This banking mess is bad mojo

Posted by: mojo_jojo

This banking mess is bad mojo - 04/02/08 05:13 PM

The Feds are throwing the kitchen sink at the mix. That an we have a Fed chairman in Bernanke that is a scholar of the Great Depression. Now Congress has decided to help. We are truly fscked now. The Bear Sterns bail out was nothing more than trying to prevent a run on other financial institutions. And the other shoe has yet to drop on some very shaky hedge funds that Bear is on the hook for. So as tax payers we will be left holding the bag. And now we have Congress trying to exacerbate the problem by bailing out municipalities and stupid individuals with our tax dollars.<br><br>We have to let this thing hit bottom. There are going to be many "sucks to be you" situations that need to happen before our housing market can recover. <br><br>If nothing else, prosecute those lenders and brokers that misled their borrowers and let those that couldn't afford home ownership go back to renting. And those speculators that bought on slim margins in hopes of flipping for a profit, let them hang. "It sucks to be them" <br><br><br>Having big government try and bail this thing out is only going to prolong the pain. IMHO.<br><br>
Posted by: lanovami

Re: This banking mess is bad mojo - 04/02/08 05:16 PM

Yep yep yep. There is a time when the meddling must end. Especially if it is just throwing more money at it.<br><br>We are what we repeatedly do. -Aristotle
Posted by: Lea

Re: This banking mess is bad mojo - 04/02/08 05:21 PM

Like I told matt once, the earth just tilted on its axis ~ I'm in complete agreement. <br><br>Actually, that was when he and I discovered we both really like curling, but still . . . <br><br><br><br><br><br><br>[color:white]xx</font color=white>[color:blue]I always deserve it. Really.</font color=blue><br><br>
Posted by: polymerase

Re: This banking mess is bad mojo - 04/02/08 05:30 PM

Totally agree. I wouldn't have used the "sucks to be you" type language but to be truthful (and I really only am) the language fits. We sure haven't reached rock bottom and these band aids are just prolonging the misery. Rip the band aids off and let's see if we can move on.<br><br><blockquote><font size=1>In reply to:</font><hr><p>If nothing else, prosecute those lenders and brokers that misled their borrowers<p><hr></blockquote><p> Wishful thinking. I know you're showing your warm fuzzy side here and we appreciate it but those lenders and brokers are already gone. Prosecuting the wind in the willows would be as useful.<br><br><br><br><br><br>
Posted by: DLC

Re: This banking mess is bad mojo - 04/02/08 05:31 PM

Well one thing this illustrates is , you can rarely leave businesses to "police" themselves. Too many greedy SOBs out there... <br>anyone who proposes deregulation or no regulation ... look at this mess.<br><br>and this isn't the first of this Administration... remember Enron ?<br><br>David (OFI)
Posted by: Lea

Re: This banking mess is bad mojo - 04/02/08 05:35 PM

If we're gonna bail out these idiots, then they have to agree to real regulations just like the banks did after the Depression. Duh. Like that'll ever happen, at least in the prevailing atmosphere. On the other hand, if the gov just let's 'em drop like flies . . . yep. Works for me. Let 'em drop like flies.<br><br><br><br><br><br><br>[color:white]xx</font color=white>[color:blue]I always deserve it. Really.</font color=blue><br><br>
Posted by: mojo_jojo

Re: This banking mess is bad mojo - 04/02/08 05:38 PM

I spent the day in a board meeting with some financial dudes that are pretty heavy hitters in NYC that know alot more than me. I wasn't surprised by much that they had to say. But the gist was what I referenced earlier. They were very adamant however, concerning going after the bad apples. You said that they are likely gone. That may be true, but that is a remedy of the market correcting itself. The less than scrupulous are shod early on in a melt down. <br><br><br>
Posted by: mojo_jojo

