- The Demise Of The EU
Submitted by Jeff Thomas via InternationalMan.com,
Back in the ‘90s, when the EU had ceased to be a mere trade agreement and had become a full-blown oligarchy that would eventually gobble up most of Western and Eastern Europe, my belief was that it had not only been a doomed concept, it had additionally been rushed into being far too quickly. Although, at that time, the governments of Europe were gleefully joining up. I said, “I give it twenty years, tops.”
It was an offhanded remark and, in truth, I was throwing a dart at a board regarding the time period, but twenty years did seem about right to me. And this shouldn’t have been a difficult prophecy. There were three major reasons for its validity.
“Good Fences Make Good Neighbors”
First off, the countries of Europe had perennially been at war with each other since long before gunpowder was invented. Europe is basically tribal and there is simply no way that the mindsets and objectives of, say, the British are going to be the same as, say, the French. If under the EU diktat, British fishermen were then told that they could no longer fish their own waters because Brussels had decided to give British territorial waters to the French so that they could fish, there would be greater cause for enmity between countries than ever before in history. (The quote above from Robert Frost was meant to pertain to individual property owners, but it applies equally to modern-day tribes.)
Sudden Change Breeds Resentment
Second, the rulings from Brussels came in a torrent after its formation. Nearly every country in Europe was shoehorned into fitting in with Union objectives. As a result, whilst some countries gained some advantages, all countries lost the basic freedom that comes with self-determination. Those who objected were threatened that they’d better behave. Those who suggested departing from the union were further threatened that they’d be shut out of EU trade and destroyed economically.
Most people behave like sheep in most situations. That’s a basic trait of mankind, in any culture, in any age. However, sudden change (in either events or public opinion) often sparks revolt. Certainly King George of Britain discovered this when he chose to make up for a wartime monetary shortfall by imposing a stamp tax on his colonies in America. A decade later, the French people, when they heard (falsely) that Queen Marie Antoinette had replied to the shortage of bread amongst her minions, “Let them eat cake,” it served as a jolt to public opinion that would send many Frenchmen over the edge to the point of rebellion.
The elite in Brussels have grossly overplayed their hand, time and time again, by imposing sudden and dramatic change on the countries of Europe, whilst behaving arrogantly, bringing many of Europe’s people to the boiling point.
It Wasn’t the People that Joined the Union
To add to the tyranny, no country’s population voted in a majority to join the union. Half-hearted referenda were undertaken by some countries, but voter turnouts were often poor. In other countries, the referenda were not binding. In the end, each government went ahead with only minority support and plunged headlong into a union that would benefit them, the leaders, but would not serve their people well.
The EU was, from its inception, the antithesis of “government of the people, by the people, for the people.” It was, instead, an “uber-government of the political leaders, for the political leaders, by the political leaders.”
All the above contributed to the likelihood (at least in my view) of a short-lived EU.
But the easy task is to predict the event. The more difficult task is to predict an approximate date, so that investment decisions and major life decisions may be timed to avoid the individual becoming collateral damage. The important question therefore would then be, “What will be the trigger to begin the collapse?”
As the years passed and the cracks in the EU started to appear, the race was on as to whether the undoing would be as a result of the economic failure of the southern member-states, or by the social strains of immigration that Brussels forced onto its member-countries. In each case, it was predictable that the political leaders would defend the EU policies at all costs, although each would increasingly lose the support of constituents by doing so.
On the economic front, all eyes were on Greece and the other Mediterranean members, as they clung stubbornly to their collectivist economic policies. They would continue to bleed red ink at the expense of their more economically responsible Northern brethren. Along the way, in order to appease her voters, German Chancellor Angela Merkel stated firmly that the EU would not bail out the Italian banks; that they would have to rely on bail-ins (a measure that had been approved in 2014 for all EU countries). Then the news came that the German Deutsche Bank was on the ropes, threatening to cause a bloodbath for the German people. Germany, having lost billions of its money to the other EU countries, would need $14 billion to pay for Deutsche Bank’s mis-sold mortgage-backed securities and that would just be the beginning.
The German people had paid through the nose to support other EU members, but a line had been drawn in the sand as to future bail-outs, just before Germany realised its own crisis.
Suddenly, Mrs. Merkel has been caught between her obligation as Chancellor to the German people and her personal commitment to the EU. Her problem is exacerbated by the fact that she is up for re-election in 2017.
Ironically, in the race for the collapse of the EU, it may be that the trigger that begins the process is Germany, the country that was most responsible for its creation.
The comparison with the Titanic is an apt one. Like the Titanic, the EU was presented as a “super-state”, one that would be bigger and better than all the others in Europe. It was declared unsinkable. Yet, soon after it was launched, it hit an unexpected iceberg from which it could not recover.
Years from now, historians and economists will debate the identity of the EU iceberg. Some will say Brexit, others will say Deutsche Bank. Still others will cite events that we have not yet seen. However, for our purposes, it matters little. The dominoes have begun to fall and all of us that may be impacted by an EU collapse should make sure that we have all our own ducks in a row – to assure that we are impacted as minimally as possible.
- Behold, The Trumpening
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
If the US presidential debate last night showed anything, it must be that just about everyone has dug themselves into their trenches and had no desire whatsoever to ever come out.
This seemed especially clear on the Hillary side, which appeared to include -to an extent- ‘moderators’ Anderson Cooper and Martha Raddatz, judging from their interruptions. But, granted, they were the only biased side in the discussion, so we don’t really know what trenches the Republicans have dug.
The biggest problem with biased moderators is that people notice their bias. Not those who are on one side already, it passes them by. But others do. And perhaps more importantly, -in this case-, Hillary’s team loses its ability to adopt a neutral view. And she will therefore hear so much praise that she can’t figure out if she’s not done too well.
To illustrate that point: the main takeaway must be that Trump won the debate hands down, but that’s the opposite of what Hillary sympathizers concluded and what various polls said. It’s still true though, if only for one simple reason. That is, for 48 hours straight all talk and ‘reporting’ had been about Trumps lewd ‘words’ on the Access Hollywood tapes.
Trump really was cornered, and he knew it, everyone knew it. But after the second debate, and within 90 minutes, most of the talk turned towards how he ‘threatened’ to jail Hillary. Now, that’s not what he said, but even if he had, it’s something a lot more people sympathize with than with his language on the tapes. That’s a lot of territory ‘conquered’.
