Jim,
I move my 401K with a different time horizon in mind. When a top is just too damn obvious (to me anyways) I go from 100% S&P to 0% S&P. Each time, circumstances are different. The last 3 times (over 3 yrs.) I got completely out, I went completely back in within a month.
This time a bit more caution is required. The Russian lower house is playing hardball. It's predominantly communist and fascist. Its members smell blood and are willing to let Russia fall deeper in order that they can gain more leverage.
Afghanistan is becoming particularly thorny. The US govt. pumped up the Afghan resistance in the late 80's with weapons to fight the Soviets. When the US "commie patrol" figured the Afghanis had everything well in hand, they completely walked away. The organization that defeated USSR in that conflict were left without necessary support to establish a proper forward looking political and social infrastructure. THAT was a huge mistake on our govt's. part. Unocal moved in with a plan for an oil pipeline that would lessen dependence on Iran's position as an oil conduit. Each time a new Islamic fundamentalist group wrenched control of Afghanistan from the previous (and less extreme) group, the newbies massaged the naievity (sp?) of the sparse group of US officials that kept flimsy watch on the situation. Unocal stepped up and supported each new group on the grounds that their pet project was still safe by the word of each new controlling faction. (Unocal is mostly controlled by former, high ranking govt. officials. The pipeline was seen as a very strategic initiative) Well, as each progressively unsavory group of Islamic fundamentalists took control of the govt. and military there, Unocal continued to have nothing but dollar signs in their eyes. Then the Taliban moved in. They, of course, told Unocal what they wanted to hear. Unocal forwarded their support of the Taliban to our govt. proper. Our govt. said, "OK".
In the meantime, Saudi Arabia and the US pressured Sudan to expel that guy who claims responsibility for the dual embassy bombings (you know, what's his name). He already had close ties to Bagdad and, curiously enough, the Taliban. Well guess where he is now. Yup...Afghanistan. He basically runs the place. Now, guess where Sudan's foreign minister went immediately after the US sent missiles into Sudan and Afghanistan. Yup...Bagdad.
Unocal has scrapped the pipeline project at a loss of several billion. They had partnered themselves with a huge (US supportive) oil concern in the Middle East that also has some former US govt. officials at or close to the helm. A big bundle was dropped on the whole thing and some tooth'n'nail types on the global corporate side are extremely pissed off. I think the embassy bombings and our response are closer to what might be considered war than what we're led to believe. Wall Street is not particularly bullish when there's a prospect of a war.
As if that weren't enough...North Korea tested a missile that adds a heap of range to their arsenal today. They flew it right over Japan.
Then...Algiers (the capital of Algeria) was victimized by a bomb blast attributed to Islamic fundamentalists today. A rather powerful blast.
George Soros is targeting Hong Kong on the basis of weakness in their currency. Stan Druckenmiller (Soros' chief strategist) seemed to hint that success in shorting Hong Kong into the ground will be parlayed into a monetary assault on Japan.
I'm sure I've left out one or two things but...I've established the general idea.
I think Asia is the least of the market's worries right now. But...it's still somewhat of a worry.
Doug R |
