2008 Financial Thread

[Kiwon]

Let's get 2008 started off right by setting up a dedicated thread for financial tips and helps for capitalist pig Packer Rats.

2007 was a pretty good year for many sectors with real estate being the most notable exception. Personally I had a couple of growth mutual funds that did quite well (28% and 17%) which makes me :D Even better is the fact that these two particular funds are dedicated for the kids' future college expenses.

As the 4th quarter of 2007 indicated, it will probably be harder to match the gains of 2007 in 2008.

So, wise PR friends, where should we look to make money in 2008?

Sector, mutual fund and individual stock suggestions for research would be much appreciated.

[LL2]

2008 was pretty good for us as well. Our mutual funds returned a 32% avg. The year before we did 22%. My goal is 20% or better a year.I'm thinking about switching to ETF's this year.

[MJZiggy]

I think getting a job might be a good place to start... :?

[Kiwon]

Anyone have some info on companies in the following areas:

Eco-friendly caskets

http://www.usatoday.com/money/industries/environment/2007-12-26-ecoburial_N.htm

Unmanned aircraft manufacturers

http://apnews.myway.com/article/20080101/D8TTB3O00.html

Also, what's the news with the XMSR and SIRI merger? Is there any set timeframe for its approval/disapproval by the government?

[Freak Out]

Oil crossed $100 again and gold was up damn near $25 bucks an ounce!

[Freak Out]

Boeing and Ford have teamed up to produce some pretty amazing UAV's.

http://finance.google.com/finance?q=Boeing&ie=UTF-8&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&sa=N&tab=we

http://finance.google.com/finance?q=NYSE%3AF

Here is another interesting player.

http://www.avinc.com/

http://finance.google.com/finance?q=aerovironment&ie=UTF-8&oe=utf-8&rls=org.mozilla:en-US:official&client=firefox-a&um=1&sa=N&tab=we

[Kiwon]

Good links, Super Freak.

UAVs have proven their worth and the market will continue to mature as they expand into civilian uses. Definitely a growth market.

AVAV looks like an interesting company. Small market cap, currently profitable with a backlog of orders, and expecting a 20-25% income growth over 2007.

Nice tip. "Kam-sa-ham-ni-da" as we say in Korean (Thank you).

[Freak Out]

Good links, Super Freak.

UAVs have proven their worth and the market will continue to mature as they expand into civilian uses. Definitely a growth market.

AVAV looks like an interesting company. Small market cap, currently profitable with a backlog of orders, and expecting a 20-25% income growth over 2007.

Nice tip. "Kam-sa-ham-ni-da" as we say in Korean (Thank you).

No worries Kiwon....I've always been a big fan of Boeing and Ford and bought into AeroVironment after seeing a tech write up about them and doing some research.

The prideful American in me looks at the Ford price as a great bargain.

[Bretsky]

http://www.247wallst.com/2007/12/ten-stocks-that.html

For the risky investors I found this article very interesting; anybody have any views on these little guys ?

[Partial]

I don't think Charter or AMD are going to do anything noteworthy.

[Bretsky]

I don't think Charter or AMD are going to do anything noteworthy.

I'd have a hard time putting money into CharterCrap

ETrade intrigues me though. They seem like a company that will come back in the next couple years.

[Kiwon]

http://www.247wallst.com/2007/12/ten-stocks-that.html

For the risky investors I found this article very interesting; anybody have any views on these little guys ?

I am very familiar with PALM, SIRI, and your favorite, CHTR.

CHTR is the riskiest because of its debt load but......it increased 4X in 2007 and then fell back to earth again. I made some money with it but got out too early, way early in fact but who could have guessed it would have gone to $4.73?

The potential is there if the industry picks up as a whole. Hopefully the NFL Network and the cable companies can learn how to live together which would help everyone.

It's definitely a short-term play for someone with money to risk.

PALM is the next riskiest. I think it will go still lower in 2008 and then slowly turn it around. They have lost their main market to RIMM and APPL, but they have a couple of Apple guys on board that helped develop the iPhone so who knows? The low-cost Centro is selling well.

I'm betting that PALM carves out a niche for itself. There was a interesting article a couple of weeks ago about the future of PDAs/SmartPhones. Depending on the future apps, especially financial and video, they could again become indispensable.

I've seen Korea go from beepers to the tinest of phones to phones with rather large screens as people watch TV and movies while riding the subway so size is less of a concern as weight, which is the area where Treo has been knocked.

Buy low in 2008 and hold for awhile.

SIRI - I'm hoping for the merger, but even if it doesn't happen I think SIRI will be okay. People that enjoy the radio don't want to put up with static and such if they are on the road a lot. People can have mp3 jacks in their cars but still there is nothing like riding and listening to the radio.

Sirius' name is starting to gain penetration into the broader market as well after years of heavy advertising so name recognition is increasing.

There is some money to be made by getting in now and trusting that the anti-business Dems don't kill the merger. The company becomes instantly profitable if the merger goes through.

If not, then it will be another couple of years until profitability.

[MJZiggy]

PALM is the next riskiest. I think it will go still lower in 2008 and then slowly turn it around. They have lost their main market to RIMM and APPL, but they have a couple of Apple guys on board that helped develop the iPhone so who knows? The low-cost Centro is selling well.

I'm betting that PALM carves out a niche for itself. There was a interesting article a couple of weeks ago about the future of PDAs/SmartPhones. Depending on the future apps, especially financial and video, they could again become indispensable.

I've seen Korea go from beepers to the tinest of phones to phones with rather large screens as people watch TV and movies while riding the subway so size is less of a concern as weight, which is the area where Treo has been knocked.

Buy low in 2008 and hold for awhile.



I don't know, my Palm died and lost all my data right as I was gonna send out Christmas cards and I'm still rather pissed about it.

[Kiwon]

What about the lasers used by dermatologists for tattoo removal, wrinkles, etc.?

Are they specialized laser equipment manufactured specifically for those purposes? Who are the manufacturers?

[SkinBasket]

I don't know, my Palm died and lost all my data right as I was gonna send out Christmas cards and I'm still rather pissed about it.

That's why we sync.

[MJZiggy]

software got wiped when I changed computers...couldn't find the disc to reinstall on the new one.

I found this really cool product that doesn't have this problem--never needs synching and is guaranteed never to crash. It's called a paper calendar and address book.

[LL2]

I don't think Charter or AMD are going to do anything noteworthy.

I'd have a hard time putting money into CharterCrap

ETrade intrigues me though. They seem like a company that will come back in the next couple years.

I agree. ETrade's stock is cheap right now. I remember after the tech stock bubble burst thinking that a few of these internet companies are dirt cheap and will rebound nicely. Some of them dropped as low as $1 a share. One of them was Priceline, and now they are at $112 a share.

[Kiwon]

I found this really cool product that doesn't have this problem--never needs synching and is guaranteed never to crash. It's called a paper calendar and address book.

:D :D :D

[Kiwon]

Suspense grows over XM-Sirius antitrust review

Thu Jan 3, 2008 3:32pm EST
By Peter Kaplan

WASHINGTON (Reuters) - U.S. government antitrust lawyers have spent nearly 10 months so far investigating Sirius Satellite Radio Inc's plan to acquire rival XM Satellite Radio Holdings Inc, despite company hopes that the deal would be approved by the end of 2007.

The delay may be due to the complexity of the issues raised by the merger of the only two U.S. satellite radio companies -- or because the Department of Justice (DOJ) is putting together a case to block the deal in federal court, analysts at Stifel Nicolaus said in a research note on Thursday.

Alternatively, top officials at DOJ may be leaning toward approval but might still be weighing arguments from staffers who oppose the deal, Stifel Nicolaus said.

"Like many others, we believed it was likely that the DOJ would have reached a decision before the winter holidays," Stifel Nicolaus said.

Washington, D.C., antitrust lawyer Andre Barlow, of the firm Doyle, Barlow & Mazard, said some analysts may have underestimated the complexity of the investigation.

"It certainly wasn't as imminent as (some) projected," Barlow said, referring to previous rumors that the government was about to make a decision.

Asked by Reuters about the ongoing review, Sirius and XM issued a joint statement saying: "As the companies said from the outset, we expected to complete the processes at DOJ and the FCC so that the regulators could make their decisions and the merger could close by the end of 2007. We have fully complied with the requests from both agencies. The ball is now in their court and we look forward to their determinations."

A key antitrust issue in the case is whether the combined satellite radio company would still face enough competition from free, over-the-air radio and new technologies.

The deal, announced on February 19, 2007, would bring entertainers such as Oprah Winfrey and shock-jock Howard Stern under one roof. Sirius and XM, both of which are losing money, each currently charge subscribers about $13 a month for more than 100 channels of news, music, talk and sports.

Barlow said the DOJ antitrust division is probably in the latter stages of reviewing the deal. But he said a final decision could still take some time because the proposed deal raises complicated questions about emerging technologies and how officials should view the radio business.

"It is a complicated deal to review," Barlow said.

The traditional radio industry, as well as some consumer groups and U.S. lawmakers, have criticized the deal as anti-competitive. But the satellite radio companies argued that they face plenty of competition from traditional radio stations and from the growing popularity of iPods and other personal audio players.

To allay critics' concerns, the two companies promised that after the merger, they would offer several new packages starting at lower prices, which they say would give consumers more programming choices than XM or Sirius could provide individually.

In November, one industry analyst said an antitrust decision by the department could be imminent and he believed the deal would be approved. Two U.S. lawmakers on the House Judiciary Committee responded with a letter to U.S. Attorney General Michael Mukasey, saying they were concerned about reports that officials might intend to approve the merger over objections of career attorneys at the Justice Department.

The Sirius-XM deal is also being examined by the Federal Communications Commission, which is expected to follow the Justice Department's lead.

The FCC is studying whether the deal would be in the public interest -- and whether to enforce a 1997 FCC order prohibiting the two companies from merging.

Shareholders from both companies approved the merger on November 13. XM shareholders would get 4.6 shares of Sirius common stock for every share of XM owned.

Shares of XM, which closed at $13.98 the day before the February 19 deal announcement, have been volatile ever since. XM dipped below $11 a share in May and then nearly hit $16 in late November. On Thursday, XM was trading at $12.57, up 15 cents.

The share price of Sirius, meanwhile, had a 52-week peak of $4.26 just before the deal was announced and was trading late Thursday at $3.12, up 7 cents.

[LL2]

We are doing a 401k rollover to an IRA account at Scottrade. Can we buy stocks like Etrade or others within an IRA? I know you can buy ETF's and looking into those as well. If you buy stocks within an IRA and sell the stock down the road the returns are still tax deferred. I know I need to ask our broker, but I thought I'd see if others have done it.

[Scott Campbell]

We are doing a 401k rollover to an IRA account at Scottrade. Can we buy stocks like Etrade or others within an IRA? I know you can buy ETF's and looking into those as well. If you buy stocks within an IRA and sell the stock down the road the returns are still tax deferred. I know I need to ask our broker, but I thought I'd see if others have done it.




Yes, you can trade stocks in a self directed IRA, and the gains are tax deferred.

[LL2]

Cool! Thanks!

[Kiwon]

Forget tupperware. Host a Taser party.

http://www.foxnews.com/story/0,2933,320385,00.html

TASR went from nothing to the $90-100 range as I recall in less than a year.

Then the lawsuits started and the stock price came down. Things have leveled off now. Taser sales parties via independent distributors are a good idea.

Just "don't tase me, bro."

[LL2]

E*Trade is under $3 a share. Does anyone think this could be a good stock worth buying cheap? I think E*Trade is one of those companies that got clobbered by the sub-prime mortgage mess and will rebound in the long run. Plus, they are a well known name brand.

[LL2]

I've been watching E*trade closely this past week and it's sinking like a rock. Getting close to $2 a share. I'm glad I haven't bought any yet, but I'm wondering if I should wait a little longer.

[The Leaper]

I wouldn't consider E-Trade right now...stocks are not a hot commodity at present, and the economy is starting to head south. Don't see much revenue for that company in the near future.

[Freak Out]

Ooops! :oops:

http://arstechnica.com/news.ars/post/20080109-att-torpedoes-its-own-stock-takes-other-telcos-down-too.html

[LL2]

Ooops! :oops:

http://arstechnica.com/news.ars/post/20080109-att-torpedoes-its-own-stock-takes-other-telcos-down-too.html

That was funny! Gotta watch what you say.

[Kiwon]

The market is down 5% already this year.

As tempting as some beaten down stocks might look it takes some courage to jump in now with any significant cash.

[The Leaper]

The economy is going in the pooper. Consumer confidence is going in the pooper. Typically, you'd think politicians in Washington would get the economy humming in an election year...but with their approval ratings all hovering around 15%, I guess they don't care anymore.

[SkinBasket]

The economy is going in the pooper. Consumer confidence is going in the pooper. Typically, you'd think politicians in Washington would get the economy humming in an election year...but with their approval ratings all hovering around 15%, I guess they don't care anymore.

According to everyone, the economy is always going in the pooper. No one's ever satisfied with any economic gain and no one understands how the economy actually works anyway. Make money, spend some, save some. That's about as in depth as any economic advice should ever get.

[Kiwon]

I didn't know that DAL and NWA were in merger talks. How long has this been going on?
.................................................. ...............................

Lawmaker won't back Northwest-Delta merger

By Barbara De Lollis, USA TODAY

U.S. House Transportation Committee Chairman James Oberstar said Wednesday that he opposes ongoing merger talks between Minnesota-based Northwest Airlines and Delta Air Lines, saying any merger of major domestic carriers would hurt consumers.

Oberstar, a Minnesota Democrat and a key player in aviation policy, said any airline consolidation would result in a rapid collapse of the industry into two or three megacarriers. "I don't think mergers are in the best public interest, and that includes this one," he said.

Oberstar's comments came during a conference call with reporters in which he confirmed ongoing discussions between executives of Atlanta-based Delta (DAL), the USA's No. 3 airline, and No. 6 Northwest (NWA).

Neither Delta nor Northwest have publicly acknowledged the merger talks, and both declined to comment Wednesday.