Meanwhile, even the likes of Paul Ryan don’t seem to grasp what happened overnight (he apparently think Hillary already won). What he doesn’t appear to see is, again, that Trump looked completely lost for 48 hours, but doesn’t look so lost now. There are 4 weeks and a day left in the campaign, and a lot can still happen.
Look, Trump is a buffoon. The word could have been invented specifically to define him. And it would be a very bad idea to make him president of the US. But that doesn’t mean the idea of making Hillary president is any better. It may well be worse, for a variety of reasons.
What the debate made clear once more is that America stands face to face with itself, it’s looking in a giant mirror, one which -only- in choice moments does not contort its own image, and America finds there’s nothing to like about what it sees in those brief moments in that mirror. And then therefore immediately proceeds to contort that image like it’s used to doing.
America may not like to look at its own stone cold hard reality, but it’s better than any culture ever in painting a picture of itself that it does like. In fact, it’s the first nation ever that made exactly that its main goal in life.
The Brits, the French and the Dutch try to hide their dark colonial and slave trading pasts, but America built an entire culture around contorting its history, right there in Hollywood, with ‘stars’ like John Wayne and John Ford being celebrated for movies that celebrate the annihilation and violent submission by the white man of both Native Americans and African slave populations.
In that same vein, the ‘heroic exploits’ of US soldiers in Muslim countries from Libya to Afghanistan in the past decades are now a major topic for the next generation of twisted history in movies and other media, in which invasions, drone killings and carpet bombings are portrayed as acts of bravery that warrant Purple Hearts. While the people whose lives and cultures are destroyed are swept under the first available carpet.
But that’s another story for another time. Back to last night’s debate. Trump may have won big, but he left some substantial scraps on the table that he may yet come to regret. Perhaps he was too focused on digging himself out of the ‘grab that pu**y’ hole -and yes, that is foul- to notice he was already out. Hard to say. He has the intuition, but does he have the brain?!
The first thing either The Donald or one of his team members must hammer down, urgently, is the way past stupid narrative of Russia’s involvement in US politics. Hillary repeatedly brought it up again, and it’s cheap fare for her, she can say anything she likes on the issue, no-one will contradict her or check any facts.
There were all these alleged fact-checkers ‘active’, but they dare not check the facts on this (there are none). Anything the Democratic Party wants to hide, it is free to hide behind Putin. No questions asked. That is insane at best, and Trump should have halted the narrative.
As should Cooper and Raddatz, and the army of fact checkers, but the fix was in. The low point must have been the allegation that Wikileaks is linked to Putin. Really? Come with facts, or forever hold your tongue. Too much cheap fare, hollow as can be, and Hillary build much of her story on it. Not good on the part of the Trump people.
I was reading an August 2 piece by Timothy O’Brien at Bloomberg the other day on Trump’s Russian connections, and Tim seems to start off with good hope of ‘inking the deal’, but ends up admitting there’s no there there.. The entire narrative of Trump’s Russian connections is as false as John Wayne’s heroism in slaughtering Native Americans. He should have cut that tale short in the debate, He didn’t.
Hillary gets to say, without any interruption or fact checking that “Russia has decided who it wants to be president, and it’s not me.” and that is way beyond any comprehension, really. There is zero proof of that, as there is of everything the US claims about Russia.
For all we know, Putin would much prefer Hillary to be president, because he sees Trump as a much stronger opponent when the chips are down. Hillary’s allegations are just a narrative she thinks will appeal to voters. She’s wrong. At least when it comes to those who wouldn’t have voted for her regardless of the narrative.
The second issue Trump desperately needs to put to bed is the one of his taxes. And mind you, I did say Trump should not ever be president of the US. That’s my perspective.
Hillary again last night painted a picture of Trump leaving US veterans out in the cold by not paying enough taxes. Trump retorted by saying Buffett (not Jimmy) and Soros do the same. But that’s a huge missed opportunity.
Paying taxes in America, and in any western nation, is not some voluntary exercise; there are laws, and they are some of the most stringent and most punishable there are. You cheat on your taxes, and the IRS or their equivalent in other countries have the power to go after you like no other government institution. Tax cheats very often go to jail.
That none of this has happened to Trump means, it’s that simple, that he did not break the law. He has used to the law to his advantage, just like everyone else who could, sure, But there’s not an inch of evidence, not even a hint, that he did anything illegal.
Hillary’s campaign is well aware of this, so the issue gets presented as some -pretty opaque- moral issue: ‘You didn’t do well by our veterans’. But what could he have done? Should Trump be the only American, or only western citizen, to tell the IRS to please take another extra $10 million or so, or $100 million, after they were done auditing him? So he wouldn’t be attacked 20 years on when running for office? It makes no sense in any sense.
And yes, the situation is very different if you’re on a payroll for some company, you can’t deduct what Trump could. But he’s not alone in that; in fact, all American entrepreneurs are in the same boat, and they will all try to swing that boat in the direction that fits them best. And Hillary loves these entrepreneurs as much as anyone when it suits her purposes. And her accountants do the same thing, they follow the same principle. Perhaps for lesser amounts, but that’s not the point.
Trump’s taxes are a non-issue, a brainless narrative. Not something for Hillary or anyone else to use as some innuendo-laden topic, anymore than Trump can use Hillary’s tax files against her in an ‘innuendo illegal’ way. Any judgment on that is up to the IRS, not either the Republican or Democratic campaigns. It’s ridiculous that Hillary can use that in a debate, and Trump and his people should have shut that venue down long ago.
But anyway, we have that 4 weeks and a day to go, and there’ll by much more to ‘enjoy’. Still, Trump came back last night from very very far away. No matter what CNN and other polls may say. Those polls are as biased as the night’s moderators.
It might be a good idea to realize that a year ago nobody ever gave Trump a shot at the gold medal, and his support never came from the people who conform with CNN (which nobody watches stateside anyway) or ABC.
We’ll talk again soon. Meanwhile, I’m with Susan Sarandon, who says bring it on, bring on Trump, because she despises Hillary, and because:
“Donald Trump will bring the revolution immediately; if he gets in then things will really explode.”
Sort of like what I wrote before, that if you must choose between two very bad options, might as well pick the worst and get it over with:
- U.S. Intelligence Meddles In US Presidential Election: Backs Hillary Clinton
Submitted by Alexander Mercouris of The Duran
U.S. Intelligence meddles in U.S. Presidential election: backs Hillary Clinton, tries to stop Donald Trump
The fact and evidence-free statement by US intelligence that Russia was behind the DNC leak is an attempt to swing the US Presidential election in Hillary Clinton's favour and amounts to the direct interference of US intelligence in a democratic US election.
