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When Panic Is Prudent

When the president addresses Congress and the nation tonight, he will have the interesting rhetorical challenge of explaining precisely how dire our economic situation is (justifying extraordinary bailouts and stimuli), but why we should nonetheless be optimistic and hopeful and willing to spend and invest and believe in the future. He must explain how it's important that we dramatically cut the deficit, but how it's also important that we first run the deficit up to stratospheric -- make that ionospheric -- levels. [Yeah, I Googled it.]

Here's what he can't say: "It may be time to start panicking." Or: "I'm out of ideas. You got any?"

A president must exude confidence even as the roof is caving in. He must never look as though he's winging it. We've wung it too much in recent years. The citizens expect to see a president with a strong grip on the steering wheel of the gleaming '67 Firebird that sadly is now plunging over the economic cliff.

It's a tall order for Obama. He'll have to summon a lot of late-winter weather: sunny optimism quickly replaced by gloom and blustery winds, and then more sunshine, and then a howling gale, and so on. His speech will have to wear many layers.

So much of the economy is built on human psychology. We have nothing to fear but fear itself, unless fear happens to be highly adaptive for that given moment. They invented fear for a reason.

Cautiousness is another good psychological state. For example, if I were the kind of person with money, and wanted to invest it somehow, I'd seriously consider the mattress as the best option. With the private sector dysfunctional and the government playing whack-a-mole, it's just not a wise moment to be interacting with what we used to call the free market.

That said, I keep finding myself in a state of high confidence that the bottom has been reached in the economic crisis, with rebound imminent. Invariably, this feeling of confidence coincides with the Dow plunging another 300 points. At some point the Dow will be unable to plunge 300 points because it will start the day at only 250. Or can it go into the negative??

(I'm pretty sure that shares in General Motors, for example, would be more logically priced in negative figures, since GM appears to be, in its current incarnation, a vast mechanism for destroying wealth rather than creating it.)

I'm not savvy about stocks -- I bought WorldCom at $48 a share, Lucent at $55. Most of my investments have been self-immolating. The broader stock market yesterday sunk to levels not seen since 1997, but my portfolio has reverted to roughly 1932. I was the last guy to invest in whalebone corsets. I'm still heavily invested in catapults and trebuchets. This sort of thing runs in the family: My caveman ancestors missed a chance to invest in fire at 3 cents a share.

It may be fundamentally maladaptive to believe that things will get better in the long run. For a hundred thousand years, sunny optimists have become lion chow.

But I will stick to my long-term forecast. The U.S. will get through this crisis and, for many years and even decades to come, will be the most powerful country, economically and militarily, on the planet. Don't tell me China is about to surpass us. Ain't happening anytime soon unless they can figure out how to clean up their environment and manufacture a bunch more young people.

My optimism isn't quite what you'd call a solid conviction. It's more like a hunch. As I've said before,, I just like our chances. (But don't listen to my stock tips.)


From the Boodle this morning, here's Sara54:

"Because this is my profession, gotta throw in my two cents.

"It's like a giant sale right now and everything is 80% off. We're all (financial reps, our clients, and those of us that work in the financial sector) buying anything we can afford right now.

"And things will get better because historically they always do. About 18 months into a recession it starts to come back. We're about 14 months into it. (Disclaimer: I am not making promises, I am just telling you historical data and as always, past performance does not guarantee future results and so on and so forth and now I can't be sued). It'll take a few years to get back to where we were, but it'll get there and if you're not in the market, you've locked in your losses. So stay in it.

"Check out Ibbotson's SBBI for historical charts on treasury bills v. bonds v. inflation v. stocks. Shows growth of $1 from 1925 to the present in those four areas. Stocks are always where you want your money to be to keep up."

By Joel Achenbach  |  February 24, 2009; 6:20 AM ET
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Next: Moral Hazard


I don't even listen to my own stock tips, these days. Ah, I remember the days when I was a tech stock genius (until I wasn't).

How do faschnachts sound to everyone?

Posted by: -dbG- | February 24, 2009 9:41 AM | Report abuse

Repost --

I would also suggest as a counter to the Post's piece that Nationalizing certain banks was always on the table, but wasn't thought to be as close to reality as we are now observing.

I have here and other places blogged away with little resulting conversation, that the Fed. Govt should be dumping money into smaller local banks that are still working. The larger ones which, in many ways, have participated in this contraction of consumer and small business credit, may very well become "occupied" territories just long enough to be broken back up into regional operations that can be more responsive to their locales.

We don't need a big Citigroup. We need 30 smaller local banks that are out there in the community and who's managers understand must function "LIKE A BANK" to survive.

Posted by: russianthistle | February 24, 2009 9:42 AM | Report abuse

I went back before I posted here and warned everyone, but I guess I'm no leader.

Hey guys, over here!

