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03-18-2008, 03:27 PM | #16 |
Only looks like a disaster tourist
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That's not your name. That's just what your grandmother calls you.
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03-18-2008, 03:35 PM | #17 |
changed his status to single
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She did until she died in the South Tower in 2001. Insensitive jerk.
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03-18-2008, 04:36 PM | #18 | |
Read? I only know how to write.
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Quote:
How severe is this crisis? Defaults appear to be about 2%. Non-performance loans may be either 4% or 6%. Trivial? Yes. But due to spread sheet lying and money games (similar to those in Enron and encouraged by pathetic regulations by the George Jr administration), the last straw broke it. Many once regarded 'stable' entities (ie Bear Stearns) were doing what Enron did. A resulting downturn should attack the many entities that have been playing spread sheet games. This will result in job losses, significant inflation, or other problems. But then you should have been preparing for 'bad weather' before my posts were warning of it. At this point, the majority of damage to investments has probably been done. Company reports will continue to be negative. But knee jerk reactions this late in the storm are ill advised - a generalized comment that may not be valid for some entities. For example, if invested in Chrysler, then consider getting out of what has been a terrible investment for the past decade - see the product to know why. Starting maybe this summer, some good deals should be available as, for example, house prices drop enough to return to reality. IOW time now to start study or planning for what those investments will be next year. But again, learn from history. The massive spending by a wacko and lying government has only started to be felt. Deja vue Nam. Once those costs actually appear is about the same time that massive war spending finally stops. America's slow withdrawal (defeat) in 1972 Nam resulted in recession in 1976 and 1979. Don't expect investments to be as robust due to so many outstanding bills. See the next post to appreciate how large those hidden costs. We owe so much money to everyone that the dollar has dropped to $0.67. And then in the past month, it dropped another 4.5%. That is further loss on your investments and a reason why prices must increase. Economics will punish America for "financial mismanagement" (quoting an international source) by George Jr's administration. Excessive economic incentives when the economy needed to be fixed by a downturn. From the 1970s, the economy prospered by selling off American assets and by exporting. One of the most productive jobs back then was selling used American construction equipment to many other nations that did not use money games to promote (lie about) growth. For example, Caterpillar is finding almost all its growth in exporting construction equipment. And, of course, companies who only cater to the top 1% income earners should remain profitable. Good reasons explain why companies such as Sharper Image must not exist. Expect problems in public services and government spending. Government has been mortgaging itself especially with tax cuts while government spending only increased. Construction jobs created only by government pumping money (liquidity) into the economy must be reduced significantly - years from now. Massive drop in the dollar is only part of the problem. Inflation will eventually also take revenge for all that spending created by mortgaging America. What happens to a treasury bond of 3% when inflation is 1.5%? Welcome to another pending problem. Bottom line - getting out of investments is too late. Your time to get out is when others foolishly accused this poster of being so negative. Now is the time to start preparing for the many good buys. Now is the time to recognize that past history is not a good measure of better investments because some industries were fueled only by George Jr's economic mismanagement (stimulus packages). When should you have been scared? When the Economist labeled the falling brick “Housing Prices”. The problem was that obvious back then. Too late to be scared now. Last edited by tw; 03-18-2008 at 04:41 PM. |
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03-18-2008, 04:44 PM | #19 | |
Read? I only know how to write.
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Rumsfeld said "Mission Accomplished" would cost about $660 per American and would be paid for by Iraq's oil revenues. If you had any economic grasp, then you knew he was lying.
George Jr now says the war costs about $25,000 per American. From The Economist of 13 Mar 2008 entitled "Eyeing the Wages of War": Quote:
Those who only understand war as a solution (ie 'big dics') must now deny this. Remember, America did not pay for most of Desert Storm. So the resulting downturn was mild. But America has yet to pay for "Mission Accomplished". Changes imposed upon the American economy should be considered when planning your financial future. |
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03-18-2008, 04:48 PM | #20 | ||||||
Read? I only know how to write.
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Aimeecc's question was how to invest? From The Economist of 1 Mar 2008 entitled "Money for old hope: A special report on asset manaegment":
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Most people cannot invest in all 500 stocks. Now investors can buy a stock (an ETF) that, in turn, invests in all 500 S&P stocks. Invest in everything by eliminating the expensive 'good looking' professional. Get advantages of a mutual fund without the major expense - the professional. Reap higher returns by investing in an index fund. Or invest in ETFs. Some famous ETF stock symbols are SPY & QQQ. |
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03-18-2008, 07:10 PM | #21 |
changed his status to single
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I'm honestly not sure if you misunderstand or if you knowingly misrepresent what the numbers mean, but either way your ability to do so is mystifying.
