On January 26, 2008, a 30-year-old part-time entrepreneur named Mike Merrill decided to sell himself on the open market. He divided himself into 100,000 shares and set an initial public offering price of $1 a share. Each share would earn a potential return on profits he made outside of his day job as a customer service rep at a small Portland, Oregon, software company. Over the next 10 days, 12 of his friends and acquaintances bought 929 shares, and Merrill ended up with a handful of extra cash. He kept the remaining 99.1 percent of himself but promised that his shares would be nonvoting: He’d let his new stockholders decide what he should do with his life.

Meet the Man Who Sold His Fate to Investors at $1 a Share

The cult of equity is dying. Like a once bright green aspen turning to subtle shades of yellow then red in the Colorado fall, investors’ impressions of “stocks for the long run” or any run have mellowed as well. I “tweeted” last month that the souring attitude might be a generational thing: “Boomers can’t take risk. Gen X and Y believe in Facebook but not its stock. Gen Z has no money.” True enough, but my tweetering 95-character message still didn’t answer the question as to where the love or the aspen-like green went, and why it seemed to disappear so quickly. Several generations were weaned and in fact grew wealthier believing that pieces of paper representing “shares” of future profits were something more than a conditional IOU that came with risk. Hadn’t history confirmed it? Jeremy Siegel’s rather ill-timed book affirming the equity cult, published in the late 1990s, allowed for brief cyclical bear markets, but showered scorn on any heretic willing to question the inevitability of a decade-long period of upside stock market performance compared to the alternatives. Now in 2012, however, an investor can periodically compare the return of stocks for the past 10, 20 and 30 years, and find that long-term Treasury bonds have been the higher returning and obviously “safer” investment than a diversified portfolio of equities. In turn it would show that higher risk is usually, but not always, rewarded with excess return.

The problem with all of that of course is that inflation doesn’t create real wealth and it doesn’t fairly distribute its pain and benefits to labor/government/or corporate interests. Unfair though it may be, an investor should continue to expect an attempted inflationary solution in almost all developed economies over the next few years and even decades.

Gross: Cult of Equity “Dying”

If a coalition headed by New Democracy and other parties that say they're committed to the euro (and to finding a way to keep the bailout deal) wins, that government would face a huge problem. Another 10 billion in austerity cuts would bring even more Greeks into the streets. The country might indeed become ungovernable. The government might fall almost immediately. And Greece would be headed out of the euro in August anyway.

After August, I think the Greek economy sinks ever deeper in to recession, the country cannot meet even looser austerity demands, and it heads out of the euro anyway.

Why Greece is headed out of the euro

12-year old Victoria Grant explains why her homeland, Canada, and most of the world, is in debt.

Victoria Grant - Public Banking Institute

60 Minutes - Steve Kroft talks to the bank examiner whose investigation reveals the how and why of the spectacular financial collapse of Lehman Brothers, the bankruptcy that triggered the world financial crisis.

The case against Lehman Brothers

Bond king Bill Gross says it's time to get your portfolio ready for a long-period of lower market returns.

Bill Gross says it's time for investors to plan a "Great Escape"

It's time for defense, says Bill Gross, manager of the world's largest bond fund.

"Over the past 30 years, an offensively minded Federal Reserve and their global counterparts," or other central banks, "were printing money, lowering yields and bringing forward a false sense of monetary wealth," Gross wrote.
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Time to sell..

PIMCO's Gross shifts to defensive investment model

JAY: You've written that, you know, all economies are planned to some extent; this idea that there's simply a free market without government planning is not very realistic. And [incompr.] you've raised the question: but who does the planning, and for whom? Talk about that.
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Interesting video & transcript.

A Planned Economy for the 1%

And now investors want to take the next step: Negative interest rates. Last week, the group of bond traders that advises the Treasury on debt matters unanimously recommended that the Treasury allow investors to offer to pay the government for lending it money. You’d give the Treasury $10,000 now and get back $9,990 in a few months.

Investors demanding larger government deficits

Franz Herrmann, head of the German Association of Savers (BDS), has spent half a century trying to be a good investor. As a child, he filled piggy banks and, as an adolescent, he put money away in his savings account. Later came a building loan contract, in addition to 12 life insurance policies. "Money attracts money," his father liked to tell him, quoting a German saying. "I was hardwired for saving money," Hermann explains.

At 52, he says he figured out "what's going on." He'd earned money through his business selling beer steins and jewelry in Munich's city center. But he became convinced that he'd actually lost money through his savings efforts and cancelled his insurance policies, while the small interest earnings from his remaining savings accounts were "eaten up by inflation," he says. To fight back, Herrmann formed the BDS. Now he makes appearances around the country, warning of "money-destroying instruments." He's certain that saving is "state-sanctioned robbery."

Fearful Investors Stash Money in Luxury Goods