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Airplanes, Automobiles and Market Crashes

24 | By Shah Gilani

By the time you’re reading this, I’ll be 30,000 feet in the air – if my plane’s not delayed further.

While that doesn’t matter to you, it does to me… if we crash.

What’s relevant about my flying today is that this morning on my way to the airport, in the back of a cab in dead slow traffic, I started thinking about airplanes and stock-market crashes.

The Dow Jones Industrial Average closed on Thursday higher than it’s ever been. In fact, it’s now well over halfway to 30,000 feet. It can cruise along comfortably and keep rising from here, for sure.

What’s worrying me this morning, besides almost missing my flight, is that, to get the U.S. and global economies to liftoff speed, the Federal Reserve has spent almost $4 trillion. (I considered writing that number out here, with all those zeros for dramatic effect, but thought, This isn’t a funny piece I’m writing – it’s serious.) And globally, central bankers have spent another, maybe, $6 trillion.

And those are lowball estimates – no joking.

Now I’m going to tell you how much our global leaders are actually spending to keep our economies going. And I’m going to tell you what that means for the market – and our wallets…

Altitude Sickness

And those are only the “on the record” numbers, on account of our being able to see them to count them to some degree. But the real numbers are probably closer (collectively) to somewhere between $16,000,000,000,000.00 and $20,000,000,000,000.00 (oops) when you consider the “off the record” “liquidity programs,” “infrastructure projects” and “government assistance programs” (some call it welfare) implemented to augment direct central bank money printing.

That’s a lot of “thrust” going down the runway.

What if it isn’t enough? What will happen if the U.S. economy stalls? What will happen if economies in Europe, Asia, and emerging and frontier markets start stalling? What if we start stalling while at the same time inflation, from all that printed money, rears its ugly head?

How safe are stocks here at this altitude?

So I get to the airport and have to check an oversized bag (that’s another $75), which necessitates me getting in line as the clock is ticking down on my departure time.

And the trying-to-be-friendly cute counter gal, who sees me perspiring, says, “Are you on a flight today?”

I looked at her and, because I wasn’t in a funny mood thinking about the market and global economies, replied, “No, I always come here to weigh my bags.”

Well, she didn’t think I was funny. So she gives me that “I can make you miss your flight if I want to look” and asks a question I’m sure is code for “Are you a terrorist?”

With a serious attitude she says, “You’re perspiring. You look nervous. Are you afraid of flying?”

“No,” I said, “I’m afraid of crashing.”

That didn’t help matters.

But, I guess she figured if I wasn’t going to crash the plane, I must not be a terrorist. So, to try and comfort a nervous flier, she says that stupid thing I’ve heard before, “You know, statistically, flying is much safer than driving – because your car can always stall out.”

I looked at her as if she was an idiot and said, “While that’s true, at least when my car stalls out I don’t fall 30,000 feet.”

And I smiled, as if to say, “I’m just kidding.”

At that point I think she was warming up to me.

Then, with a big smile, she asks me where I want to sit.

Although I wanted to say “next to you,” without missing a beat I said, “In the little black box please.”

She looked at me as if I had two heads and asked (yeah, she really asked this), “Why would you want to sit in the little black box?”

“Because,” I said, “whenever there’s a crash, that’s the only thing they ever find intact.”

And for good measure, because now she was laughing, I asked her, “What do they make that black box out of anyway, and why the hell don’t they make planes out of that stuff?”

She gave me her number… but, that’s another story.

Fast forward, past the TSA wannabe-FBI types (as if they could ever pass the IQ test), to me sitting down in the middle seat, believe it or not, between a married couple.

Their nonstop banter while I was wedging my way between them gave their status up. So I asked thoughtfully, “Would you two like to sit together?”

“No,” he said (no “thank you” or nothing). “She likes the aisle, and I like the window.” And they proceeded to keep talking over me.

Well, they’re about to close the door (hopefully all the way), so I’m going to have to e-mail this quick post to the publisher to have it over-edited and sent to you before they tell me to turn off all electronic devices.

But before I go… two things.

Actually, I only have time for one, so I’ll try and work them in together.

Because this is a long over-the-water flight and I don’t like the annoying couple on either side of me, I hope they both fall asleep so when we’re somewhere over the middle of the ocean I can shake them both vigorously and say in a terrified tone, “Hey, I guess now we’re going to find out if these seat cushions really do float!”

Like I said, I’m not afraid of this market flying.

I’m afraid of it crashing.