Oberstar told reporters he invited Northwest executives to his office on Tuesday to discuss the status of merger talks to avoid operating "on the basis of rumor."

He said the executives confirmed the talks with Delta. The talks are in the early stages, Oberstar said, and the executives told him that they would look for another partner if Delta were to move ahead with No. 2 United Airlines (UAUA) as a merger partner instead of Northwest. Oberstar says he believes Northwest is currently talking only with Delta about a possible merger.

By law, mergers between large airlines must undergo scrutiny by the Department of Justice antitrust unit and the Department of Transportation. But congressional leaders can hold public hearings and exert pressure on regulators and have done so in the past.

Officials at American (AMR), currently the world's largest airline, said Wednesday that a "more rational industry structure" resulting from consolidation could benefit both consumers and the industry. But they stopped short of climbing onto the merger bandwagon.

CFO Tom Horton, in a conference call about American's quarterly financial performance, said the complexity of putting together two airlines makes it difficult to achieve the desired results. Horton said American is watching Delta's search for a possible merger partner closely and contemplating what its competitive response, if any, would be, he said.

U.S. Rep. Jerry Costello, a Democrat from United's headquarters state of Illinois and chairman of the House aviation subcommittee, issued a statement saying, "The history of these (merger) deals is not a positive one for consumers and airline employees." At the same time, Costello said, he'd review any proposed merger on its merits.

[Freak Out]

So much for buying American....

January 20, 2008
Foreigners Buy Stakes in the U.S. at a Record Pace
By PETER S. GOODMAN and LOUISE STORY

Last May, a Saudi Arabian conglomerate bought a Massachusetts plastics maker. In November, a French company established a new factory in Adrian, Mich., adding 189 automotive jobs to an area accustomed to layoffs. In December, a British company bought a New Jersey maker of cough syrup.

For much of the world, the United States is now on sale at discount prices. With credit tight, unemployment growing and worries mounting about a potential recession, American business and government leaders are courting foreign money to keep the economy growing. Foreign investors are buying aggressively, taking advantage of American duress and a weak dollar to snap up what many see as bargains, while making inroads to the world’s largest market.

Last year, foreign investors poured a record $414 billion into securing stakes in American companies, factories and other properties through private deals and purchases of publicly traded stock, according to Thomson Financial, a research firm. That was up 90 percent from the previous year and more than double the average for the last decade. It amounted to more than one-fourth of all announced deals for the year, Thomson said.

During the first two weeks of this year, foreign businesses agreed to invest another $22.6 billion for stakes in American companies — more than half the value of all announced deals. If a recession now unfolds and the dollar drops further, the pace could accelerate, economists say.

The surge of foreign money has injected fresh tension into a running debate about America’s place in the global economy. It has supplied state governors with a new development strategy — attracting foreign money. And it has reinvigorated sometimes jingoistic worries about foreigners securing control of America’s fortunes, a narrative last heard in the 1980s as Americans bought up Hondas and Rockefeller Center landed in Japanese hands.

With a growing share of investment coming from so-called sovereign wealth funds — vast pools of money controlled by governments from China to the Middle East — lawmakers and regulators are calling for greater scrutiny to ensure that foreign countries do not gain influence over the financial system or military-related technology. On the presidential campaign trail, the Democratic candidates have begun to focus on these foreign funds, calling for international rules that would make them more transparent.

Debate is swirling in Washington about the best way to stimulate a flagging economy. Despite divided opinion about the merits, foreign investment may be preventing deeper troubles by infusing hard-luck companies with cash and keeping some in business.

The most conspicuous beneficiaries are Wall Street banks like Merrill Lynch, Citigroup and Morgan Stanley, which have sold stakes to government-controlled funds in Asia and the Middle East to compensate for calamitous losses on mortgage markets. Beneath the headlines, a more profound shift is under way: Foreign entities last year captured stakes in American companies in businesses as diverse as real estate, steel-making, energy and baby food.

The influx is the result of a confluence of factors that have made the United States both reliant on the largesse of foreigners and an alluring place for opportunistic investors. With American banks reeling from the housing downturn and loath to lend, businesses are hungry for cash.

The weak dollar has made American companies and properties cheaper in global terms, particularly for European and Canadian buyers. Even as Americans confront the prospect of a recession, economic growth remains strong worldwide, endowing oil producers like Saudi Arabia and Russia and export powers like China and Germany with abundant cash.

As the German company ThyssenKrupp Stainless broke ground in November on what is to be a $3.7 billion stainless steel plant in Calvert, Ala., its executives spoke effusively about the low cost of production in the United States and the chance to reach many millions of customers — particularly because of the North American Free Trade Agreement, which allows goods to flow into Mexico and Canada free of duty.

“The Nafta stainless steel market has great potential, and we’re committed to significantly expanding our business in this growth region,” said the company’s chairman, Jürgen H. Fechter,, according to a statement.

Foreign giants like Toyota Motor and Sony have been sinking capital into American plants. Investment in the American subsidiaries of foreign companies grew to $43.3 billion last year from $39.2 billion the previous year, according to the research and consulting firm OCO Monitor.

“This is a vote of confidence in the American economy, the American marketplace and the American worker,” the deputy Treasury secretary, Robert M. Kimmitt, said. “These investments keep Americans employed and keep balance sheets strong.”

Five million Americans now work for foreign companies set up in the United States, Mr. Kimmitt said, and those jobs pay 30 percent more than similar work at domestic companies. Nearly a third of such jobs are in manufacturing, which explains why Rust Belt states have been wooing foreign investment.

“We’ve lost 400,000 manufacturing jobs,” said Michigan’s governor, Jennifer M. Granholm, a Democrat, who has traveled three times to Europe and twice to Japan in pursuit of investment since taking office in 2003. “I’ve got to get jobs for our people.”

Some labor unions see the acceleration of foreign takeovers as the latest indignity wrought by globalization.

“It’s the culmination of a series of fool’s errands,” said Leo W. Gerard, international president of the United Steelworkers. “We’ve hollowed out our industrial base and run up this massive trade deficit, and now the countries that have built the deficits are coming back to buy up our assets. It’s like spitting in your face.”

Other labor groups take a more pragmatic view.

“We need investment and we need to create good jobs,” said Thea Lee, policy director for the A.F.L.-C.I.O. in Washington. “We’re not in the position to be too choosy about where that investment comes from. But it does bring home the consequences of flawed trade policies over many, many years that we’re in this position of being dependent.”

At the center of concern is the growing influence of sovereign wealth funds, which invested $21.5 billion in American companies last year, according to Thomson. Analysts say they could skew markets by investing to improve the fortunes of their national companies or to pursue political goals.

“This is a phenomenon that could be called the growth of state capitalism as opposed to market capitalism,” said Jeffrey E. Garten, a trade expert at the Yale School of Management. “The United States has not ever been on the receiving end of this before.”

Perhaps emblematic of national ambivalence, in an appearance on CNBC last week, the voluble market analyst Jim Cramer spoke in menacing terms about the growing role of state investment funds from the Middle East and China.

“Do we want the communists to own the banks, or the terrorists?” Mr. Cramer asked. “I’ll take any of it, I guess, because we’re so desperate.”

Proponents of investment from overseas note that finance from sovereign wealth funds is a mere trickle of the overall flow from abroad. Indeed, the bulk comes from Europe, Canada and Japan. Just as Americans have scattered investments around the world in pursuit of profit — with holdings of foreign stock and debt exceeding $6 trillion in 2006, according to the Treasury Department — foreigners are looking to the United States, with their capital generating economic activity, proponents say.

If fear of foreign money now inspires Americans to erect new barriers, that would damage the economy, said Todd M. Malan, president of the Organization for International Investment, a Washington lobbying group financed by foreign companies.

“The policy choices on the negative side would have enormous economic implications that would make the current situation look like a bubble bath,” he said.

Tensions spawned by foreign investment hark back to the 1980s, when Japan snapped up prominent American businesses like Columbia Pictures, and some intoned that the American way of life was under assault. The new wave of foreign money is washing in at an even more important time, analysts say.

The United States has lost more than three million manufacturing jobs since 2001, with foreign trade often taking the blame. Foreign-made goods now account for roughly one-third of all wares consumed in the United States, roughly tripling their share over the last quarter-century. The soaring price of oil and a widening trade deficit underscore how the American economy is increasingly vulnerable to decisions made far away.

In 2005, Congressional opposition scuttled a bid by the state-owned Chinese energy company Cnooc to buy the American oil company Unocal. The following year, furor on Capitol Hill prevented DP World, a company based in the United Arab Emirates, from buying several major American ports.

No such outcry has greeted the purchase of stakes in major Wall Street banks by state investment funds in the United Arab Emirates, Kuwait, China, Singapore and South Korea. This is largely because the banks sold passive slices and ceded no formal control, which would have set off a federal review of the national security implications. But the silence also reflects the imperative that these enormous institutions swiftly secure cash.

“It would be good if these companies didn’t need all this capital and better if the capital was available in the United States,” said Senator Charles E. Schumer, Democrat of New York, who was a vocal opponent of the DP World deal. “But given the situation that these institutions find themselves in and the fact that there’s a pretty strong credit squeeze, there’s only two choices: Have foreign companies invest in these firms or have massive layoffs.”

In years past, particularly when Japanese money washed in, many foreign purchases proved not to be so prudent in the end. This time, with the dollar weak and troubled American companies in a poor bargaining position, the prices really do seem cheap, some economists say.

“They’re buying financial assets at well under book value,” said Gary C. Hufbauer, a trade expert at the Peterson Institute for International Economics.

Trade experts assume tensions will rise as developing countries — which tend to have more state companies — continue to expand their share of investment in the United States.

Canada still spends the most money buying stakes in American companies — more than $65 billion in 2007, according to Thomson. But other countries’ purchases are growing rapidly. South Korea’s investments swelled to more than $10.4 billion last year from just $5.4 million in 2000. Russia went to $572 million from $60 million in that span; India to $3.3 billion from $364 million.

But even if political tension increases, so will the flow of foreign money, some analysts say, for the simple reason that businesses need it.

“The forces sucking in this capital are much bigger than the political forces,” said Mr. Garten, the Yale trade expert. “If there is a big controversy, it will be between Washington on the one hand and corporate America on the other. In that contest, the financiers and the businessmen are going to win, as they always do.”

[Freak Out]

Son of a bitch the markets overseas took a beating today...hold on to your hats boys and girls.

[Kiwon]

Son of a bitch the markets overseas took a beating today...hold on to your hats boys and girls.

Yeah, really builds a lot of confidence when we hear about fears of a world-wide recession. :roll:

So if you have some extra money to invest where do you go? Bonds and Money Markets which aren't paying anything.

[Freak Out]

Son of a bitch the markets overseas took a beating today...hold on to your hats boys and girls.

Yeah, really builds a lot of confidence when we hear about fears of a world-wide recession. :roll:

So if you have some extra money to invest where do you go? Bonds and Money Markets which aren't paying anything.

Gold or Real Estate....oil stocks....I am really nervous about whats going to happen tomorrow.

The fucking dollar is going the way Drachma.

[Freak Out]

Son of a bitch the markets overseas took a beating today...hold on to your hats boys and girls.

Yeah, really builds a lot of confidence when we hear about fears of a world-wide recession. :roll:

So if you have some extra money to invest where do you go? Bonds and Money Markets which aren't paying anything.

Paying nothing is better than losing.

[Freak Out]

Shit...this is going to be painful.

[Kiwon]

Shit...this is going to be painful.

Ha, ha....tomorrow could be a bloodbath! :(

Dow Industrials Are Set to Plunge 500 Points When Trading Opens Today

[LL2]

If you have cash now is the time to buy! Buy stocks and/or real estate. They are at a discount right now.

[Freak Out]

I did some shuffling into some domestic and foreign bonds the past month and it has paid off the last few days. I don't think we've seen bottom just yet though so before I went on a buying frenzy I would wait to see what shakes out for at least the next couple of days.....people lose their minds at times.

[Freak Out]

Another brutal day. Buy and hold no longer applies.

[Freak Out]

The politics of an economic nightmare

No U.S. leader wants to admit how bad the damage may get from the one-two punch of the credit crunch and housing slump.

By Robert B. Reich

Jan. 23, 2008 | A possible economic meltdown is worrisome enough, but a possible meltdown in an election year is downright frightening. For months now, Republicans have been pushing the White House to take some action that looked and sounded big enough to give them some cover if and when things got worse. President Bush has now responded with a stimulus package more than twice as large as the one Bill Clinton briefly entertained at the start of 1993 but couldn't get passed.

Not to be outdone, Democrats want to appear at least as bold, which means they'll suspend pay-go rules and throw fiscal responsibility out the window. In other words, hold your noses, because the "bipartisan" stimulus package that's about to be introduced could be a real stinker, including tax cuts for everyone and everything under the sun -- except, perhaps, for the key group of lower-income Americans. These are the people who don't earn enough to pay much if any income taxes, but who are the most likely to spend whatever extra money they get and therefore are most likely to stimulate the economy. The real behind-the-scenes battle will be over whose constituencies get what tax cuts, and for how long. Don't be surprised if the only thing Congress really stimulates is campaign contributions.

Meanwhile, Fed chairman Ben Bernanke and Co. have surprised everyone with a rate cut larger and sooner than expected. The three-quarters of a percentage point ("75 basis points" in biz-speak) cut announced Tuesday morning may not sound like much, but it's bigger than any rate cut in decades. The politics here are more subtle because Bernanke and his Federal Reserve governors are supposed to be independent of politics. But as witnessed under the reign of previous chairman Alan "it's prudent to reduce the surplus with a tax cut" Greenspan, Fed chairs can have political agendas. Bernanke has been under a lot of pressure lately to cut rates big-time -- and the pressure has come not only from Washington Republicans but from panicked Wall Street Democrats, including, apparently, my old colleague Robert Rubin, formerly President Clinton's treasury secretary. (By the way, what could Rubin have been thinking when he allowed Citicorp to sell all those fancy securitized debt instruments, while agreeing to buy them back if they couldn't be resold?) Expect lots and lots more Washington activity -- enough seemingly bold strokes to convince voters that our nation's capital is doing whatever is necessary to stop whatever seems to be going wrong with the economy.