Posted by: -dbG- | February 24, 2009 9:42 AM | Report abuse

And as I've said before, whether we are or will continue to be "Number One" in the world is not the relevant question to ask. The discussion I'd rather see is "where do we fit in" to the world economy, "what do we have to offer" that contributes to a brighter future for all of humankind, for this Earth that is home to all of us--people and other living creatures. We all have to live together.

At some point, excessive prosperity is nothing more than a burden that requires heavy artillery to protect it. Oh, yeah--we passed that point a while ago.

Diminishing returns have been the hallmark of our "defense" spending for a long time but the Iraq invasion is an extreme case and I hope the pendulum is about to swing back in the other direction now.

Posted by: kbertocci | February 24, 2009 9:45 AM | Report abuse

Catapults and trebuchets may be a wise investment. The wandering barbarian hordes are going to need lots of them to storm gated communities as our economy sinks to Postman/Waterworld levels of anarchy.

Posted by: yellojkt | February 24, 2009 9:48 AM | Report abuse

As has been noted before, the particular twisted Genius of America is our ability to respond to crises. That is, although we may be lacking in such things as avoiding crises through prudent forethought and reasonable preventative measures, when it really hits the fan we have a way of coming through. My guess is that only in times of grave danger can we manage to agree on anything.

So I too am optimistic. I'm not selling anything (although I admit I am putting more money into bonds and non-perishable foodstuffs.) It is clear to me that the market is reacting to uncertainty.

And yet, I really hope Obama can find some magic words to say. Something that makes my confidence in the future less cerebral and more emotional.

I mean, it is one thing for your brain to understand intellectually that a scary open-grate footbridge will hold your weight and not collapse before you can get to the other side thus making you plunge thousands of feet into the rocky chasm below full of hellfire and primordial beasts.

Yet it's much more comfortable if the rest of your body agrees.

Posted by: RD_Padouk | February 24, 2009 9:50 AM | Report abuse

GM does have a knack for taking perfectly good iron ore and making it unfathomably ugly.

Posted by: yellojkt | February 24, 2009 9:50 AM | Report abuse

Joel, the day I made my first dollar selling some coffee, was the day I totally eclipsed my profit upside from my decade(s) in technology.

I am sort of convinced that the only person "stupider" than folks investing in the technology realm are those actually thinking that they are building a business. Sooner or later, you will get crushed. On the way to getting crushed, it will suck out everything you got, just in the hopes that things will work out and you are owning a "cash cow."

As hard to believe as it may be, there existed a group of people WHO ACTUALLY BELIEVED that, if the government didn't act and act right away, the likes of COMCAST would put VERIZON out of business (even as Verizon was telling little fibs about everything associated with FIOS as it was being rolled out). Yes, amazing, you agree I am sure that, no matter how pathetic Verizon is, it won't go out of business... heck, they are sewing up the wireless world and FIOS rolling out and they make enough money STILL leasing handsets to old ladies for $15 a month. COME, freakin' on!!!!

Well, indeed, as I said, it was true. Mr. baby Powell decided to crush all small competitors in the telecom world with a single decision. We wake up one morning and we are all basically done. Toast.

At least we were Toast knowing that we, in our instant failure status have somehow saved Verizon. What a damned relief.

As far as technology is concerned, you can look at two decades of failed promises and unearned projections. Sure, you can point out a Google or folks who have ridden Microsoft from the early days, but the start ups? Even the ones that were still around mostly have a bankruptcy in their mezzanine phase that sort of tossed your investment out the window.

You know, in Ray Kurzweil's fantastic book, "The Singularity is Near," you get a good feel for the investment situation that is the world of technology. I think of those classic old cowboy flicks where someone is always trying to jump off a moving train, well, involving yourself or your money in technology is more akin to jumping onto a moving train. Clearly not wise.

Posted by: russianthistle | February 24, 2009 10:05 AM | Report abuse

GM isn't exactly one of those Soviet industries that converted valuable raw materials into worthless junk. Unfortunately, they lost the profitable market for personal cars years ago and were left depending on pickups and (at least for a while) SUVs. It seemed, though, that they were losing the SUV business, apart from the very limited category of truck-based behemoths whose main job is to haul the boat.

It's kind of interesting spotting right-wing scenarios to the effect that the whole crisis is due to smart money leaving the markets because Obama's nationalizing and regulating the economy to death. Not to mention that Ronald Reagan would have said some cheerful words lifted from Readers Digest and then gone off to the Ranch for a couple of months, fully expecting that when he returned, the recession would be over and everyone happy. And Dr. Alan Keyes, according to NewsMax, called Obama a "radical communist" who will destroy the US, which will "cease to exist" unless he's stopped. I guess he wants Congress to expel Obama on grounds that he was born in Kenya.

During the Great Depression, the US managed not to have its very own Stalin or Mussolini. I assume Keyes' rants will remain mere entertainment.

Posted by: DaveoftheCoonties | February 24, 2009 10:05 AM | Report abuse

I just love "wung." I nominate it for word of the week.

