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David Callaway
Aug 20, 2009, 12:01 a.m. EST
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"¹ Previous Column
As Wall Street fix slips, a reminder from Enron
First Take "º
Sears about to see the hard side of the market
By David Callaway, MarketWatch
SAN FRANCISCO (MarketWatch) -- You're a wealthy health-care executive with a Swiss bank account at UBS, invested in Chinese stocks, and you're having a bad week.
Obama is coming after what meager profits your health insurance company already makes, and no amount of frantic options trading around your stock will prevent Congress from shoving health-care reform -- and a public option -- right down your throat. You don't realize it now in the hysteria, but your company will be better off in several years as reform promotes competition, and your stock is a long-term buy. For now, you're organizing "get out and shout" demonstrations at town halls and looking for Nazis. See Barney Frank take on Nazi hunter.
A British health-care union stages a demonstration in London to voice opposition to some Americans' criticism of the U.K. National Health Service.
If Obama doesn't get your career, his tax people just might just get your treasure, which until now has sat perfectly free of U.S government tariffs with the Gnomes of Zurich, whose ancestors rolled Jewish accounts for the real Nazis during the war. You never thought your Switzerland-based investment bank would cough up your name, or the names of almost 5,000 other U.S. holders of Swiss accounts. Together they held $18 billion at one point, or about $3.6 million each on average, including yours. Now you're going to be a poster boy for the "imprison the rich" campaign gathering steam in Washington, and the Internal Revenue Service is sending a picture of your house in Greenwich to the New York Post. See full story.
You might have the last laugh, however. That's because your portfolio, illegally set up to avoid Chinese rules on foreign investing, is down 20% in the past three days as stocks in Shanghai plunged. One of the recent quirks about the China market is that despite the fact that foreigners can't invest in local shares, international markets have tended to move in lockstep with it each time it has jumped or plunged in the past two years.
You saw China rock the world when the Shanghai market fell 9% in one day in February, 2007, and you know it could happen again, especially after the spectacular rally you're seen in your portfolio since the beginning of March. You wanted to take some profits and rotate back into oil, but you never got around to it, and now you've missed the best part of that rally as oil rose above $72 a barrel on Wednesday.
You're extremely nervous because you realize that September is just around the corner, and it's the traditionally the worst month of the year for stocks. You remember last year's collapse of Lehman Brothers, which housed your retirement account of auction rate securities before that market froze and collapsed. And you've noticed that despite a year of global economic pain and despair, not one real reform has occurred on Wall Street, or looks set to. You're encouraged, wrongly, that your health-care industry might also slip the Obama revolution.
You're excited by reports this week that the global recession has ended, and that the U.S. recession might have ended in June, but you've seen this false hope before. And you can just feel that stocks have one more scare in them before they can truly begin to build a new bull market. You fear it might come in September, or worse, October -- that month of legendary market crashes.
You know there are still scores of banks getting set to fail, and even the biggest ones aren't out of the woods just yet. Friday afternoons are times of great stress for you, as you await MarketWatch email alerts on which banks have been taken over that week, and you wonder how you got talked into that Southeast regional bank ETF by your broker, now missing.
Your private plane is being held in the Cayman Islands by investigators looking into your ties to golfing buddy Allen Stanford. Your bookie wants to know the status of the ten grand you bet on Tiger Woods to win the PGA last weekend. And your wife is on the other line about to confess to a five-year affair with Bernie Madoff. She has photos.
Worst of all, your beloved Philadelphia Eagles have picked up Michael Vick, and PETA is demanding you give up your season tickets.
You reach for a smoke, but your city has gone smokeless. Somehow, you remain convinced that you are not to blame.
David Callaway is editor-in-chief of MarketWatch.
- littlecapitalist | 1:15am Today1:15am 8/20/09
Sears has already missed a golden opportunity to capture new customers, and that could spell real trouble for department store icon.
1:41pm Today1:41pm 8/20/09 | Comments: 11
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