You can't push a rope

(18 Feb) Among other leadership gems that were crammed into our little shaven heads in Marine Corps Officer Candidate School was the one in the title. It suggests that a leader can't push from behind - s/he must pull from in front.

For the record - I'm proud to say I vote as an Independent, having been able to actually enroll as one while living in Alaska and registering to vote. It's an actual option there. My disclaimer, of course is that I've been working/living in the world of investing and raw capitalism for much more than half my life, so I do have certain truths I hold to be self-evident. And those revolve around the markets, economy and like that.

Those truths include the ones that, many times - when it comes to the markets - perceptions, not facts, are reality. Right now, the perceptions among many in the country are that we're at the edge of the abyss and the world will never be the same again. "Millions" are at risk, only 14 people will own homes in another couple years and everyone will be out of work - just ask that math whiz who is the Speaker of the House. Why do people have these perceptions that are so far away from the facts? Has to do with that rope statement above.

The fact is that the tone for this is primarily the fault of the national leadership. They - not just he - are saying, "worst since the Depression", "dangerous times" and other assorted scary movie dialogue. Don't these people read history? Don't they have anyone on their huge staffs who understands the markets and how they work? Have they never heard of market cycles?

Most people - regardless of education, job, gender, age, income level - don't understand these things. Shoot, even many who hold themselves out as "experts" or pundits don't understand them. So, what are they to do or think or feel when the national "leadership" is crying wolf. Not wait around to get bit, I don't believe.

Let's look at some examples of what I mean.

The spending bill, aka, stimulus, is a great place to start. Hard to get passed right away. Can't waste time debating it. Got to get it into law right away. So, it happens - it's law. Oh, says the national "leader", it's going to take some time to start to see the benefit of any of this and, in the meantime, things are sure to get worse. Oh yeah, I feel much better about the future now - not. Markets agreed - they tanked, working toward lows not seen since last November. I guess that big $13 a week didn't impress everyone after all.

The secretary of the Treasury has been working on the financial problem even when he was at the NY Fed. You'd think he would know that when you've promised a bill to deal with the biggest economic problem we have - that's actually real - you would bring some substance to the announcement. Nope. It was the equivalent of "trust me". Sorry, dude - nobody did and the markets tanked big time.

Wednesday, let's all feel good and help all those fine people who didn't really qualify for loans in the first place to make their payments for them and give $200 billion to the fine team of Freddie and Fannie to help them to do so. Why, well, the potential foreclosures could be up 81% if we don't! Oh no, not 81%!!! (As an aside - I hate to bring up facts - IF all the homes they said would actually go into foreclosure, the TOTAL of homes foreclosed, as a percentage of all the owner-occupied homes, would be 3%...I didn't forget a zero either.) That 81% referred to by the great two letter named news "service", refers to the potential increase - not even actual. So, today, the markets didn't tank - they just went into antipathy mode.

What are these people thinking or drinking? The markets are a big boys game and not one that lends itself to consensus and focus groups and group think. You need facts, You need plans. You need decisiveness.

You need actual leadership.