By the time I got to buy into fire it was already up to 137 shekels and trading briskly. And there were these two young whiz kids thought they had a new application for it, which they wanted to call iForge. I missed that one, unfortunately. And I missed the whole Greek Fire bubble, which turned out to be a Ponzi scheme. Ya buy a Greek Fire franchise, then you recruit two or three tinkers, and theu buy in, and then they sell francises to a couple other tinkers and sorcerers, and pretty soon all the profits come rolling in.

Only they didn't.

And boy, you should have seen it when the Spanish Inquisition collapsed and all the iron maiden and rack manufacturers went belly up. Oh, the wailing and gnashing of teeth -- or, well, the absence thereof.

And then along came Luther and the whole indulgences thing went down the toilet.

I'm telling ya, it was tough back then, too.

Posted by: curmudgeon-1 | February 24, 2009 10:12 AM | Report abuse

I read a story this morning saying that we haven't reached the bottom for the stock market - that it will be in the neighborhood of 6,000 for the Dow. Yikes. Stocks have lost about 50 percent of their value, compared to 89 percent that was lost between October 1929 and July 1932, when they hit bottom.

My monthly brokerage statement came the other day. I think I'll file it without opening the envelope.

Posted by: slyness | February 24, 2009 10:13 AM | Report abuse

Wing, wang, wung? Sing, sang, sung? Wing, winged, have winged?

Obama has a stool with too many legs. Leg One: the stimulus package. Leg Two: TARP II or the Recovery Whatever Package that Obama and his administration have renamed it--plus accounting for TARP I funds to satisfy the American people, plus a clear indication of whether some banks will or will not be nationalized, or pre-nationalized, as Krugman would like to say. Leg Three: the mortgage crisis. The Creeping Leg Four: the Detroit bailout. Now is probably not a good time to mention Chris Matthews' tingly leg? Any more important legs on the near-horizon?

With so many legs on the stool, it certainly puts Obama in the Swedish high-Celsius hotseat. (Yeah, I Googled it.)

We'll be watching tonight, not so much observing the style points (which one can't miss), but looking for detail. Will Tim Geithner ever crawl out of Dick Cheney's secret, undisclosed cavelike bunker, or will Obama carry all the economic weight on his own shoulders?

Until this evening, Boodle. Husband pulled an all-nighter and continues to work these morning hours. I've got my nose stuck in the details of the development of the Connecticut Western Reserve of Ohio, about the time of the financial panic of the late 1830s.

Posted by: laloomis | February 24, 2009 10:15 AM | Report abuse

I remember in a recession past, I had to beg my good friends to buy Apple stock. At the time, Apple was selling at $12 a share. The company was doing well enough, BUT, most important, I had to badger my friends to look at Apple's balance sheet that, after doing the math, showed that Apple had $8 a share in CASH. In a sense, folks were spending only $4 per share on the future, which was pre-iPod or iPhone and so much more.

So, slyness, I think the market is going to go a lot further down before the rich will pull their off-shore wallets out and buy securities.

As they say, we aren't done yet. Not even close.

Posted by: russianthistle | February 24, 2009 10:23 AM | Report abuse

The past participle may be "have wunged," I'm not sure.

Grammar isn't an exact science.

Posted by: curmudgeon-1 | February 24, 2009 10:25 AM | Report abuse

Happy Fat Tuesday, Fasnacht, Shrove Tuesday, etc., all.

Fasnacht, donuts, pancakes & syrup, and more sweets for everyone!

I've been using the term "wung" for most of my life. In fact, I think I can safely use the term to describe *how* I've lived my life...

A darn shame that the OCO ended up in the Pacific (though it *was* supposed to gather data on how much CO2 was being absorbed by the oceans, was it not?), and I cannot help but arch an ayebrow at NASA's circumspect way of communicating that the launch failed.

It's too bad that we don't have a spare OCO ready to go - I wonder if the North Koreans could make space for it on their upcoming booster test? For the right price, that is...

Ach, more meetings, gotta run.

Cassandra, don't expect to see much Boodling from Scottynuke this week - he's on vacation in New England with the MiniNuke and the NukeFamily.


Posted by: -bc- | February 24, 2009 10:29 AM | Report abuse


You and the stock market tips. I know my neighbors think I'm crazy, but I could not stop laughing the whole time I read this kit. Funny man, JA.

Thanks, Mudge.

Slyness, I didn't do the walk, just could not come to terms with the cold, plus waiting for the daughter to return the car.

Posted by: cmyth4u | February 24, 2009 10:31 AM | Report abuse

bc, your NKorea comment was really choice!

Posted by: russianthistle | February 24, 2009 10:32 AM | Report abuse

Anyone missing a white wabbit?


Posted by: DLDx | February 24, 2009 10:36 AM | Report abuse

When I started my 401K back in 1987, I was told that mutual funds were a great way to reduce risk. I didn't fully understand that this was only true if the number of winners and losers in your portfolio are equivalent. When everything tanks, this "distributed risk" is like that much-overused metaphor of the deck chairs on the Titanic.

