The ongoing financial turmoil and financial discussion thread

[DementedReality]

Originally Posted by Table 5

honestly, this is just sad...if not surprising.

http://voices.washingtonpost.com/liv...l?hpid=topnews

the executives spent $200,000 for rooms, $150,000 for meals and $23,000 for the spa

how many people did they have in their party and for how long? seriously, thats some serious eating to spend that much!!!

[Table 5]

Originally Posted by Slava

The shorts always make me wonder a little bit...it seems sort of ridiculous to say in times like these, but the markets are usually moving upwards.

Yeah, definitely think the shorts are more of a short/mid-term option at best.

[photon]

I'm scared to ask, but what's an ETF?

[MoneyGuy]

Exchange traded fund: They're traded like stocks. There are dozens of them. They provide the general market or you can get them for various sectors. They're cheap but very volatile.

[MoneyGuy]

Originally Posted by Table 5

I think there are a few things that might not be a bad time to get out of yet, especially if you're still in the green. For some people the peace of mind of not losing money might be worth it.

Slava/Moneyguy what are your thoughts on sector-specific ETF's? Ive been looking at getting into ETFs in Oil/Gas (DIG), financials (UYG), real estate (URE), and technology (ROM).

Be prepared for extreme volatility in sector ETFs. Only put a small part of your money there, maybe no more than 8-10% for an aggressive investor into any one sector. Not a bad choice, IMO.

[photon]

Interesting! That make sense I guess, get in and out of funds more easily.. doesn't that impact the actual value of a fund though beyond the value of the assets that a fund holds?

Or I guess a fund would be traded based on those assets so not really, just seems strange. People always find new ways to hold and exchange money.

[Table 5]

Originally Posted by MoneyGuy

Be prepared for extreme volatility in sector ETFs. Only put a small part of your money there, maybe no more than 8-10% for an aggressive investor into any one sector. Not a bad choice, IMO.

I'm ok with that, because I'm fairly young and don't really need the money (knock on wood!) for the next few years anyway.

Tell me if I'm foolish, but if something is so volatile. yet safe in the fact that it's not going to go bankrupt, can't that also be a really good advantage? For example, even if a whole sector is tanking, you are almost guaranteed that it will come back up (unlike single securities which can go bankrupt) as long as you can wait a bit....and since it's so volatile, it might not be always that long. So in a way you could always hold out during the lows, and sell in the highs....ideally.

[Nancy]

Originally Posted by Table 5

That makes sense. I think I'm the type of person who can pay attention to market and a pretty big news junky, so I don't think i would necessarily hold something for 30 years without making any moves. I was just thinking of maybe diversifying into 5-6 index funds, which i think should over the long-term be a fairly safe bet.

ProShares also has some ETF SHORT indexes as well, which is sort of interesting....I'm not really sure if it's too late to short things at the moment, but is also an interesting option at times.

ProShares has a financial sectors short that I was looking at today, but I think it has been stopped or something... which would be obvious given that they have banned shorting those stocks.

The ETF market has really exploded lately. There are almost 500 of them now, and, in addition to the shorts, there are some interesting raw currency and gold plays.

I was actually looking at buying one of the two O&G short ETFs as a hedge against unemployment, but thought better of it.

[MoneyGuy]

Originally Posted by Table 5

I'm ok with that, because I'm fairly young and don't really need the money (knock on wood!) for the next few years anyway.

Tell me if I'm foolish, but if something is so volatile. yet safe in the fact that it's not going to go bankrupt, can't that also be a really good advantage? For example, even if a whole sector is tanking, you are almost guaranteed that it will come back up (unlike single securities which can go bankrupt) as long as you can wait a bit....and since it's so volatile, it might not be always that long. So in a way you could always hold out during the lows, and sell in the highs....ideally.

Yup. That's the attitude to have.

[Phanuthier]

Originally Posted by Table 5

honestly, this is just sad...if not surprising.

http://voices.washingtonpost.com/liv...l?hpid=topnews

That's just funny / sad

I bought AIG too, 100 shares this morning. I figured hey, for $3.50 its a good deal. At worst, it blows the sack and I lose $350. But for that dividend yeild and some potential of going up, its worth it.

BAC I wasn't so lucky, finally decided to get in at $28 for 50 shares, now it looks like its $20. I think I'll drop another 50 in at $20.

