Que Sera, Sera

In the world of financial crystal ball gazing the "collapse of the markets" has simply got to be the hottest thing going. The theory, in case you haven't heard, goes something like this: The baby-boomers are going to retire, and then they're going to sell their stocks and dump billions and billions of shares into the financial markets, and then the financial markets are going to collapse from the accumulated weight, and then we're all going to be destitute and eating out of garbage cans. It's inevitable, you see, and people everywhere are talking about it.

Too bad it's a bunch of bull, but even so there I was watching the Wall Street Journal Report (a fine show, by the way) and wouldn't you know it they had this professor of finance is up there and...

Maria: Professor, in your new book you predict dire things to come for investors in the years ahead. Can you explain why you think things look so bleak?

Tweedy Professor: Well, Maria, the baby-boomers are going to retire and sell their stocks and there's not going to be anybody around to buy them all.

Maria: Oh, I see. Then you think that the baby-boomers are the last generation that will ever want to own financial assets?

Tweedy Professor: Yes, that's right. After the baby-boomers retire no one will want to save and invest anymore. When that happens the financial markets will collapse and we'll all be living in poverty and despair.

Maria: Interesting... (Maria says that a lot)

Tweedy Professor: There simply won't be any money left after the markets collapse.

Maria: Sure, there's no money so there's no one to buy stocks. Interesting. Let's turn now to my other guest to get his reaction. You're an investment advisor. What are you telling your clients? Is it the end of the world?

Nattily Attired Investment Professional: No, we don't think so. (Nattily Attired Investment Professionals always say "we" instead of "I"). We've looked at the problem and we're actually quite bullish.

Maria: But you just heard what the tweedy professor said.

Nattily Attired Investment Professional: Yes, and quite frankly we think the professor has a drug problem.

Maria: Drug problem professor? Or do you think the Nattily Attired Investment Professional is being too optomistic?

Tweedy Professor: Yes

Maria: Yes what? Yes to the drug problem or yes to being overly optomistic?

Tweedy Professor: Both

Maria: Ok then, let me toss it back to you. You've heard the professor admit he has a drug problem but he still thinks the world is coming to an end. What is your response?

Nattily Attired Investment Professional: Maria, we're not going to run out of investors. Sure there'll be poverty and despair but the fact is that the rich continue to get richer - filthy rich, in fact, and when you've got that much money, well, there are only so many things you can buy. We think that going forward there will be plenty of investment opportunites for that 1% of the population.

Maria: Professor, what about that? Sure there'll be poverty and despair but there are also gonna be a lot of money in the hands of the super rich.

Tweedy Pr0fessor: First let me clarify what I said earlier Maria. Yes I use drugs but it's not a problem. I'm only chippin' and I assure you I can stop whenever I want. Now, about the whole concentration of wealth question.

Maria: Yes, professor. Let's face it, there are only so many mansions and yachts and private jets you can own before you start to get bored with it all. Won't these people still be investors?

Tweedy Professor: Well, that's a good point Maria. Sure, the super rich will continue to invest in the financial markets. But we're only talking about 1% of the population here.

Nattily Attired Investment Professional: Yes, but that 1% has 99% of the money.

Tweedy Professor: Yes, but will they be investing in the U.S. markets, especially if those markets are in decline because of the intense selling pressure brought on by this upcoming wave of retiring baby-boomers. I think you'll see them looking to overseas markets instead where the growth rates will be much higher.

Maria: Sounds pretty thin professor. Ok, Mr. Nattily Attired Investment Professional we'll let you have the last word on this subject.

Nattily Attired Investment Professional: Whether you buy or whether you sell - we still get our cut.

Maria: Well said, and I'm sure we'll want to have you both back on the show to continue this discussion. Mr. Tweedy Professor and Mr. Nattily Attired Investment Professional, thank you both for being on the show.

Tweedy Professor: Thank you Maria.

Nattily Attired Investment Professinal: Thank you.

Maria: Coming up next. The housing market - Is there a Bubble? We'll talk to a leading financial columnist to get his views on why he thinks the real estate market will collapse and we'll all be living in poverty and despair and eating out of garbage cans. That and more coming up on the Wall Street Street Journal Report. I'm Maria Bartiromo. Be sure to stay tuned.