Posted by: RD_Padouk | February 24, 2009 10:38 AM | Report abuse

I am doing my share to stimulate things. Since we actually managed to unload our old house, I have been freed to resume my profligate ways of donating money to every bleeding-heart organization that sings me a sad song (and assures me that it's a 501c3 non-profit so my donation is tax-deductible). Just this morning, I made an unsolicited donation to the Folklore Society of Greater Washington because funds are tight for the Washington Folk Festival (WFF), which will be the last two days of May, this year. At Glen Echo, as usual. I urge you to go. I will be in the storytelling program on Saturday, which may encourage you to attend on Saturday -- or, maybe, on Sunday.

Posted by: ScienceTim | February 24, 2009 10:39 AM | Report abuse

Oh dear. Usually I feel like Christopher Robin, sometimes like Piglet. The Kit and Boodle have caused me to temporarily feel more like Eeyore.

Posted by: Yoki | February 24, 2009 10:42 AM | Report abuse

In defense of my overlords at NASA -- 'failed to achieve orbit' is not merely euphemistic. The eventual crash into the Antarctic Ocean was not what wrong, it's an end result of the failure. The mission was dead the moment the payload fairing failed to release. Everything after that, including the crash, is a consequence and immaterial to the actual problem. They knew that the mission failed to achieve orbit before they knew other details (I'm guessing), hence the circumspect language.

Posted by: ScienceTim | February 24, 2009 10:49 AM | Report abuse

Howdy, y'all. I was out of pocket all weekend and have enjoyed the Backboodling. The live Oscar discussion was great. Sorry about the satellite.

I look forward to seeing how Obama walks this tightrope. I tend to come down in the "truth" camp - Had we not had cheerleaders last fall giving us rosy pictures, perhaps we would have begun recovery or at least acknowledged the extent of the problem earlier. You have to admit there's a problem to fix it, and I think some people aren't there even yet.

Russianthistle, I have enjoyed your posts about supporting banks that work.

Posted by: Ivansmom | February 24, 2009 10:50 AM | Report abuse

Just to play with everyones heads a little markets are currently up, well for the mment anyways.

Posted by: dmd2 | February 24, 2009 10:55 AM | Report abuse

Darn didn't refresh fast enough, markets now going down. Think I will just ponder my crocus bulbs I noticed just peaking out of the soil yesterday, if my investments have tanked at least my spring bulbs are rising - I am taking joy wherever I can these days.

Posted by: dmd2 | February 24, 2009 10:57 AM | Report abuse


Posted by: omnigood | February 24, 2009 11:04 AM | Report abuse

Good Morning All
I stopped to look for the comet last night,the star field wasn't as good as most nights.I couldn't find it and got too cold to keep looking,perhaps tonight.

I don't know much about the stock market,but my neighbor used to play with it.He would short specific stocks,hoping they would perform poorly.Is that something you can do with the whole market in general? Just a thought since it seems to be spiraling down almost daily.

I was once surf fishing at Assateague Island and heard a big explosion and saw stuff falling from the sky into the ocean.Later I found out a Nasa rocket sent from Wallups Island exploded after take-off.

Posted by: greenwithenvy | February 24, 2009 11:29 AM | Report abuse

Salvia coccinea (scarlet sage) is flowering in the wild and in the yard, where it's fending for itself anyway. The young royal velvet camellia opened its first flower. Our winter weather is generally too warm for camellias, but this one was strongly recommended by an expert grower near Orlando.

Posted by: DaveoftheCoonties | February 24, 2009 11:31 AM | Report abuse

Oh camellias, I will imagine Red Barber anticipating then enjoying their flowers in Tallahassee, while I chip ice off the front walk, for the next 6 weeks.
DotC-you always make me miss FL and I don't much care for the place.
kbert-as usual, a voice of reason.

Posted by: frostbitten1 | February 24, 2009 12:03 PM | Report abuse

Hey, what about me? Aren't I a voice of...of...

OK, never mind.

Posted by: curmudgeon-1 | February 24, 2009 12:08 PM | Report abuse

Mudge-you are more often the voice of seasoning.

Posted by: frostbitten1 | February 24, 2009 12:13 PM | Report abuse

Voice of teasin'

Posted by: Yoki | February 24, 2009 12:15 PM | Report abuse

Oh, look - the Boss has been working this AM:

gwe, it was *cold* out last night, and the comet is in a location that is not easy for me to view (trees, light pollution, etc.), but I did spot it last night at around 10:30 with my naked eye as a very faint 'sMudge and confirmed with my Orion 'scope.

You'll like it when you see it -- it has a faint greenish hue.

russianthistle, glad you liked the NK comment. If this had happened a couple of weeks ago, I'd have suggested we have OCO2 hitch a ride with Iran's flight.


