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Dear Mr. Berko:

Dear P.W.:

I’m compelled to tell you that your broker is dumber than mud. He probably uses food stamps to mail fruitcake to his mother for Christmas. The two mutual funds he wants you to own were born at Merrill Lynch years ago. Suffice it to say, Merrill did a lousy job of running those funds, and I think BlackRock, which has a new manager/owner, will do just as poorly. Neither fund is worth owning. I’ll not bore you with the negative numbers except to say the past five-year performance records of both funds “sphinx.”

By the way, brokers seem to be selling a lot more mutual funds and annuities these days, probably because the 5 percent to 12 percent commission costs are significantly higher than the cost to purchase common stocks.

Now, I’m going to give you the Reader’s Digest version of the European and Asian economies. Germany, where exports account for 32 percent of economic output, is facing catastrophic recession. Russia is entering a Siberian ice age. It is facing a possible devaluation of the ruble, a severe drop in its standard of living, and even its oligarchs are suffering. England is hurting badly; the government is staring at possible deflation and might have to sell Windsor Castle, Big Ben and Parliament to fund day-to-day operations. The Italian economy is in dire straits and has had four quarters of negative growth. Italy might petition the Vatican for loans to pay government employees. And France? Well, there’s gloom throughout the country. French workers don’t work; they strike. Consequently, more than 1.3 million workers have gone out on strike to protest France’s abominable economy, which looks flat as crepes.

Eastern Europe — Hungary, Croatia, Romania, Czech Republic, etc. — is being pummeled and could capsize into chaos. Spain’s economy is so bad that the government might lease its collection of Picasso and Goya paintings to Bill Gates and Warren Buffett. Meanwhile, unemployment is so high that Madrid is fearful of mass demonstrations.

China’s economy is beginning to look like a train wreck; 31 million Chinese are unemployed, factories are closing and sales of chopsticks are down 29 percent. India is beginning to swim in red ink; its economy has overheated, businesses have over-expanded and its gross domestic product is expected to fall into negative territory this year. The Japanese economy plunged at its fastest pace in 35 years, and the government announced that the country is in a serious recession. Emperor Akihito of Japan might not get a cost of living adjustment in 2009.

Mexico’s problems are so severe and the government needs money so badly (low oil prices really hurt) that it is tripling its cocaine and cannabis exports to the United States with enormous success. The Canadian economy is so dependent on the United States that Canada has nearly been sucked dry.

Ireland is on the verge of collapse and so is Greece. Iceland has already melted, and the World Bank believes that the world’s economies will post their worst performance since the Great Depression. They expect the sharpest losses to be in East Asia, where industrial production could fall by as much as 15 percent to 18 percent in 2009.

The time to invest in Europe is when there’s blood in the streets, and things look as if they can’t get any worse. Well, I’d rather wait till blood begins to run in the gutters, because I think things can get much worse in Europe and Asia.

So, P.W., keep your eyes open, your mind clear, your cash position big, your bills paid, your spending in check and your common sense about you. And stay away from that Merrill “Lynchem” broker, who ought to be nominated to the John Thain Hall of Shame.

Please address your financial questions to Malcolm Berko, P.O. Box 1416, Boca Raton, Fla. 33429 or e-mail him at malber@comcast.net. © 2009 Creators Syndicate Inc.