Re: This banking mess is bad mojo - 04/02/08 05:39 PM

This mess transcends political stripes David.<br><br>
Posted by: mojo_jojo

Re: This banking mess is bad mojo - 04/02/08 05:56 PM

The problem isn't with what we know as traditional banking. I have banking friends that are weathering this storm quite well. There exists a shadow banking industry in the derivative and hedge fund markets that are so intricately complex that few understand them. The evolution of these markets didn't really get a head of steam until the last several years. Asset and mortgage backed securities sold as "bond funds" are a relatively new thing. The real problem exists in the valuation of these securities. No one seems to know what exposure to failure that there is in these markets. <br><br>
Posted by: polymerase

Re: This banking mess is bad mojo - 04/02/08 06:12 PM

<blockquote><font size=1>In reply to:</font><hr><p>No one seems to know what exposure to failure that there is in these markets. <p><hr></blockquote><p> That is what really amazes me. Someone, maybe a half dozen people, deciding yes or no on a buy in on say a 40 billion dollar loan in an afternoon meeting and they have no clue how much risk is involved. That there is a real risk the 40 billion can turn into 40 million. Christmas bonus money is all that is left, in the blink of an eye.<br><br><br><br><br>
Posted by: Shooshie

Re: This banking mess is bad mojo - 04/02/08 07:39 PM

Last week I pulled 50% of our portfolio out of the funds and stocks we were in, and put it into European and Asian investments. In three days, the spread between what I had before and what I changed to was already $5000. My American investments have taken a turn upward now, but the spread is still broadening in favor of the foreign investments. I may go 100% Euro-Asian, but so far what's left of my patriotism keeps me from it. I think at some point I'm going to have to put my family first, and hold on to our future. I just don't know what that point is, or how much I want to lose before making that final switch. If this current upturn does not last, I'm may to have to do it. I really am afraid that the dollar is going to tank. I've watched the value of some funds drop 30% in four months, with no sign of letting up. The Euro-Asian funds have been the highest performing (by a long shot) available in our annuities and IRA's, and that's been consistent for most of the past 10 years. Now it's ridiculously better. <br><br>At any time in the past, drops like this spelled value for me. That means we could acquire more units per purchasing dollar. This time I'm afraid that there may be no rebound, or it may be significantly delayed, and our losses may be difficult to recover from. <br><br>What are you guys doing? Are you staying the course so that your purchased units can grow more rapidly? Or are you switching to funds with dramatically more valuable growth percentages? Do you think the dollar is going to hold its own? If so, why? How can the dollar keep any value when we've essentially counterfeited several trillion? Do the old ways of accounting simply no longer matter? Can we now mint unlimited amounts of dollars in the form of interest bearing debts, and not adversely affect the value of existing dollars? Unless we're living in an Alice-Through-The-Looking-Glass world, it HAS to make a difference. Only in a world where a king says "the dollar shall remain the most valuable coin in the realm!" can that happen, and in spite of Dubya's unlimited dictatorial powers, that's one he still can't be the master of. Why? Because value is ALWAYS in relation to something else. Value is a relative measurement. <br><br>Let's say there are 100 popsickle sticks in the world, and no chance that anyone will ever make another, and you are using them to measure the value of blue feathers, the mode of currency world-wide. Someone breeds a flock of birds -- a whole plantation of birds -- that shed blue feathers 10 times a year. There are piles and piles and piles of blue feathers. Mountains of them. But at any time, they are all together worth 100 popsickle sticks, for that is a value that cannot change. There will never be another popsickle stick made. Ever. (all the trees were cut down to make room for blue-feathered bird plantations.) A king could say that each feather is worth a popsickle stick, but people would know that it's not true. They may maintain the ruse for a generation, but some day the reckoning would come. <br><br>Anyway... I'd really like to know how you all are managing your investments. I feel completely inadequate to be doing this, and I would not make a change but for this fear that the reckoning of blue feathers to popsickle sticks is near! <br><br>Shooshie<br><br><br><br><br><br>[color:green]Pictures and things</font color=green>
Posted by: DLC

