Market Commentary for the week of February 16, 2009

Def., Bank 1. Establishment for receiving, keeping, lending, or issuing, money, and making easier the exchange of funds, etc.

Def., Banking 1. The business of operating a bank

How many of us today, in the wake of the global credit crisis, truly believe in the definitions above. The fact that confidence in our social institutions has been ripped apart is testimony either to the fact that our institutions failed us or we failed to hold those institutions accountable for their mission statement.

In either case, something is drastically wrong with a moral code that can allow greed, avarice (ill intentions), leverage, and banality to infuse the most precious of trusts we place in our financial institutions to uphold a standard of equity, peace of mind and good values.

Make no mistake, the banking system is not alone in inflicting damage upon the investing public. Wall Street brokerages are equally guilty in manipulating their product offerings so as to make it appear that we need their latest toys to accumulate wealth.

And, of course, where would the global financial system be without a “willing” customer base.

A higher calling.
Today’s missive is not about ascribing guilt or blame for the financial crisis, but rather to highlight the gross disrepair of trust and confidence that the crisis engendered, and upon which it was able to sustain.

Today’s markets are inert and confused by attempts to resuscitate the flow of capital. After all, without customers no business can survive.

So how, then, to lure us back? Through innovation and new product offerings?

As with the golfer learning (or re-learning) to play the game, it always boils down to fundamentals.

I get fatigued observing all the “hotshots” making their way to investment banks and brokerages with a sense of entitlement, as if they know more, can do more than their superiors. Look, that’s the attitude any fledgling must have to make it in this world,

But the world of money is more sacred than many professions. It’s not about what we can do for ourselves, its about what we as representatives of our profession can do to help our clients achieve their objectives. The scions of our industry seem to have forgotten that mission.

Where to begin.
The makers of our crisis’ resolution must begin with fundamentals, pay heed to undeniable definitions, and sprinkle-in a little humility to go with their morning coffee.

Consider, as well, that we are only in the “infancy” of the global crisis. Typically, tectonic events such as this take years to unfold and resolve. The cyclical patterns of current market behavior indicate an economic overhang that is not going away easily. As with all bubbles, the destruction of momentum and confidence can endure and permeate, creating the need for systemic changes and innovative, non-traditional, solutions.

Therefore, whether by innovation or fundamentals, the bull will rebound. The date not-yet certain.