Our Christmas WIsh List

As we approach the Christmas and New Year’s holidays, we’d like to take the opportunity to thank the readers of Signature Update for the many comments, suggestions, and feedback we’ve received this past year. Many readers are also clients of our practice, Signature Wealth Management, while others are simply interested in keeping abreast of the impact of various events in our economy. Regardless, we appreciate your interest and hope you find Signature Update to be insightful, useful, and interesting.

The US and global economy isn’t taking time off for the holidays, but we are. We hope you’re able to spend extra time with your loved ones and enjoy the spirit of the season.

American consumers and businesses have been humbled this year by the dramatic financial crises we’re enduring. We all expect that there’s likely more to come; but we also know that as better times return to our economy, the memories of lost jobs, falling portfolio values, and distressed housing markets will linger and encourage prudence from some of us while others will blithely return to patterns of excess. Such is the nature of man and economy. For this experience to provide long term value to our society, we must be willing to remember, without fixating, to make decisions with a greater sense of rationality than avarice and greed and to allow optimism to always win out over pessimism while remembering that either should always temper the other.

As a people, we need to become more responsive and less reactive. We need to give our hearts to a cause without losing our minds in the support of irrational ideal. We need to learn to separate the issues and objectively pay attention to both sides of an argument before weighing in with our support.

Just in case Santa Claus is one of our readers, or perhaps more likely, one of you has Santa’s ear, we thought we’d use this forum to publish our Christmas Wish List. Here are our most hoped-for gifts this year. We think you’ll understand why we’re interested in each of them:

1) Success and bi-partisan cooperation for the incoming Obama administration – Harry Reed and Nancy Pelosi will need to lay off the partisan rhetoric and Republican leadership needs to offer more support for the new president.

2) The swift passage of an economic stimulus package that includes middle-class and business tax incentives, job creation, and infra-structure investment – let Larry Kudlow help design this and we’ll all have a better Christmas in 2009.

3) A national energy policy that weans us off of foreign oil in less than 20 years, provides incentives for renewable energy development that makes sense (i.e. not corn-based ethanol), and recognizes the efficiency of nuclear fuel sources – Chief of Staff Rahm Emanuel and congressional leaders will need to exercise more forward thinking and backbone than their predecessors have evidenced to get this done – if they’ll think more about children and grandchildren’s generations than short-sighted constituencies, they’ll have a much easier time of it.

4) Open credit markets where consumers and businesses can effectively borrow for capital investment and overall liquidity – Mr.’s Bernanke, Summers, and Geitner have a lot of work to do, and the American consumer and business leadership needs to be patient and faithful.

5) An SEC Chairperson willing to ‘clean house’ and enforce the law - Mary Shapiro’s about to have the job. She’ll need more backbone and less institutional memory to get the job done, and she’ll need to aggressively prosecute the likes of Bernard Madoff and naked short-selling violators.

6) A bottom in the housing market – Jim Cramer is standing firm on June 30, 2009 as the bottom of the real estate market – is he right, or is he ‘Cramer’? Booya!

7) The swift return of the up-tick rule in short selling – Ms. Shapiro must not repeat the mistakes of her office’s past and ought to include brief history lessons in her senior staff meetings.

8) Overhaul of ‘mark to market’ accounting rules for banks and publically held corporations – valuations that reflect the long-term nature of the instruments rather than what might be garnered for them during a fire-sale is imperative – we’re sure Steve Forbes has already written code language in his Forbes Magazine editorial columns.

9) Rational thinking from Hamas leadership in Palestine as a changing of the guard takes place at about the same time as Obama’s inauguration – the leadership change expected is violently anti-Israel and well armed, posing grave threats to Israeli citizens and those governments seeking middle east peace – that may not be as long a list as many would suppose.

10) Consumer Price Index (CPI) increase of 1.5% to 2%, including energy prices, with oil at less than $50 per barrel.

Personally, I’d also like more power tools (planer, joiner, and radial arm saw), a new Corvette, and the DOW at over 14,000; but that may be asking too much, too soon.

We wish you and your family a very Merry Christmas and a Happy New Year!

Signature Update is offered by Richard Haskell Sr., Managing Director of Signature Wealth Management