Financial Conservation

"The post-op on the great crash of 2008 continued in Washington Thursday as the Joint Economic Committee (JEC) held a hearing on financial reform.

'Unfortunately, the regulatory regime that failed so terribly leading up to the financial crisis is precisely the regulatory regime we have today,' Treasury Secretary Geithner declared. 'We need comprehensive financial reform.'

There is a way to have a financial system with a 'reasonable degree of stability' and 'serves a public purpose,' Galbraith says. 'But it does require having a government which is not run by the financial sector.'

Galbraith didn't use the term 'Government Sachs,' but said 'we're not going to get where we need to get...if you have this revolving door where all the people from Wall Street go down to Washington and offer their services and basically serve their own worldview and the financial interests of their friends.'"

MED Comment: Arsonist or Firefighter? You can't be both at the same time.

Leading up to his current position, Secretary Geithner served in key economic roles such as an Under Secretary of the Treasury under Treasury Secretaries Robert Rubin and Lawrence Summers and President of the Federal Reserve Bank of New York. Clearly, Secretary Geithner was a member of the major insiders club that exercised considerable influence and who knew the real internal workings of our economy during the period of time that our severly under code financial house of cards was under construction.

Dr. Galbraith makes an essential point. It defies common sense to expect the same type of insider mindset that travels in the same tight circles with those who have heavy vested interests in maintaining the status quo to be the right choice of official who will demand -- without backing down -- the kind of transparency that will be critically necessary to restore our economic health.

Time to stop buying into this self-serving notion that only the same recurring candidates from the same clubs are available or capable of filling these positions.

Where's the real change for the better?

http://finance.yahoo.com/tech-ticker/article/375918/%22A-Gov...

Bull

Liz Ann Sonders, chief market strategist at Charles Schwab, represents the more bullish point of view saying, "It's very clear we're in the midst of a V-shaped recovery." Tech Ticker credits Ms. Sonders with keeping its viewers ahead of the curve. It goes on to say, "In October 2008 she said the recession was upon us and would be deep. Remember, this was months before the NBER's official declaration and at a time when most economists were debating whether or not a recession was in the offing. In June 2009 she said the recession was ending, if not already over, a highly controversial statement at the time."

Ms. Sonders says, "I'm on the more optimistic end of the spectrum," she says. "I'm not expecting the kind of pop in growth you'd normally see after such a big compression, but probably [growth] still above what is a very low level of expectations."

http://finance.yahoo.com/tech-ticker/article/369869/On-the-M...

Bear

Robert Prechter, founder of Elliott Wave International and author of Conquer the Crash, is on the other end of the spectrum cautioning retail investors to "stay away... for now." He was bullish near the lows in March, but now says the stock market "is in a topping area." Mr. Prechter compares the current market to those of 1966-74 or 1929-32, where massive bear rallies gave way to another "big leg down", i.e., a W-shaped recovery.

Mr. Prechter is predicting another crash in 2010 that will bring stocks below this year's lows. His word to the wise, "be patient, don't rush it" keep your money in cash and cash equivalents for now and wait out this bear market. His analysis further indicates 5 or more years before we turn the corner into real bull territory and "it'll be the buying opportunity of a lifetime."

http://finance.yahoo.com/tech-ticker/article/367008/Bob-Prec...

Ms. Sonders and Mr. Prechter are professionals who have both made, through extensive research and study of the same market history, reasonable sounding arguments for their diametrically opposing views. They represent armies of experts on both sides of the ongoing bull vs. bear debate. Whether the market as a reflection of the underlying economy will experience a W, V, U, "Square Root" or whatever shape of recovery, remains to be seen.

As emphasized in my previous posts, my personal view is that we will be stuck in a volatile environment until we have seriously tackled the underlying structural rigging problems of our economy that were decades in the making.

However, I am optimistic that, unlike before, these problems are being dragged kicking and screaming out of the shadows and into the public eye where with full recognition -- over time -- they will be resolved.

How to Solve the Dilemma: Core Asset Conservation

First, let's stop buying into this Wall Steet notion that we have to "climb the wall of worry" for the rest of our lives. There are alternatives.

As a financial planner, I specialize in the management and preservation of what are defined as Living and Legacy Core Assets. For my clients, the bull vs. bear dilemma is solved by placing these core assets in a step structure that provides, safety of principal, locked-in gains as credited and liquidity. By utilizing the indexing method, clients are able to share in the upsides of the market, but have an automatic defense system in place that eliminates the possibility of losing principal or credited gains whenever the market wave patterns turn negative.

