Growing Concerned Once Again

I've often made fun of the so-called smart money. Among other things, many of those who hold themselves out to be experts on financial matters failed to see the financial crisis coming and totally missed the boat when it came to predicting the severity of the subsequent downturn.

Nonetheless, it might be time for a reassessment.

For one thing, there are plenty of charlatans, lucky-breakers, and analytically depraved "strategists" running around Wall Street and other financial enclaves who give the appearance of being tuned in to what is going on but who are actually quite clueless.

Clearly, these individuals shouldn't be characterized as "smart" in any sense of the word except with respect to their ability to fool a great many people some of the time.

However, those who have a serious wad of cash and who like to sling it around in markets were apparently more prescient than your average Wall-Streeter when it came to anticipating the ugliness that fell upon us during 2008, according to a firm that keeps tabs on what the wealthy are up to.

More importantly, as Pragmatic Capitalism notes in "The Super Rich Are Super Pessimistic," they are reportedly growing concerned once again about where things are headed:

One of the most glaring trends in the 2008 bear market was the increasing bearishness of the super rich.  Generally thought of as more savvy investors and less susceptible to economic downturn, this group of investors proved more vulnerable than many previously thought.  As the super rich pulled out of the markets in 2008 and pulled in their purse strings the economy ground to a halt.

Data released from Spectrem Group shows that the super rich are again becoming very bearish.  Their Millionaire Investor Confidence Index plummeted to a new 2010 low and fell the most since summer of 2009.  George H. Walper, Jr., President of Spectrem Group says the decline is worrisome:

“Millionaires posted their biggest decline in investment confidence in more than a year in August, while affluent investors saw their confidence decline for a third-straight month. The millionaires’ decline is particularly troubling since it suggests millionaires, typically more sophisticated than the broader affluent population, are reverting to a bearish frame of mind.”

Source: Spectrem Group

Comments

[robert rice]

This situation has been bought on by the steady destruction of the middle class. I find it very strange that Lou Dobbs who reported on this daily has suddenly dissaperd from the news media. Reckless trade with China and allowing jobs to be sent to other countries. What would one expect other than an American economic disaster. I don't believe for one minute that the people behind these insane policys don't understand what thier doing. Give me a break. They are pulling our system down on purpose because they want America to be subject to thier global agenda.

[Bill Mcdonald]

I still love that story(apocryphal?) where Joseph P. Kennedy, Sr said that the day the shoe shine boy told him to get into stocks, that was the day he started thinking about getting out.

As good an example of smart money as I can come up with on such short notice!

[corruption kills everything]

Their not clueless on how to line their pockets through chicanery .....

No One Left to Sell CDOs To? Sell to Yourself!

Faced with increasing difficulty in selling the mortgage-backed securities that had been among their most lucrative products, the banks hit on a solution that preserved their quarterly earnings and huge bonuses: They created fake demand.

http://www.ritholtz.com/blog/2010/08/no-one-left-to-sell-cdos-to-sell-to-yourself/

[Progressive Ed]

At Incline Village, an enclave for the wealthy located on the North Shore of Lake Tahoe, CA, I noticed almost half the homes have a "For Sale" sign on the front lawn!!

[Rocky]

The millionaire wannabes in Incline Village don't understand that you won't become a millionaire by spending as if you were one already. That way lies financial ruin.

[purchase order sample]

Personally I feel that over all world's finance is travelling on the same track as it used to be from the begining. Mostly, scenrios change but the basics remain the same. Today, due to financial imbalances, rich is becoming richer day by day. On the other hand poverty rate is going very high. Middle class is in thick soup. Its becoming very difficult for them to maintain their middle standard.