Posted by: -bc- | February 24, 2009 12:20 PM | Report abuse

Somewhat related to KB's inspired idealism (sometimes I think we were separated at birth; then I think I was separated at birth from Frost- -- are we cosmic triplets?)

See this tubey video from the WaPo on leadership:

Pearlstein intervewing Bill Drayton, the father of social entrepeneurship

Assignment: Write a compare/contrast summary paragraph on Jesuit and Google leadership innovation.

Posted by: CollegequaParkian | February 24, 2009 12:22 PM | Report abuse

Portland, Oregon seems to have become too expensive for me. The place is a pretty good NORC (Naturally-Occurring Retirement Community) due to buses and sidewalks. Camellias grow automatically in that climate.

Red Barber mostly noted the fall-flowering sasanqua camellias, which seem to be badly underappreciated. Visiting southern (western) Honshu this fall, I was impressed by the sasanquas, except for the ones that had been cut into balls. The Japanese do balls more elegantly than we do, but a ball is a ball. Not an appropriate shape for a respectable shrub.

On the side, a particularly prickly bromeliad in yard has begun flowering and the Easter lilies are behaving as if they've scheduled an Easter gig, which is odd--the usual flowering time is more like June.

Being a moderate Protestant, I didn't much appreciate Jesuits until I got to deal regularly with a biologist in our Washington headquarters office who'd been to Fordham.

Martin Scorsese is working on a movie adaptation of a celebrated Japanese novel set during the horrific persecution of Christians of the early Tokugawa Shogunate. I think there'll be a chance to visit Nagasaki next year; need to squirrel away the money starting now.

Posted by: DaveoftheCoonties | February 24, 2009 12:54 PM | Report abuse

Well, at this writing the market is up about 90 points. It needs to go up about 3,000 points for us to recoup our portfolio losses. Got an ad in the mail yesterday from a local real estate agent that lists sample properties sold. A house about 6 doors down from us, same model, sold "Distressed" for $285K. Two years ago these houses were selling for close to $500K. We aren't underwater yet, but if this keeps up we might be flirting with it.

Posted by: ebtnut | February 24, 2009 12:56 PM | Report abuse

Like many European languages, German has formal (Sie) and informal (du) versions of “you.” These were designed by Europeans primarily as a clever way to confuse American seventh-grade language students and thus keep the U.S. educational system lagging far behind their own.

There are no hard and fast rules for when one should use either version, but in general … you should Sie someone at least a few times before trying to du them.

-Chris Harris (another Traveling Curmudgeon)

Posted by: omnigood | February 24, 2009 1:05 PM | Report abuse

Omni, methinks thy has thine personal pronouns a bit mixed up. Thou needest to be more carefulester.

Posted by: curmudgeon-1 | February 24, 2009 1:12 PM | Report abuse

51 hours and 47 minutes.

Just sayin'.

Posted by: curmudgeon-1 | February 24, 2009 1:14 PM | Report abuse

Because this is my profession, gotta throw in my two cents.

It's like a giant sale right now and everything is 80% off. We're all (financial reps, our clients, and those of us that work in the financial sector) buying anything we can afford right now.

And things will get better because historically they always do. About 18 months into a recession it starts to come back. We're about 14 months into it. (Disclaimer: I am not making promises, I am just telling you historical data and as always, past performance does not guarantee future results and so on and so forth and now I can't be sued). It'll take a few years to get back to where we were, but it'll get there and if you're not in the market, you've locked in your losses. So stay in it.

Check out Ibbotson's SBBI for historical charts on treasury bills v. bonds v. inflation v. stocks. Shows growth of $1 from 1925 to the present in those four areas. Stocks are always where you want your money to be to keep up.

Also, morning everyone! (In my time zone, anyway.) Spent an hour waiting in line at the local social security office (because for the past two weeks their phone line has been busy) only to find out that they don't do presentations for private companies anymore. GET A BETTER PHONE SYSTEM!!

Posted by: Sara54 | February 24, 2009 1:22 PM | Report abuse

Princeton's published a guide to the birds of East Asia--China, Taiwan, Korea, Japan, and Russia. By a guy named Brazil.

I manage to not notice our own charismatic birds. My gosh, you can see caracaras not far away. But someone must contemplate that guide to Asia and drool at all those birds.

Posted by: DaveoftheCoonties | February 24, 2009 1:23 PM | Report abuse

Joel, I believe a correction is in order sir:

If you'd intended to make a "Thelma and Louise" reference with car plunging over the cliff scenario, that would have been a Ford Thunderbird, not a Pontiac Firebird.
And a mid-'60s 'bird, too, not a '67. '67 T-birds had a ramjet nose/grille that I find rather grotesque.

I've seen the movie rather recently, so it's reasonably fresh in my mind.

Having said that, if you were going for the famous "chicken" scene in "Rebel Without a Cause," I think that car that went over with Mineo's character in it was a '49 Mercury, but it's been a long time since I've seen that one.