When you know that your Living and Legacy Core Assets are safe, with non-core assets that have direct exposure to the markets, you are in a far stronger position -- financially and psychologically -- to either try and time the upswings and downswings, or just ride out any of the more severe downturns which may occur and not be forced to sell at the wrong time.

From the standpoint of timing, milestones in life, such as college tuition, an untimely death or guaranteed retirement income are totally indifferent to whatever state the economy or the markets may be in at the time they arrive.

True asset allocation is adding the guarantees of the step structure as a permanent feature to the mix of diversifying risks among the wave patterns of various assets classes in order to provide the stability you can rely on to support the milestones for yourself and those who depend on you.

"Repealing Glass-Steagall was 'obnoxious' and a bipartisan 'absurdity'...

The end result of the repeal was you have 'taxpayers subsidizing risk-taking' on Wall Street...

'It's the most anti-capitalist thing I've ever heard of in my life.'

...Glass-Steagall wasn't regulation, 'it was common sense'..."

http://finance.yahoo.com/tech-ticker/article/369201/Why-Jami...

"The numbers are bleak -- unemployment has surpassed 10 percent for the first time since 1983 -- and Warren is not surprised.

'Let's face it,' Warren said, 'This is sort of how we went about the rescue -- we rescued at the top and we left the bottom to kind of fend for itself -- and that's showing up in the unemployment numbers.'

Warren went on to explain that the report is really about the guarantees the Government made to protect banks' assets while leaving the public out to dry.

Morning Joe host Joe Scarborough suggested that it was the old 'socialize the risks, privatize the gains' scenario, but Warren took it one step further.

'The way I think of it is: they say something like 'Give me your money, investors and I'm going to Las Vegas and put it all on red 22. And if red 22 comes in -- woo! we are RICH. If red 22 doesn't come in, don't worry because the tax payers will pay you back the money you invested.'"

See post: The Cheerleaders vs. The Chicken Littles and comments re "A Jobless Recovery" --http://coreassets.savingadvice.com/2009/10/30/the-cheerleade...

http://www.huffingtonpost.com/2009/11/06/elizabeth-warren-we...

http://www.pbs.org/now/shows/546/index.html

"...upgrading the 401(k) alone won't save the nation's retirement-savings problem.

Here's why: Remember, the biggest factor in whether the 401(k) works as designed has to do with when you retire. If the market rises that year, you're fine. If you retired last year, you're toast. And the chances of your becoming a victim of this huge flaw in the 401(k) plan are pretty high. The market fell in four of the nine years since the beginning of the decade. That means anyone retiring this decade had a nearly 50% chance of leaving work in a down market. In fact, your chances of retiring into a down market are even greater than that: forced retirements spike in recessions just as the stock market is tanking.

The solution: a new type of insurance. Retirement savings, it turns out, are exactly the type of asset we need insurance for. We need insurance to protect against risks we can't predict (when the market collapses) and can't afford to recover from on our own. "People tend to meld savings and insurance in their mind, but they are not substitutes," says Nancy Altman, a former Harvard professor and the author of The Battle for Social Security. "It's fine to have a savings plan as a supplement but not as the main retirement protection for everyone." She says the best way to guarantee a replacement for people's wages in retirement is by pooling risk, and the way to do that is through insurance."

http://www.time.com/time/business/article/0,8599,1929119-5,0...

"William Black, professor at the University of Missouri-Kansas City School of Law is dumbfounded. 'We put ourselves on the hook in a completely inept way where we lose first. We lose entirely as the taxpayers.'

Black, a former top federal banking regulator, blames Treasury Secretary Timothy Geithner for negotiating such a bad deal on behalf of the American public.

His argument goes as follows:

The government was in no way obligated to lend the struggling CIT money and, in fact, initially refused to provide it bailout funds. More importantly, being the lender of last resort, the government should have guaranteed we'd be the first to get paid if CIT eventually filed Chapter 11. By failing to do so, 'it's like he [Geithner] burned billions of dollars again in government money, our money, gratuitously,' says Black."

http://finance.yahoo.com/tech-ticker/article/364593/Geithner...

The host of MSNBC's Morning Meeting is one example of an increasing number of people from across the spectrum with high-profile platforms who are stepping out, asking the hard questions and won't quit until we get some straight answers and solutions to the same unresolved systemic problems that brought us to the edge of economic meltdown.