The single most important event of the US Presidential election took place last week and to my knowledge it has gone completely unreported.
This was not the video tape of Donald Trump’s grotesque and deeply offensive sexual banter from 2005.
It was the public confirmation that an intelligence agency is directly interfering in an ongoing US Presidential election.
The intelligence agency in question is not however that of Russia as is being reported. It is that of the United States itself.
To understand why this is so, consider the statement US intelligence published last week on the subject of alleged Russian hacking of the Democratic National Committee and of other US agencies involved in the election. It reads as follows:
“The U.S. Intelligence Community (USIC) is confident that the Russian Government directed the recent compromises of e-mails from US persons and institutions, including from US political organizations. The recent disclosures of alleged hacked e-mails on sites like DCLeaks.com and WikiLeaks and by the Guccifer 2.0 online persona are consistent with the methods and motivations of Russian-directed efforts. These thefts and disclosures are intended to interfere with the US election process. Such activity is not new to Moscow—the Russians have used similar tactics and techniques across Europe and Eurasia, for example, to influence public opinion there. We believe, based on the scope and sensitivity of these efforts, that only Russia’s senior-most officials could have authorized these activities.”
(bold italics added)
The statement is an implicit admission that US intelligence has no evidence to back its allegations of Russian hacking.
It is merely “confident” – not “sure” – that it is the Russians who are behind the hacking, and it is clear from the statement that it arrived at this conclusion purely through inference: because the hacks supposedly were “consistent with the methods and motivations of Russian-directed efforts”.
US intelligence assumes the Russians were behind the hack not because it knows this to be so but in part because of what it believes Russian motives to be.
The statement backs its claim with a textual trick. It says “the Russians have used similar tactics and techniques across Europe and Eurasia”. It then immediately follows these words with the words “for example”.
These lead to the expectation that an actual example of such Russian “tactics and techniques” is about to follow. Instead what is provided are the fact free words “to influence public opinion there”.
The words “for example” lend nothing to the meaning of the statement, which would be exactly the same without them. These two words as used in the statement are actually meaningless. That is a sure sign that their presence in the statement is intended to confuse the casual reader, and that this is true of the statement as a whole.
The words are designed to create a subliminal impression to a casual reader that the Russians have been caught doing this sort of thing before, without however providing a single actual example when this was the case.
Demonstrating how thin the case of Russian government actually is, the statement then goes on to say
“Some states have also recently seen scanning and probing of their election-related systems, which in most cases originated from servers operated by a Russian company. However, we are not now in a position to attribute this activity to the Russian Government.”
(bold italics added)
In other words US intelligence admits the mere fact servers operated by a Russian company may have been used for “scanning and probing” – and presumably also for hacking – is not in itself proof of the involvement of the Russian government.
This is consistent with what I have heard, which is that skilled and well-resourced hackers can use compromised machines to carry out hacks by remote access, and that the mere discovery that a particular machine has been used in a hack does not in and of itself implicate the owner. (I should stress I am not an expert in this field and I may have misunderstood this. However it appears to be what US intelligence is saying).
This part of the statement seems to me intended to prevent challenges to the eventual outcome of the election based on US intelligence’s claims of Russian hacking. US intelligence does not want to be drawn into post-election arguments about the validity of the election outcome, which might lead to demands that it make public its “evidence” of Russian hacking. In the process US intelligence however casts doubt on what is almost certainly the only actual evidence it has of Russian state involvement in the hacking.
In summary, the statement is a mere statement of opinion, it is not a statement of fact, and the evidence upon which it is based is threadbare.
Moreover since the DNC hack is a criminal offence, it is a statement of opinion made about a matter which is presumably being investigated by the police.
The relevant police agency is presumably the FBI, which significantly is not a co-author of the statement.
That in turn begs a host of questions: has the FBI been shown the “evidence” upon which US intelligence expresses its opinion and has made the statement? Has it asked to see this “evidence”? Was it invited to co-author the statement? What does the FBI think of the public involvement of US intelligence in a domestic criminal matter which falls within the FBI’s exclusive competence?
If the statement is merely a statement of opinion based on inference of which guesses about Russian “motivations” apparently form a major part, and one which moreover concerns a matter which is or ought to be the subject of investigation by the police and not therefore the subject of this sort of comment, why was it published at all?
The short answer is in order to help Hillary Clinton win the US Presidential election.
To that end the statement fulfils two purposes: firstly, it discredits the content of any leaks that might otherwise damage Hillary Clinton’s campaign by lending credence to her claim that they are part of a Russian ‘dirty tricks’ campaign against her; and secondly, it lends credence to the claim popularised by Hillary Clinton’s campaign and by Hillary Clinton’s supporters in the media that Donald Trump is Putin’s candidate and that Putin is trying to help him win the election.
That the second is one of the purposes of statement is proved by its reference to US intelligence’s “belief” that the leak was authorised by “Russia’s senior-most officials”. This is clearly intended to refer to Putin, and is intended to give the impression that Putin himself personally authorised the DNC leak in order to damage Hillary Clinton and to help Trump win the election and become President.
US intelligence has meddled in elections in other countries on numerous occasions starting with the Italian parliamentary elections of 1948.
To my knowledge this is however the first occasion that US intelligence has directly and publicly meddled in a US national election, acting to help one candidate defeat another.
It matters not whether this was done by US intelligence on its own initiative, or whether it was pressured to do so by officials of the Obama administration or of Hillary Clinton’s campaign.
Either way the disturbing truth must now be faced: the practice of US intelligence meddling in and trying to influence national elections has now been imported home to the US.
- "The World Has Reached A Dangerous Point" – Gorbachev Sees Rising Threat Of Nuclear War
As Russia and America creep ever closer to outright conflict, now that the diplomatic facade of the proxy war in Syria falls away with every passing day, one voice if calling for the world to stop and reassess what it is doing. Former USSR leader Mikhail Gorbachev warned on Monday that the world has reached a “dangerous point” as tensions between Russia and the United States surge over the Syria conflict; a conflict which if escalated even fractionally further, could result in all out war between the two superpowers according to General Joseph Dunford.
Gorbachev blamed the current state of affairs between Russia and US on the “collapse of mutual trust” and urged the sides to resume dialogue and push towards demilitarization and complete nuclear disarmament.
