i can't say that i predicted the fall of bear stearns from $172 to $2 a share over the past year.

but then again i failed to predict the junk bond crisis of the 1990s (which took down drexel burnham lambert), the S&L collapse, or the 1987 market crash. (i was about 10 then)

but before the socialists go around high-fiving each other in fray, and exulting in the comeuppance of capitalism (which it isn't, its yet another correction) you might want to consider where your self interest lies . .. if you work for a company with a retirement plan or 401K, read on. if not, class is dismissed.

• raise your hand if you DONT know where your pension is invested. everybody's hand should be up at this time . . .
• pension funds are like giant mutual funds. and the bigger ones, like calpers (if you work for the state of california) aren't necessarily smarter. they just concentrate every more money in the hands of some $79,000 a year "manager" who gets sold on where to invest your pension. want to bet that he put NONE of it in subprime mortgages? i didn't think so.
• suppose your answer is "no he didn't" and you're lucky enough to be correct. now, do you want to bet that he completely avoid the shares of bear sterns (down 989% this year), lehman brothers (-65%), citibank (-60%), merrill lynch (-60%), or even chase (-20% for the past 12 months, but bizarrely up 10% today because the street feels they got a great deal on bear sterns)
• ok - same question on mutual funds - did your pension guy avoid any and all mutual funds which held any of the stocks of the above companies?

you can see where this is going. if you work for a responsible company (or government agency) that tries to provide for its workers, this is no time to be exulting the presumptive downfall of capitalism.

as i recall, the death of capitalism was prematurely predicted in 2001 (dotcom crash), the 1990s (junk bond crash), the 1987 crash, the S&L scandal, the 1970's (stagflation), the 1960's (vietnam era deficits) and so on and so forth.

that's not to say that this time those doomsayers won't be right. just that the odds are severely against them, and its nothing you should be rooting for unless you're convinced global warming is so imminent that you can comfortably live on a park bench.

but to come full circle and alleviate your pension benefits concerns, not that i've riled you up over them: there's a government agency that insures your benefits, just like the one that insures your bank deposits. you're not going to starve or freeze to death in your old age (unless the goverment starts printing money in excess to "monetize" the national debt, and we have venezuelan style hyper inflation)

but if you run into your pension fund manager in a wine bar somewhere this week, don't bother to ask if he was "smart enough" to avoid the subprime crisis. we already know he wasn't. but be reassured that pensions are sufficiently diversified that he wasn't 100% in bear sterns, lehman, subprime mortgages, or junk bonds, or cheating S&L's, or ethanol futures, or whatever the "hot idea du jour" is going to be next.

and buy your forlorn calpers pension fund manager a drink. he's not making very much at $79,000 a year, and he lost money the past 3 months too.