Re: This banking mess is bad mojo - 04/02/08 07:48 PM

Yes it does..... but the business failures and bailouts tend to pile up on GOP watches...<br><br>Remember the massive S&L bailout of the 1980's ... Ronnie's watch.<br>Enron, Tyco, and this mess GWs watch... <br>I don't remember any bailouts under Clinton... if there were, enlighten me.<br><br>David (OFI)
Posted by: DLC

Re: This banking mess is bad mojo - 04/02/08 07:51 PM

Well I'm not for bailing any of the bad business people out and that includes individuals who bought 3 X the house they could afford** or needed...<br><br>damm I had to scrimp and save for my first down payment... make you conservative with $, and not stupid to overextend yourself...<br><br>** course that should be decided on individual cases.<br>No easy answers that's for sure.<br><br>It would hurt the economy if they'd reel in the blood sucking oil companies... they hurt all businesses, esp truckers... etc... <br><br>they're increasing the inflationary indexes... and for what so some oil exec can buy a 5th or 6th $1 million house ?? or boat , or plane ? while others fall trying to get the basic necessities and feed their families ! <br><br>I tell you what... set a gallon of gas at $2.50 and anything they charge over that the Govt charges the oil companies the difference and it goes into the general tax fund and is used to lower everybody else's tax burden... I guarantee tomorrow.. the price of gas will be $2.49 !! <br><br>David (OFI)
Posted by: Llewelyn

Re: This banking mess is bad mojo - 04/02/08 08:36 PM

is that $2.50 before or after the (approx) 46.8 cents tax per gallon?<br><br>I used to think it was terrible that life was unfair. Then I thought what if life were fair and all of the terrible things that happen came because we really deserved them? Now I take comfort in the general unfairness and hostility of the universe.
Posted by: DLC

Re: This banking mess is bad mojo - 04/03/08 03:11 AM

before..... <br>most of the tax on gas is the state tax in most states... Federal tax is either 18 or 22/ gallon... I forget which...<br><br>I'm not big on overregulation, but the gas costs is tied to everything...<br>we regulate utilities (gas and electric), so why not this source of energy ??<br>doesn't make sense.<br><br>David (OFI)
Posted by: mojo_jojo

Re: This banking mess is bad mojo - 04/03/08 04:37 AM

Personally I have roughly 30% of my work 401k in international equities. I would have to look over my account activity to nail down when I did this, but I'm thinking its been about three years now. <br><br>As I mentioned earlier, I had the opportunity to listen to some investment folks yesterday. They are with a firm that handles the investments for the non-profit group that I participate with. They were there to give us our annual update on our investments performance and to revisit the investment guidelines that we passed as a board back in 1999. Our guidance back then was pretty conservative and we have been happy with annualized growth of roughly 5% since 1999. <br><br>Anyhow, as an aside to the business at hand we quizzed these guys on the current state of financial affairs and where we might want to place our personal investment money. This was all discussed at lunch and the three gave three very different answers. One said to ride it out. Equities are at attractive prices, and when this market finally bottoms out, there will be strong growth for the next few years. Next advice was relating what he had done personally. That is he moved the majority to money market funds. He is nervous that the bottom could be prolonged and deep. But he is six years from retirement age. Lastly, and this blew me away. The third guy said he pulled everything out of equities two years ago and invested in undeveloped commercial property in small to medium sized markets. Like Albany, Poughkeepsie and Newburgh. Strong growth is still happening in that region of our state. But that would be way too unknown for someone like me. Bottom line is that there is no crystal ball. Invest in what you know to the best of one's ability. Pretty big crap shoot right now. especially for those that are at or nearing retirement age.<br><br>
Posted by: Llewelyn