24 Responses to Airplanes, Automobiles and Market Crashes

    • Louis.Satter says:

      With the current application of Presidential influence commonly known (FED ) the entire investment programs as we know them are soon to expire, and the already weakened dollar will get called and when it does the entire economy will simply crash..
      should the countries that are holding our debt should decide to demand payment of the outstanding debt there will be a mass loss of our way of life. in my life time I have seen the numerous ups and downs that have occurred in the last twenty (20) years and now in retirement I worry that I’l probably be bankrupt in two years. The market has shown me that if you are careful, you even have something left over to give to your children.

      • grmagic says:

        The FED is a separate entity not under presidential control. I’m certain you want to blame Obama for everything that the FED has done but like most (all?) Republican attacks on him, yours has absolutely no merit.

  1. JAY B JACOBI says:

    If all of us would just pray sincerely and toss fear and doubt, Trust in God for real, fight for integrity plus, spend wisely —perhaps we would all fly a bit more true. Kindly JB

  2. JSmiggey says:

    Yes,the Stock Market is climbing – and it’s wings seem level … but it is SPEED that controls Altitude …….of which the loss of it – will determine the Route / Destination it will then travel.

  3. Neil Gordon says:

    Ive been reading your newsletter for months.Im about to embark on my first small stock investment in many years. Im an Ameican Picker who sells his wares and find the market for resale to be slow in my region. I appreciate the bloodhound work and effort you do and share.
    I remember travelling with my 6 yr son via plane. My analytical mind heard every sound and I worried myself sick just before takeoff. Finally the engine thrust propelled the plane where its wheels lifted and all was well. Sometimes before embarking on an investment it is the same dilemna. Yet all is well by the grace of God with a good team in place and a good strategy

  4. Edouard D'Orange says:

    Sounds to me like you’ve got that funny feeling, like me, that this market is flying higher than it should and investors, including the black pool money, is thinking that this time it’s different, that we can keep going higher because…1) there’s no place else to put money because of the lousy savings account returns, 2) investor confidence is high (AAII is almost always a contrary indicator), 3)the Federal Reserve is still supporting the economy, or is ready to step in if it falters, and 4)economic indicators still look good, like unemployment, even if there are reasons why the underlying numbers are not so good (lowest percentage of employed) or are manipulated (inflation, anyone?). Does it seem like 2007 to others, or is it just my perception?

  5. william picken says:

    Well I just signed up for Short Side Fortunes. I hope you can make me as much in profits as you made just me larf! Question is though…. how can you be living living in the Hamptons yet flying coach?

  6. Lois Poster says:

    The only bright spot in my day, and the first real chuckle in what have been tragic months! Thank you!!

  7. Chuck says:

    Nicely written, Shah 🙂

    All right, let’s suppose the market crashes, or corrects significantly. Would you rather be holding US dollars, or high-quality, world-dominating, A-rated stocks?

  8. John Birch says:

    Beautifully said son ……clearly a journo
    Didja “enjoy”…….the flight mate …and the company
    How was the date after the mercy dash home

    Time to make us rich Shah ….let her rip bud

    Cheers from down under ….back on the tarmac

    jb

  9. RUSS SMITH says:

    Hi!, Patrons Of Insights And Indictments Et Al:

    Without knowing anything about the full consequences regards the death and fall of all fiat currencies worldwide, I look forward to the ultimate outcome of all fiat currencies worldwide crashing and burning. Perhaps then the US will consider going back to Article 1; Section 10 of the US Constitution which calls for gold and silver coins (specie) only and then perhaps the world’s economies will begin again to fly right side up because the TRUTH will prevail? However, like Pilate asked of Jesus: “Truth what is that?” In talking to various people over the past couple of years, the consensus seems to be today that everyone expects prices to keep on going higher and higher endlessly and perhaps that is a contrarian’s signal to look the opposite way? Does anyone including Shah know for certain?

    RUSS S.

  10. Mike says:

    Personally, I find it real hard to beleive that a person of your wealth and stature EVER flies coach class on any airline. Business class (what the airlines used to call “First Class) is usually two seats abreast and very comfortable; that is if you can be comfortable locked inside a steel tube going six hundred miles an hour, half way to space. Nice story though; and I too am scared to death that were about to see an un-winding in the equities markets the likes of which few if any have ever seen. A fertile environment for options to be sure, and some people with the knowlege, experience, (guts) and money are going to get rich well beyond the dreams of avarice

  11. ozzie george says:

    When things get to this stage just about the only thing one can do is to joke about it. Gorgeous.
    Thanks Shah.

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