“I think the world has reached a dangerous point. I don’t want to give any concrete prescriptions but I do want to say that this needs to stop. We need to renew dialogue. Stopping it was the biggest mistake. Now we must return to the main priorities, such as nuclear disarmament, fighting terrorism and prevention of global environmental disasters. Compared to these challenges, all the rest slips into the background.” Gorbachev said in an interview with RIA Novosti.
Relations between Moscow and Washington, already at their lowest since the Cold War over the Ukraine conflict, deteriorated sharply in recent days as the United States pulled the plug on Syria talks and accused Russia of hacking attacks.
Soviet President Mikhail Gorbachev (L) and U.S. President Ronald Reagan
begin their mini-summit talks in Reykjavik October 11, 1986.As a result, last week Russia moved nuclear-capable Iskander missiles in Kaliningrad, near the hear of central Europe, an indication that a nuclear disarmament is the last thing on the mind of either Putin or Obama; quite the contrary a new nuclear arms race has begun. That, however, did not stop Gorbachev to preach the need for nuclear disarmament.
“Of course, at this moment it is difficult to talk about moving towards a nuclear-free world, we must honestly admit it. But we should not forget: as long as there are nuclear weapons there is the threat of their use. It could be an accident, a technical malfunction of someone’s evil will – a madman or a terrorist,” the former Soviet leader said. Or a perfectly sane, administration official intent on starting a new world war to benefit his or her financial backers.
In the interview, Gorbachev also reminded that in line with the nuclear non-proliferation agreement all of its signatories must hold talks on nuclear disarmament uniting the eventual full destruction of nuclear weapons.
“The nuclear-free world is not a utopia, but rather an imperative necessity. But we can achieve it only through demilitarization of politics and international relations.”
Gorbachev added that veterans of international politics, such as the “council of sages” chaired by former UN leader Kofi Annan, understood these problems and expressed hope that their voices would be heard by modern leaders. At the same time he emphasized that the main responsibility for global security lies on these modern leaders who would make the greatest mistake if they do not use the last chance to return international politics to a peaceful course.
The former Soviet leader’s interview was published on Monday to coincide with the 30th anniversary of the USSR-US summit in Reykjavik, which eventually allowed the nuclear arms race to slow down and greatly contributed to the end of the Cold War. Ironically, it comes out at a time when the nuclear arms race is back front and center.
Looking back to a more sensible time, Gorbachev reiterated that the Reykjavik summit was a major breakthrough. “First, we agreed on many issues and second, we managed to look over the horizon, see the perspective of a nuclear-free world,” he said.
“It was very appealing that in the course of our negotiations President Ronald Reagan sincerely spoke about the necessity to rid the world of the weapons of mass destruction. We shared a common position on this issue.”
Sadly, today that is no longer the case, and as we said over the weekend when we profiled the latest Russian nuclear escalation, the next move will be one by NATO and it will be proportional, as the west delivers even more nuclear weapons in close proximity to Russia in what will become a tit-for-tat “defection” from the game theoretical equilibrium, until the “accident, technical malfunction, madman or terrorist” emerges and unleashes an unthinkable scenario.
- Obama Econ Advisor Blames Back Pain And Video Games For Bad Labor Market
Princeton professor and former Obama White House economist Alan Krueger would like for you to know that low labor force participation rates likely have nothing to do with Obama’s awful “jobs recovery”, stagnant real wages or soaring entitlements that provide massive disincentives to work. Rather, his “thorough research” indicates that men are more likely dropping out of the labor force due to excessive back pain and/or because video gaming technology has become so amazing that young adults are just choosing to stay home instead. Sadly, this is a true story.
According to The Washington Examiner, Krueger’s “research” indicated that 47% of men, between the ages of 25 and 54, reported taking pain medication during the previous day. Of those men, 40% said their pain prevented them from working. To summarize, the awful labor market under Obama has nothing to do with his failed economic policies…it’s pure coincidence that as soon as Obama took office a massive percent of the overall working-age male population came down with severe back pain. That seems reasonable.
Nearly half of working-age men who aren’t in the labor force take daily pain medication, according to new research that highlights one alarming possible reason for weak labor force participation in the U.S.
Of men between the ages of 25 and 54, 47 percent said that they took pain medication during the previous day in a survey commissioned by Princeton professor and former Obama White House economist Alan Krueger. For two-thirds of those men, the medication was prescribed.
Those results line up with what Krueger found in government-conducted surveys, and they add a new explanation for low male labor force participation, namely that many men may be too sick or injured to work.
Of the men who reported taking medication, 40 percent said that pain prevented them from working.
But back pain apparently isn’t the only thing keeping young men out of the work force. Krueger also asserts that the improved quality of video gaming consoles has caused young people to increasingly choose “idleness” over work. Yes, we’re sure it has nothing to do with minimal job growth and stagnant or declining real wages for America’s youth…video games makes a lot more sense.
The analysis downplays some of the reasons that have been suggested for the drop. For instance, Krueger reports little evidence that disability insurance is increasingly a disincentive to work, as some economists have suggested.
Instead, he focuses on the possibility that some working age people, especially men, have health problems, and that getting them back to work might necessitate increasing their access to healthcare.
For younger working-age men, aged 21-30, video games also may be part of the problem, Krueger finds. While falling labor force participation for that group mostly reflects school attendance, idleness is also up. And that might be because, he finds, playing video games is more attractive than older forms of idleness, such as watching television. He discovers that young men out of the labor force spent 6.7 hours a week on average playing video games in the years 2012-2015, up from 3.6 hours a week in 2004-2007.
Sounds like a simple little video gaming tax should clear up the unemployment problem among America’s youth. This could be a huge win for Democrats as they could raise taxes and solve unemployment with one simple bill…best of both worlds.
And parents are actually paying Princeton nearly $100k a year for their kids to be taught this garbage.
- "Why Do They Hate Us So?": One Western Scholar's Reply To A Worried Russian Student
Submitted by Michael Jabara Carley via Strategic-Culture.org,
I gave a lecture in Moscow during the spring about western-Soviet relations over the last century. With the partial exception of World War II, it is a narrative of unrelenting hostility. After I had finished, a student asked, «why do they hate us so?» The answer is not complicated. You cannot cross «da man» in the United States, that is, the powerful, wealthy US «deep state», which sets the rules for everyone else and enforces its worldwide hegemony against disobedient states and leaders.
You could not get more disobedient than the Bolsheviks. In November 1917, or October according to Julian calendar, they seized power in Russia and declared their intention to make a world socialist revolution. You can imagine the indignation and anger of the western powers, all at war with Imperial Germany, looking over their shoulders to see that revolution had erupted in Russia. It’s a complicated story but not everyone in the west reacted blindly to the Bolshevik seizure of power; none other than the British Prime Minister David Lloyd George thought the Entente should back the Bolsheviks against the Germans. His idea was an early prototype of the eventual Grand Alliance.