Fortunately, because of these efforts there is a growing level of public awareness and support for getting at the root of these problems -- not just paving them over yet again as occurred with Brooksley Born who was featured in the PBS Frontline documentary, "The Warning" (see post below).

There are those cheerleading type experts with the perpetual, frozen smiles who maintain that the necessary measures have been taken to deal with the financial crisis, the economy is now showing signs of recovery, all is under control and we're back on track with the market in rally mode since March leading the way. Then there are those labeled by the smiling ones as the Chicken Littles who are speaking up and saying, not so fast, it's not quite that simple.

Several posts back I provided a link to the PBS Frontline documentary,
"The Warning." The piece focuses on a woman named Brooksley Born who was the head of the Commodity Futures Trading Commission in the mid-90s. Ms. Born courageously raised major red flags to the Clinton administration and congress about the need to regulate financial instruments known as over the counter derivatives. As the documentary points out in detail, she was quickly labeled a Chicken Little and thrown under the bus by the big boys. This lack of regulation ultimately led to the crash of the derivatives market, and helped to trigger the financial crisis.

http://www.pbs.org/wgbh/pages/frontline/warning/view/

It's interesting to note, going back to 1987, that some of the same power players and their proteges who are the stars of "The Warning" have remained in key economic positions in both the Republican and Democratic administrations that have followed to this very day.

The financial crisis literally froze the engine of our economy. Once an engine freezes up, it's not as simple as adding oil (read government stimulus racking up more taxpayer debt) and you're on your merry way. It has to be taken apart and rebuilt, which in the case of our economy will take a lot more time and digging beneath the surface than the cheerleaders are willing to admit.

Part of the process of rebuilding the engine of our economy will be to seriously question certain metrics and long-standing fashion trends in thinking that may no longer apply. For example, we continue to hear from the cheerleading experts the same old mantras chanted over and over again like the following: "A Jobless Recovery." With unemployment on the rise as the stock market rallies, this is like Wall Street sticking its big thumb -- that it has on the scales of the economy -- in the eye of Mr. and Ms. America on Main Street saying, "We're ok, you're on your own." Also, I'm trying to reconcile in my own mind how this fits with an economy that the same experts have to admit is based 70% on the consumer. If people are losing their jobs or know those who are, where's the incentive to keep the consumer engine revving at high RPMs? "The stock market is a leading indicator of the economy." Is this metric still accurate or reliable in a market where the controlling mindset has clearly had a generational shift away from the stability of long-term investing based on real productivity to one that is predominated by short-term, grab-and-run speculation that drives cycles of over-inflated "paper asset appreciation" -- think bubbles -- creating a volatile and unstable economic environment?

My personal favorite from the cheerful ones was when the latest bubble was exploding, they were broadcasting to the masses, "When your statement arrives, don't open it -- don't even go near your mailbox until we tell you the coast is clear."

The economy remains on thin ice and our margin for error is as slim as it has ever been.

In "The Warning" there is an interview with Michael Greenberger. Mr. Greenberger served as director of the Division of Trading and Markets at the Commodity Futures Trading Commission from 1997 to 1999. He currently heads the University of Maryland's Center for Health and Homeland Security and teaches the class Futures, Options and Derivatives at the University of Maryland School of Law. Following are some excerpts of that interview that was conducted on July 14, 2009:

"When I first walk in the door, Brooksley said to me, 'This is a $13 trillion market.' ... By the time in May 1998 that we actually try to do something about it, it is a $27 trillion market. By the time Congress in December of 2000 deregulates it, it's an $80 trillion market. As we sit here today, the market has dropped from above $600 trillion to $592 trillion notional value. It's dropped because of the meltdown. ...

And obviously, it went from $13 to $27 to $80 to $600 trillion because nobody's watching the market.

Brooksley had the conception that she wasn't worried about the rest of the administration. She was worried about the financial services industry, that we were effectively now going to say swaps are futures, the dirty words, and that this would meet a lot of resistance.

Because?

Because it meant that this multitrillion-dollar market would now have to be traded transparently with capital reserves, with fraud and manipulation requirements, with the regulation of intermediaries, and on organized exchanges rather than this private little gamesmanship where it was. ...