The problem is, people have different views about what's going wrong. Wall Street sees it as a credit crisis -- a mess that seems never to reach bottom because nobody on Wall Street has any idea how many bad loans are out there. Therefore, nobody knows how big the losses are likely to be when the bottom is finally reached. And precisely because nobody knows, nobody wants to lend any more money. A rate cut won't change this. It's like offering a 10-pound lobster to someone so constipated he can't take in another mouthful.

Main Street sees it as a housing crisis. Homes are the biggest assets Americans own -- their golden geese for retirement and their piggy banks for home equity loans and refinancing. But home prices have been dropping quickly. It's the first time this has happened in many decades -- beyond the memories of most Americans, which is why they never expected it to happen, why they bought houses so readily when credit was so easily available, and why so many people bought two or more of them, speculating and fixing up and then flipping. But now several million Americans may lose their homes, and tens of millions more have only their credit cards to live on and are reaching the outer limits of what they can spend. As consumer spending shrinks, companies will reduce production and cut payrolls. That has already begun to happen. It's called recession.

How much worse can it get? The housing bubble drove home prices up 20 to 40 percent above historic averages relative to earnings and rents. So now that the bubble is bursting, you can expect prices to drop by roughly the same amount, and new home construction to contract. The latter plunged last month to its lowest point in more than 16 years. A managing partner of a large Wall Street financial house told me a few days ago the scenario could get much worse. He gave a 20 percent chance of a depression.

Even if a stimulus package were precisely targeted to consumers most likely to spend any money they received, the housing slump could overwhelm it. According to a recent estimate by Merrill-Lynch, the slump will hit consumer spending to the tune of $360 billion this year and next. That's more than double the size of the stimulus package President Bush or any leading Democrat is now talking about. And the Merrill-Lynch estimate is conservative.

In reality, the crisis is both a credit crunch and the bursting of the housing bubble. Wall Street is in terrible shape and Main Street is about to be in terrible shape. And there's not a whole lot that can be done about either of these problems -- because they are the results of years of lax credit standards, get-rich-quick schemes, wild speculation on Wall Street and in the housing market, and gross irresponsibility by the Fed, the Treasury and the Comptroller of the Currency.

As a practical matter, our only real hope for avoiding a deep recession or worse depends on loans and investments from abroad -- some major U.S. financial firms have already gotten key cash infusions from foreign governments buying stakes in them -- combined with export earnings as the dollar continues to weaken. But this is something no politician wants to admit, especially in an election year. So we're going to go through weeks of posturing about stimulus packages of one sort or another, and then see enacted the big fat bonanza of a temporary tax break that will likely have little effect. That, perhaps along with a few more rate cuts by the Fed. The presidential candidates will be asked what should be done about the worsening economy, and they'll give vague answers. None will likely admit the truth: We're going to need the rest of the world to bail us out.

[Joemailman]

Big Wall Street Rally!!! :wave:

[Kiwon]

ARBA up 8.51% in one day! (9.69)

Missed opportunity :(

[Freak Out]

Good read on automobiles and oil....among other things. Long.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aoCSD7m5zHhA&refer=home

[LL2]

These cars will be the future

http://www.smartusa.com/index.aspx

[SkinBasket]

These cars will be the future

http://www.smartusa.com/index.aspx

People use their cars for far too many things for these glorified golf carts to be "cars of the future." That and fat people don't like feeling like a sardine. And there are a lot of fat people.

[Partial]

Smart Cars are retarded. Way too small and light to be practical. Can you imagine driving one of those in a snow? At least Hybrids have heavy batteries adding some weight and friction.

[MJZiggy]

Maybe so, but they'd be fantastic and economical commuter cars in certain cities with horrid congestion problems and completely sucky and expensive mass transit...

[Harlan Huckleby]

Many families own two cars. They can get a smart car for tooling around and a dumb car for longer trips.

Another big story is that Israel is investing big time in electric cars. Could be a great fit. I will step and fetch a story ....

[Harlan Huckleby]

Israel Is Set to Promote the Use of Electric Cars

By STEVEN ERLANGER
Published: January 21, 2008
JERUSALEM — Israel, tiny and bereft of oil, has decided to embrace the electric car.

On Monday, the Israeli government will announce its support for a broad effort to promote the use of electric cars, embracing a joint venture between an American-Israeli entrepreneur and Renault and its partner, Nissan Motor Company.

Prime Minister Ehud Olmert, with the active support of President Shimon Peres, intends to make Israel a laboratory to test the practicality of an environmentally clean electric car. The state will offer tax incentives to purchasers, and the new company, with a $200 million investment to start, will begin construction of facilities to recharge the cars and replace empty batteries quickly.

The idea, said Shai Agassi, 39, the software entrepreneur behind the new company, is to sell electric car transportation on the model of the cellphone. Purchasers get subsidized hardware — the car — and pay a monthly fee for expected mileage, like minutes on a cellphone plan, eliminating concerns about the fluctuating price of gasoline.

Mr. Agassi and his investors are convinced that the cost of running such a car will be significantly cheaper than a model using gasoline (currently $6.28 a gallon here.)

“With $100 a barrel oil, we’ve crossed a historic threshold where electricity and batteries provide a cheaper alternative for consumers,” Mr. Agassi said. “You buy a car to go an infinite distance, and we need to create the same feeling for an electric car — that you can fill it up when you stop or sleep and go an infinite distance.”

Mr. Agassi’s company, Project Better Place of Palo Alto, Calif., will provide the lithium-ion batteries, which will be able to go 124 miles per charge, and the infrastructure necessary to keep the cars going — whether parking meter-like plugs on city streets or service stations along highways, where, in a structure like a car wash, exhausted batteries will be removed and fresh ones inserted.

Renault and Nissan will provide the cars. The chairman of both companies, Carlos Ghosn, is scheduled to attend the announcements on Monday. Other companies are developing electric cars, like the Tesla and Chevrolet Volt, but the project here is a major step for Renault, which clearly believes that there is a commercial future in electric cars.

Israel, where the round-trip commute between Tel Aviv and Jerusalem is only 75 miles, is considered a good place to test the idea, which Mr. Agassi, Renault and Nissan hope to copy in small countries like Denmark and crowded cities like London, Paris, Singapore and New York. London, which has a congestion area tax for cars, lets electric cars enter downtown and park free.

Project Better Place’s major investor, Idan Ofer, 52, has put up $100 million for the project and is its board chairman. He will remain chairman of Israel Corporation Ltd., a major owner and operator of shipping companies and refineries. “What’s driving me is a much wider outlook than Israel,” Mr. Ofer said. “If it were just Israel, I’d be cannibalizing my refinery business. I’m not so concerned about the refineries, but building a world-class company. If Israel will ever produce a Nokia, it will be this.”

Mr. Ofer has his eye on China, with its increasing car penetration, oil consumption and environmental pollution, where he has interest from a Chinese car company, Chery, for a similar joint venture.

Renault will offer a small number of electric models of existing vehicles, like the Megane sedan, at prices roughly comparable to gasoline models. The batteries will come from Mr. Agassi. The tax breaks for “clean” electric vehicles, which Israel promises to keep until at least 2015, will make the cars cheaper to consumers than gasoline-engine cars. “You’ll be able to get a nice, high-end car at a price roughly half that of the gasoline model today,” Mr. Agassi said.

He contends that operating expenses will be half of those for gasoline-driven vehicles, especially in Europe and Israel, where gasoline taxes are high. The company, and the consumers who use it, will normally recharge their batteries at night, when the electricity is cheapest, and they expect the batteries to have a life of 7,000 charges, though Mr. Agassi says he is counting on only 1,500 charges, which is roughly 150,000 miles, the life of the average car.

“Because the price of gasoline fluctuates so much during the life of a car, it’s hard to predict the cost basis for driving,” Mr. Agassi said. “But electricity fluctuates less, and you can buy it in advance, so I can give you a guaranteed price per mile, cheaper than the price of gas today.”

Mr. Agassi predicts that a few thousand electric cars will be on Israeli roads in 2009 and 100,000 by the end of 2010; Israel has two million cars on the road, and about 10 percent are replaced each year.

Mr. Agassi suggested this model for the electric car — concentrating on infrastructure rather than on car production — at a 2006 meeting of the Saban Forum of the Brookings Institution, which Mr. Peres attended. He was enthralled by the idea.

Mr. Peres, who is sometimes dismissed as a dreamer by more cynical Israelis, has in the past embraced and helped to develop some successful notions — like Israel’s nuclear weapons program. He is a strong believer in Israel’s mission to better the world, he says, and not simply sell arms to it. Israel is the 11th-largest arms exporter, as measured by dollar sales, according to the Stockholm International Peace Research Institute.

Mr. Peres, who knew Mr. Agassi’s father, said in an interview that after hearing Shai Agassi speak: “I called him in and said, ‘Shai, now what?’ I said that now is the time for him to implement his idea, and I spoke to our prime minister and other officials and convinced them that this is a great opportunity.”

“Oil is becoming the greatest problem of our time,” Mr. Peres said in an interview in his office. Not only does it pollute, but “it also supports terror and violence from Venezuela to Iran.”

“Israel can’t become a major industrial country, but it can become a daring world laboratory and a pilot plant for new ideas, like the electric car,” he said.

Mr. Peres sees this project as part of his “green vision” for Israel, arguing that what the nation may lose in tax revenue it will save in oil. He also supports a larger investment in solar power, saying that “the Saudis don’t control the sun.”

Mr. Ofer wants profits, but also thinks the project will help the environment, especially in developing countries. “China is on a very dangerous march from bicycles to cars without any notion of what they’re doing to this planet in terms of air,” he said.

And in Mumbai, he said, “you can’t even see the sky.”

James D. Wolfensohn, the former World Bank president, is a modest investor in the project.

“Israel is a perfect test tube” for the electric car, he said. “The beauty of this is that you have a real place where you can get real human reactions. In Israel they can control the externalities and give it a chance to flourish or fail. It needs to be tested, and Agassi is to be commended for testing it and the Israeli government for trying it.”

[LL2]

Many families own two cars. They can get a smart car for tooling around and a dumb car for longer trips.

This is exactly my thinking. A car like the smart car would be perfect for me for commuting to work and short trips to the store, and the bigger car for when the family is together traveling here and there. People are going to have to start thinking this way. Gas pricing will continue going up, and I'm predicting it will be $4 a gallon by summer.

[Kiwon]

Jerome Kerviel.......a name that will live in finance infamy..........bets $73,000,000,000 of other people's money on European equity market indices.......uses extraordinary methods to coverage his tracks........personal profit?.........he's bound to be a psychopath.

So what were this guy's motives?
.................................................. .................................................. .....

PARIS (AP) — Societe Generale detailed Sunday how a young trader evaded all its controls to bet some $73 billion — more than the French bank's market worth — on European markets, saying he hacked computers and used other "fraudulent methods" to cover his tracks, causing billions in losses.

The bank says the trader, Jerome Kerviel, did not appear to have profited personally from the transactions and seemingly worked alone — a version of events reiterated Sunday by Jean-Pierre Mustier, chief executive of the bank's corporate and investment banking arm. But, in a conference call with reporters, Mustier added: "I cannot guarantee to you 100% that there was no complicity."

<edit>

Societe Generale said Kerviel misappropriated other people's computer access codes, falsified documents and employed other methods to cover his tracks — helped by his previous experience working in offices that monitor traders.

<edit>

The bank said Kerviel had built up a position worth some $73.5 billion — which was eventually closed or hedged by last Wednesday with a loss of $7.21 billion.

"The position was unwound over three days in a controlled fashion," it said.

Jean-Michel Aldebert, of the Paris prosecutors' office, told reporters Saturday that Kerviel gave himself up of his own free will. The trader had not been seen in public since the bank announced his unauthorized trades in a statement on Thursday.

His motives remained a mystery, and the bank said it appeared that he did not gain personally from the trades. Acquaintances described Kerviel as reserved and considerate, a young man who once taught children judo and held the door for elderly neighbors.

[packinpatland]

Smart Cars are retarded. Way too small and light to be practical. Can you imagine driving one of those in a snow? At least Hybrids have heavy batteries adding some weight and friction.

Not everyone has that problem.

[Kiwon]

Hold the phone.........there's more intrigue......

Rogue trader in £3.6bn fraud threatens to 'name names' as bank admits he may have had a gang

From JULIE MOULT and PETER ALLEN in Paris

The rogue trader accused of defrauding France's secondlargest bank out of £3.6billion is believed to have been part of a gang.

Executives at Societe Generale had originally insisted that 31-yearold Jerome Kerviel acted alone.

They compared him to a "lone arsonist who burnt down a big factory".

But yesterday they conceded that he was unlikely to have carried out his deception without accomplices.

And in interviews with detectives, Kerviel was said to be "naming names" and refusing to be a scapegoat.

As the hunt began for any coconspirators, Societe Generale admitted that although it was the victim of the biggest fraud in history, it could have been worse.

Paris-based Kerviel had gambled a total of at least £37billion as his investment losses spiralled out of control - more than the bank's entire market value.

In a statement, it said Kerviel built up two portfolios of investments - but that one of them consisted of "fictitious operations", leaving the bank hugely exposed.

Detectives are working on information that he made a series of phone calls to traders at other investment banks before news of the scandal broke - allowing them to make highlylucrative deals based on his tips.

But Societe Generale has made it clear that Kerviel did not personally benefit from the fraud.

Jean Pierre Mustier, one of its chief executives, said: "I cannot guarantee to you 100 per cent that there was no complicity."

Today, the junior trader is expected to be charged with an array of complex offences and brought before a court in the French capital.

If found guilty of charges including computer misuse and forgery he could be facing a 15-year prison term.

Kerviel, who earned a relativelymeagre £75,000 a year, was arrested on Saturday, a week after his catastrophic dealing was uncovered.

A team of police financial specialists quizzed him for 48 hours as they tried to unravel the extent of his astonishing deception - four times that of British banker Nick Leeson.