Maybe you'd care to step back a moment and reread the last time we went through this issue.. IIRC you still had a couple of questions you were going to answer for us.
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03-18-2008, 08:44 PM | #22 |
to live and die in LA
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Would now be a good time to mention short-traded ETFs again? For every direction the economy heads, there are ways to increase wealth, if you have diligently saved up the resources to invest.
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03-19-2008, 12:01 AM | #23 |
Read? I only know how to write.
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Paul Volcker is a retired Federal Reserve Chairman who destroyed massive inflation buy attacking the American Standard of Living using massive interest rates. He stopped trying to fix the economy, protecting jobs, and economic stimulus. He made everyone suffer which solved economic problems.
On Charlie Rose are answers to aimeecc questions. There are no sound byte answers. These notes from his discussion are some of the best answers that aimeecc might get. Financial crisis is due to excessives in mortgage lending. Federal Reserve action raises questions. Function is to provide liquidity to the financial industry center. Now they stepped in to save Bear Stearns that was highly (excessively) leveraged. All investment banks are highly leveraged and interconnected. Federal Reserve now lends to investment banks - a major change. Is it wise? Could we have risked the demise of Bear Stearns? Unknown because all firms are so interconnected and also highly leveraged. So this is a test of a new financial system where banks are no longer the dominate center of our financial system. Investment banks are now larger, mostly unregulated, especially since SEC (ie remember Harvey Pitts) does little to no oversight. Fed Reserve was not conceived as a place to put bad assets. Now that is what has happened. (Something like 50% of the Feds budget may be tied up with questionable mortgages.) Fed is taking over bad assets from these highly leveraged investment bankers. Volcker says this is wrong in the long term. Federal Government (Treasury) did not step in because government currently has no tools. That should change. Freddie Mac, et al are government institutions intended to solve mortgage problems in times of stress. But for 1970 budget games, Freddie Mac became a big private intuition torn between whether it is a profit center or a mortgage solution organization. Fed had to step in because nobody else could (or would) - ie Freddie Mac and Sally Mae. That should change. Freddie and Sally have direct credit lines to the Treasury that were not used. All this should have been seen coming. We did not ask obvious questions because short term profits and low cost imports made everyone happy - unaware because we wanted to be. Financial situation was unsustainable. We have been consuming more than we produce for a long time made worse because foreign investment let us ignore these impending problems. Economy not too bad, especially exporters. But we have lost manufacturing capacity. If we can get through this crisis, we will have a better balance economy. Question is 1) how and 2) how long the pain, How? Confidence among asset holders is too low. Even Freddie Mac & Sally Mae should go out and buy back their own paper. Things would be worse if commercial banks were not properly capitalized. We convinced ourselves that complex financial instruments created market stability. Literally mathematical models with no basis in financial reality were used to justify absurd conclusions. Mathematicians without financial experience were making predictions that others believed. Humans got too exuberant. Having the dollar as a world currency has been good for everyone - as long as the US economy is stable. Things such as protectionism has been harmful. Off balance accounting has been harmful. Instability in America creates instability internationally. Even Swiss Franc is worth more than a dollar. US has ignored these international problems created by a dropping dollar. Dropping dollar made worse by lower interest rates and resulting inflation. Volcker specifically mentioned increasing food prices. These rates are no where near to what Volcker had to fix, but equivalent to what was starting in 1970 that created the problems he eventually fixed with 15 and 20+% interest rates. How long to fix? Business firms are strong. Problems are only in financial institutions and housing. Rest of economy is still in good shape although economy may now be in recession. Past recessions verse now - confidence has not been lost. Concern would have existed had Bear Stearns declared bankruptcy causing non-performance with third parties. Would it have created a panic? Yes or no - also called unknown. People are paying high for credit protection. When that diminishes, then stability is being restored. What we must do? Take a serious look at the entire regulatory system. Financial system is now doing excessive risk taking. Too much off-balance financial statements. Too many people getting highly compensated for taking risk without suffering from their mistakes - sitting happy in Palm Beach - including those who decide these compensation packages. Banking system does not have this problem due to proper regulation. But investment banking system has no such regulation and is doing so with better contributions to Congressmen. |
03-19-2008, 09:16 AM | #24 |
“Hypocrisy: prejudice with a halo”
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Anyone but the this most fuked up President in History in 2012! |
03-19-2008, 09:45 AM | #25 |
go ahead, abbrev. it
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SKF, SRS and others work for me.
