Monday, August 30, 2010

The Smart Money Masturbates

For a couple of years now, I've been recommending that people cash out their 401k's. It only makes sense. Here's the logic in play.

10y returns= -10%. Future inflation+higher taxes= net loss. Why would you worry about a 10% penalty on early withdrawals when in fact you may lose 30% or more due to negative returns, inflation, and higher taxes?

More and more people are catching on. There has been 51 billion in stock market outflows during the prior 4 months. And without a food source, those sharks on Wall Street are starving. Computer driven algorithms are the only thing that trades on anemic volume.

The best part of all of this is that Wall St., those greedy bastards that have pillaged taxpayers, investors, and Main St.- are getting theirs. They can't loot you- if you don't play. Wall Street considers themselves the "smart money." We'll see. In the meantime, I have enjoyed watching Wall St. play with themselves. I can't wait for the layoff announcements.

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