Because of the complexities of the alleged crime, it is likely to be many months before the case is ready to be brought against him.

Kerviel had been investing the bank's money by hedging on European equity market indices, meaning he betted on how the markets would perform.

It was reported yesterday that he is co- operating fully with police during hours of interviews saying: "I can explain everything".

Jean-Michel Aldebert, chief of the financial section of the Paris prosecutor's office, yesterday said Kerviel was providing some "interesting facts".

"He is collaborating and says he is ready to explain everything. He says he wants to co-operate fully. He's feeling fine.

"It's going well. The investigation led by the experts from the financial brigade is extremely fruitful."

Family and friends are rallying round Kerviel, whose family home is in Brittany. A neighbour at his apartment block in Neuilly sur Seine said: 'Do you expect us to believe he was the only one in on this?

"It's ludicrous in the extreme to believe that just one person could be responsible for all of this."

Kerviel's aunt Sylviane La Goff said he had spent the 48 hours before his arrest locked in his brother Olivier's apartment on the Boulevard Hausman with their mother Marie-Jose.

As the scandal unfolded, he assured her: "Mummy, I have done nothing wrong."

The bank's chairman, Daniel Bouton, is expected to be ordered before the French national assembly's finance commission this week to explain how the massive fraud went unnoticed despite a plethora of so-called safeguards.

[Kiwon]

Whoa....Microsoft offers some serious change for Yahoo.

Are they getting serious about taking on Google?

Microsoft to bid $44.6B for Yahoo

REDMOND, Wash. (AP) — Microsoft Corp. is offering $44.6 billion in cash and stock for search engine operator Yahoo Inc. in a move to boost its competitive edge in the online services market.

The unexpected announcement Friday comes as Microsoft, the world's biggest software company, seeks new ways to compete more effectively against the search and online advertising powerhouse Google Inc.

In a letter to Yahoo's board of directors, Microsoft Chief Executive Steve Ballmer said the company will bid $31 per share, representing a 62% premium to Yahoo's closing stock price Thursday, and emphasized that the deal isn't subject to financing.

"In February 2007, I received a letter from your chairman indicating the view of the Yahoo board that "now is not the right time from the perspective of our shareholders to enter into discussions regarding an acquisition transaction," Ballmer wrote.

"According to that letter, the principal reason for this view was the Yahoo board's confidence in the "potential upside" if management successfully executed on a reformulated strategy based on certain operational initiatives, such as Project Panama, and a significant organizational realignment."

"A year has gone by, and the competitive situation has not improved," Ballmer added.

Under terms of the proposed deal, Yahoo shareholders could choose to receive cash or Microsoft common shares, with the total purchase consisting of 50% each cash and stock.

Microsoft said it sees at least $1 billion cost savings generated by the merger, and intends to offer significant retention packages to Yahoo engineers, key leaders and employees. The software giant said it believes the takeover would receive regulatory clearance and close in the second half of 2008.

[Freak Out]

Well fuck it...I can't hold off any longer and am going to dump a bunch of gold. It's up 40 fucking percent in just 6 months or so and I started buy a long time ago. :lol: I've been real antsy about it for weeks now and I'm seeing some sells so I'm going to make some money and buy another piece of property and take a long vacation with the wife. It has to start tailing off a bit right?
My daughter who is going to start school in New Zealand in three months was thinking of ways to make some extra money before leaving so I told her to sell all the gold jewelry she bought in Asia a few years ago. A bunch of soft Thai stuff.....she made close to a 350 percent profit! It's freaking crazy.

[Kiwon]

Timing is everything.

"The best laid plans of mice and men." - You make a plan, stick with it, prices go up, then you get "antsy." What to do? Stick with the plan or take what's on the table.

Always a tough decision.

[Joemailman]

http://money.cnn.com/2008/02/05/markets/markets_afternoon/index.htm?postversion=2008020516

Wall Street's worst day in 3 months
Stocks tank after an economic report and comments from a Fed official amplify recession panic. Dow loses 370 points.

NEW YORK (CNNMoney.com) -- Stocks tanked Tuesday, after a report showing a big slowdown in the services sector of the economy and cautionary comments from a Fed governor amplified fears that a recession is underway or imminent.

According to early tallies, the Dow Jones industrial average (INDU) lost about 370 points, seeing its worst single session on a point basis in over three months. The decline equaled a drop of 2.9%.

The broader Standard & Poor's 500 (SPX) index lost 44 points, its worst single-day point loss since last August. The decline equaled a drop of 2.9%.

The Nasdaq composite (COMP) fell 73 points and saw its worst single-day point loss since mid-October. The decline equaled a drop of 2.6%.

"The pebble in the pond this morning was the ISM report and then the comments from [Fed governor] Lacker came out and that kind of pushed people over the edge," said Kim Caughey, senior equity analyst at Fort Pitt Capital Partners.

Stocks tumbled in January, with the Nasdaq seeing its worst start to the year ever, on fears that the credit and housing market crises will send the economy into recession, if it isn't there already.

After such a steep decline, stocks managed to bounce back for a few days last week as investors scooped up battered shares. But the rally was short-lived, with stocks tumbling anew this week.

"This is a very volatile time, everyone is nervous and the volatility shows the degree of nervousness," Caughey added.

"This is the most unequivocal sign we've had that the economy is weakening," said Stephen Stanley, chief economist at RBS Greenwich Capital. "We've had data pointing in that direction, but they've been all over the map and it always seemed like there was a silver lining in the weak reports."

"There is nothing in this report that was redeeming," he added. "It's simply terrible."

Looking to the Federal Reserve. Richmond Fed President Jeffrey Lacker, in a speech Tuesday, said that the report raises the risks of a recession, Briefing.com reported. However, he said that inflationary pressures are also rising, which could limit further interest rate cuts. Lacker is an alternate member of the Fed's policy committee this year.

His comments seemed to suggest the threat of "stagflation," the combination of slowing growth paired with higher inflation, a miserable economic development investors are hoping to avoid.

Last week's monthly jobless claims report and fourth-quarter GDP growth report suggested an acceleration of the economic slowdown. Investors will next look to Wednesday's fourth-quarter productivity report to see if it shows a rise in unit labor costs, i.e. wage inflation, and next week's Jan. retail sales report, amid fears about a consumer spending recession.

The Federal Reserve cut interest rates twice in late January, leaving the fed funds rate, a key short-term interest rate that affects consumer loans, at 3%. The fed also cut the discount rate, which affects bank loans. The Fed has also injected billions into the financial system through a series of auctions.

The Fed actions have already started to have an impact, but it typically takes a good six to 12 months for rate cuts to work their way through the economy.

KB Home (KBH, Fortune 500) and a few other homebuilders were among the few gainers on the session, thanks to a Banc of America Securities upgrade, Briefing.com reported.

Market breadth was negative. On the New York Stock Exchange, losers trounced winners over four to one on volume of 1.65 billion shares. On the Nasdaq, losers beat winners by over three to one on volume of 2.48 billion shares.

In currency trading, the dollar gained versus the yen and the euro.

U.S. light crude oil for March delivery fell $1.32 to $88.70 a barrel on the New York Mercantile Exchange.

COMEX gold for April delivery plunged $19.10 to $890.30 an ounce. To top of page

Looks like investors are acknowledging the reality that the economy is heading into a recession, and Fed rate cuts aren't going to change that.

[LL2]

If you have cash now is a good time to buy.

[Freak Out]

If you have cash now is a good time to buy.

That depends on what you are buying...we are far from bottom in some sectors. I feel for people who have lots of money in 401ks and have not been paying attention.

[LL2]

Even with the horrible start to this year our retirement fund is up almost 10% for the year. If by 2nd qtr the market starts turning around we will be looking pretty good this year.

[Kiwon]

I would expect that the market is going to be a roller coaster probably until November's general election.

Both Obama and Clinton have already laid out plans for enormous increases in social spending and aren't shy in directly attacking the business community.

I think we are all in for a bumpy ride until the next president is certain and business leaders can get a sense of how hostile the new administration will be.

[Freak Out]

Some good advice.

February 17, 2008
Keep It Simple, Says Yale’s Top Investor
By GERALDINE FABRIKANT

IT has been a time to worry even the savviest investors. The credit markets have been in a crisis, the domestic stock market has been shaky and overseas markets haven’t been much better.

What should an individual investor do?

Don’t try anything fancy. Stick to a simple diversified portfolio, keep your costs down and rebalance periodically to keep your asset allocations in line with your long-term goals. That is the advice of David F. Swensen, who has run the Yale endowment since 1988, relying on a complex strategy that includes investments in hedge funds and other esoteric vehicles. The endowment earned 28 percent in its last fiscal year, which ended June 30, beating all other endowments. It finished the year with $22.5 billion.

For most people, he recommends a very basic approach: use index funds, exchange-traded funds and other low-cost instruments, and stick to your long-term asset allocation — even when the markets are in tumult.

Don’t be distracted by market forecasts, he said. “You have to diversify against the collective ignorance,” he said. “I think nobody is in a position to react to these big macro-issues. Where is the dollar going to be or what is G.D.P. growth going to be in China? For every smart person on one side of the question, there is another smart person on the other side.”

For most individual investors, he said, copying the strategies of institutions like Yale is virtually impossible: big investors have access to fund managers and arcane strategies that are beyond the reach of most people.

“The only people who should get involved are sophisticated individuals who have significant resources and a highly qualified investment staff,” Mr. Swensen said.

“Most people do not have the resources and time to pick market-beating managers” of hedge funds, private equity funds or funds of funds, he said. And he said that the techniques used by hedge funds often result in higher taxes than those of index funds.

So he advocates another approach, which he outlined in the book “Unconventional Success: A Fundamental Approach to Personal Investment” (Free Press, 2005). He proposes a portfolio of 30 percent domestic stocks, 15 percent foreign stocks, and 5 percent emerging-market stocks, as well as 20 percent in real estate and 15 percent each in Treasury bonds and Treasury inflation-protected securities, or TIPS.

The real estate investment can be made through real estate index funds. Though the real estate market has declined and your portfolio is below its target allocation to it, he said, don’t try to time the market. Go ahead and rebalance because no one really knows where the market’s bottom is.

Diversification will buffer a portfolio from declines in specific asset classes. For example, he said: “If the dollar declines dramatically, you have foreign and emerging-market equities. And a declining dollar may well be associated with inflation, but a diversified portfolio would include TIPS,” to provide a hedge. “That means if any of these scenarios play out, an investor has sizable chunks of his portfolio that protect against them,” Mr. Swensen said.

When possible, he said, rebalancing should be done in a tax-sheltered account, like an I.R.A. or a 401(k), to avoid tax liabilities. “When you are putting fresh money to work,” he said, “you put it in an asset class where you are underweight and take money out of a class that is overweight.”

He says it is fruitless for individual investors to pick stocks. “There is no way that an individual can go out there and compete with all these highly qualified and compensated professionals,” Mr. Swensen said.

HE criticized the approach of Jim Cramer, the CNBC host, who encourages investors to trade stocks in strategies that Mr. Swensen says cost heavily in commissions and taxes.

“There is nothing that Cramer says that can help people make intelligent decisions,” Mr. Swensen said. “He takes something that is very serious and turns it into a game. If you want to have fun, go to Disney World.”

Brian Steel, a spokesman for CNBC, responding on behalf of Mr. Cramer, said Mr. Cramer “had a long history of success as a trader and fund manager.” He added that Mr. Cramer is a proponent of long-term investing and thorough research.

Mr. Swensen says investors should forget market timing entirely. Once an individual sets up a program, it should be rebalanced quarterly or semiannually, he said, “but it should be disciplined.”

When the markets decline, try not to pay attention, he said. “Let yourself off the hook,” he said. “If you pursue the sensible long-term policy, look at it over a 5- to 10-year period. Don’t look at five months.”

[Kiwon]

Taxes and Bowling

Higher taxes are coming, that's for sure.

In the category of unintended consequences is that Milwaukee may lose part of its historic culture - The United States Bowling Congress headquarters might be moving.

Potential bowling loss hits city's heart (http://www.usatoday.com/news/nation/2008-02-19-bowling_N.htm)

(from the article)

The relocation of the USBC, the sport's governing body, to Arlington, Texas, isn't quite a done deal. Chief operating officer Kevin Dornberger (190 average) warns that Milwaukee must find ways to reduce the cost of doing business here to keep the group and its 195 employees in suburban Greendale.

There are no personal income taxes in Texas, Dornberger says, and health care costs and real estate taxes are more affordable there. Arlington might offer tax incentives. Dornberger has asked officials here for a proposal today, and a decision will be made by March 14, when the USBC's contractual hold on property in Arlington expires. The USBC's board of directors voted in January to start negotiations for a move, which would happen this year.

(edit)

If the organization does head South, it would end a relationship that dates back to 1907. That's when the USBC's predecessor organization set up shop here, says Doug Schmidt (190 average), author of a 2007 book on Milwaukee's bowling history, They Came To Bowl: How Milwaukee Became America's Tenpin Capital.

[Kiwon]

Human nature is interesting.....

Light Crude Oil closes at over $100 a barrel for the first time and the prediction is for $4 gasoline by Spring.

Do you remember the absolute panic in the media when oil crossed the $65 barrier before the 2006 mid-term elections? Then they began to dramatically fall. Conspiracy theories were everywhere.

Now Light Crude is up 70% IN A LITTLE OVER ONE YEAR and hardly anyone is commenting about it.

As Vince Lombardi said, "What the hell is going on out there?"

http://www.wtrg.com/daily/small/clfclose.gif

[Freak Out]

Crude oil is at a record high....the dollar is worth less than toilet paper and the US is the worlds leading debtor nation.

No worries.

[Kiwon]

No worries...

....be happy!

[Freak Out]

No worries...

....be happy!

Couldn't have said it better myself.

http://www.youtube.com/watch?v=yjnvSQuv-H4

[MJZiggy]

Crude oil is at a record high....the dollar is worth less than toilet paper and the US is the worlds leading debtor nation.

No worries.

I still remember the surplus and all the fighting about what they'd do with it. That was a nice problem to have.

