For every big bank going under there are 100 of little ones that did not lend money to people who were at risk to not pay it back. They are doing just fine. Does the bail out give some money to those little banks too? Nope, it's all about bailing out the irresponsible.
This is a tough situation, but in the end I think I support the decision to not bail out Wall Street.
Time to learn a hard lesson. I think we're better off in the long run.
Hey Slava, I'm interested how you see these affecting emerging markets, in the long run. I'm not really looking for any fund or stock tips, just the general idea of how emerging markets will likely react to this recession / pending depression in the USA. And why they will probably rebound harder.
I just also wanted to say, I really appreciate your input on all of this. From purely an interest standpoint (I don't have very much skin in the game), its sometimes tough to grasp the macroeconomics of these types of events and your comments really help.
__________________
"With a coach and a player, sometimes there's just so much respect there that it's boils over"
-Taylor Hall
As far as my comment about the shredder, I was serious. I have been extremely close to buying a bunch of these to give to clients with that advice...but I've never taken the final plunge on that.
I think that would be awesome! It would truly bring the point home.
"Don't read any of your statements until you are x years from retirement and then don't open them until you are in my office and we can can discuss them."
Hey Slava, I'm interested how you see these affecting emerging markets, in the long run. I'm not really looking for any fund or stock tips, just the general idea of how emerging markets will likely react to this recession / pending depression in the USA. And why they will probably rebound harder.
I just also wanted to say, I really appreciate your input on all of this. From purely an interest standpoint (I don't have very much skin in the game), its sometimes tough to grasp the macroeconomics of these types of events and your comments really help.
Well the emerging markets are an interesting play in all of this. For people of my age bracket (early 30's) I'm big on China and India in general. While China has dropped considerably this year the long-term outlook is impressive to say the least. I would consider a few ways to invest in these areas: (A) index fund into emerging markets (B) mutual fund with a track record and people on the ground.
Its an interesting dichotomy there. On one hand you have the credit issues playing out globally. This has even caused China to cut interest rates for the first time in about 6 years a couple of weeks ago and try to stimulate the markets this week. On the other hand with the price of oil and commodities in general dropping the materials for growth are affordable for these countries.
I think that the emerging markets are going to be great places to be invested in about 6 months. The US still is aout 1-2 years into the new presidents term before that gets interesting...its a slow growth story there to be sure. Just remember that foreign investment in general should make up the minority of your portfolio, no matter how large or small that portfolio is.
(This is all my personal viewpoint...just to be clear. If you want actual advice then PM me or lets have a coffee. I can't be giving broadstroke investment advice on a message board...for your best interest!!)
I think that would be awesome! It would truly bring the point home.
"Don't read any of your statements until you are x years from retirement and then don't open them until you are in my office and we can can discuss them."
I got a quote to produce some with a logo and everything on top. I thought that it was both cheeky and a good idea. I do think its a good idea...and maybe I'll still do it. I wasn't sure that the regulators would love the idea as much as me however!
Good post. Fundamentally this is absolutely right. You should also invest in a shredder so that when your quarterly or monthly statements arrive you can get rid of them before you even bother to open them.
Thats what I do with the stuff you send me.
Well truthfully , I open it and become confused about what it means, and then I put in in my "files" which eventually either gets sorted, or shreded.
__________________
"Wake up, Luigi! The only time plumbers sleep on the job is when we're working by the hour."
As far as my comment about the shredder, I was serious. I have been extremely close to buying a bunch of these to give to clients with that advice...but I've never taken the final plunge on that.
I'm pretty much like this. At the very least, I'll leave my statement for a few weeks before I open it, but sometimes it goes right into the shredder. I prefer to stick my head in the sand and trust that my advisor and the managers of my funds know what they're doing. Right now, I'd say the worst thing that you can do is move your money around or pulling it out completely, and risk missing the rebound. If your fund managers are competent, they should be smart enough to minimize the damage, and maximize the rebound. So we'll see if it pans out that way. (Not that I'll know, as my statements will be in the shredder.)
I wonder if the years past meltdown explains why cowperson has disappeared.
I hope that isnt the case ... did he leave with a statement, or simply disappear? Honestly, I miss his viewpoint.
Slava, and others, threads like this are awesome. A great way to help gain a basic understanding of what is going on.
Slava, obvously, your strategy is to buy and hold. It is a viable strategy. Given that we seem to be on the edge of economic disaster, it makes it very hard not to try and time the markets.
What were economists saying in 1929? Was the predominate advice to 'wait out this downturn, and keep holding", or was it to "buy low and grow with the market"? What happened to people that kept any investments - did those investments totally disappear into oblivion, or did they infact regain value years later? In the end, what ended the Depression? (my Social Studies from 15+ years ago is a little fuzzy)
Obviously, I bring up the Great Depression because it feels like we could be on the cusp of something THAT huge. Yikes!
Libertarian Harvard economist argues against the bailout...The US needs more people like this IMO.
Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.
Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.
The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.
The media is so sensational these days that the average person wants to stuff any cash they have in their matress, while wearing SPF 100, eating organic glutin free muffins and pondering if they'll still have a job tomorrow.
800 point swings could be avoided if people weren't connected with up to the second RSS feeds and stock tickers from their e-brokerage account. I know several people who stay at home now and invest thier parents money "day trading" with their e-trade account.
The news reports about gas hitting 2.00 a litre, are just as responsible for the oil bubble as any other real economic or real world secenario. All people see is the Sensational news report.. I can't wait to see the headlines on the news papers tomorrow, and the "LEAD STORY" on the news tonight...
The media is so sensational these days that the average person wants to stuff any cash they have in their matress, while wearing SPF 100, eating organic glutin free muffins and pondering if they'll still have a job tomorrow.
800 point swings could be avoided if people weren't connected with up to the second RSS feeds and stock tickers from their e-brokerage account. I know several people who stay at home now and invest thier parents money "day trading" with their e-trade account.
The news reports about gas hitting 2.00 a litre, are just as responsible for the oil bubble as any other real economic or real world secenario. All people see is the Sensational news report.. I can't wait to see the headlines on the news papers tomorrow, and the "LEAD STORY" on the news tonight...
Good point, agreed.
I long for the days of real news, and not 'News Entertainment'.
Add to the realestate market here. Half of the boom was just the media propelling "I better get in before its too late". Likewise with the decline.
The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.
Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.
This is kind of sickening.
That column is the best bit of information I've read about this whole mess.
I guess we will see just how bad things are. After such a huge drop in one trading session usually the next day is positive. If it goes negative again, watch out.
Any person who has investments or mutual funds, any person whose parents are retired and live off those investments got punched in the twat today. People pull back on the reigns instantly and stop spending money on everything like vacations, food, electronics, cars, businesses. Those protesting the fat cats getting a bailout on wallstreet are foolhardy because I can pretty much guarantee that they are going to be just fine with the money they have socked away. Its the people who need their jobs and lose them are the ones who are really going to suffer.
You're right fotze. To put it cynically and simply everything will be cheaper and they'll get to buy more....the same ole gang.
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