LANDFALL 2009

Three P’s of Investing :

May set out Possibilities

Assign Probabilities

Cannot Predict events

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LANDFALL 2009

2007 Forecasts Realized

Stocks crash over 50%

Subprime Slime… historic housing crisis

Derivatives Implode – bye, bye Wall Street

Mother of All Credit Crunches GLOBAL

FOUR HORSEMEN ARRIVED

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LANDFALL 2009

CONSEQUENCES

Large brokers gone

Big Banks Bankrupt ?

Loss of Faith

Corruption Exposed

Bailouts and Stimulus

Huge Human Cost

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LANDFALL 2009

WHO FAILED?Copyrighted First Financial

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LANDFALL 2009

Who Failed ?

Management/Boards

Regulators-Auditors

Government…Policies

Academics and Theories

Analysts….Money Managers

Main StreetCopyrighted First Financial

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LANDFALL 2009

WHAT FAILED ?Copyrighted First Financial

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LANDFALL 2009

What Failed ?

Oversight Processes

Economic Methods

Structures and Systems

Accounting Measurements

Greed and Stupidity…..people’s values

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LANDFALL 2009

Immediate Concerns

Devalued US$

Hyperinflation

Extended Deep Recession?

Social Unrest….Human Costs

Protectionism = Political

Upheaval

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LANDFALL 2009

FUTURE ISSUESCopyrighted First Financial

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LANDFALL 2009

FUTURE ISSUES Population increases = no sense

Depleting resources…. Math doesn’t work

Environment vs. Economics

Geopolitical shifts----new powers?

Unknown, Unknowns

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LANDFALL 2009

NEAR TERM STRATEGY

Safety first then income

Long gold and hard assets

Plus soft commodities

Short US $ , treasuries

Short high end retail

Trident Opportunity

Special situations and structures

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LANDFALL 2009

LONG TERMCopyrighted First Financial

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LANDFALL 2009

LONG TERM

REMEMBER WE CANNOT PREDICT

HYPOTHESES AND THEORY MUST BE

RETESTED

FOLLOW SECULAR TRENDS

POPULATION GROWTH VS RESOURCES

WATCH SHIFTS IN GLOBAL LIQUIDITY

CURRENCY AND GOLD ARE TOOLS OF

EXCHANGECopyrighted First Financial

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LANDFALL 2009

A final word

There are opportunities in crisis

This too shall pass

The issues are also clear

Predictive thinking, economic

models etc must be addressed

Yet we do things as they are

hard…not easy

The torch has been passed…..

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Insights Inc. 2009

LANDFALL 2009

Copyrighted First Financial

Insights Inc. 2009