In 1918 there were few takers for that eccentric idea especially when the Bolsheviks annulled the tsarist state debt and nationalised banks and industries in which foreigners held billions in investments. In the west these actions struck at the heart of the capitalist world order, and for the next three years, the Entente sent money, arms and troops to overthrow the Soviet government.
The Bolsheviks acted as defenders of the revolution but also as defenders of Russia. It was an easy transition since the so-called Allies, had they succeeded in reversing Soviet power, would have established a Russian semi-colony, much as they sought to do in the 1990s. The Poles too were mobilised against Soviet Russia, launching an offensive in April 1920, with tacit French support, to re-establish their 18th century eastern frontiers, including the city of Kiev. The Polish plan did not work out as intended, the Bolsheviks fought back, portraying themselves as defenders of the traditional Russian state. Admittedly it was an incongruous role for world revolutionaries, but if you scratched the skin of most Bolsheviks, you would find defenders of Russian national security interests.
During the interwar years Soviet-western relations were almost always bad. The former Entente powers punished Soviet Russia for its refusal to pay the tsarist debts and compensate foreigners for nationalised property and equities. They applied economic sanctions to break the Soviet state where military force had not succeeded. The red scare, anti-Soviet electoral politics, and containment characterised US, British and French conduct during the 1920s. Those policies did not work. The Soviet government relied on its own resources to modernise its economy. Joseph Stalin’s policies were brutal and ruthless, but they led to the building of a powerful, industrialised state by the end of the interwar period.
During the 1930s the Soviet government, recognising early on the menace of Hitlerite Germany, proposed collective security to the western powers, in fact, a defensive anti-Nazi alliance. At first there was some western interest in Soviet ideas, but not for long. One by one, the USSR’s putative allies reverted to what one Soviet diplomat, Ivan M. Maisky, called Sovietophobia and Russophobia. Adolf Hitler portrayed Germany as a bulwark against communism, and the French and British elites played into his hands. As Maisky put it, the great question of the decade was «Who is enemy no. 1, Nazi Germany or the USSR?» With notable exceptions, ruling elites in Europe got the answer wrong.
You have to give Stalin credit for he stuck to collective security for six years, in spite of all the failures. Only in August 1939 did he abandon this policy when it became obvious that France and Britain were not serious about a war-fighting alliance against Nazi Germany. It was then that the Nazi-Soviet non-aggression pact was concluded. Western opinion was generally indignant, conveniently forgetting the Munich accords in 1938 and all the other western attempts to compose with Hitler. Even today Russophobic politicians, journalists and historians harp on the non-aggression pact to blacken Russia and its president Vladimir V. Putin. Such manipulations remind me of the Biblical parable of the mote and the beam. The west, then as now, should pull the beam out of its own eye before criticising the mote in the eye of Russia, Soviet or otherwise.
Unable to count on France and Britain, Stalin concluded a modus vivendi with Hitler, not to make an «alliance» with him, but rather as one scorpion wary of another might do, circling and raising its tail high, ready to strike. Stalin did not want to fight alone against the NaziGermany, but he outsmarted himself because, as it turned out, the USSR was obliged to fight almost alone against the Wehrmacht for three years from 1941 to 1944. This was the period of the Grand Alliance against the Axis powers.
I watched recently a Russian film about the Great Patriotic War. After some bloody fighting, one Red Army soldier asks another «what kind of allies are they, who let us do all the fighting against the Wehrmacht?» Not a bad question to ask. Perhaps it was unfair to Franklin Roosevelt, but not to Winston Churchill. FDR was a rare president who was able to keep at bay the Sovietophobic US «deep state». Churchill blew hot and cold about his Soviet allies, but as soon as the tide of battle turned against Hitler, he erupted about Russian «barbarians» and communist «crocodiles» even though some of his cabinet colleagues were scandalised.
In April 1945, it took the US «deep state» only a fortnight after the death of FDR to persuade his successor, Harry Truman, to call into question the Grand Alliance. It was also a fortnight after VE Day in May 1945 that Churchill received a copy of «Operation Unthinkable», a plan he requested to make war against the USSR, stiffened with ten German divisions.
The United States was quick to follow up with more realistic ideas on building up a West German «partial state» as the best way to contain or even roll back the Soviet presence in Europe. With the Marshall Plan in 1947, the United States was able to buy the loyalty of Western Europeans, transformed into dependent compradors. Stalin could not compete in that game of rich Uncle Sam, poor Uncle Joe.
Having greased the rails with the Marshall plan and CIA money, NATO was established in 1949. Soviet propaganda portrayed the NATO «allies» as mere US ciphers. Little has changed since then. Present day NATO members remain compradors, obedient vassals of the United States, rather than defenders of the national interests of the countries they represent.
It took another forty years for the USSR to collapse and disappear. That period was marked by visceral hostility, interrupted only by a brief period of cosmetic détente after the Cuban missile crisis in 1962. World War II had scarcely ended before the red scare and containment policies returned to the fore. It was Act II of the Cold War. In the 1980s the USSR tried to defeat an Islamic insurgency in Afghanistan supported by the United States. The Americans allied themselves with Islamist fundamentalists, most notably Osama bin Laden, portrayed as a hero then, who became a villain later. «Blowback», one American professor called it. Bin Laden was eventually shot by US Navy Seals in Pakistan. There were many other Wahhabis, however, to take his place.
After the disappearance of the USSR, you might think the Americans would have declared victory and then offered a hand to the Russian rump state under Boris Yeltsin,. who played court jester in President Bill Clinton’s White House. Yeltsin claimed he had no choice but to submit to the Americans, but of course he had a choice. In 1991 he and two other Soviet politicians plotted the dissolutionof the USSR for their own political purposes. They sold out the country which the Bolsheviks had defended, and for which 26 million soldiers and civilians died during the Great Patriotic War.
Yeltsin’s grovelling in Washington and his encouragement of his oligarchs’ looting of Russian national resources earned only American contempt. «Keep ‘em down» was the US policy; generosity was out. «We won, you lost,» the Americans proclaimed. Contrary to commitments made to the fatuous Mikhail S. Gorbachev about no NATO eastward expansion, NATO drove right up to Russia’s western frontiers.