We aren't going to take it over. It's not going to be government-run, but it's got to be done transparently. Everybody needs to know what's happening. It's got to be overseen by a regulator who ensures that fraud and manipulation are not conducted within those markets. We've got to make sure that when people make commitments, they have the capital to back those commitments up.

...and we see the template -- crisis, worry, threatened reform, pull back from the crisis, 24/7 lobbying, all is forgotten.

Right now, all I can tell you is that the battle is evenly matched. You would think after everything we've been through there shouldn't be a battle; it should be understood. No, no, the financial services industry has organized itself and will pitch very, very hard for continuing to have these markets be unobserved by anybody outside of the banking system or their customers. No capital requirements, no fraud controls, no manipulation controls and no regulation of the intermediaries. It's going to be a close-fought battle."

Consider also that competitive economies around the world have had decades to send their generations to American universities and they have closely studied our innovation and formulas for success -- and, more recently, our formulas for failure. These competitors are now in a far stronger position than ever before to beat us at our own game.

The tentacles of this predicament that were carefully hidden from the general public eye have been taking hold and spreading throughout the system for decades. Naturally, those who were the architects and engineers of this deeply implanted structural rigging of taking risks with no skin in the game, what has been referred to as the "socialization of risks and privatization of gains", and who have profited greatly from their handy work, would prefer -- and will fight tooth and nail -- to essentially maintain the status quo. And as public scrutiny bears down, we, of course, are having to sit patiently and watch as the Cheerleaders put on display their standard unctuously dismissive attitudes, denial of personal responsibility and prepared spin as to how forces beyond their control brought us to the edge of economic meltdown. Not a problem, we know this movie by heart, and it won't be the last time we see it.

However, this time around, things are different. The Chicken Littles aren't going away with their feathers tucked between their legs. Public awareness is on a steady drum beat and growing. People from all sides of the political and social spectrums, from low to high-profiles, are uniting in their understanding of what and how much is at stake here. It took time to get into this mess and it will take time to reestablish ourselves in a healthier direction.

As Michael Greenberger put it, the battle is on and the template of crisis that some are counting on --worry, threatened reform, pull back from the crisis, 24/7 lobbying, all is forgotten -- is now facing challenges that are as formidable as the crisis calls for.

In any event, one thing is for certain: we cannot expect political will to take the lead until our non-partisan cultural will has first been established. This is what is meant by the old saying, "Great leaders follow."

"But I can't help thinking that both the victim and the alleged killer are casualties of a treacherous economy, which continues to batter the ordinary American while the experts proclaim recovery is upon us."

http://finance.yahoo.com/expert/article/moneyhappy/199067

"PIMCO's Bill Gross with a great monthly letter. Here are the key points:

- Over the past 30 years, paper asset prices rose 2X as much as they should have based on economic fundamentals

- This was the result of leverage

-The asset price rise in turn pumped up the economy's fundamentals (Soros's reflexivity)

-The government wants to restore the "old normal" (2007) not the 'new normal' (slower growth as asset prices return to trend)

-Therefore... The Fed will keep rates at 0% for at least 18 months into sustained 4% growth

-Next year, when the inventory restocking effect wears off, 4% will be tough

Bill Gross:

In a New Normal economy (1) almost all assets appear to be overvalued on a long-term basis, and, therefore, (2) policymakers need to maintain artificially low interest rates and supportive easing measures in order to keep economies on the 'right side of the grass.'

Let me start out by summarizing a long-standing PIMCO thesis: The U.S. and most other G-7 economies have been significantly and artificially influenced by asset price appreciation for decades. Stock and home prices went up - then consumers liquefied and spent the capital gains either by borrowing against them or selling outright. Growth, in other words, was influenced on the upside by leverage, securitization, and the belief that wealth creation was a function of asset appreciation as opposed to the production of goods and services...

My point: Asset prices are embedded not only in our psyche, but the actual growth rate of our economy. If they don't go up - economies don't do well, and when they go down, the economy can be horrid.

To some this might seem like a chicken and egg conundrum because they naturally move together... if long term profits match nominal GDP growth then theoretically stock prices should too.

Not so. What has happened is that our 'paper asset' economy has driven not only stock prices, but all asset prices higher than the economic growth required to justify them..."

"But of course, there's a reason why it's not legal. Allowing insider trading would annihilate the concept of a level playing field in the market. Altucher says hogwash. That's just an illusion. 'There's already no level playing field,' he says. This problem of insider trading is 'so widespread' retail investors are already at a disadvantage."

http://finance.yahoo.com/tech-ticker/article/361119/Legalize...

