Kreblog

From my relatively short time as an adult I have learned:

• Americans don’t know how to invest their money (well what money they have to invest):
  • Ignoring setting up “safe/no risk/boring” emergency savings.
  • Running up high household credit card debt.
  • Buying “McMansions” with subprime loans expecting the market can never go down.
  • Mismanaging their 401Ks.
  • Putting all their retirement savings into their own company’s stock.
  • Trying to get rich flipping houses.
  • Borrowing home equity to buy into ”Dot Com” dog food delivery companies that are in the red.
  • Becoming day traders with the help of CNBC “celebrities.”
• Wall Street investors and economists with PHDs don’t know how to invest money either:
  • Paying the same company to setup a “Dot Com” IPO in one department and in another department selling market analysis that, surprise, the IPO is a “hot buy.”
  • Heavily investing in ”Dot Com” dog food delivery companies that are in the red.
  • Changing risk models to justify subprime lending.
  • Aggressively pushing subprime loans just to make a profit selling them.
  • Packaging and re-packaging subprime loans in order to make even more profits.
  • Giving bogus “AAA” ratings to unknown investments.
  • Selling the risk of unknown investments to insurance companies based on bogus ratings.
• Wall Street investors will do whatever it takes to manipulate “The Market” to increase their profits on the upside and leave others holding the bag on the downside.
• “The Market” runs not on quantifiable company earnings but unquantifiable human emotions reacting to earnings (“Stocks tumble today on news of beating market expectations”).

Lastly I’ve learned that, it is true that historically, overtime, money can be made in “The Market”… but just not at the pace most Americans, Wall Street investors, and economists with PHDs care to wait for.

Question: Is it just me or does it seem like a loosing bet to base policy on Americans, Wall Street investors, and economists with PHDs will do the right thing when it comes to investing?