Charlie Brown

How many times has Lucy pulled the ball away just as Charlie Brown went to kick it? More than I can count, that’s for sure. He may have had a good heart, but the boy was not the brightest bulb in Peanut’s chandelier (that was likely Schroeder). We’ll never really know, of course, because the whole thing wasn’t real, just a comic strip there to amuse us.

The stock markets are many things: amusing, frustrating, even enthralling. They are most emphatically real. So when we see them drop substantially for a prolonged period of time, their entertainment value begins to wane. When our retirement accounts and individual net worth declines during severe bear markets like the two we experienced in the first decade of this new century, the luster of easy riches begins to tarnish. The first drop from 2000 into 2003 was forgiven, perhaps, by a rapid recovery. The second, which coincided with a collapse of real estate and near failure by major banks, may not be so easy to forget. Has the average investor become both older and wiser? If wiser just means more cautious then we may not see a stampede back into equities any time soon.

The Federal Reserve hopes that is not the case. They want to provide an ample supply of cheap money which will look for better returns than those currently provided by the banking system. They want you to buy stocks and houses and such other things that come under the heading of “risk assets.” Will the siren call of potential profit work once more on the American populous? Or will we, rather, distrust monetary officials both public and private and, unlike C. Brown falling for Lucy’s charming promises, refuse to take yet another kick at what may prove ephemeral? How dire would the consequences be should America become a nation of savers rather than consumers?