In 2000 when Putin was elected president, he publically promoted security and economic cooperation with Europe and the United States. After 9/11, he offered real assistance to Washington. The United States accepted the Russian help, but continued its anti-Russian policies. Putin extended his hand to the west, but on the basis of five kopeks for five kopeks. This was a Soviet policy of the interwar years. It did not work then and it does not work now.
In 2007 Putin spoke frankly at the Munich conference on Security Policy about overbearing US behaviour. The «colour revolutions» in Georgia and the Ukraine, for example, and the Anglo-American war of aggression against Iraq raised Russian concerns. US government officials did not appreciate Putin’s truth-telling which went against their standard narrative about «exceptionalist» America and altruistic foreign policies to promote «democracy». Then in 2008 came the Georgian attack on South Ossetia and the successful Russian riposte which crushed the Georgian army.
It’s been all down-hill since then. Libya, Syria, Ukraine, Yemen are all victims of US aggression or that of its vassals. The United States engineered and bankrolled a fascist coup d’état in Kiev and has attempted to do the same in Syria reverting to their «Afghan policy» of bankrolling, supplying and supporting a Wahhabi proxy war of aggression against Syria. Backing fascists on the one hand and Islamist terrorists on the other, the United States has plumbed the depths of malevolence. President Putin and Russian foreign minister Sergei Lavrov have made important concessions, to persuade the US government to avert catastrophe in the Middle East and Europe. To no avail, five kopeks for five kopeks is not an offer the United States understands. Assymetrical advantages is what Washington expects.
One cannot reproach the Russian government for trying to negotiate with the United States, but this policy has not worked in the Ukraine or Syria. Russian support of the legitimate government in Damascus has exposed the US-led war of aggression and exposed its strategy of supporting Al-Qaeda, Daesh, and their various Wahhabi iterations against the Syrian government. US Russophobia is redoubled by Putin’s exposure of American support for Islamist fundamentalists and by Russia’s successful, up to now, thwarting of US aggression. Who does Putin think he is?
From my observations, I would reply that President Putin is a plain-spoken Russian statesman, with the support of the Russian people behind him. For five kopeks against five kopeks, he will work with the United States and its vassals, no matter how malevolent they have been, if they adopt less destructive policies. Unfortunately, recent events suggest that the United States has no intention of doing so. After one hundred years of almost uninterrupted western hostility, no one should be under any illusions.
* * *
So then, the question is «Why do they hate us so?»
Because President Putin wants to build a strong, prosperous, independent Russian state in a multi-polar world.
Because the Russian people cannot be bullied and will defend their country tenaciously.
«Go tell all in foreign lands that Russia lives!» Prince Aleksandr Nevskii declared in the 13th century: «Those who come to us in peace will be welcome as a guest. But those who come to us sword in hand will die by the sword! On that Russia stands and forever will we stand!»
- More Leaks: "Hillary Should Stop Saying Things That Are Untrue, Which She Often Does"
This morning saw Wikileaks dump another 2,086 John Podesta emails as the world nurses its post-debate hangover.
We suspect the following ‘hacked and therefore entirely inadmissible and probably completely made up by devil-worshipping Russia-lovers’ will make a bad day for Hillary a little worse…
In an email from March 2016, Brent J. Budowsky – a liberal / progressive American political opinion writer and blogger for publications including The Hill, the LA Progressive, and The Huffington Post – explains to John Podesta his biggest fears about Hillary Clinton’s liabilities…
From:brentbbi@webtv.net
To: john.podesta@gmail.com, roy.spence@gsdm.com
Date: 2016-03-13 09:43
Subject: Bernie, Elizabeth and de Blasio
Sometime soon I am going to suggest that Bernie, Elizabeth Warren and Bill de Blasio create the equivalent of a People’s PAC to raise huge amounts of money from small donors—after the convention—to support electing liberals at all levels….including but far beyond Hillary assuming she is nominated…..
Beyond this Hillary should stop attacking Bernie, especially when she says things that are untrue, which candidly she often does. I am one of the people with credibility to suggest Bernie people support her in November, and she and Benenson and others have no idea of the damage she does to herself with these attacks, which she does not gain by making.
Instead the smart move would be to look for issues where she can dovetail with Bernie. One I am definitely going to suggest would be to take his proposal for a free public college education paid for by a transaction tax on Wall Street speculation and add one new dimension….that to receive this benefit young people should devote one year to some form of community or public service…. There is no reason Hillary cannot not support this….
Right now I am petrified that Hillary is almost totally dependent on Republicans nominating Trump….she has huge endemic political weaknesses that she would be wise to rectify…..even a clown like Ted Cruz would be an even money bet to beat and this scares the hell of out me…..
Of course, one should not read the message since the messenger – the satanic hands of Putin-spawned hackers – invalidates any and every comment made in these emails, which are clearly manufactured to ‘rig’ the American elections… or perhaps, just perhaps, for the first time in history, Americans are being de-lobotomized and given the chance to decide what ‘news’ they pay attention to – as opposed to being spoon-fed by establishment propagandists.
- How The "Perverse Economic Effects Created By ETFs" Are Setting Up The Next Crash
One of our favorite topics over the years has been observing the inversion of fundamental cause and effective, or rather, the reflexivity of synthetic, “passive” products such as ETFs and VIX, which in a normal world are driven by the value of their underlying securities, yet which in recent years have seen the direction of causality inverted, and where it is the value of the synthetic product that inluences the market price of its underlying constituents, or said simply, the “tail wags the dog.” We have observed this phenomenon in both ETFs and VIX, the result of which has been even more confusion about whether fundamental causal links are even applicable any more.
This “inversion” is also one of the main points discussed by RBC’s head of US cross-asset strategy, Charlie McElligott, who points out a recent FT article, and makes two stark observations.
To wit:
FINANCIAL TIMES ON “…THE PERVERSE ECONOMIC EFFECTS CREATED BY ETF’s”: Two points:
- In a world of manic factor crowding via the exponential growth of cheap passive index and smart beta products, get ready for the class-action lawsuits in a future-state. And:
- this is BEYOND GOLD as an example of “tail wagging dog” / “echo chamber” / “feedback loop amplification” from the market structure shift experienced within the industry over the past 10+ years:
“Steve Bregman, president of Horizon Kinetics, the New York investment adviser, points out that ExxonMobil, the oil company, is included not only in S&P index products, but in ETFs for active beta, momentum, dividend growth, deep value, quality and total earnings.