"A year after the financial collapse of 2008, indeed some firms are reigning in risky behavior.

'But, the rest of the financial industry does not warrant as much optimism,' says Leo Tilman, president of L.M. Tilman & Co. and author of 'Financial Darwinism: Create Value or Self-Destruct in a World of Risk.' 'We're seeing a lot of very similar behaviors that have led to the previous crisis.'

With a meaningful economic recovery facing an uphill battle, Tilman says it may require another bubble before serious financial reform takes hold. 'I'm thinking about the current environment. Unfortunately it's this shaky bridge over a volcano,' he says.

Meanwhile, Tilman points to three big themes:

- The timing of the next bubble will depend on the U.S. economy and the dollar.
- Economic signs point to extreme caution by mid-2010.
- Ultimately, we still need the right kind of transparency among financial institutions for true financial reform."

"Dr. Nouriel Roubini, professor of economics and international business at the Stern School of Business at NYU and chairman of RGE Monitor, is perhaps best known for his prescient predictions of the financial market collapse in 2005.

Index Universe (IU.com): You've said that you're worried we're already sowing the seeds of the next crisis. Where do you see that most directly?

Dr. Nouriel Roubini (Roubini): Well in commodities, I look at oil prices. They fell from $145 last summer, came down to $30 earlier this year and now they're back close to $80. But if I look at the fundamentals of demand and supply, demand is down to 2005 levels, supply and inventories are at all-time highs. In my view, the movement in oil prices is not fully justified by the fundamentals.

There are improving fundamentals. There is a global recovery. But that justifies oil going from $30 to maybe $50. I think the other $30 is all speculative demand feeding on it—speculators and herding behavior. Last year, when oil was at $145, that killed the global economy. I worry that oil is going to go up above $100 for reasons that have nothing to do with the fundamentals of supply and demand. Oil at $100 would have the same negative effects on the global economy as oil did at $145 last year.

Last year, when oil was at $145, the global economy was still growing. Right now it has collapsed, and is recovering. Oil pushing above $100 would have nasty, negative real trade effects and real disposable-income effects on all importing countries:U.S., Europe, Japan, China, India; all the countries that were hit by the oil shock last year. So that's an element that is in my view totally speculative, and dangerous to the global economy."

http://www.pbs.org/wgbh/pages/frontline/warning/view/

Time to start thinking Financial Conservation!

An infinite amount of time and resources are spent in making the language of conservation universal in its reach. As a result, the basic necessity of mindfully conserving and not wasting our natural resources has been firmly established. The Green Message is Everywhere. And we have seen how this message is truly effective when directed at the grassroots individual level.

It would be a small step, not a great leap, to apply this pervasive awareness of the core principles of conservation to our individual financial resources that are finite and equally important to our basic survival and quality of life on this planet. In so doing, we will provide a more reliable foundation as well as the example necessary to help ensure that current and future generations are prepared and equipped to Stay in Step with the Life Cycles.

It cannot be determined by anyone with certainty ahead of time how the timing of the markets -- up phase or down phase -- in any asset class will stack up against the timing of an individual's unalterable life cycles and the various levels of life responsibilities and obligations that kick in at each stage. Consider Core Asset Conservation whereby you first distinguish your core financial assets -- those assets necessary to keep you in step with the life cycles -- from non-core financial assets. Place core financial assets in financial vehicles that guarantee -- up front -- Safety of Principal and Locked-In Gains as achieved. Diversification of risks is a concept best applied to remaining non-core financial assets.

Granted this is not an approach suited for everyone, but neither was the much touted notion of "diversifying risks" of all of an individual's assets -- both core and non-core -- through the popular asset allocation models that lead many to believe they were protected and would have the money they were relying on to meet their various life needs as they arrived at the later stages of life. This obviously turned out not to be the case on a massive scale and a great number of people reaching across generations have been severely and, in many cases, unalterably damaged.

It is the trader/speculator mindset that created and dominates the current as well all other volatile economic environments of the past. Since we can't expect the historic profits now flowing to the savviest of the trader/speculator type to act as a disincentive to this type of behavior, it's anyone's guess as to when some kind of equilibrium will be restored to the markets. In the meantime, for financial journalist and the main stream media outlets they work for to continue telling the average investor in today's highly volatile and unstable economic environment that they are just going to have to run faster and do a better job of diversifying risks to keep up with the trader/speculators who had them "outgunned" from the start is flagrantly misleading and irresponsible.