Posted by: -bc- | February 24, 2009 1:31 PM | Report abuse

What was that car that went over the cliff, repeatadely, with various animals or caracters in Saturday Night Live? It may be the '67 Firebird Joel was referring to.

Listening to English speakers struggling with the vous/tu is indeed a small but constant pleasure of life. It may not be the case for long though, the way the kids are speaking today the "vous" is destined to a slow death.

Posted by: shrieking_denizen | February 24, 2009 1:45 PM | Report abuse

Um, bc...Mineo didn't go over the cliff in the car. Buzz Gunderson (Corey Allen) did. Sal Mineo's character, Plato, was shot by police at the door of the Griffith Observatory planetarium (while wearing Jim's (James Dean's) jacket.

(I played James Dean's father in our high school production.)

Posted by: curmudgeon-1 | February 24, 2009 1:50 PM | Report abuse

Tu worries me. I usually use vous. Except with my husband. Who doesn't speak French.

Posted by: Sara54 | February 24, 2009 1:50 PM | Report abuse

I don't know about echt Germans, but the Swiss are over-the-top on the whole formal address thing. When we lived there, people who had been close friends for years still used Sie to each other, would introduce friends as, say "Herr Doktor und Muller und Frau Doktor Muller" instead of Franz and Heidi Muller.

It becomes rather tedious after a while.

Posted by: Yoki | February 24, 2009 1:55 PM | Report abuse

You guys are bidding adieu to "vous," shriek? I'll be that costs a lot of money to switch over all your text books. I guess that's what they call vous 'dieu economics.

Posted by: curmudgeon-1 | February 24, 2009 1:56 PM | Report abuse

Toonces the driving cat! Where was this metaphor during the Bush years when we needed it?!?

Posted by: Jumper1 | February 24, 2009 1:58 PM | Report abuse

That would be Toonces the Driving Cat, WHO, ironically, wasn't a particularly good driver.

Posted by: yellojkt | February 24, 2009 1:59 PM | Report abuse

As I once said to my younger sibling at breakfast, enquiring as to his drink preference,

"Echt tu, brew tea?"

Posted by: curmudgeon-1 | February 24, 2009 1:59 PM | Report abuse

I agree with you in principle Sara. But here's the problem. Even if the market goes back up, which it probably will eventually, this is still just pretend money. It only counts if you can actually cash it out. But how can you determine when to cash out?

Since I am at least two decades from retirement, the wise Mutual Fund People have always advised me to simply let it ride and then transfer to bonds and money markets when I am close to retirement.

Much like the whole idea of Mutual Funds, this is based on the assumption of a reasonably calm and monotonically increasing market.

But given the *insane* amount of market fluctuation we have seen over the last decade, is this reasonable? What if, say, in 2029 the market decides to crash again?

So this is why, although I am not locking in losses by selling the stocks I have now, I am also changing my future retirement purchases to go much heavier into bonds.

Yes, I might miss the opportunity to make a killing. But I am also positioning myself to make sure that I will have sufficient funds under all scenarios. I make a good living, and don't need to be rich when I retire to be happy. I am trading greed, if you will, for a bit more peace of mind.

Posted by: RD_Padouk | February 24, 2009 2:01 PM | Report abuse

Dave of the Counties:

Shusaku (Paul) Endo is the author of the masterwork and deeply sobering book called _Silence_.

Here is what Endo says about his portrayal of the Christ in the book:

"...I tried not so much to depict God in the father-image that tends to characterize Christianity, but rather to depict the kind-hearted maternal aspect of God revealed to us in the personality of Jesus."

From "The Christology of Shusaku Endo" by Fumitaka Matsuoka, Theology Today, October 1982, p. 295

Fumitaka Matsuoka spoke at my college on Endo, before he published this article.

I read the book in a class called "Literary Constructions of the Christ" that also included Nikos Kazantzakis' "The Last Temptation of Christ."

Both books helped form my mature Christian identity.

Posted by: CollegequaParkian | February 24, 2009 2:02 PM | Report abuse

Although "Echt Tu, bro, tea?" also works.

Posted by: curmudgeon-1 | February 24, 2009 2:02 PM | Report abuse

Also, of course, I am keenly aware that bonds are subject to inflation risk, which is why I am not putting everything, or even most everything into bonds. But mutual fund managers have, in my opinion, traditionally advised a far more aggressive allocation than I think is really necessary.

Posted by: RD_Padouk | February 24, 2009 2:05 PM | Report abuse

However, one might note that at the end of the movie, even though Buzz and Plato are dead, James Deans winds up with Natalie Wood, so I'd say all in all it was a pretty good day's work.

I'd guess many of you are unaware that the subtitle of the book upon which "Rebel Without a Cause" is based is: "The Hypnoanalysis of a Criminal Psychopath," a 1944 psychiatric page-turner.

