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The economy continues to unravel, but our financial picture if we keep our jobs is stable. This is primarily because most of the money was moved out of the market in the middle of the crash. A percentage was moved back in in parts while the DOW was below 7,000, although this may have been wise, it may have been foolish. Of our retirement assets, they straddle stocks with about a 50% position. The DOW is now trading around 8,000.

Our overall economic position is up 6% for the quarter (24% nnualized!) but this is in large part because of back pay owed to both of us that was realized this quarter rather than due to any investing acumen. The real threat to FIRE at this point is the lack of available investment vehicles which will get some real rate of return. Inflation seems probable, and corporate growth will undoutably be diminished for many more quarters. so we are looking at several (many?) years of no obvious growth vehicles. A good trader could undoubtably do well in this situation, but that is very luck driven.

We now have a 5% of total assets in gold as a possible inflation hedge. Of course, gold is at a high at this time, so may already have priced in a good amount of potential future inflation. This position may not really be a strong one because of this reason.

The future of the assets for the next few quarters looks good merely because there is much more back pay from years of work which will show up in the accounts in upcoming quarters. However, it is nice to see a graph which reflects a "bounce" after severe losses, especially against a backdrop of a stock market which still fell heavily this quarter despite its recent comeback.

Paying off the house in the upcoming quarter seems a certainty to reduce forced cash outflow with a guaranteed rate of return, which would be a good buffer against either of us losing our jobs in the cash flow department.

It is not clear if the market as a whole will crash heavily ala 29, or go into a rebound mode and make up for some of its losses to come out around 10,000 or so. For this reason straddling the stock market with retirement assets seems like a rational course of action in the hopes of getting better future price points and of partially avoiding the possible heavy crashes which may come if any of these economic plans on taxpayers coin do not pan out. Of course, this will miss out on the possible leveling gains. My suspicion is that first quarter numbers, combined with rising defaults on commercial properties, combined with Congress taking a lot of heat for bailing out banks will lead to a further round of bank failures and further economic downturn.

However extreme uncertainty dictates a "halfway" approach.

Our cash position as a portion of assets is at a record level (within records) compared to any time except mid 2005 when we were saving aggressively to buy a car with cash.
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