Tuesday, June 21, 2011

"Helicopter Men, Grounded"

"Helicopter Men" is the label hung on those unelected persons who manipulate the financial markets of our world to make everything all right. Like Ben Bernake. This class of persons is referred to in a list-serve email I received last night from Fernando Crespo, a portfolio manager with J.P.Morgan. His email links to a JP Morgan newsletter written each month by Michael Cembalest, the Chief Investment Officer for that financial firm. The latest newsletter is full of disturbing graphs and other data, but I thought the following portion of Mr. Cembalest's introductory paragraph is particularly worth posting for those of us dealing with our household budgets:

Helicopter Men, Grounded. Over the last 2 years, it has been hard to disentangle how much of the global recovery was organic, and how much was a byproduct of stimulus (monetary and fiscal). We are now going to find out how fast the world can grow on its own, relying on the private sector. Political and economic factors are bringing the era of the Helicopter Men (and not just Helicopter Ben) to an end. Markets are likely to be in for a bumpy ride as this takes place, with reduced return expectations for financial assets. How to adapt? As I said to my wife when we were discussing investments recently, my highest conviction portfolio idea may be this: let’s spend less money. . .

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