With the S&P 500 up more than 60% from those dark days in March, it is becoming very easy to forget what it felt like to hold course in the face of what was clearly some very uncertain times. If you need a reminder, this video may help.

You may have already forgotten, but back then, there was an almost universal recognition that talking about risk in a "lifeboat drill" sort of way is completely different than EXPERIENCING IT.

Risk is funny that way: You can't understand it until you feel it.   More 

Upper income taxpayers have become America's meal ticket. Federal, state, and even local governments are tapping taxpayers in the top brackets to fund a laundry list of projects and services . In 2007, the top 1% of tax returns paid 40.4% of all federal individual income taxes while earning only 22.8% of adjusted gross income.

There is growing evidence that this group is reacting to the fiscal equivalent of "overfishing."  Recent studies have pointed out that many high-net-worth individuals have fled high-tax states such as New York and California.

But few people would take such a drastic step simply to get a tax break, and the federal government would take its cut either way. So it is doubtful that these tax refugees concern Congress. What should worry Washington is how tax disincentives might disrupt the economy.   More 

The other day, I was invited to give a talk to an investment club. Before my appearance, they sent me their club portfolio, making up of 20 stocks they have carefully chosen.

I took a look and was able to find out.

1. 18 out of the 20 are S&P 500 member stocks whose names appear regularly on CNBC and newspapers.
2. Only one foreign stock was among the 20. The company happened to have a big presence in Maryland where we live.   More 

As a passive investor, my use of ETFs has been confined to holding a large, highly liquid major ETF index while waiting for the wash rules to lapse. For example, if Vanguard Total Stock Market VTSMX was sold for tax-harvesting reasons, shares of Vanguard Total Stock Market ETF VTI could be purchased in portfolios to maintain proper exposure. After the wash rules expire, the mutual fund could be repurchased. Other than this option, passive low-cost index mutual funds are the preferred investment vehicle for client portfolios. Why?   More 

REP. HENRY WAXMAN (D-Calif.): And my question for you is simple: Were you wrong?

ALAN GREENSPAN: And what I'm saying to you is, yes, I found a flaw....a flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.

REP. HENRY WAXMAN: In other words, you found that your view of the world, your ideology, was not right, it was not working?

ALAN GREENSPAN: That is--precisely. No, that's precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.

The part that worries me the most about what former Fed Chairman Greenspan told to Congress was the part about the "model" not working. This is one of the brightest economists ever. This is the guy that President Bush called a "rock star." What he is saying here is that after 40 years of "considerable evidence," the model broke.   More