[Joemailman]

Bear Stearns accepts emergency funding and stock drops over 40%. They will probably not be an independent company much longer.

http://money.cnn.com/2008/03/14/news/companies/jpm_bsc/index.htm?postversion=2008031414

[LL2]

When is this stock market going to start going north again? So far this year the market is back to where it was over a year ago. I do wish I had $20k to but some stocks that are on sale.

[Kiwon]

When is this stock market going to start going north again? So far this year the market is back to where it was over a year ago. I do wish I had $20k to but some stocks that are on sale.

Which ones do you like?

[MJZiggy]

Hey, does this mean they're buying my new 401K stocks cheap? Bonus!!

[Freak Out]

Bear Stearns accepts emergency funding and stock drops over 40%. They will probably not be an independent company much longer.

http://money.cnn.com/2008/03/14/news/companies/jpm_bsc/index.htm?postversion=2008031414

We own them now.......what a joke. But I can see the FED having to do something because there was a run on the bank and they did not have the $$ to cover it.

[LL2]

When is this stock market going to start going north again? So far this year the market is back to where it was over a year ago. I do wish I had $20k to but some stocks that are on sale.

Which ones do you like?

About a month ago I bought stock in netgear (NTGR), Etrade (ETFC), American Oriental Bioengineering (AOB), and Tata Motors (TTM). I tought they were good buys at the time and I think they are better buys right now. There are a few others I own too, but can't think of them right now.

[Joemailman]

Bear Stearns accepts emergency funding and stock drops over 40%. They will probably not be an independent company much longer.

http://money.cnn.com/2008/03/14/news/companies/jpm_bsc/index.htm?postversion=2008031414

We own them now.......what a joke. But I can see the FED having to do something because there was a run on the bank and they did not have the $$ to cover it.

It appears the Fed was worried that Bear Stearns going under would have a ripple effect on Wall Street. http://www.washingtonpost.com/wp-dyn/content/article/2008/03/14/AR2008031401617.html?nav=rss_print

The debate is whether it was really potentially that bad, or whether the Fed panicked.

[Kiwon]

Just my opinion, I'm not a big fan of the government's latest moves (meddling in the sub-prime market, stimulus checks and bailing out Bear, Sterns).

Politicians create the climate for economic problems and then, borrowing words from Obama's pastor, Jeremiah Wright, begin to panic when "the chickens come home to roost." This is especially true during an election year.

Some people are benefited, of course, but at what cost to the integrity of America's overall financial system?

A guy from Singapore I met in the Philippines recently reminded me of the familiar adage regarding economics, "When America sneezes the rest of the world catches a cold." Sound economic policies do matter, not just in America, but also in the economies of nations across the globe.

[Kiwon]

When is this stock market going to start going north again? So far this year the market is back to where it was over a year ago. I do wish I had $20k to but some stocks that are on sale.

Which ones do you like?

About a month ago I bought stock in netgear (NTGR), Etrade (ETFC), American Oriental Bioengineering (AOB), and Tata Motors (TTM). I tought they were good buys at the time and I think they are better buys right now. There are a few others I own too, but can't think of them right now.

Of these, I think AOB is the most interesting long term. In addition, I love the Asian values from their website, "AOBO will bring greater happiness, health and love to the world!"

I'm already into ALU so that cancels NTGR for me. I expect CSCO to gain market share in the future.

ETFC is scary, definitely short term IMHO, and TTM, well, gotta give them credit for marketing a $2,500 "the People's Car." Just don't hit any cows on the Indian roads in this all-aluminum car.

http://www.tatamotors.com/our_world/images/pc-luxury.jpg

[Kiwon]

Well fuck it...I can't hold off any longer and am going to dump a bunch of gold. It's up 40 fucking percent in just 6 months or so and I started buy a long time ago. :lol: I've been real antsy about it for weeks now and I'm seeing some sells so I'm going to make some money and buy another piece of property and take a long vacation with the wife. It has to start tailing off a bit right?
My daughter who is going to start school in New Zealand in three months was thinking of ways to make some extra money before leaving so I told her to sell all the gold jewelry she bought in Asia a few years ago. A bunch of soft Thai stuff.....she made close to a 350 percent profit! It's freaking crazy.

Freaky, have you sold all your gold? It's up over $1,000 an ounce.

You should be sitting pretty now. Good job.

[Freak Out]

Well fuck it...I can't hold off any longer and am going to dump a bunch of gold. It's up 40 fucking percent in just 6 months or so and I started buy a long time ago. :lol: I've been real antsy about it for weeks now and I'm seeing some sells so I'm going to make some money and buy another piece of property and take a long vacation with the wife. It has to start tailing off a bit right?
My daughter who is going to start school in New Zealand in three months was thinking of ways to make some extra money before leaving so I told her to sell all the gold jewelry she bought in Asia a few years ago. A bunch of soft Thai stuff.....she made close to a 350 percent profit! It's freaking crazy.

Freaky, have you sold all your gold? It's up over $1,000 an ounce.

You should be sitting pretty now. Good job.

I did sell some but held off on the majority...smart (lucky) thing. I read a funny story a few days ago about gold....for years loads of little vials of water and gold dust has been sold in Alaska as a tourist thing...now the assayers are buying it up like crazy. On a whim I took one that I think I paid $8 for down to an assayer here and got $161 for it...%60 of market value! Crazy.

[Freak Out]

March 15, 2008
Op-Ed Columnist

George Speaks, Badly
By GAIL COLLINS

Watching George W. Bush address the New York financial community Friday brought back many memories. Unfortunately, they were about his speech right after Hurricane Katrina, the one when he said: “America will be a stronger place for it.”

“You’ve helped make our country really in many ways the economic envy of the world,” he told the Economic Club of New York.

You could almost see the thought-bubble forming over the audience: Not this week, kiddo.

The president squinched his face and bit his lip and seemed too antsy to stand still. As he searched for the name of King Abdullah of Saudi Arabia (“the king, uh, the king of Saudi”) and made guy-fun of one of the questioners (“Who picked Gigot?”), you had to wonder what the international financial community makes of a country whose president could show up to talk economics in the middle of a liquidity crisis and kind of flop around the stage as if he was emcee at the Iowa Republican Pig Roast.

We’re really past expecting anything much, but in times of crisis you would like to at least believe your leader has the capacity to pretend he’s in control. Suddenly, I recalled a day long ago when my husband worked for a struggling paper full of worried employees and the publisher walked into the newsroom wearing a gorilla suit.

The country that elected George Bush — sort of — because he seemed like he’d be more fun to have a beer with than Al Gore or John Kerry is really getting its comeuppance. Our credit markets are foundering, and all we’ve got is a guy who looks like he’s ready to kick back and start the weekend.

This is not the first time Bush’s attempts to calm our fears redoubled our nightmares. His first speech after 9/11 — that two-minute job on the Air Force base — was so stilted that the entire country felt like heading for the nearest fallout shelter. After Katrina, of course, it took forever to pry him out of Crawford, and then he more or less read a laundry list of Goods Being Shipped to the Flood Zone and delivered some brief assurances that things would work out.

O.K., so he’s not good at first-day response. Or second. Third can be a problem, too. But this economic crisis has been going on for months, and all the president could come up with sounded as if it had been composed for a Rotary Club and then delivered by a guy who had never read it before. “One thing is certain that Congress will do is waste some of your money,” he said. “So I’ve challenged members of Congress to cut the number of cost of earmarks in half.”

Besides being incoherent, this is a perfect sign of an utterly phony speech. Earmarks are one of those easy-to-attack Congressional weaknesses, and in a perfect world, they would not exist. But they cost approximately two cents in the grand budgetary scheme of things. Saying you’re going to fix the economy or balance the budget by cutting out earmarks is like saying you’re going to end global warming by banning bathroom nightlights.

Bush pointed out — as if the entire economic world didn’t already know — that Congress has already passed an economic incentive package that will send tax rebate checks to more than 130 million households. “A lot of them are a little skeptical about this ‘checks in the mail’ stuff,” he jibed. Jokejoke. Winkwink.

Then, after a run through of “ideas I strongly reject,” Bush finally got around to announcing that he was going to “talk about what we’re for. We’re obviously for sending out over $150 billion into the marketplace in the form of checks that will be reaching the mailboxes by the second week of May.

“We’re for that,” he added.

Once the markets had that really, really clear, Bush felt free to go on to the other things he was for, which very much resembled that laundry list for Katrina (“400 trucks containing 5.4 million Meals Ready to Eat — or M.R.E.’s ... 3.4 million pounds of ice ...”) This time the rundown included a six-month-old F.H.A. refinancing program, and an industry group called Hope Now that offers advice to people with mortgage problems.

And then, finally, the nub of the housing crisis: “Problem we have is, a lot of folks aren’t responding to over a million letters sent out to offer them assistance and mortgage counseling,” the president of the United States told the world.

But wait — more positive news! The secretary of Housing and Urban Development is proposing that lenders supply an easy-to-read summary with mortgage agreements. “You know, these mortgages can be pretty frightening to people. I mean, there’s a lot of tiny print,” the president said.

Really, if he can’t fix the economy, the least he could do is rehearse the speech.

[Kiwon]

I love the title of her piece, "George Speaks Badly." No one has ever reported on this before. It's groundbreaking.

Well, one good thing about Bush's presidency coming to an end is that maybe the NYT op-ed pieces blaming him for every conceivable problem will begin to cease.

Bush is inarticulate. So what? Hillary's a proven liar and sounds like everyone's ex-wife or mother-in-law when she gets worked up and Obama speaks in endless platitudes spoken eloquently. I wonder if Gail Collins can step out of her bias bubble to notice that her own newspaper is a utter failure financially and journalistically. No, that's not important. Bush as the stupid bumbler, that's the narrative that never seems to get old for the elites and NYT loyalists. Now, Governor Eliot Spitzer, there's a bright boy. He can pronounce the names of both the heads of Saudi Arabia AND Russia. Wow, I bet Gail Collins voted for him.

Bush and the Congress have made questionable moves of late but President's Bush's address to The Economic Club of New York reveals that he at least understands some economic basics. Oh, he's not as well spoken as the New York snob Gail Collins, but so be it. She has a lot of experience as a country's chief executive, I'm sure.

Democrats have to create a climate of fear in order to justify the coming tax hikes and wealth redistribution. President Bush on the other hand actually had something positive to say about his country. Imagine that, America is not the cause of every evil known to man. Here's part of his speech:

"In a free market, there's going to be good times and bad times. That's how markets work. There will be ups and downs. And after 52 consecutive months of job growth, which is a record, our economy obviously is going through a tough time. I want to remind you, this is not the first time since I've been the president that we've faced economic challenges. We inherited a recession, and then there were the attacks of September the 11th, 2001, which many of you saw firsthand, and I made the difficult decisions to confront the terrorists and extremists on two major fronts: Afghanistan and Iraq. And then we had devastating natural disasters. And the interesting thing, every time this economy has bounced back better and stronger than before. So I'm coming to you as an optimistic fellow.

(That's the other part that Gail Collins doesn't like - the optimism..)

One bill in Congress would provide $4 billion for state and local governments to buy up abandoned and foreclosed homes. You know, I guess this sounds like a good idea to some, but if your goal is to help Americans keep their homes, it doesn't make any sense to spend billions of dollars buying up homes that are already empty. As a matter of fact, when you buy up empty homes you're only helping the lenders, or the speculators. The purpose of government ought to be to help the individuals, not those who speculated in homes. This bill sends the wrong signal to the market.

[A] lot of folks are worried about their neighbors losing work. ... [S]ometimes, if you're going to lead this country, you have to stand in the face of what appears to be a political headwind. ... I'm troubled by isolationism and protectionism. ... [W]hat concerns me is, is that the United States of America will become fatigued when it comes to fighting off tyrants, or say it's too hard to spread liberty, or use the excuse that just because freedom hadn't flourished in parts of the world, therefore it's not worth trying, and that, as a result, we kind of retrench and lose confidence in our -- the values that have made us a great nation in the first place. But these aren't American values; they're universal values. And the danger of getting tired during this world [sic] is any retreat by the America -- by America was going to be to the benefit of those who want to do us harm. Now, I understand that since September the 11th, the great tendency is to say, we're no longer in danger. Well, that's false. That's false hope. It's either disingenuous or naive, and either one of those attitudes is unrealistic. And the biggest job we've got is to protect the American people from harm. I don't want to get in another issue, but that's why we better figure out what the enemy is saying on their telephones, if you want to protect you."

[Joemailman]

http://www.usatoday.com/money/industries/banking/2008-03-16-jpmorgan-bearsterns_N.htm

Hope nobody owns a lot of Bear Stearns stock. JP Morgan is buying it for $2 a share. It closed at $30 on Friday.

[Kiwon]

http://www.usatoday.com/money/industries/banking/2008-03-16-jpmorgan-bearsterns_N.htm

Hope nobody owns a lot of Bear Stearns stock. JP Morgan is buying it for $2 a share. It closed at $30 on Friday.

Holy Molly! That's what I call a fire sale.

I wonder what type of bonuses Bear Stearns execs got last year. They better be ready to give them back after the shareholders law suits get cranked up.

I wonder what type of BR debt that JP Morgan is assuming.

[GrnBay007]

Is anyone out there with money laying around checking out the foreclosures?? This housing bust can't last forever. Seems like there are some incredible deals out there right now.

[Joemailman]

30% of Bear Stearns stock is owned by their employees. I wonder how many people are about to lose a big chunk of their retirement savings, ala Enron.

[Freak Out]

We know Bush creates his own reality and like his father before him is completely disconnected from the world most Americans live in and his statement this morning after hearing from Paulson reaffirms all of this...

" ...You've reaffirmed the fact that our financial institutions are strong and that our capital markets are functioning efficiently and effectively. "

:lol: :lol: Gotta love the Dubya,

[Freak Out]

Is anyone out there with money laying around checking out the foreclosures?? This housing bust can't last forever. Seems like there are some incredible deals out there right now.

I would hold off just a bit longer....the foreclosures should really start to climb soon.