Between the second quarters of 2013 and 2016, Exxon had a revenue decline of 46 per cent, and earnings per share decline of 74 per cent and a debt increase of 129 per cent, which led to a share price increase of 4 per cent. Anything could happen to the energy industry or Exxon’s fortunes, but a liquid index component can only go up.”
Seriously…standing ovation. Citizen Kane style.
Fund Management: On the perverse economic effects created by ETFs (Financial Times)
By John Dizard
Oct. 10 (Financial Times) — We have a consensus now in America that everyone deserves above-average investment returns, low risk and high liquidity.
These benefits, or rather, entitlements, should be delivered continuously at low cost, with no real or even apparent conflicts of interest on the part of portfolio managers.
If these benefits are not delivered, then the responsible portfolio managers, and any other complicit Wall Streeters, should be punished civilly and criminally, not only as institutions but as individuals.
If you think that is an exaggeration, wait until there is a severe or sudden decline in the value of equities, specifically exchange traded funds, and watch the consequent Congressional hearings. We still have some time before that happens, and before then every plausible form of indexed investing is going to take market share from active human managers.
I am opposed to this trend, because algorithms do not read newspaper columns or the advertising displayed next to them. So you should probably discount some of the doubts I raise as nothing more than arguments for my profession’s interests.
The most serious risks arising from ETFs are the macro consequences of too much capital committed in too few places at the same time. The vehicles for over-concentration change over time, but the outcome is the same. Investors’ cash goes to money heaven, and there is a pro-cyclical decline in productive investment.
Risk concentration always seems rational at the beginning, and the initial successes of the trends it creates can be self-reinforcing. Since US growth stocks such as Avon, the cosmetics company, Polaroid, the photography group, and IBM, the computer company, outperformed the market, growth-orientated portfolio managers raised more money in the early 1970s, which then led to more cash going to buy the same stocks.
There was some truth at the beginning of those story arcs, and so it is with indexed investing. Many “active” managers who are really formulaic hacks charge a lot of money to create the same herding risks, and provide little, if any, value added in the form of considered and effective capital allocation or liquidity provision.
Since the August 2015 flash crash of some ETFs, the SEC, the US regulator, and Wall Street have paid a lot of attention to market-structure problems created or exacerbated by the funds.
There has been less analysis, though, of some of the perverse economic effects created by ETFs or other forms of indexation. Index sponsors need stocks with a large float-adjusted market capitalisation, so index managers have a structural bias to a short list of large-cap S&P 500 stocks.
Steve Bregman, president of Horizon Kinetics, the New York investment adviser, points out that ExxonMobil, the oil company, is included not only in S&P index products, but in ETFs for active beta, momentum, dividend growth, deep value, quality and total earnings.
Between the second quarters of 2013 and 2016, Exxon had a revenue decline of 46 per cent, an earnings per share decline of 74 per cent and a debt increase of 129 per cent, which led to a share price increase of 4 per cent. Anything could happen to the energy industry or Exxon’s fortunes, but a liquid index component can only go up.
Mr Bregman says: “The normal valuation for a lapsed growth company might be 12 to 15 times earnings. But all of the companies at the top of the S&P 500 have a valuation of 22 to 25 times earnings. If the indexation money comes out of them, they would be driven 25 to 50 per cent lower, relative to the market.”
Such an unwind in the indexation/ETF regime will have political as well as financial consequences. Wall Street’s probable next regulators from the Senator Elizabeth Warren wing of the Democratic party will not take long to make an aggressive move on asset managers.
As one Democratic activist reformer says: “This is why it is so critical to have the right person as chair of the Securities and Exchange Commission. Even though there are critical differences between the large asset managers and the banks, [companies] such as BlackRock do control and manage crucial parts of the financial infrastructure.”
If, or when, indexed product sponsors have to face the consequences on the other side of monetary easing and a rising market, there are a lot of nominally active but low-performing managers who will also lose market share. Automated or semi-automated portfolio management offerings will be there to pick up that business.
Reportedly, Interactive Brokers, the brokerage, via its Covestor subsidiary, will be offering a set of five strategies for automated portfolio management, rebalanced quarterly, for a fee of 8 basis points.
So how much more value are human portfolio managers offering when they charge a premium to those machines?
- "Can We Stop This Nonsense, Please?"
Submitted by Lance Roberts via RealInvestmentAdvice.com,
Can we stop this nonsense? Please.
One of the biggest reasons why investors consistently underperform over the long-term is primarily due to the extremely flawed advice promoted by Wall Street, because they have a product or service to sell you, and the media, because they don’t know better.
The latest bit of advice that you should immediately hit the “delete” key on is from Simon Moore via Forbes. The article, while it certainly fits the “buy and hold” narrative, is rife with flawed assumptions and analysis. To wit:
“You shouldn’t worry about market corrections. Not because they won’t come — they will. There is just no way of knowing when. Consider the data. It turns out that since corrections can’t be predicted, the best strategy is to remain invested for the long haul.“
Yes, as I will explain in just a moment, you should definitely worry about corrections as the destruction of capital is far more important than chasing returns.
However, the point of saying “corrections can’t be predicted” is inherently flawed. Yes, you definitely can not pinpoint the exact date and time of corrections, but THEY CAN be avoided.
There is a simple reason why every great investor has a simple rule that varies in form: “buy low, sell high.” Purchasing an investment is only ONE-HALF of the investment process, without the “sell” no money is ever actually made. Furthermore, it is the “sell” process that ultimately minimizes the effect of the correction and, most importantly, if you don’t “sell high,” you can’t “buy low.”
However, there are some basic premises around understanding the “when” corrections are most likely to present themselves. As shown in the chart below, a simple analysis of moving-average crossovers on a longer-term time frame can help investors avoid corrective processes in the market.
Did it work every time?
Of course, not. No investment discipline works 100% of the time. But that is not the point of investing to begin with. Missing a majority of the corrective processes, over the long-term, significantly improves returns. The chart below is $1000 invested on a “buy and hold” basis as Simon suggests versus using the simple moving-average crossover analysis in the chart above.
Not only did the risk managed portfolio achieve better long-term returns, it did so with significantly less volatility. That lower level of volatility allowed investors to remain adhered to their investment discipline versus eventually being flushed out at the bottom of major market corrections due to the inherent emotional biases we all possess.
Okay, let’s get on with the rest of the nonsense.
The Fallacy Of Long-Term Returns
Simon states:
“One of the best datasets on long-term returns comes from Elroy Dimson and colleagues at London Business School. They look at 116 years of data and find that a dollar invested in 1900 becomes $300 in 2015.
