself. I think it is wise to be cautious about what beliefs you adopt and maybe this is a place where it can be investigated.
Not that long ago, Iran was a free country, women wore mini skirts, and explored careers, and enjoyed being free, but now that fundamentalism has taken hold, women are worse off than they have been in a very long time there. Women here will suffer similar fates, I believe in the hands of fundamentalists if they get in to political power. Fundamentalism is, fundamentalism in any religion or language, and it smells like a cult.
Today women may yearn for familiar times, and if they do, we will surely get them, in a way we will live to regret.
I believe Obama stands for a forward moving government, and one where we will address pollution world wide, and that he is capable of taking us far into a world where we would be seen as caregivers of this early domain.
A biblical story tells such a story about those who squandered the gift and those who used it and invested wisely. It fits here I believe. It is a balanced approach, and not a cultish one.