Re: This banking mess is bad mojo - 04/03/08 05:00 AM

I think it's both, the cheaper is gas, the more pricy is diesel.<br><br>Also how do you factor in the value of the dollar? Look at the price of a barrel in Euro's or some of the middle eastern currencies (like where we get our oil from). The major factor in cost at the pump is the value of the dollar last year to this year.<br><br>I used to think it was terrible that life was unfair. Then I thought what if life were fair and all of the terrible things that happen came because we really deserved them? Now I take comfort in the general unfairness and hostility of the universe.
Posted by: SgtBaxter

Re: This banking mess is bad mojo - 04/03/08 05:25 AM

<blockquote><font size=1>In reply to:</font><hr><p>we regulate utilities (gas and electric)<p><hr></blockquote><p>Maryland doesn't, and Pennsylvania won't starting next year I believe. :P<br><br>I've seen our electric bill go from about $65 a month to $300. That's using all flourescent lights, and new energy efficient washer/dryer. I honestly don't know how I can save any more energy, short of burning a campfire for heat and cooking, and killing rabbits for food so I don't need the refrigerator. <br><br>Last month, the wife's parents electric bill was $750. That's more than my house payment!<br><br>Idiots in the state house got a wild idea 10-15 years ago that deregulation would stimulate competition and lower prices. Guess they weren't so smart. People in this state aren't so smart either, they keep voting them back in. ;)<br><br><br>Hey I'm an F'n Jerk!
Posted by: DLC

Re: This banking mess is bad mojo - 04/03/08 05:28 AM

Good point the declining $ hurts on imports too.<br><br>but with the Utilities, there are Commissions that deal with the details and they decide what's reasonable profit and what's gouging... so why not do that with the oil companies ??<br>we're definitely being gouged.. esp. when the oil companies are reporting record profits. The "free market" is NOT working here because there are no alternatives and I believe that they all charge high because they know no one will stop them... and the customer is litereally over a barrel... an oil barrel. They're not stupid... just exceedingly greedy.<br><br>It would be different if this weren't a necessity.. and the price effects everything we do & use, including food and medical needs - other necessities. <br><br>David (OFI)
Posted by: DLC

Re: This banking mess is bad mojo - 04/03/08 05:33 AM

Hey Sarge !<br><br>"Maryland doesn't, and Pennsylvania won't starting next year I believe. :P<br>I've seen our electric bill go from about $65 a month to $300. "<br><br>Thanks for proving my point !! <br><br><br>they did the same crap here in GA about 10-12 years ago and our gas bills went from about $50 to $150 or $200... some market competition !!<br>I think they conspire to set the rates and there are minor variations but they're ALL high. <br><br>same with the oil companies...<br><br><br>David (OFI)
Posted by: SgtBaxter

Re: This banking mess is bad mojo - 04/03/08 06:21 AM

<blockquote><font size=1>In reply to:</font><hr><p>I believe that they all charge high because they know no one will stop them...<p><hr></blockquote><p>Well the price of oil is a complex thing, it's not just them charging what they want, it's the entire futures market. They're pricing stuff on what they think will happen months down the road. Problem is, when that doesn't actually happen, as seems the case lately, then shouldn't there be some recourse? <br><br>I don't know how or even if these folks are regulated in any way. Maybe if the noose was tightened on them for a change, and they started getting axed for making lousy forecasts we'd see a change.<br><br>Meanwhile I'm seeing several stations here with $3.50 regular and $4 premium. <br><br>Time to go kick Matt in the nuts ;)<br><br><br>Hey I'm an F'n Jerk!
Posted by: Shooshie

