Reality Check

OK, it's good to do a reality check now and then, just to be sure you rinse off all the media Kool Aid stains. (A quarterly review can't hurt anyone, can it?)

So, a few questions:

Are we done with the layoffs?

Are the decent jobs coming back?

Has the wave of foreclosures stopped?

Have home values really bottomed?

Is no-one upside down in their mortgage anymore?

Is the mortgage delinquency rate falling?

Is the shadow inventory of homes cleared?

Is the bankruptcy rate falling?

Are private pensions solvent?

How about public pensions?

Are the states solvent?

How about municipalities?

Are the toxic debts off the FED's books?

Are Fannie Mae and Freddie Mac out of the woods?

How about the FDIC?

And, is the wave of bank failures behind us?

Are the US automakers OK?

How about the bond market?

Is Medicare in the black?

How about Social Security?

Are banks back to lending?

Is the retail sector OK?

Is the energy picture good?

Are farmers/ranchers in the black?

Is the dollar sound?

Are the EU countries stable?

China?

Russia?

The middle east?

Heck - how about America - are WE stable?

Is wall street suddenly honest?

Is the government suddenly honest?

Is the government even under control?

Are the unfunded liabilities gone?

Are federal deficits back to a "reasonable" size?

Will Obamacare save money?

Is the media telling us the truth about anything (besides last night's low temp)?

Sorry. You know the answers. The DOW may be at 11,000 but I see no valid reason for it. If you like gambling, have at it, but I just don't see the value. The market is (allegedly) forward looking, so where's the acknowledgment of our predicament? If we're honest, America really looks like some kind of sick amalgam of Weimar Germany and Zimbabwe, with a little Soviet bureaucracy thrown in for good measure.

I've probably mentioned this book before, and if you haven't read it it's high time: "Extraordinary Popular Delusions and the Madness of Crowds." It's the first book any investor should read. Otherwise, your odds may be better in Vegas. I can suggest a few good chapters for the next revision of that classic: Union defined benefit pensions. Social Security. Tech stocks. The US Housing market and subprime lending. The Federal Reserve.

As Hitler observed: "What luck for the rulers that men do not think."