[Tyrone Bigguns]

Is anyone out there with money laying around checking out the foreclosures?? This housing bust can't last forever. Seems like there are some incredible deals out there right now.

You ain't seen nothing yet. It will be at least another year of this.

I live in sub prime nirvana...az..and the mortgage brokers..and I mean real brokers..not the guy that switched from selling cars the minute the market got hot..are all telling me that at the minimum a year. Tyrone's brother, who is a very financially viable guy has his bankers saying pretty much the same.

I dont' think many on this board realize how many bad loans are out there. Those no doc loans were given to anybody with ok credit..so every bartender, waiter, person who earned off tips..got a place on. Now, they are screwed because you need to show some sorta earning..and they can't do it. They can't afford the new payments after the arm term ends..nor can they refi as they can't prove earnings.

Every week there are more commercials for REDC and buying properties at auction. Ty's crackhead friend went to buy a property that the bank had bought after foreclosure (poor bastard had left 100k in equity in the place)...house at one time valued at 650...bank offered it at 395...property sold at 375.

And, let's not forget the other countries like India, Australia, UK that are also going thru their own sub prime problems.

[The Leaper]

You ain't seen nothing yet. It will be at least another year of this.

I agree Ty.

On average, I would expect home prices to tumble at least another 5-10% before the housing market truly corrects itself. The supply of available homes is only going to continue to grow...and the credit crunch means there are fewer and fewer people buying.

[Partial]

It's disgusting because I keep seeing more and more condo's being built.

How many housing solutions do we really need?

[Tyrone Bigguns]

You ain't seen nothing yet. It will be at least another year of this.

I agree Ty.

On average, I would expect home prices to tumble at least another 5-10% before the housing market truly corrects itself. The supply of available homes is only going to continue to grow...and the credit crunch means there are fewer and fewer people buying.

Ty moved to AZ two years ago at the height of the market..when Ty's good friend had his modest 1700 sq ft. house go from 180 to 310 in less than a year. Ty was incredulous.

Ty's friend's girfriends friend had a house in Sdale valued at one time at 750k...now she is happy cause realtor getting people to look at it at 450K.

Ty heard many people tell him to buy. Ty, being the contrarian and often a pariah, said no. Ty rented and continues to do so now. Ty was told by many that he was throwing money away. Ty laughed. Ty knows that housing is not always the best investment. Ty knows that the american dream is just that..a dream.

Ty's friend is a heavyweight banker in chi-town. Ty's friend was financing a condo conversion in Tempe. Your basic college type apartment. One closet per bedroom..no storage space, etc. Ty went to the chic opening of it. Ty's fell on the ground in paroxyms of laughter when told that a 2 br/2bath/800 sq feet was 250K.

Ty will be scooping up a very nice condo next year. Ty owned a home. Ty is lazy. Ty wants no part of yard work, etc.

[Tyrone Bigguns]

It's disgusting because I keep seeing more and more condo's being built.

How many housing solutions do we really need?

Partial,

are you a commie. Are you against the free market?

[Partial]

It's disgusting because I keep seeing more and more condo's being built.

How many housing solutions do we really need?

Partial,

are you a commie. Are you against the free market?

No, but you have to wonder what is going to happen to housing prices when the supply is of epic proportions and the demand rises at the rate of the population growth.

Unfortunately, I see prices taking a nose dive. It is unfortunate because my Mom was planning on moving in the next few years.

[Tyrone Bigguns]

It's disgusting because I keep seeing more and more condo's being built.

How many housing solutions do we really need?

Partial,

are you a commie. Are you against the free market?

No, but you have to wonder what is going to happen to housing prices when the supply is of epic proportions and the demand rises at the rate of the population growth.

Unfortunately, I see prices taking a nose dive. It is unfortunate because my Mom was planning on moving in the next few years.

That is the free market. America love it..or get out.

No wondering at all. Prices will go down.

[Scott Campbell]

You ain't seen nothing yet. It will be at least another year of this.

I agree Ty.

On average, I would expect home prices to tumble at least another 5-10% before the housing market truly corrects itself. The supply of available homes is only going to continue to grow...and the credit crunch means there are fewer and fewer people buying.


And that is at the heart of the matter. There were people in houses who couldn't afford them to begin with. There were valid reasons that prior to 5 years ago you couldn't get a no money down home. This had to end badly.

[Scott Campbell]

Is anyone out there with money laying around checking out the foreclosures?? This housing bust can't last forever. Seems like there are some incredible deals out there right now.

You ain't seen nothing yet. It will be at least another year of this.

I live in sub prime nirvana...az..and the mortgage brokers..and I mean real brokers..not the guy that switched from selling cars the minute the market got hot..are all telling me that at the minimum a year. Tyrone's brother, who is a very financially viable guy has his bankers saying pretty much the same.

I dont' think many on this board realize how many bad loans are out there. Those no doc loans were given to anybody with ok credit..so every bartender, waiter, person who earned off tips..got a place on. Now, they are screwed because you need to show some sorta earning..and they can't do it. They can't afford the new payments after the arm term ends..nor can they refi as they can't prove earnings.

Every week there are more commercials for REDC and buying properties at auction. Ty's crackhead friend went to buy a property that the bank had bought after foreclosure (poor bastard had left 100k in equity in the place)...house at one time valued at 650...bank offered it at 395...property sold at 375.

And, let's not forget the other countries like India, Australia, UK that are also going thru their own sub prime problems.



Just saw this and agree completely. I also have a good friend in the sub prime business, and those boys know the score. His outlook isn't quite as rosy as you friends.

Talking with those guys makes me wonder why I got in my line of business. The (relatively) easy money is in finance - despite all the current contrary evidence.

[GoPackGo]

You ain't seen nothing yet. It will be at least another year of this.

I agree Ty.

On average, I would expect home prices to tumble at least another 5-10% before the housing market truly corrects itself. The supply of available homes is only going to continue to grow...and the credit crunch means there are fewer and fewer people buying.


And that is at the heart of the matter. There were people in houses who couldn't afford them to begin with. There were valid reasons that prior to 5 years ago you couldn't get a no money down home. This had to end badly.

I am really glad I backed out of buying my first home in 2005 for $200,000. That same home now is worth $180,000 and I would have used an ARM loan to get it. I'm still renting a house, waiting for the right time to buy one with a 30 year fixed.

[Scott Campbell]

I'd say RG's advice about having enough money down to buy a home is looking pretty sage right now.

[oregonpackfan]

Tyrone,

Why do you always refer to yourself in the third person? You sound like a sports star talking about himself. :)

[Scott Campbell]

Tyrone,

Why do you always refer to yourself in the third person? You sound like a sports star talking about himself. :)



That's his shtick.

[Tyrone Bigguns]

Tyrone,

Why do you always refer to yourself in the third person? You sound like a sports star talking about himself. :)



That's his shtick.

Scott,

I must ask you to stop appropriating my culture.

[Tyrone Bigguns]

Is anyone out there with money laying around checking out the foreclosures?? This housing bust can't last forever. Seems like there are some incredible deals out there right now.

You ain't seen nothing yet. It will be at least another year of this.

I live in sub prime nirvana...az..and the mortgage brokers..and I mean real brokers..not the guy that switched from selling cars the minute the market got hot..are all telling me that at the minimum a year. Tyrone's brother, who is a very financially viable guy has his bankers saying pretty much the same.

I dont' think many on this board realize how many bad loans are out there. Those no doc loans were given to anybody with ok credit..so every bartender, waiter, person who earned off tips..got a place on. Now, they are screwed because you need to show some sorta earning..and they can't do it. They can't afford the new payments after the arm term ends..nor can they refi as they can't prove earnings.

Every week there are more commercials for REDC and buying properties at auction. Ty's crackhead friend went to buy a property that the bank had bought after foreclosure (poor bastard had left 100k in equity in the place)...house at one time valued at 650...bank offered it at 395...property sold at 375.

And, let's not forget the other countries like India, Australia, UK that are also going thru their own sub prime problems.



Just saw this and agree completely. I also have a good friend in the sub prime business, and those boys know the score. His outlook isn't quite as rosy as you friends.

Talking with those guys makes me wonder why I got in my line of business. The (relatively) easy money is in finance - despite all the current contrary evidence.

Rosy? Geez, and i worked hard not to appear to be a doom and gloom asshole.

I'm with your buddies...I think we are really going to suffer for quite a while.

Ty's brother has two million dollar properties in N.Scottsdale that he can't sell..or rather he could sell, but he would be financially hurt by doing so.

Ty saw this coming early as Ty had transitioned from being in tech to headhunting. Ty's territory was S.Cali and civil engineers/surveyors. Boom, suddenly firms that were crying for land dev candidates were letting people go. Reminded Ty of the dot com/y2k era.

Business: Agreed. When the market turns again..3 or so years, i may just bail to that. If a bunch of used car salesmen can make 300k why not Ty?

[Tyrone Bigguns]

You ain't seen nothing yet. It will be at least another year of this.

I agree Ty.

On average, I would expect home prices to tumble at least another 5-10% before the housing market truly corrects itself. The supply of available homes is only going to continue to grow...and the credit crunch means there are fewer and fewer people buying.


And that is at the heart of the matter. There were people in houses who couldn't afford them to begin with. There were valid reasons that prior to 5 years ago you couldn't get a no money down home. This had to end badly.

I am really glad I backed out of buying my first home in 2005 for $200,000. That same home now is worth $180,000 and I would have used an ARM loan to get it. I'm still renting a house, waiting for the right time to buy one with a 30 year fixed.

Smart move. Same one i made.

Sometimes having that sound Wisco background...30 year fixed, etc. stops us from making a ton of money in risky areas...but, it also prevents catastrophic mistakes.

[Scott Campbell]

I think RG recommends a 15 year fixed. I know I do. You used to get a half a point discount on the interest rate, and if you can't qualify for the higher payments, its a pretty good indicator that you might be in over your head on the 30 year.

[Freak Out]

Always get the 15 year fixed if you can afford it. If you start with a 30 fixed or an ARM as soon as you can refinance do so to a 15 year. Before you know it your home is paid for.
The market in Alaska is still solid...nothing is really coming down in price enough to make any big moves buying up income property or such...but I'm heading south this Thursday and will be looking everywhere I go for some deals.

[Kiwon]

There were valid reasons that prior to 5 years ago you couldn't get a no money down home. This had to end badly.

Yeah, but just think how much the late-night infomercial industry would have suffered. :roll:

[Freak Out]

Wasn't the head of Bear Stearns just saying 4 or 5 days ago that everything was groovy and that they had a good cushion to make it through these tough times? Sounds like another Enron story.

[GoPackGo]

I think RG recommends a 15 year fixed. I know I do. You used to get a half a point discount on the interest rate, and if you can't qualify for the higher payments, its a pretty good indicator that you might be in over your head on the 30 year.

Do you know of any books or websites that support this financial strategy?

[MJZiggy]

I'm pretty sure you can find it in Motley Fool. The idea is that not only are you paying it off in 15 years as opposed to 30, the sheer number of dollars that you put into interest payments is cut WAY way down. My ex always said that we'd take the 30 and pay it like a 15, figuring that way if you hit a financial snag, you weren't forced to make the higher payment, but somehow he never got around to paying the 30 like a 15 (which sucks because we'd have a lot of money if he had).

[Scott Campbell]

I think RG recommends a 15 year fixed. I know I do. You used to get a half a point discount on the interest rate, and if you can't qualify for the higher payments, its a pretty good indicator that you might be in over your head on the 30 year.

Do you know of any books or websites that support this financial strategy?


My first personal finance book - Wealth Without Risk - Charles Givens. Much of it is getting pretty dated.

[LL2]

I'm pretty sure you can find it in Motley Fool.

I love the Motley Fool. I subscribe to a couple of their newsletters. I've been a fan for years.

I've read Wealth Without Risk years ago...you want a classic...try The Richest Man in Babylon.

[oregonpackfan]

Always get the 15 year fixed if you can afford it. If you start with a 30 fixed or an ARM as soon as you can refinance do so to a 15 year. Before you know it your home is paid for.


Consumer advocates Clark Howard and Dave Ramsey also favor getting a 15 year fixed if you can afford it.

About 5 and 1/2 years ago, we went from a 30 yr. fixed mortgage at 7.0% to a 15 yrd fixed mortgage at 5.0%. Our monthly payments went up just $34!

In the long run, we are saving thousands of dollars.

[Partial]

Always get the 15 year fixed if you can afford it. If you start with a 30 fixed or an ARM as soon as you can refinance do so to a 15 year. Before you know it your home is paid for.


Consumer advocates Clark Howard and Dave Ramsey also favor getting a 15 year fixed if you can afford it.

About 5 and 1/2 years ago, we went from a 30 yr. fixed mortgage at 7.0% to a 15 yrd fixed mortgage at 5.0%. Our monthly payments went up just $34!

In the long run, we are saving thousands of dollars.

Wow! Yeah, you guys are probably saving a lot of money!!!

[LL2]

Wasn't the head of Bear Stearns just saying 4 or 5 days ago that everything was groovy and that they had a good cushion to make it through these tough times? Sounds like another Enron story.

Looks like Enron for these folks!

http://money.cnn.com/galleries/2008/fortune/0803/gallery.bear_big_losers.fortune/index.html

[The Leaper]

Wasn't the head of Bear Stearns just saying 4 or 5 days ago that everything was groovy and that they had a good cushion to make it through these tough times? Sounds like another Enron story.

Not really. Most Enron investors were the little guys. Enron was a massive corporation with a lot of regular employees with stock options they were counting on for retirement/education/whatnot. The big wigs bailed before the ship sank and pocketed their cash, but the little guys all went down with the ship.

Bear Stearns did not do anything illegal...they simply accepted too much risk based on the housing market and got burned.

[Tyrone Bigguns]

Catch Cramer last week.

"Don't be an idiot. Don't sell Bear."

My god, has anybody lost more money than this guy? Funny thing, i use to read his columns and think he was pretty smart. Now, i just think he is a talking head.

[Joemailman]

He actually said "Don't take your money out of Bear". He says he was responding to a question of whether people should pull their money out of Bear accounts, not whether they should sell Bear stock.