Originally Posted by MoneyGuy

Be prepared for extreme volatility in sector ETFs. Only put a small part of your money there, maybe no more than 8-10% for an aggressive investor into any one sector. Not a bad choice, IMO.

ETF's are something I'm looking to get into, but I'm not too sure where to buy them - funds from my bank (TD Waterhouse) ? From my (BMO) Investorline? I definately want to go in for ETF's or some sort of foreign investment into China/India, looking to go in a little more aggresively at 15-20% ... the only thing that scares me is China nationalizing companies I might own.

[Nancy]

Originally Posted by Phanuthier

That's just funny / sad

I bought AIG too, 100 shares this morning. I figured hey, for $3.50 its a good deal. At worst, it blows the sack and I lose $350. But for that dividend yeild and some potential of going up, its worth it.

BAC I wasn't so lucky, finally decided to get in at $28 for 50 shares, now it looks like its $20. I think I'll drop another 50 in at $20.


ETF's are something I'm looking to get into, but I'm not too sure where to buy them - funds from my bank (TD Waterhouse) ? From my (BMO) Investorline? I definately want to go in for ETF's or some sort of foreign investment into China/India, looking to go in a little more aggresively at 15-20% ... the only thing that scares me is China nationalizing companies I might own.

You can buy them through investorline just like a regular stock. For some of them, you may have to add the exchange qualifier to the symbol.

Here's a list of ETFs:
http://www.masterdata.com/HelpFiles/ETF_List.htm

[Bertuzzied]

Originally Posted by Phanuthier

BAC I wasn't so lucky, finally decided to get in at $28 for 50 shares, now it looks like its $20. I think I'll drop another 50 in at $20.

I was looking at it too. I will prob buy if it hits $20 and probably after Oct 10. Their share offering was at $22/share.

Bank of America Corporation today announced the pricing of its offering of $10 billion, or 455 million shares, of common stock. The transaction includes an option to the underwriters to purchase up to 68.25 million additional shares of common stock. Bank of America expects to deliver the shares of common stock on October 10, 2008.

[Incinerator]

Bank of Canada just cut the overnight rate by half a percent...now at 2.50...Prime should be 4.25% soon?

[Ronald Pagan]

Where can I buy into some Bre-X?

[Slava]

Originally Posted by Incinerator

Bank of Canada just cut the overnight rate by half a percent...now at 2.50...Prime should be 4.25% soon?

Ya, that cut puts prime at 4.25%. Very low rates...but not a lot of effect on the market thus far. I think that this will help to some extent and help get people looking at buying again though.

[Incinerator]

Originally Posted by Slava

Ya, that cut puts prime at 4.25%. Very low rates...but not a lot of effect on the market thus far. I think that this will help to some extent and help get people looking at buying again though.

for those who carry a balance on their CC, time to get a prime-based Mastercard from Capital One haha

[Bertuzzied]

Originally Posted by Incinerator

for those who carry a balance on their CC, time to get a prime-based Mastercard from Capital One haha

I wonder how many people would not qualify for that though.

I think Citi or MBNA is offering like 0% for a year on their mastecards right now.

[Incinerator]

Originally Posted by Bertuzzied

I wonder how many people would not qualify for that though.

I think Citi or MBNA is offering like 0% for a year on their mastecards right now.

That's only on Balance Transfer, the Prime + 0.9% card from Capital One applies to purchases too, I'd be on that like a fat kid on cake if I didnt have a LOC at prime already...

[Slava]

Originally Posted by Bertuzzied

I wonder how many people would not qualify for that though.

I think Citi or MBNA is offering like 0% for a year on their mastecards right now.

Well this is the elephant in the room with cutting interest rates at this point: lending has tightened to being with. So you can borrow for less, but new borrowing is getting harder as we go forward.

[Incinerator]

Originally Posted by Slava

Well this is the elephant in the room with cutting interest rates at this point: lending has tightened to being with. So you can borrow for less, but new borrowing is getting harder as we go forward.

add to that people with good credit who the lenders would favour more are generally people who are responsible about their finances.

Which means in these times of economic uncertainties, these are the same people who would tighten their belt and forego the luxuries, reducing spending and the stimulation to the economy...

So what is the point of making money cheaper to borrow for people who won't spend it?