there's a lot of companies swimming naked at the beach these days

there's a lot of companies swimming naked at the beach these days

fiction
Edward w Pritchard


Warren Buffet says you can't tell who is swimming naked until the tide goes out. The tide is money, liquidity and when the Federal reserve board tightens credit, even a very little, from huge levels of expansive credit growth  all the American companies with too much leverage on borrowed money are exposed.

Confidant ambitious fast talkers have dreams. They sometimes become CEO's and everybody at their companies ride along. Ratio analysis of financial health is pooh poohed in internal meetings at businesses large and small as irrelevant and outdated thinking. Outsiders tasked to regulate things are looking out the window. Then the tide goes out so to speak. The bull market ends and guess what? The growth of the last few years was a mirage.

Watch the lawsuits, watch the allegations fly. The financial  bull market in America is teetering. Real business in America has been staggering for years, customers are tapped out or no longer in a keeping up with the Jones mood. Where will the growth come from to propel the American economy forward?

America has been nearly drowned in a flood of liquidity. Government tries to stimulate demand by providing easy money. The wealthy, the informed intelligent well situated investors profited as the stock market went up 100% from the February 2009 lows. The gap widens between rich and poor grows as the wealthy make large profits from passive investing activities.

What now America. How can our leaders pull the next rabbit out of the hat to keep America growing?

Maybe it's better to have less interference by Government in the first place. Well intentioned or not too much financial intervention into markets by government turn out badly. Distorted signals sent by government to ambitious confidant fast talking CEO's end up in aggregate hurting every body.

I have lost my faith in our leaders. Time to fend for myself I suppose.