Posted by: curmudgeon-1 | February 24, 2009 2:05 PM | Report abuse

Sniped by Jumper because I got distracted by the Wikipedia article on all the Toonces sketches.

Said article being considerably longer than the one about Joel, if we're still going my Wikipedia wordage as a measure of fame.

Posted by: yellojkt | February 24, 2009 2:07 PM | Report abuse

SCC: "going by Wikipedia wordage"

Who put the 'm' so close to the 'b'?

Posted by: yellojkt | February 24, 2009 2:09 PM | Report abuse

"I am trading greed, if you will, for a bit more peace of mind." I'd argue that you were never greedy RD, and are attempting to trade risk for peace of mind. My heartburn with the whole powers of the universe, investment banking, hedge fund shell game of a recent past is that we regular investors had no way to accurately judge the risk we were taking in our fuddy duddy old mutual funds (apparently the mega investors like pension funds didn't either). I wouldn't rush whole hog into cash, but then I wouldn't recommend any particular strategy to anyone. My philosophy has always been risk (anything, in all walks of life) until you can't sleep at night, then back off two.

Posted by: frostbitten1 | February 24, 2009 2:14 PM | Report abuse


Let it ride until retirement and set a pre-determined amount that you will cash out at--and if there are ever profits over a pre-determined percentage (say 10%) takes those out and lock in those gains.

When you retire, take the money and create a diversified retirement portfolio. Have the first few years of your retirement money in fixed annuities, bonds, and other low/no-risk vehicles for a guaranteed monthly income.

For the middle phase of your retirement (say years 7-14) have a second account of conservative accounts that will grow just enough to cover inflation (5% is good and multi-sector bond portfolios are one of our recommended options with other conservative dividend-paying stocks) but not lose principal--move these funds to the low/no-risk vehicles when you use up your first phase of retirement money.

For the third account, you need to have more aggressive stocks (diversified) so it will grow to provide enough money to start the whole process over again should you live longer than 25 years in retirement. Generally, over 14 years of growth at historical values, you'll have more than you started with in this account and can re-distribute.

We have a whole system worked out for our clients with these phases--we harvest the profits at a certain percentage to lock in gains and all that. It works really well. But if you don't have some money in stocks for your retirement 1)you're going to have no purchasing power, and 2) you'll run out of money before you die.

Posted by: Sara54 | February 24, 2009 2:19 PM | Report abuse

bc, I was indeed thinking of the chicken scene in Rebel, not of Thelma and Louise. The latter of which, I think, was implausible; the former was frighteningly believable.

fyi, new kit coming in a bit...

Posted by: joelache | February 24, 2009 2:21 PM | Report abuse

"Also, of course, I am keenly aware that bonds are subject to inflation risk, which is why I am not putting everything, or even most everything into bonds. But mutual fund managers have, in my opinion, traditionally advised a far more aggressive allocation than I think is really necessary."

Sounds like you're doing fine. And frostbitten's rule of risk is a good one--take as much as you can until you can't sleep at night and back off from that a little bit.

If you're diversified, you should be fine.

Posted by: Sara54 | February 24, 2009 2:23 PM | Report abuse

I managed to make it through a whole summer working in France without once using a second person pronoun to address a particular senior co-worker. I didn't know how to choose, so I just didn't. Yay for circumlocution.

My main complaint with the French I was taught in school is that they taught me to use "nous." That's not done anymore, apparently. No, it's all about "on." We're not going anywhere, one is going there! How was I supposed to know that?

Posted by: -bia- | February 24, 2009 2:24 PM | Report abuse

My point, I guess, comes down to the observation that average behavior is sometimes vanishingly rare.

The average number of kids in a family is something like 2.5. So calculations based on this number are just fine from making aggregate decisions. But individual decisions based on the assumption that you and your spouse will, in fact, have exactly 2.5 children are doomed to fail.

This means that investment strategies based on average market behavior will work just fine on average. But when it comes to individual financial decisions, there needs to be more subtlety.

You need to really look at your individual needs and think about how you can build up tolerance to the exceptional.

Posted by: RD_Padouk | February 24, 2009 2:26 PM | Report abuse

Sara - your words are very wise, and that is exactly what I am doing. Unfortunately, the kind of advice you are advocating has been, in my experience, hard to find. Instead you get the "on average" philosophy that I described above.

Posted by: RD_Padouk | February 24, 2009 2:29 PM | Report abuse


Individual needs are taken into account. Which is why we have a whole scientific system for asset allocation for our clients. We have clients that have yachts, travel, and 3 houses as necessities during retirement. We have others that just require a garden and money for books. So each plan is very different, but they all follow the 3-phase diversification system.

I just gave you the broad overview of what can provide the safest retirement--diversification.

