There is a lot to worry about these days and no shortage of individuals capitalizing on that fact. If you think the Mayans knew something about the cosmos that modern star gazers haven’t figured out there are numerous websites that will assist you in deciphering the workings of the long count. If you believe the end of the calendar will result in a pole shift – which, to my surprise, has nothing at all to do with NASCAR – there are at least 253,000 places, according to Google, you can visit on the web to understand the consequences. If you want a place to ride out the aftermath, “doomsday bunkers” returns another 356,000 results on Google. If you’re really lazy or just trying to wean yourself off the internet before the electromagnetic pulses, you can tune in to Doomsday Bunkers, a new reality show on the Discovery Channel. If the well armed paranoids profiled there aren’t enough to convince you that death would be preferable to sharing the future with this crowd, you can surf over to the National Geographic channel and find out how many cans of pork and beans you need to stockpile on Doomsday Preppers.

Or maybe your worries tend more toward the political in which case you can find an echo chamber to fit any political leaning. Worried that Obama is a socialist with an agenda to match? Glenn Beck’s got a website that will confirm your worst fears and sell you some gold in one convenient location. If that isn’t radical enough, head over to Ann Coulter’s site where you can buy her new book, Demonic, How The Liberal Mob Is Endangering America. Lean a little more to the port side of the political aisle? Worried that Romney and the Republicans will steal the election? Get yourself over to Democratic Underground or Daily Kos. No matter how you think America will end – or if you think it already has – you can find a website to back up your views.

If, on the other hand, your concerns are more about economic collapse, that search term returns over 12 million results. “Coming depression” gets you over 55 million places to visit with a wide variety of financially apocalyptic scenarios from which to choose. Worried about hyper inflation? Deflation? Whatever your preferred method of economic apocalypse, a plethora of web sites will confirm your worst fears. Financial gurus like Harry S. Dent have methods to predict the future course of the economy and products to sell that will help you avoid the worst. Just don’t ask him about his last book, The Roaring 2000s, which for some reason doesn’t get a lot of mentions on his website.  And don’t miss from the authors of Aftershock, a book about economics written by a marketing guru with just one failed company in his background. If you prefer a site with a little more credibility you can head over to Zero Hedge, which may or may not have been started by someone kicked out of the financial biz for insider trading.

Want something more mainstream? How about Paul Krugman’s book, The Return Of Depression Economics? Or, if you prefer, head over to Amazon and pick up Art Laffer’s The End of Prosperity. Or just visit the New York Times or Wall Street Journal editorial page on a daily basis and you’ll find out how one political party or the other is responsible for all that ails us, which is a long, long list from global warming denial and union busting to creeping socialism and taxmageddon. If you’re still not convinced that we are indeed headed for hell in a handbasket, just turn on the TV and tune in MSNBC or Fox News, one of which is sure to have you yelling at the screen and scaring your pets in short order.

I don’t mean to minimize the challenges facing the world right now, but is it possible, just possible that we’ve gone a little bit overboard with the doom and gloom? Is it possible that the world – economic, political or physical – is not ending and that maybe you ought to keep paying the mortgage? We’ve been in a funk for so long that the “new normal”, as PIMCO calls it, is beginning to feel a little abnormal. We’ve replaced irrational exuberance with irrational melancholy and markets reflect the mood. The utilities index, populated with highly regulated companies with few prospects for growth, trades for a higher multiple than the NASDAQ and the S&P 500. Blue chip companies are issuing bonds with yields not only less than the rate of inflation but also less than their dividend yields. McDonald’s recently issued a 7 year bond with a coupon of  1.875% while their common dividend provides a yield of 3.2%. I understand that the common stock carries more risk but is the state of the global economy such that I should give up all the potential growth of McDonald’s over the next 7 years to gain the “safety” of a bond that is a sure loser after taxes and inflation? We don’t own MCD but if my only choice is MCD bonds or MCD stock, I’d take the common and at least the possibility of a capital gain.

We all know about the potential downside risks in the global economy. China is slowing down – and probably even worse than they are telling us – and that is putting pressure on the resource economies. Australia, Brazil and the other countries that have been drafting on Chinese demand will have to find other sources of growth. Europe is in the midst of a debt crisis, a banking crisis and, unless they stop holding summits and actually do something, probably a currency crisis. The US economy is slowing – again – after only the weakest of recoveries from the 2008 crisis. And there are the things that most people don’t even know about. The stress in the global financial system is almost as bad now – worse some might argue – as it was in 2008. Greek, Spanish and Italian banks are experiencing a kind of silent run with deposits fleeing to Switzerland and Germany. The resulting imbalance is made up via the national central banks and the ECB but interbank lending has basically come to a halt. Many of our own largest – too large – banks were just downgraded last week despite the wonders of Dodd-Frank.

So, yes, there is a lot to worry about. The resolution of these many crises is almost universally expected to be negative. China will have a hard landing. Emerging markets will submerge in the wake of China’s crash. Europe’s banks will fail and the Euro will break up as they confront their own Lehman moment. The US economy will fall back into recession as the Fed dithers and the politicians go over the fiscal cliff.  It’s all negative, all the time.

I suppose things could come out that way with all these well known black swans coming home to roost but if so, it will be the most anticipated economic collapse in history. There is a positive case to be made though. China’s slowdown may convince the leadership there of the limits of government directed investment as a path to sustainable growth. It will also reduce the artificial demand for and cost of basic commodities such as food and gasoline. The Chinese slowdown should also push emerging markets to diversify their economies and reduce their dependence on natural resources. Europe is being pushed to reform rigid labor markets and reduce government intrusion into the market. And here in the US, local and state governments are being forced to become more efficient and confront the lavish costs of public pensions. The fiscal cliff may finally force the federal government to reform in positive ways as other governments, such as Canada in the 90s, have in the past. The benefits to society of organized government come with a cost and more efficient use of public funds should not be demonized. Finally, the recent actions of the Federal Reserve have started a long overdue debate about the role of monetary policy.

I know it isn’t popular to be optimistic right now. A book about our bright economic future couldn’t even get published right now much less make the best seller list. But the best seller list is a lousy place to get investment advice. One of the most popular financial advice writers of the late 70s was Howard Ruff whose book How To Prosper During the Coming Bad Years was a best seller in 1979. He followed that up with Survive and Win in the Inflationary Eighties (1981). He recently updated his first best seller by adding In the 21st Century to the title. While you ponder the significance of that contrarian nugget, you might also consider the possibility that the Mayan calendar ends where it does because they ran out of government funding.

For information on Alhambra Investment Partners’ money management services and global portfolio approach to capital preservation, Joe Calhoun can be reached at: or 786-249-3773.

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