That’s a real return before any fees and commissions that equates to 5% per year.
Furthermore, that time period includes 2 markets that experienced a total loss during the period – Russia and China when they moved to Communism. The period also includes 2 World Wars, the assassination of 2 sitting Presidents (McKinley and Kennedy), 23 US recessions, and at least one hundred revolutions or major insurrections in many countries around the world.”
First, let me just say for the record everything in the statement above is absolutely correct.
The problem is you DIED long before ever achieving that 5% annualized long-term return.
Let’s look at this realistically.
The average American faces a real dilemma heading into retirement. Unfortunately, individuals only have a finite investing time horizon until they retire.
Therefore, as opposed to studies discussing “long term investing” without defining what the “long term” actually is – it is “TIME” that we should be focusing on.
Think about it for a moment. Most investors don’t start seriously saving for retirement until they are in their mid-40’s. This is because by the time they graduate college, land a job, get married, have kids and send them off to college, a real push toward saving for retirement is tough to do as incomes, while growing, haven’t reached their peak. This leaves most individuals with just 20 to 25 productive work years before retirement age to achieve investment goals.
This is where the problem is. There are periods in history, where returns over a 20-year period have been close to zero or even negative.
This has everything to with valuations and whether multiples are expanding or contracting. As shown in the chart above, real rates of return rise when valuations are expanding from low levels to high levels. But, real rates of return fall sharply when valuations have historically been greater than 23x trailing earnings and have begun to fall.
Long-term investment success depends more on the WHEN you start investing. This is clearly shown in the chart below of long-term secular full-market cycles.
Here is the critical point. The MAJORITY of the returns from investing came in just 4 of the 8 major market cycles since 1871. Every other period yielded a return that actually lost out to inflation during that time frame.
So, yes, major events do matter.
If you were unlucky enough to start investing in 1929, given life expectancies during that period, it is likely you died long before getting back to even.
For those who were about to retire heading into the turn of the century, it is unlikely they are any closer to retiring today than they were 16-years ago. Maybe that is why the number of individuals over the age of 65 still in the labor force is at its highest level on record.
The bottom line is that YOU don’t have 100+ years to invest in order to achieve those “average” long-term returns you have been repeatedly promised. Well, that is unless you have contracted “vampirism” during your recent visit to Transylvania.
Second, your “long-term” investment horizon is simply the time you have between today and when you retire. And spending a bulk of that time horizon “getting back to even” is not an investment strategy that tends to work out well.
No, Stocks Don’t Do Well During Negative Events
“Also, consider that even in recent history bad events can be associated with positive returns. 2013 was a year that included a US government shutdown causing almost a million government workers to be furloughed, a $13 billion fine for a major bank (JP Morgan), major revelations on government data collection from Edward Snowden, and an attack at the Boston Marathon. Internationally, there was turmoil in Egypt and Syria, a major typhoon in the Philippines and a terrorist attack that killed 69 people in Kenya. The US economy grew at a relatively meager rate of 2.2% and unemployment held above 7% for most of the year.
Yet in this rather bleak environment with many bad news stories the S&P 500 grew 32% for the year. It was the best return for the S&P 500 in 18 years.”
Really!
Uhm…you kind of forgot that 2013 was likely an anomaly driven by $85 billion dollars of liquidity injected each month by the Federal Reserve to offset the potential ramifications of the “fiscal cliff.”
It would have likely been a far different outcome ex-QE.
Historically speaking, stocks do NOT do well during negative events. Do events such at “Long-term Capital Management,” “Asian Contagion,” “Financial Crisis,” etc. ring any bells?
2008 Was a 30-Year Event?
“In fact, since 1928 there has been only one worse year for the S&P 500 than 2008. On average, a negative year for the S&P 500, which has occurred on average about every 3-4 years, means a decline of just under 14% on average.
It’s important to remember that 2008 was extreme, and more than double the average decline we have seen in a bad year for the market. We should consider it the sort of event we’d experience once every 30 years if history is any guide, rather than a standard bad year for the markets.“
Well, there are just a lot of things wrong with that statement.
First, as shown in the table below, average corrections, particularly when associated with recessions, tend to be far worse than 14% on average. Try closer to 30%.
Second, if 2008 was a “once-in-30-year event,” then what are we calling the near-32% decline during the “dot.com” crash just seven years prior?
Yes, Please Worry About Corrections
In all fairness, Simon is only reiterating the “buy and hold” nonsense that continues to flood the mainstream media. This is the problem that occurs when people who don’t actually manage money for a living, write commentary about how you should manage your money.
With retirement plans having a finite time span for both accumulation and distribution of assets, the time lost in“getting back to even” following a major market correction is the primary consideration.
The chart below, which shows the difference between the inflation-adjusted returns on a $100,000 investment in the S&P 500 growing at 8% annually as opposed to the impact of gains and losses in market returns over time, illustrates the difference between expectations and reality.
The reason the chart begins in 1990 is, despite analysis showing 116-year investment returns, roughly 80% of all investors today began investing. Of that 80%, roughly 80% of those began after 1995. If you don’t believe me, go ask 10 random people when they started investing in the financial markets and you will likely be surprised by what you find.
Unfortunately, most investors remain woefully behind their promised financial plans. Given current valuations, and the ongoing impact of “emotional decision making,” the outcome is not likely going to improve over the next decade or possibly two.
For investors, understanding potential returns from any given valuation point is crucial when considering putting their“savings” at risk. Risk is an important concept as it is a function of “loss”. The more risk that is taken within a portfolio, the greater the destruction of capital will be when reversions occur.
Many individuals have been led believe that investing in the financial markets is their only option for retiring. Unfortunately, they have fallen into the same trap as most pension funds which is believing market performance will make up for a “savings”shortfall.
However, the real world damage that market declines inflict on investors, and pension funds, hoping to garner annualized 8% returns to make up for the lack of savings is all too real and virtually impossible to recover from. When investors lose money in the market it is possible to regain the lost principal given enough time, however, what can never be recovered is the lost “time” between today and retirement. “Time” is extremely finite and the most precious commodity that investors have.
In the end – yes, market corrections are indeed very bad for your portfolio in the long run. However, before sticking your head in the sand, and ignoring market risk based on an article touting “long-term investing always wins,” ask yourself who really benefits?
This time is “not different.” The only difference will be what triggers the next valuation reversion when it occurs. If the last two bear markets haven’t taught you this by now, I am not sure what will. Maybe the third time will be the “charm.”
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