Welcome To The Brand New Normal

Well, here we are. Twenty years ago, if anyone had told me the world and its financial systems would look like this, I would've immediately asked them if they had any more of what they were smoking. I'm not completely surprised, though. Twenty years ago (plus one or two) I was an amateur musician, a semi-pro beer drinker, and a professional history student. Twenty years later, I am still using the history book smart skills effectively, I think. Especially now.

To give credit where credit is due, the title for this soon to be bi-weekly piece was inspired by Pimco CEO Mohammed El-Arian's May 2009 secular outlook published on the firm's website. Pimco, if you're not familiar, is an investment management colossus whose fingers, eyes, ears, and anything else sensory are glued to the global financial/economic pulse and have always had the Batman like ability to skate to where the puck is going to be. Mr. El-Arian's thesis, to crudely synthesize it in twenty words or less, is that, financially speaking, it’s a whole new ball game for all of us. That means no more Hummers. No more football field sized plasma televisions purchased with a fifty thousand dollar limit Visa platinum card. No more McMansions. Net, net, it'll be a looooooong time before Wall Street slickee boys can drink champagne with hookers in hot tubs full of money again. But, will that really be a bad thing going forward?

Ah yes, the going forward. How bad is it out there? I'm no old salt but I've been around the track enough to have an opinion. It's fairly bad. Ugly when compared to the Pax Romana consumer toga party. Again, I'm a B-league historian and the 1929-1930's similarities are eerie. The market charts sync up. The socioeconomic/political environment was the same: a corrupt, inept, do nothing, deregulate everything Republican administration, widening disconnect between the haves and have nots, the widespread democratization of equity investment where EVERYONE is a friggin' expert, especially your brother-in-law. There are some differences, specifically the Fed's quickness to pull the market liquidity trigger. But like Mark Twain said: "History doesn't always repeat, but it usually rhymes."

I plan to touch on a lot of topics related to how we got here and where I think we're going in future posts and, naturally, those posts will be opinion driven by, well, my opinions. Allow me to clarify some things upfront. I'm not a gun toting conservative. I'm not a bike riding liberal. I hate the Rush Limbaughs, the Glenn Becks, the Anne Coulters, and the other cartoon conservatives who appeal to the lowest common denominator with their racism, bile, and stupidity. I despise the limousine liberals and the Volvo democrats whose pity and guilt create handouts and enablement that seems more condescending then those who actually are condescending, not to mention their P.R. stunt activism. I've never considered the Kennedys national heroes. Based on their conduct and behavior, they might as well build a trailer park at Hyannis Port. I once took an online political quiz. I scored "libertarian". I've been to a libertarian presidential convention. Those people are insane. God help us if they get elected.

I'm certain I will write something that will piss you off. So be it. That's the beautiful thing about America. We can do that to each other and still peacefully coexist. Feel free to leave comments. I might post them. I might not. As long as it's clean (profanity is allowed though, for emphasis and in context), non-violent, and pertains to the topic, its fair game.

That being said and all things being equal, let the game begin.

-Jake Stein