18 September 2008

Nowhere But Up


Now the Russians are in a panic. It is to be expected, I suppose, since their financial institutions are fragile and new. The swashbuckling creation of the Oligarchies in the breakup of the old Soviet State represented the freeing of the gray and black economies that always coexisted with the Marxist monolith.

You can understand that they might have some functional problems. The markets are closed in Moscow today for “correction,”, and the system is clearly rattled to its sandy foundation.

It has been spectacular of late. Russian heavy bombers have deployed to Venezuela, relations with Cuba have warmed, and Russian ships are headed for the Caribbean. If I were to hazard a guess, there will be more rather than less bluster, since it is easier to blame those offshore for domestic woes. We have seen this sort of thing before, and it fills me with a little dread.

Desperate times invite desperate ac tivity, and it is tempting for autocrats to create crisis in order to divert attention from self-inflicted wounds.

Moscow is blaming all this on Wall Street, and the suddenly chastened American Masters of the Universe certainly are an attractive target. With the jitters in the Asian markets, we are in an area of mass hysteria that I have only read about in the history books.

In other times, I would expect the villagers to light the torches and swarm toward the castle. I expect that is precisely what is going to happen in November, and Mr. Bush will be remembered in the near term more as a militant version of Herbert Hoover than as the swaggering titan of the Single Superpower that he must imagine.

It really is about the economy, and we really have bee quite stupid.  have been checking the balance in my 401K daily of late, since the agreement over who owns my latest pension has been pending for some weeks. When I logged on yesterday morning, I saw that something dramatic had happened. The nest-egg had disappeared, and the date of the transfer was starkly relevant.

The conservative fund has declined by over 10% since I bought into it last year. I have contributed pre-tax dollars with monotonous regularity, and had the net effect of throwing six hundred dollars out the window each payday. They are pre-tax dollars, after all, so the practical effect is not as bad as it could be.

Still, the fact that the transfer occurred on the latest Black Monday, and the sharp decline means I will have to look under the seat cushions on the sofa for a few thousand dollars to bring things up to the agreed amount of the transfer. On the up side, it is done, and I no longer have to worry about it. I have an opportunity to elect new investments, and the ensuing losses will be smaller since there is nothing there.

Starting from zero, there is no place to go but up. I only wish I had a couple heavy bombers to send somewhere, and tell my neighbors this is all someone else's fault.

Copyright 2008 Vic Socotra
www.vicsocotra.com