[Tyrone Bigguns]

He actually said "Don't take your money out of Bear". He says he was responding to a question of whether people should pull their money out of Bear accounts, not whether they should sell Bear stock.

Uh, maybe. He is backpedaling pretty fast right now.

He said the common stock was worthless at 36..yet a day before it was at 60.

Also, review how CNBC was talking about a "run" on the bank..it is context. Should cramer have been advocating that..perhaps.

Oh, and Cramer is NOW saying the FDIC is guaranteeing the money..just not the equity. Veering into Clinton speak...what is sex.

I don't buy his double speak at all.

[Kiwon]

Visa IPO Raises Nearly $18B

(AP) SAN FRANCISCO -- The credit crisis that has been haunting the stock market for months wasn't enough to scare investors away from the IPO of the world's largest credit card processor.

Overcoming the jitters that have battered many of the lenders that issue its cards, Visa Inc. sold 406 million shares at $44 apiece late Tuesday to raise nearly $18 billion and complete the most lucrative initial public offering in U.S. history.

The price topped the range of $37 to $42 per share that Visa set three weeks ago, reflecting high demand to own a piece of a company that's promising earnings growth of 20% despite a credit crunch that's choking the U.S. economy. "This shows that all the recent financial turmoil obviously hasn't bothered a lot of people," said Nicholas Einhorn, an IPO analyst for Renaissance Capital of Greenwich, Conn.

http://www.foxbusiness.com/markets/industries/finance/article/visa-ipo-raises-nearly-18b_526509_9.html

.................................................. .................................................

Credit crunch? No problem. Americans are hooked on credit.

Check out the chart for MA (MasterCard)

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=mA&sid=0&o_symb=mA&freq=1&time=9

From $40 to $227 in 18 months. I read the articles, but....... didn't pull the trigger. Shoulda, woulda, coulda. :(

[Freak Out]

Damn.....I was somewhat surprised when gold dropped $40 some dollars today...I had a few sells in I did not think they would kick so soon. Oh well...a profits a profit.

[Kiwon]

Damn.....I was somewhat surprised when gold dropped $40 some dollars today...I had a few sells in I did not think they would kick so soon. Oh well...a profits a profit.

I saw that it dropped $59.

"Gold for April delivery fell $59, or 5.9 percent, to $945.30 an ounce on the Comex division of the New York Mercantile Exchange, the biggest drop for a most-active contract since June 2006. Gold reached a record $1,033.90 on March 17."

Just a bump in the road. Gold will go higher in the months to come over as the market struggles with political uncertainly, inflation, credit, and tax worries.

I expect the economy will be on a roller coaster for at least another year. Stability won't return until after the new Democratic administration is in place, tax proposals are on the table and Wall Street can determine how anti-business the Dems will be.

I would be in no hurry to sell. Just appreciate the fact that you have a solid insurance policy as the economy goes through this painful purging process.

[Kiwon]

Finally....

Justice Department approves XM-Sirius radio deal


http://www.usatoday.com/money/media/2008-03-24-sirius-xm-satellite-approval_N.htm?loc=interstitialskip

It took 14 long months amidst John Conyers' (D-Mich) pleas to drag the process out even further but the Justice Department finally came through. The merger still has to clear the final hurdle of the FCC.

What's the future of Satellite Radio Broadcasting? Who knows, but at least it's more likely that their WILL BE satellite radio broadcasting with the combined strength of both companies.

Good news for XMSR or SIRI shareholders.

[MJZiggy]

Is gold still high? I realize I have a bit of it to offload...

[Kiwon]

Is gold still high? I realize I have a bit of it to offload...

$929-930, still very high, but has backed off a little due to the Fed trying to stabilize the market.

[Scott Campbell]

Is gold still high? I realize I have a bit of it to offload...



How much gold you got there Zig? I might be able to make room for number 8. Come make me an offer.

[MJZiggy]

Lol, it ain't THAT much, Scott...Who do you take it to to sell it?

[Scott Campbell]

Lol, it ain't THAT much, Scott...Who do you take it to to sell it?

I've never owned gold. Staying away worked out pretty well for a long time - until pretty recently.

[Freak Out]

Buddy, Can You Spare a Billion?

By Dana Milbank
Friday, April 4, 2008; A03

Meet Alan Schwartz, welfare recipient.

As the chief executive of Bear Stearns, he's getting rather more public assistance than your typical welfare mom -- specifically, $30 billion in federal loan guarantees to help J.P. Morgan Chase take over his firm. But then, Schwartz has had rather more than his share of suffering of late.

As his firm collapsed, he was forced to forgo his entire 2007 bonus, leaving his compensation for the past five years at a paltry $141 million, according to Business Week. Things have become so bad that, the Wall Street Journal discovered, Schwartz has had to rent out his 7,850-square-foot home on the ninth green of a suburban New York golf course -- leaving the poor fellow with only his 17-room, seven-acre home in Greenwich, his condo in Colorado and the athletic center he built for Duke University.

Schwartz's tale of woe tugs at the heartstrings all the more because he and his colleagues at Bear Stearns were, he believes, blameless for the bankruptcy of two hedge funds and the subsequent collapse of the 85-year-old investment bank. "I am saddened," Schwartz told the Senate banking committee yesterday. He was saddened that Bear Stearns was undone by "unfounded rumors and attendant speculation," despite its impeccable balance sheet.

"Due to the stressed condition of the credit market as a whole and the unprecedented speed at which rumors and speculation travel and echo through the modern financial media environment, the rumors and speculation became a self-fulfilling prophecy," Schwartz told the senators. "There was, simply put, a run on the bank."

Sen. Richard Shelby (R-Ala.) asked the corporate-welfare recipient whether he shares any blame for his indigent circumstances. "Do you believe that your management team has any responsibility for the company's collapse?"

Schwartz could think of no missteps -- not even his decision to remain at a conference at the Breakers in Palm Beach while his firm was imploding. "I just simply have not been able to come up with anything, even with the benefit of hindsight," said the blameless chief executive, escorted into the hearing room by superlawyer Robert Bennett.

Fortunately for Schwartz, he had a sympathetic audience in the banking committee, whose members have received more than $20 million in campaign contributions from the securities and investment industry, according to the Center for Responsive Politics. "I want the witnesses to know, and others, that as a bottom-line consideration, I happen to believe that this was the right decision," Chairman Chris Dodd (D-$5,796,000) said before hearing a single word of testimony.

"You made the right decision," Sen. Evan Bayh (D-$1,582,000) told the regulators who worked out the loan guarantee.

"The actions had to be done," agreed Sen. Chuck Schumer (D-$6,162,000).

Only a minority of senators, particularly those with smaller pieces of the campaign-cash pie, dissented. "That is socialism!" railed Sen. Jim Bunning (R-$452,000). "And it must not happen again."

To the extent the lawmakers objected to the Bear Stearns bailout, they worried that the Fed's actions would create a "moral hazard" -- an economic term of art -- that, as Shelby put it, "encourages firms to take excessive risk based on the expectations that they will reap all the profits while the federal government stands ready to cover any losses if they fail."

Shelby's notion was a curiosity for the senators, who don't often spend a lot of time worrying about moral hazards. No fewer than five other senators invoked the phrase. "I think the moral hazard was minimized," Federal Reserve Chairman Ben Bernanke, one of the witnesses, reassured the senators.

No moral hazard, however, would interfere with the lawmakers' compassion for the beleaguered Schwartz and his fellow witness, J.P. Morgan Chase's Jamie Dimon, who had given a combined $260,000 in political contributions in recent years -- a small part of the $1.7 million their co-workers contributed in this election cycle alone. That's a sizable handout -- but a good investment compared with the $30 billion federal hand-up.

"On behalf of all of us here on this dais, our sympathies go out to your employees," Dodd told Schwartz after his opening statement. "There's no adequate way we can express our sorrow to them for what happened. Obviously, shareholders, same sort of feelings, but obviously the employees particularly. It's a particularly hard blow."

Of course, some might consider $30 billion an adequate expression of sympathy, but Dodd was apologetic as he gently probed Schwartz. "You both will have forgotten more in the next 10 minutes than I'll ever probably understand about all of this," he told the witnesses, but didn't the irregular trading at Bear Stearns mean than "more than just rumors" were behind Bear Stearns's demise?

"You could never get facts out as fast as the rumors," Schwartz explained. "It looked like there were people that wanted to induce panic."

Sen. Bob Menendez (D-N.J.) reminded Schwartz that two of the firm's funds went bankrupt in 2007. "It caused concern, not only here but on Wall Street," the senator said. "Did that dramatically alter your behavior?"

Evidently not. "I'm not sure I understand the question," Schwartz answered

:lol: :lol: :lol: :lol: :lol:

[LL2]

An excellent and educational article. As someone that is the middle man between importers and U.S. Customs I find articles like this interesting, and also why my business is also pretty much recession proof.

Some Chinese Guy Is Paying Your Mortgage

http://www.fool.com/investing/international/2008/04/03/some-chinese-guy-is-paying-your-mortgage.aspx

Bill Mann
April 3, 2008

I'm about to say something many readers will find quite controversial. It might even anger some of you.

Some Chinese guy is helping you pay your mortgage.

I know, you don't recall ever getting a check from a Mr. Li, and if you were to find this Mr. Li, he'd disavow sending funds to you, but the nature of the balance of trade between China and the United States guarantees that what I'm about to tell you is true (unless you don't own a home or it's paid off, but let's not get pedantic).

Here's why
Over the last decade, China's trade surplus with the U.S. has added up to $1.3 trillion. What this means (tautologically) is that these dollars accumulate in the Chinese financial system, most notably at People's Bank of China (PBOC) -- the Chinese equivalent to the Federal Reserve. What then happens is -- OK, this is boring. How about we track what happens using a Barbie doll?

And yes, that's what I'm saying: Our willingness to consume Barbie dolls is forcing some Chinese guy to pay your mortgage.

Globetrotter Barbie
So, we head off to Target (NYSE: TGT) to buy a Barbie Doll. They cost approximately $20 apiece. Of this amount, most goes to Target, manufacturer Mattel (NYSE: MAT), various tax authorities, etc. And a smaller amount -- let's call it a dollar -- goes back to China.

The Chinese factory where Barbies are made is, redundantly, Chinese. All of its costs are rendered in Chinese yuan, but all of its contracts are rendered in U.S. dollars. So its contract with Mattel to produce 100,000 Barbie Fairytopia Rainbow Adventure Elina dolls (yes, I have girls) is worthless to the company until it converts those sawbucks into yuan. They do so by taking their dollar receipts to a commercial bank, which converts them into local currency.

Stick with me now -- for without even paying attention, we've just met our Mr. Li. He makes a paltry 1,500 yuan per month ($200) assembling Barbie dolls at the factory. We'll get back to him in a second.

Keeping with our dollar
So this dollar meets up with thousands and millions of other U.S. dollars in this Chinese bank, residuals from our consumption of Nike (NYSE: NKE) basketball shoes, Apple (Nasdaq: AAPL) iPods, whoopee cushions, and so on. Banks all over the world use their foreign currency holdings to invest them for their highest marginal use -- but not in China, where all foreign currency gets surrendered to the PBOC.

Now our single dollar has joined a river of them flowing toward the PBOC. The PBOC, in turn, has to figure out how to invest this unending stream of cash. Mostly, it's purchased U.S. Treasuries, but it's started buying U.S. equities, such as when China invested $3 billion in Blackstone Group (NYSE: BX) last May.

As a result, the dollar which we sent to China when we purchased a Barbie doll boomerangs back to the United States as some type of investment.

Wait, what about Mr Li?
In effect, this relationship means that every American has borrowed several thousand bucks from someone in China. Because remember what Treasury notes are -- an obligation to pay someone who is lending money.

In this case, while the lender here may seem like it's the PBOC, China's policy to keep its exchange rate artificially low means that the country's workers are bearing the brunt of the cost. (An interesting dynamic for a "communist" country, don't you think?)

See, the low exchange rate benefits Chinese companies by keeping costs low, but by the same measure, prevents laborers from benefiting at all. Just imagine if the yuan was allowed to float freely. Suddenly millions of folks like Mr. Li would see their paychecks double in dollar terms, China would be wracked with inflation, and its export-based economy would be a lot less cost competitive.

This has real consequences for Mr. Li. Not only does he get paid an artificially low amount (in effect, lending the balance to you), but since China has to keep finding places to stick all of those dollars that keep inflation in check, the government won't make the kinds of expenditures that make sense in a rapidly developing economy: Schools, pollution controls, and so on. If you've been to China, then you know that there are a lot of good places where $1.3 trillion could be put to work.

This makes zero sense until you realize that the overarching goal of the Chinese government is to improve the standard of living for as many of its citizens as possible, while limiting the income gap between those whose lives have already improved and those whose have not. Still, the overall impact -- the fact that our comparatively exorbitant spending is subsidized by low-paid Chinese workers is shocking on many levels.

Scratch that: It's stunning.

You have two choices
One way to combat this reality is to consume fewer Chinese goods. While some are attempting to do just (call it a Lou Dobbs-ian form of protest), it's unlikely to move the needle. Besides, why get into a trade war when the burgeoning Chinese middle class will soon be an extraordinary growth market for our own product?

So rather than make a pyrrhic political statement, I suggest you act to benefit from this reality by investing overseas. This way you can profit from the natural downward pressure on the dollar created by our spending habits. And while you needn't pick Chinese companies, an outstanding company such as Motley Fool Global Gains recommendation New Oriental Education & Technology (NYSE: EDU) would fit the bill nicely. (Incidentally, this is also a business that benefits from the burgeoning and education-focused Chinese middle class.)

If the prospect of investing in China frightens you, you can also consider picking up American names that do substantial business in the country. Yum! Brands (NYSE: YUM), for example, has opened more than 3,000 KFC, Pizza Hut, and East Dawning restaurants in China.

Pick your passion
Given today's global economic realities, it makes great sense to invest overseas and ensure that your savings have exposure to other (stronger) currencies.

[LL2]

I thought I would post the quote below, which is good considering the state of our economy with high gas prices, food prices, stagnant wages, etc.

