Assume crash positions

Paul Lamont (SafeHaven yesterday) gives sound tips on how to prepare for a serious financial crisis.

One of the points he makes is that in the USA, the Securities Investor Protection Corporation may have no more than $3.4 billion available to protect depositors' losses, compared with anything up to half a trillion potential losses in the current credit crisis.

Here in the UK, depositors are protected by the government, up to a point; but who knows what the government might do if seriously financially challenged.

Red screens

It all looked a bit woeful yesterday, but I stick with my prediction: the market will go up towards the end of the year, so that dealers can suck out a last-chance bonus. For perhaps slightly different reasons, Bloomberg reports a similar forecast.

A question

Do people actually want to be happy?

The name's Bond, Negative-Return Bond

Adrian Ash reports that pessimism has made bond prices soar, which in turn means they're a terrible investment for inflation-dodgers. He gives this graph:

Naturally he thinks this boosts the argument for gold, but I'd suggest that remorseless monetary inflation simply means that we need to store our excess wealth in a diversity of things. We just need to be careful not to pay too much, as the waves of excess liquidity temporarily make this or that asset bob high above its longer-term trend.

Winter is the growing season

Following my search for predictable stockmarket patterns ("Real Cycles"), Joseph Dancy analyses the phenomenon of winter season investment growth. It seems that "sell in May and go away" is still good advice. Dancy quotes Mark Hulbert:

[The research] implies that simply going to cash between May Day and Halloween will have only minor impact on long-term returns while dramatically reducing risk -- a winning combination that would show up in a much improved risk-adjusted performance.

Until everybody does it, of course. But what are the chances of that happening?

Off motif

Some music education howlers - though to me they seem inspired...

An opera is a song of bigly size.

A harp is a nude piano.

Find more here: Missouri School Music Newsletter

Picture(s) source

"Common Sense"