2008 turned out to be quite interesting on the Investment Serengeti.
The major theme of the events of 2008 is best summarized by a quote from George Santanya, "Those who cannot remember the
past are condemned to repeat it."
We will catalogue the events in the order of financial significance.
THE PEAK OIL CON!
This masterpiece of deception set up the Wildebeest for the largest, fastest price break in the history of Crude Oil.
Late in 2007, we were treated to a barrage of disinformation telling us that we were running out of Crude Oil, and that
the price of Crude Oil was going to between $200-$400/bbl.
We now know that the only thing peaking was the price of Crude Oil!
THE REAL ESTATE SCAM!
This scam was based on the oldest trick in the world (Group Hypnosis). Or that many people can’t be wrong!
Heard it on the Grapevine gone mad better describes this Con.
ENTER THE CONDO FLIPPERS! is the name of this movie.
Arguments ranging from they ain’t making any more land, through we all have to live somewhere, combined with the
unprecedented argument that a house is an investment was invoked. When one asked why the IRS allowed depreciation on houses,
one received a cold shoulder at best.
But now the deed is done, and reality has spoken. Collapsing Real Estate has been the driving force behind the unprecedented
prices breaks we are witnessing in all of the markets of the world. Most of the banks in the world on the ropes due to dubious
loans, based on a corrupt Real Estate Appraisal business, and supported by a bunch of deadbeats with no money down. What a
The Taxpayer Relief Act of 1997 probably played a significant role in the bursting of the US housing bubble. The lure of
tax-free money is very strong bait to the overtaxed American public! And if your house is a tax shelter, it follows that one
should shelter as much money as possible. This is the one detail that the American home buyer was acting rationally on.
But what is the point of sheltering losses? But the five year holding period caused more people to not act on the breaking
prices in an attempt to hold out until the holding period was completed. No one in the Real Estate Community gave any hint
as to the coming carnage. Only recently have the Real Estate Brokers stopped their "It’s a great time to buy a house
THE 401K TRAP!
Many people were lulled into complacency by their 401K/IRA’s.
It never dawned on them that Stock Markets drop significantly in value at the end of cycles. Admittedly, none of the "professional"
advisers have ever mentioned cycles to their victims. A charitable explanation for their advice would be that these "investment
professionals" are ignorant of cycles.
Whatever the cause, the majority of 401K/IRA holders were caught in the headlights this time. The nature of most 401K’s
is that the investors have a very limited window for decisions each year. In a fast moving market, they are unable to protect
themselves by liquiditating.
Adding insult to injury, 401K/IRA’s are banned from selling short. This great gift from Congress was designed to
eliminate these investors from selling short, and profiting from the downturn. Or at least recovering their losses.
THE REVENGE OF BERNARD MADOFF!
No discussion of the 2008 financial party is complete without giving honorable mention to Bernie Madoff.
Madoff once again demonstrated the principle of "There Is A Sucker Born Every Minute". Thank You, George Hull for that
statement (erroneously attributed to P.T. Barnum).
Madoff has pulled off the greatest Ponzi scheme in history committed by a private individual!
For over 40 years, Bernie Madoff created his persona as wonderful, caring, human being, who became a must at the "right"
parties among the elites.
No man who wants to give so much to charities could possibly be a wrongdoer, could he? And besides, the wives loved the
attention he gave them, so who was going to check on Madoff?
Madoff knew that any money he gave to charity was a "cost of business". After all, he had no real operating costs! So Madoff’s
rate of return on his charitable investments was astronomical!
Madoff is destined to become a business school case study on how to make a fortune with no product!
Bernie Madoff, this was your story, and this your epoch.
As to the investors, well, they were just props for the Madoff illusion! And what an illusion it was. Right out of the
Wizard Of Oz!
Global Warming is a hoax that competes with "the world is flat".
Only now in the end of 2008 is the truth slowly surfacing.
The hoax is that something man-made can cause global warming.
But Al Gore does get the best actor award for selling CONcepts to the wildebeest!
GOLD IS A SAFE HAVEN, AND RISES IN PRICE DURING TIMES OF UNCERTAINTY!
This story is almost too easy to refute, but it must be addressed.
Let’s see now, investment banking is in ruins, real estate has collapsed, retail sales are crumbling, and most states
are in the financial ICU.
But gold lies there drifting around like a dead fish. Hmmmmm!
Maybe they mean something really serious must happen to light the fuse on gold. Perhaps the world actually ending will
motivate the buyers. But then again, if the world actually does end, who will do the buying?
CONGRESS PROVES THAT IT DOES NOT REPRESENT THE PEOPLE!
In spite of a record response from their constituents saying "NO BAILOUT", Congress gave Bush and Wall street what they
wanted (A BIG BAILOUT).
Yes, 2008 does end an epoch. At least Americans can now stop believing in this government, and find better things to do
with their time than political activities. Why waste the time and effort?
END OF REVIEW!
THE BELLOWING WILDEBEEST REVIEW! Copyright2008