Re: This banking mess is bad mojo - 04/03/08 06:39 AM

30%, eh? Well, I think for now I'll stay with 50/50. Then I'm at least positioned to take advantage of prosperity in either market, even if I'm also exposed to failure in either. EuroPacific is not going to fail any time soon. Our other stuff isn't going to fail, either, but the dollar might, and the value of everything might tank for a while. If nothing else, that will leave me poised to buy up bargains with my EuroPacific funds before they recover. It's all such a crap shoot, as you say. Retirement? Heck, I'm still trying to figure out what I'm going to do for a career! <br><br>While some may relish playing this investment game, I'd much prefer that we all just agree to take care of the elderly -- meaning I wouldn't have to play the game. I want to make music, not choose stocks daily. I'm no good at stocks. I'm good at music. Why can't I do what I'm good at, and let someone else do the stocks? Answer: Because fund managers suck more often than not. For example: I put $15,000 in some funds nearly 20 years ago, and now they are worth $8000. Even in the dot-com 90's, they never got above the original purchase price. Why do I leave them there? I don't know. Because I hate fooling with losers? Because I pretend they're not mine? More likely as a reminder to tend to the flock. If you leave them for the "pro's," the pro's will get your money, and you won't. <br><br>Sure wish my crystal ball had an investment module to plug into it. <br><br>Shoosh<br><br><br><br>[color:green]Pictures and things</font color=green>
Posted by: DLC

Re: This banking mess is bad mojo - 04/03/08 07:47 AM

"Time to go kick Matt in the nuts ;)"<br><br>I have a much better idea... <br><br>let The gas stations charge you and me (and others in here who have been Bush critics from the beginning) the Clinton era price of $1.50 a gallon and put the excess on Matt's account !! <br><br>That's kinda like the action you mentioned !<br><br>David (OFI)
Posted by: mojo_jojo

Re: This banking mess is bad mojo - 04/03/08 11:50 AM

Hey, you think you have made some market gaff's. You're talking to the guy that bought Apple stock at $14 and sold it at $8. <br><br>
Posted by: Shooshie

Re: This banking mess is bad mojo - 04/03/08 04:43 PM

<blockquote><font size=1>In reply to:</font><hr><p>Hey, you think you have made some market gaff's. You're talking to the guy that bought Apple stock at $14 and sold it at $8. <p><hr></blockquote><p>They need an emoticon for "laughing & crying at the same time." That sounds like what I would do. Except I made an even worse mistake. I never bought Apple stock at all. All these Apple zillionaires around this forum drive me crazy!!! Had I invested in Apple early on and kept it, it would be paying for all my computers and pretty much my entire tech budget, with enough left over for growth. <br><br>Shoosh<br><br><br><br><br><br><br>[color:green]Pictures and things</font color=green>
Posted by: electricron

Re: This banking mess is bad mojo - 04/04/08 01:29 AM

I had to sell all my TXU stock because of the buyout. <br>Put all that cash into bonds.<br>Kept the rest of the 401K as it was.<br><br>While stocks usually do much better than bonds, the market had reached an all time high, and i Figure it will stagnate for a while. For the first three months this year, the bonds outperformed the stocks. ;)<br><br>I expect stocks will rebound. The economy may not be growing fast, but it's not shrinking either. <br><br>By the way, TXU did very well the last few years, which probably is why it was so attractive to Texas Pacific Group, Kohlberg Kravis Roberts, and Goldman Sachs. <br> <br><br><br><br><br><br><br>
Posted by: SgtBaxter

Re: This banking mess is bad mojo - 04/04/08 10:31 AM

<blockquote><font size=1>In reply to:</font><hr><p>I expect stocks will rebound. The economy may not be growing fast, but it's not shrinking either.<p><hr></blockquote><p>Everything rebounds, it's just a matter of how much and when.<br><br>What I wonder is how analysts can be so out of touch with how much and when. Just today I read an article in WSJ saying "we may already be in recession". Well, working in a plant that manufactures packaging and such, I can tell you quite confidently we've been in one for at least 4 months, and during Jan and Feb business was quite sparse. I'd have to disagree with you about the economy not shrinking, it shrunk!<br><br>However it's amazing how quickly things can turn around. Suddenly in the last 2 weeks it's been crazy insane. Maybe the turnaround is starting, at least we can hope so.<br><br><br>Hey I'm an F'n Jerk!