Your Three Minutes are Up

By: John Mackenzie | Mon, Mar 22, 2004
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Once a year, our children's school hold it's annual fund-raiser to assist in providing scholarships, expand fine and performing arts, increase development and resources in both personal and material nature. This years "Big Apple Auction" was an phenomenal success. In excess of one quarter of a million dollars was raised from the three hundred plus participants.

I dread these events as my convictions manage to front run a general faith in my fellow man and woman at times and this was to be one of those times.

No one sooner was the first glass of champagne in hand than I was approached by a couple of former neighbors well aware of my recent departure from the land of echo bubbles in real estate. Several months back we'd discussed the impending end of negative real rates, the complacent froth in our locale and how it might all end.

At times it's a curse... acting upon your convictions, I don't tend towards couching the analysis developed. Its base of reference and foundation reside in an interpretation of factual data and information synthesized from as many angles and points of view as possible. Daily challenges are the norm, as it's difficult to swallow the bitter pill and best to constantly accumulate as much knowledge as possible before accepting the local's nomenclature...

Around these parts of Mid-Atlantic Florida my A.K.A.'s are plentiful: Dr. Doom, The Extremist, Mr. 29, El Depresso, and that "Guy Who Believes the World's Going to End".

Lovely, meet those head on and enjoy.

My grasp around the champagne flute began to tighten and move up the stem listening to how we had, most likely departed the real estate market $100,000.00 to soon. And how this enclave is special, significant and still a "relative bargain" compared to the North East. Oddly, enuf this couples house had recently been listed. The husband stealthily departed the conversation, as with most couples I have spoke to, the thought of renting is untenable and the "Misses" simply is not going to uproot, but instead further expand the tap roots as to become immoveable.

Having been left to fend for myself with the "Misses" I gladly continued to engage her rationale. She is an imposing woman, six feet plus, intelligent, articulate and of stout Germanic Origin. We discussed the perils surrounding South Eastern Real Estate and at times I felt I was listening to a well prepared script written by those adept at marketing Real Estate as "The" proverbial hard asset. It's difficult to argue with the age old truism: "They aren't making anymore of it". Yes, I concurred, but it is certainly subject to the cyclical nature of capital flows.

In the end we smiled, agreed to disagree and agreed to agree another day. "Why don't we compare notes in January of 2006" I suggested. My champagne now warm as a crowd had gathered to see what all the intensity was about. My counter parties stature had that affect as her
lengthy career in modeling was well deserved.

A hasty exit was beat to the Martini Luge as to avoid further topica without a cocktail in hand. It's difficult to be the guy who lives two lives. The dad, the husband and the observant black artisan of "Economics". Half way across "Central Park" I bumped into my better half and began out gassing... "I'm here to have a good time and assist the school by purchasing some art. I am not here to engage in my convictions, but relax." My wife's reply: "Honey, people watched us sell our home, they've listened to you lecture on Gold and merits and they do believe you believe what you say. What's the matter?"

I had to laugh, as it's an amazing epiphany when slapped with your conviction dead center.

She was spot on. My conclusions are what they are and although I was caught off guard looking for an escape this evening, my reputation's going to front run me no matter where I travel in these parts, so why not simply speak my mind. There's too few monikers left of the Gloom and Doom kind and in the end, I believe in the facts and my analysis and not the truths perpetrated.

This community is tight knit, straight forward and fun loving.

"Go have fun" I decided.

Walking past the rows of silent auction bid sheets, I bumped into one of the few brokers I've ever met that has both feet firmly planted in reality, a Merrill Lynch guy for years. He has his clients out of the market with one exception, they have been heavily invested in Gold up to the limits of restrictions placed by the firm on solicited orders. We met several times over the past three months to discuss just how "things" were in the real world with respect to the Broad Markets, Honest Money and just how all this might unwind. An avid reader of Richard Russell and well heeled in Dow Theory, he continues to move his clients into physical gold and seeks preservation of capital, first and foremost. A rare breed, this gentleman, and someone who has a vested interest in protecting his clients and doing the right thing. His clients are friends, family and many of the local's around these parts. He understands all too well, that the bubbles will persist until they no longer can and has taken a very defensive posture in "Honest Money". Investors should be so lucky as to have this "Thinking Investors" broker standing guard over their financial assets.

Ahhhh... Common ground, refreshing.

In this day and age, information and opinion moves very quickly.

It is difficult to propose an alternate reality, one that borders on the polar opposite of perceptions. As I wandered back into the crowd that evening, I began whittling down my conviction into a three minute sound bite, well armed with a renewed vigor and gaping smile.

This encapsulated mess of a financial condition will certainly end badly, but we do have an obligation to one another. I'll continue to wear my monikers with conviction no central banker will be able to wall paper over.

It's not easy living in the real world, but we owe it one another and to those who will follow us, to do so daily.


 

Author: John Mackenzie

John Mackenzie

John Mackenzie manages private capital.

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