Posted by: Sara54 | February 24, 2009 2:31 PM | Report abuse


We work ONLY with pre-retirees and retirees, so generally our clients are VERY conservative because they don't have lots of time to be risky with all their money--our most used portfolio is the 60/40 conservative growth portfolio, so we do tend to be on the conservative side. The "on average" view needs to be taken into account, but can't be relied on for everyone. :)

Posted by: Sara54 | February 24, 2009 2:33 PM | Report abuse

Increasingly, middle class people will really wonder about the long-term realism of

1)you're going to have no purchasing power, and

2) you'll run out of money before you die.

Me and mine? My closest friends think there will be no retirement sufficient to live on for the expected span. We will work -- and scrabble with younger ones for jobs -- until we drop.

PSST. Shuush. And, we will begin to back away from tests and health protocols etc., at some point. Because, simply, dying is not as easy as it once was.

New trade-offs for us viz., independence or multi-generational living. Not sure the youngens now have living have understanding of this.

Don't mean to sound like a Depressed Dora. But, there 'tis.

Posted by: CollegequaParkian | February 24, 2009 2:33 PM | Report abuse

Oh, and when did they stop using "nous?" I hate "on."

Posted by: Sara54 | February 24, 2009 2:34 PM | Report abuse

I dunno, Sara, I just heard about it recently. shrieking, have I got it right?

Posted by: -bia- | February 24, 2009 2:37 PM | Report abuse

I used to think I'd work until I dropped, too, CqP. Sometimes the point is to figure out what you *can* live on, if you're prepared to say, move to a cheaper area (such as Mexico, maybe).

The reality is that below a certain income, the idea of investing yourself into a comfortable retirement is way optimistic and depends too much on luck and taking risks.

I've already lost at least 1/4 of my IRA and I don't have the money to replace that.

Sorry Sara, I know what you're talking about-- conservative investments do pay; my grandma had lots of war bonds that gave her children a comfortable legacy--

Honestly, without Social Security, 1/2 of the retired people in America would be completely cooked.

Posted by: Wilbrod_Gnome | February 24, 2009 2:39 PM | Report abuse

New kit. Thanks for reading my previous post before stampeding.

Posted by: Wilbrod_Gnome | February 24, 2009 2:42 PM | Report abuse

Afternoon everybody...

My only concern about the markets (since I have nothing personally invested in them) is the effect they have on the disposable income of those who do who may be interested in buying my wares.

If everyone else loses their butts, so do I.

I wonder if it's possible to outlaw all the short-selling and maybe force the legions of day traders to hold onto their shares for longer than ten minutes. Like maybe 30 days. The way the markets are set up now -- with trades flying around at the speed of light, buying and selling the same stock within minutes -- it's no wonder we have these extreme fluctuations. Who the heck can keep up?

I have a feeling a lot more people will be planting vegetable gardens and raising chickens this year. I'm thinking tent sales will be up too.

Peace out :-)

Posted by: martooni | February 24, 2009 2:42 PM | Report abuse

"You'll run out of money before you die."

That is a truthy sentence.

I'm trying to turn it into a nice epitaph.

"She ran out of money before she died."

...leaving it to the imagination whether the timing was perfect (spent my last dollar in the morning, preferably on something yummy like a croissant; died in my sleep during the afternoon nap) or not so good (retired at 65, spent all the money in six months, lived under a bridge for 40 more years)

Either way, I'm quite sure the government won't be collecting any inheritance taxes when I pass on.

Posted by: kbertocci | February 24, 2009 2:49 PM | Report abuse

Toonces the Cat! Yes! Thanks all.

Using “on” for “nous” is OK in the familiar language (guilty!) but still frown upon in formal speak or in writing, I think. Grammatically, using “on” excludes the speaker or writer of the subject of the verb so it clearly is not a “nous” but yet it’s used for that purpose.
On a fait une erreur, (A mistake was made by a group I wasn’t necessarily a part of) vs Nous avous fait une erreur (We made a mistake). W was a “on” presidency, clearly.

The French can be tedious about the use of vous/tu as well Yoki. At work they tend to 'tutoyer' people in lower rungs of the pay ladder (in particular people with menial jobs) and yet they keep "vouvoyer" and calling by their family name only colleagues of 30 years and. Hey Dupont, venez ici! They’re all mad.
The current practice of the local youth, and their teachers I presume, to nix the vous altogether is a small loss of civility, IMHO.
“We haven’t kept the cows together!” was the stock answer of an older teacher I had in high school if a pupil would dare “tutois” him.

The sisters at the Couvent St-Joseph (a private school) still “tutoient” the junior high pupils they know and “vouvoient” the seniors and the juniors they don’t know. I think it’s a neat tradition that teaches something to the kids.

Posted by: shrieking_denizen | February 24, 2009 3:05 PM | Report abuse

SCC all the seniors.
OK. Off to the bus.

Posted by: shrieking_denizen | February 24, 2009 3:08 PM | Report abuse

New Kit!

Posted by: shrieking_denizen | February 24, 2009 4:05 PM | Report abuse

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