All power and good luck to those who think they are well suited for big casino action; however, for the great many who are not so inclined or equipped and whose time and efforts for the greater good of everyone are devoted to making the real economy actually function, the playing field is not level and they remain at a distinct disadvantage.

In good faith and good conscience, more focus and attention in the mainstream media needs to be brought to this ongoing disconnect between Wall Street and Main Street.

http://finance.yahoo.com/tech-ticker/article/352636/Housing-...

http://finance.yahoo.com/tech-ticker/article/352663/The-Next...

http://finance.yahoo.com/tech-ticker/article/342659/Bernanke...

There has been for some time a disconnect between the financial markets and the real economy which they are suppose to reflect.

An infinite amount of resource and focus is given, from the grassroots level on up, to being aware of the necessity to conserve -- not waste or destroy -- our natural resources. It is a small step, not a great leap, to apply the same established principles of conservation to our financial resources that are equally necessary to support and keep us in step with the unalterable stages of life.

Consider the following:

- The financial crisis has greatly underscored the fact that economic and market forecasts are not reliable. What planning principles that are based on accommodating change can the individual look to that will compensate for this shortfall in reliability?

- How many times is it desirable or feasible in the span of a normal lifetime to rebuild life-accumulated core financial assets once you have experienced sizable losses during volatile periods in the financial markets? And how does age factor into this picture?

- What is a comprehensive alternative that will eliminate direct exposure to the uncertainties of the financial markets and provide for the safe and secure growth of the core financial assets that you depend on for such things as making a down payment on a home, paying for future college tuition or maintaining your lifestyle in retirement?

Ultimately, ethical systems (micro or macro) are built, maintained and sustained by ethical individuals. I don't see how we can get around this simple fact of life.

At the same time, new rules and regulations are clearly necessary to provide better safeguards that more accurately reflect current road and weather conditions.

In any event, it will always remain the responsibility of each and every individual to drive their vehicle under conditions and in a manner that maintains road safety for themselves and others. History has shown that when there is a lack of balance between these two factors, we cycle into phases where you get these massive pileups such as we now find ourselves in.

Through Core Asset Conservation, the individual takes back control and ownership of their future. By taking the initiative to reduce the levels of personal exposure to unnecessary risks, the individual is in a much stronger position to keep themselves and their families in step with the normal life cycles, regardless of what a constantly changing environment may put before them.

The more that follow this lead, the more stable the system.

The risk factor is shifting. Because of growing uncertainty in the market cycles and the health sciences keeping people alive longer, in order to limit their long term exposure, many employers, large and small, for some years now have instituted a shift away from the traditional defined benefit plans that provide guaranteed levels of retirement income to different forms of defined contribution plans. During the go-go period of The Big M, it went largely unnoticed by many that in this shift a large part of the risks associated with how this money was invested was being pushed from the employing entity to the individual employee.

The batting averages don't match. It is a known fact, that for many of the high-profile financial experts, a batting average of .500 is considered to be at the high end of their range of accuracy. In other words, the top people are right about 50 percent of the time and our current predicament bares this out. However, for the vast majority of people whose expertise lies elsewhere in all of the countless categories necessary to make this or any society really function, their batting average by definition must be a lot higher than .500, or they wouldn't last very long in their chosen fields. Many of what I would call the real experts invested their hard-earned life savings largely based on historical trust in a financial system that most failed to understand was morphing before their very eyes. It's reasonable to think that if this gap between batting averages was narrowed, the overall exposure to our society would be reduced accordingly.

Taking the risk out of risk. Knowing that core assets are safe and that you are not over-exposed to risk greatly helps in avoiding back-against-the-wall syndrome where you may be forced to sell out and lock-in losses out of panic or just to meet basic lifestyle needs during the more severe down cycles. By keeping your level of exposure manageable, you are essentially taking the risk out of risk by being in a more safe and secure position to ride out unexpected storms until balance in the system once again restores itself.

The real tipping point. No doubt, many of us have accomplished the goal of taking personal responsibility for the safeguard of our life savings. But the real tipping point that will take this country in a healthier direction over the long term will not be the short term massive spending plans of the system - the debate of which will be left to other forums - but a growing number of average people who are the ones really responsible for making this society function, day in and day out, realizing, once again, that as it always ends on them, it has to start with them.