February 01, 2006

Meltdown '06

"I've put myself in a position that if the end of the world came tomorrow I'd kind of be prepared... But there may be something more important than making money. This is the first scenario I've seen where I question the survivability of mankind."

- Richard Rainwater (# 112 on the Forbes 400 list with $2.3 billion).

Rainwater was a Texas Rangers investor who has enjoyed lots of Bush family kick-backs. Check this out:

But even Rainwater is worried about where the economy is headed. So what does that tell you?

Paul B. Farrel, a MarketWatch analyst, recently asked readers what they thought would trigger an economic meldown in 2006. Here is the response:
  1. National debt: 39%. Federal and trade deficits, energy, weak currency

  2. Consumer debt: 19%. Real estate and household debt, low savings

  3. Wild-cards: 13%. Natural disasters, pandemics, tsunamis, terrorists, etc

  4. War & military defense: 11%. Also homeland insecurity and credibility

  5. Miscellaneous triggers: 6%. Hedge fund risks; derivatives; p/e ratios

  6. Social Security & pensions: 4%. Government and corporate retirees

  7. Political corruption: 4%. Pork-barrels; ethics trials; class warfare

  8. Medicare and health care: 2%. Future triggers rather than near-term

  9. Optimists: 2%. They range from hostile to contrarian to the quixotic

Read Farrell's analysis - not a pretty picture.

No comments:


Blog Archive