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03-19-2008, 09:54 AM | #26 |
Super Intendent
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I am definitely not an economic or financial expert. I save each month, invest into mutual funds each month. My usual is to not think about it.
But I did stocks a few years ago. Ok, like over a decade ago. I went with 3 big companies - Intel, Johnson and Johnson, and Mellon (now Bank of New York). I invested monthly for a while, then stopped. I didn't even watch it - just let it "grow" was my thinking. Well, it never grew. I think I made a very slight profit on two, lost on one. I finally sold it all in November to put in mutual funds. So my experience is that if I wait, it will stagnate and not grow. So now I am worried that its useless in these mutual funds and I should go with something guaranteed - like a CD or money market. But those interest rates are pitiful now. |
03-19-2008, 10:08 AM | #27 |
changed his status to single
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I don't know you or your specific situation so I cannot advise you on a specific course of action for your finances. That being said, CD's are the 3rd worst choice for long term money. (cash and money market go 1st and 2nd). Long term investors belong in equity mutual funds unless they have the risk tolerance and the assets to move into the individual equity markets. If you don't want to work with a trusted advisor and don't have the time to study your options carefully, look at some asset allocation plans offered by the major fund companies.
Look for: -performance over 3,5,10 year time frames. Look for consistency, not stellar numbers. -how long has the management team been there? Are they responsible for the performance? -What was the best 12 month period the fund had? The worst? -Cost? Sales load, annual expense, waivers, etc. You're young. Pick quality investments and hold them until either YOU change fundamentally (retire, learn more, etc) or THEY change fundamentally (Management change, Prospectus change, Performance abruptly changes over 1-3 year periods.) Do not change investments based on the current state of the market. Traders trade, investors buy and hold. Both work but they require different temperments and skill sets.
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Getting knocked down is no sin, it's not getting back up that's the sin |
03-19-2008, 10:18 AM | #28 |
Super Intendent
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BTW lookout, thanks for the answers (both the long 1st one and the latest one). As I have said, I am no financial expert so I appreciate it when its in terms I understand.
Yes, I have time - both for retirement and little ones college. The funds I picked had good 3, 5, and 10 year returns. Low overhead. I didn't go with one of the huge names, but with my tried and trusty bank that at least makes the top 25 and has good reviews from Morningstar - 4 or 5 stars for all my funds from them. I like the ease at which I can access my funds, and not have to pay for trades (unlike Fidelity and others). I have 6 funds, and all but one have had a really crappy year. Of course, that can be said of the entire market. I do have a doomsday cold war mentality. Both me and my husband. Our dream is to have a large tract of land with water so when it becomes anarchy from global warming and the mismanagement of the US we have a safe haven. With clear fields of fire. And ground radar to detect any movement on our property. Some place we can stay for 20 years without ever coming out until we need to kidnap a bride for our boy. lol. |
03-19-2008, 12:47 PM | #29 | ||
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Quote:
Index funds are mutual funds that remove the expensive professional and therefore outperform other types of mutual funds. ETFs are how to invest just like an index fund usually with even higher returns. If you make 8% but pay the professional 2%, then what have you done? If you lose 4%, you still pay that up to 2% to that professional. Reality was stated bluntly by The Economist on 1 Mar 2008 entitled "Money for old hope: A special report on asset management" and quoted in Post 20 If you don't have complex tax problems. If you don't have a $million to invest. Investments that require little attention without those massive service fees. As The Economist said, "The fund-management industry has done very well - but mainly for itself" and "But whereas the clients have not always done particularly well out of the industry, the providers have prospered." Could they be any more blunt? This is an excellent time to make decisions for your future. You would pay service fees to a professional who typically underperforms the market? Welcome to mutual funds that, "persuade their clients to select their funds on the basis of past performance, even though there is little evidence to show that this is a good predictor of future success." Those who don't watch their investments are best advised to invest in indexed mutual funds without the expensive professional - without those expensive fees. Or buy a stock (called an ETF) that does same without the major expense of an industry professional - designed for investors such as aimeecc. ETFs have many names such as Spyders and Powershares. As the Economist noted, ETFs are the Wal-marts of investing. They were created for people who want higher returns and do not watch the market. Industry professional don't like these ETFs because those service fees instead appear as profits for the investor. The Economist was quite blunt about it: Quote:
Last edited by tw; 03-19-2008 at 12:53 PM. |
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03-19-2008, 01:09 PM | #30 | |
Radical Centrist
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