Robert Kennedy in a 1968 speech: "Our gross national product ... measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile."

[GoPackGo]

Is anybody here managing there own Roth IRA?

[Kiwon]

Microsoft pulls deal off the table. Let's see if the Yahoo! board or shareholders rebel against Jerry Yang and the boys.

Shareholders might could do better with a different suitor but they certainly could do far worse than MSFT.

Microsoft drops bid after Yahoo rejects higher offer

SEATTLE (AP) — Microsoft says it's dropping its 3-month-old bid to buy Yahoo because the two sides couldn't agree on a price.

In a letter sent to Yahoo Saturday, Microsoft Chief Executive Steve Ballmer said the software maker was willing to pay as much as $47.5 billion, or $33 billion, per share for Yahoo. That was up from Microsoft's original offer of $44.6 billion, or $31 per share.

But Yahoo insisted on Microsoft paying at least $53 billion, or $37 per share, according to Ballmer.

"Clearly a deal is not meant to be," Ballmer wrote in his letter to Yahoo Chief Executive Jerry Yang.

http://www.usatoday.com/tech/techinvestor/2008-05-03-microsoftyahoo_N.htm

[Kiwon]

Follow-up on MSFT - YHOO failed deal

It's about Round 3 in this case of corporate chicken.

Yahoo under pressure after deal collapse

By Richard Waters in San Francisco

An expected realignment of the consumer internet sector was thrown into doubt over the weekend after Microsoft’s surprise abandonment of its $46.5bn offer for Yahoo.

The move is set to put pressure on senior executives of both companies, as one of Yahoo’s largest shareholders criticised both sides for failing to agree a deal that would have left Yahoo shareholders with a big gain and given Microsoft a boost in its attempt to compete with Google.

It will also trigger fresh rounds of talks between some of the biggest players in the internet industry as both companies now look for other ways to boost their flagging online businesses, analysts and investors said.

Steve Ballmer, Microsoft’s chief executive, called off his company’s three-month pursuit of Yahoo in a letter - released publicly on Saturday - to Yahoo founder and chief executive Jerry Yang.

Mr Ballmer said Microsoft had raised its bid to $33 a share, from an original offer of $31, but that Yahoo had continued to hold out for at least $37.

Mr Yang is likely to face the most heated questions from shareholders over his refusal to do more to reach an agreement, with his company’s shares expected to drop sharply from their bid-inflated price of $28.67 at the end of last week.

Bill Miller, portfolio manager at Legg Mason, which owns 6 per cent of Yahoo’s stock, yesterday called on the internet company to mount an immediate stock buy-back worth at least $4bn to demonstrate its confidence in its shares, after turning down an offer that represented a 70 per cent premium to the share price before Microsoft made its offer.

“They had the opportunity to do this, and both sides missed it,” said Mr Miller.

“Yahoo’s management now is in a really difficult position – they have to prove they can get that value back to $37.”

However, Mr Miller reserved his strongest criticism for Microsoft, which he said now faced a position as “a distant number three online” over its refusal to increase its offer by a relatively small amount, at least by the standards of its own financial resources.

“To miss out on a major strategic opportunity that was worth 2 per cent of your market [value] doesn’t make sense,” he said.

Some observers speculated yesterday that Microsoft had taken a tough line on price in the hope that pressure from shareholders would force Mr Yang back to the negotiating table.

Microsoft’s apparent withdrawal “could be tactical”, said Morton Pierce, a New York mergers and acquisitions lawyer, though he added: “In deals of this magnitude, you assume they’ve really thought about it and they’re really walking away.”

Yahoo sought to present the weekend’s events as a chance to return to business as usual, and one person close to the company said it would push ahead and try to complete deals it has discussed in recent weeks with both Google and AOL.

AOL, meanwhile, has also been holding talks with Microsoft, a person close to the situation said at the weekend. Time Warner, AOL’s parent, could ultimately be one of the biggest beneficiaries of the latest turn of events if it leads to a fight between Microsoft and Yahoo for AOL, one investor said. Microsoft has also held talks with News Corp about combining its internet operations with MySpace.

The expected flurry of discussions follows the failure of a deal that would have reshaped the internet landscape, and reflects the pressure on both Mr Yang and Mr Ballmer to show that they have alternatives as they try to narrow the lead of runaway internet leader Google.

[MJZiggy]

Dammit, I was hoping yahoo might actually start to be more compatible with MSN...

[Partial]

Dammit, I was hoping yahoo might actually start to be more compatible with MSN...

Pidgin

[SkinBasket]

Pidgin

This is one of those gay codes right? Now Zool taps his toe and you crawl under the stall partition with your pants around your ankles and your abysmal dong bouncing around like a cocktail wiener on a string?

[Partial]

Pidgin

This is one of those gay codes right? Now Zool taps his toe and you crawl under the stall partition with your pants around your ankles and your abysmal dong bouncing around like a cocktail wiener on a string?



:oops: He's onto us

[Kiwon]

Pidgin

This is one of those gay codes right? Now Zool taps his toe and you crawl under the stall partition with your pants around your ankles and your abysmal dong bouncing around like a cocktail wiener on a string?



:oops: He's onto us

:D :D :D

[Kiwon]

Yahoo's down 22% in pre-market quotes.

Let the bloodbath and recriminations begin. :duel:

[Zool]

Pidgin

This is one of those gay codes right? Now Zool taps his toe and you crawl under the stall partition with your pants around your ankles and your abysmal dong bouncing around like a cocktail wiener on a string?

Don't be jealous bitch. I told you long ago that you and I aren't exclusive. I'm free to tap however many times I want, and you're free to be ball gagged in my basement and forced to watch Whats Happenin? reruns.

[woodbuck27]

I think getting a job might be a good place to start... :?

mj! Your first ? for you:

What do you really want to do? Answer that for you . . .then go for it! :)

[LL2]

Yahoo's down 22% in pre-market quotes.

Let the bloodbath and recriminations begin. :duel:

Yahoo and CEO Yang are a bunch of stupid fucks for not taking the latest Microsoft offer to be bought by a solid company. Google is going to crush Yahoo into a has been.

[Freak Out]

Food prices continue to climb globally so the number of protests and riots will climb even higher. Right now it's Asia and parts of Africa but as commoditeis continue to climb in price more and more people will feel the squeeze and start to rattle some cages.
Food is more expensive up here to begin with because of shipping but I was surprised to see the cost increases that have been put in place over the last couple of weeks. Costco had no rice. People made a run on it for fucks sake.

Soylent green anyone? :lol:

[K-town]

Soylent Green is...PEOPLE!

Green people cookies. Zesty.

[Freak Out]

I heard a interesting interview with this guy today so I thought I would post this piece he did earlier in the month. Makes some great points.

America's Most Overrated Product: the Bachelor's Degree

By MARTY NEMKO

Among my saddest moments as a career counselor is when I hear a story like this: "I wasn't a good student in high school, but I wanted to prove that I can get a college diploma. I'd be the first one in my family to do it. But it's been five years and $80,000, and I still have 45 credits to go."

I have a hard time telling such people the killer statistic: Among high-school students who graduated in the bottom 40 percent of their classes, and whose first institutions were four-year colleges, two-thirds had not earned diplomas eight and a half years later. That figure is from a study cited by Clifford Adelman, a former research analyst at the U.S. Department of Education and now a senior research associate at the Institute for Higher Education Policy. Yet four-year colleges admit and take money from hundreds of thousands of such students each year!

Even worse, most of those college dropouts leave the campus having learned little of value, and with a mountain of debt and devastated self-esteem from their unsuccessful struggles. Perhaps worst of all, even those who do manage to graduate too rarely end up in careers that require a college education. So it's not surprising that when you hop into a cab or walk into a restaurant, you're likely to meet workers who spent years and their family's life savings on college, only to end up with a job they could have done as a high-school dropout.

Such students are not aberrations. Today, amazingly, a majority of the students whom colleges admit are grossly underprepared. Only 23 percent of the 1.3 million high-school graduates of 2007 who took the ACT examination were ready for college-level work in the core subjects of English, math, reading, and science.

Perhaps more surprising, even those high-school students who are fully qualified to attend college are increasingly unlikely to derive enough benefit to justify the often six-figure cost and four to six years (or more) it takes to graduate. Research suggests that more than 40 percent of freshmen at four-year institutions do not graduate in six years. Colleges trumpet the statistic that, over their lifetimes, college graduates earn more than nongraduates, but that's terribly misleading. You could lock the collegebound in a closet for four years, and they'd still go on to earn more than the pool of non-collegebound — they're brighter, more motivated, and have better family connections.

Also, the past advantage of college graduates in the job market is eroding. Ever more students attend college at the same time as ever more employers are automating and sending offshore ever more professional jobs, and hiring part-time workers. Many college graduates are forced to take some very nonprofessional positions, such as driving a truck or tending bar.

How much do students at four-year institutions actually learn?

Colleges are quick to argue that a college education is more about enlightenment than employment. That may be the biggest deception of all. Often there is a Grand Canyon of difference between the reality and what higher-education institutions, especially research ones, tout in their viewbooks and on their Web sites. Colleges and universities are businesses, and students are a cost item, while research is a profit center. As a result, many institutions tend to educate students in the cheapest way possible: large lecture classes, with necessary small classes staffed by rock-bottom-cost graduate students. At many colleges, only a small percentage of the typical student's classroom hours will have been spent with fewer than 30 students taught by a professor, according to student-questionnaire data I used for my book How to Get an Ivy League Education at a State University. When students at 115 institutions were asked what percentage of their class time had been spent in classes of fewer than 30 students, the average response was 28 percent.

That's not to say that professor-taught classes are so worthwhile. The more prestigious the institution, the more likely that faculty members are hired and promoted much more for their research than for their teaching. Professors who bring in big research dollars are almost always rewarded more highly than a fine teacher who doesn't bring in the research bucks. Ernest L. Boyer, the late president of the Carnegie Foundation for the Advancement of Teaching, used to say that winning the campus teaching award was the kiss of death when it came to tenure. So, no surprise, in the latest annual national survey of freshmen conducted by the Higher Education Research Institute at the University of California at Los Angeles, 44.6 percent said they were not satisfied with the quality of instruction they received. Imagine if that many people were dissatisfied with a brand of car: It would quickly go off the market. Colleges should be held to a much higher standard, as a higher education costs so much more, requires years of time, and has so much potential impact on your life. Meanwhile, 43.5 percent of freshmen also reported "frequently" feeling bored in class, the survey found.

College students may be dissatisfied with instruction, but, despite that, do they learn? A 2006 study supported by the Pew Charitable Trusts found that 50 percent of college seniors scored below "proficient" levels on a test that required them to do such basic tasks as understand the arguments of newspaper editorials or compare credit-card offers. Almost 20 percent of seniors had only basic quantitative skills. The students could not estimate if their car had enough gas to get to the gas station.

Unbelievably, according to the Spellings Report, which was released in 2006 by a federal commission that examined the future of American higher education, things are getting even worse: "Over the past decade, literacy among college graduates has actually declined. … According to the most recent National Assessment of Adult Literacy, for instance, the percentage of college graduates deemed proficient in prose literacy has actually declined from 40 to 31 percent in the past decade. … Employers report repeatedly that many new graduates they hire are not prepared to work, lacking the critical thinking, writing and problem-solving skills needed in today's workplaces."

What must be done to improve undergraduate education?

Colleges should be held at least as accountable as tire companies are. When some Firestone tires were believed to be defective, government investigations, combined with news-media scrutiny, led to higher tire-safety standards. Yet year after year, colleges and universities turn out millions of defective products: students who drop out or graduate with far too little benefit for the time and money spent. Not only do colleges escape punishment, but they are rewarded with taxpayer-financed student grants and loans, which allow them to raise their tuitions even more.

I ask colleges to do no more than tire manufacturers are required to do. To be government-approved, all tires must have — prominently molded into the sidewall — some crucial information, including ratings of tread life, temperature resistance, and traction compared with national benchmarks.

Going significantly beyond the recommendations in the Spellings report, I believe that colleges should be required to prominently report the following data on their Web sites and in recruitment materials:

* Value added. A national test, which could be developed by the major testing companies, should measure skills important for responsible citizenship and career success. Some of the test should be in career contexts: the ability to draft a persuasive memo, analyze an employer's financial report, or use online research tools to develop content for a report.

Just as the No Child Left Behind Act mandates strict accountability of elementary and secondary schools, all colleges should be required to administer the value-added test I propose to all entering freshmen and to students about to graduate, and to report the mean value added, broken out by precollege SAT scores, race, and gender. That would strongly encourage institutions to improve their undergraduate education and to admit only students likely to derive enough benefit to justify the time, tuition, and opportunity costs. Societal bonus: Employers could request that job applicants submit the test results, leading to more-valid hiring decisions.

* The average cash, loan, and work-study financial aid for varying levels of family income and assets, broken out by race and gender. And because some colleges use the drug-dealer scam — give the first dose cheap and then jack up the price — they should be required to provide the average not just for the first year, but for each year.

* Retention data: the percentage of students returning for a second year, broken out by SAT score, race, and gender.

* Safety data: the percentage of an institution's students who have been robbed or assaulted on or near the campus.

* The four-, five-, and six-year graduation rates, broken out by SAT score, race, and gender. That would allow institutions to better document such trends as the plummeting percentage of male graduates in recent years.

* Employment data for graduates: the percentage of graduates who, within six months of graduation, are in graduate school, unemployed, or employed in a job requiring college-level skills, along with salary data.

* Results of the most recent student-satisfaction survey, to be conducted by the institutions themselves.

* The most recent accreditation report. The college could include the executive summary only in its printed recruitment material, but it would have to post the full report on its Web site.

Being required to conspicuously provide this information to prospective students and parents would exert long-overdue pressure on colleges to improve the quality of undergraduate education. What should parents and guardians of prospective students do?

* If your child's high-school grades and test scores are in the bottom half for his class, resist the attempts of four-year colleges to woo him. Colleges make money whether or not a student learns, whether or not she graduates, and whether or not he finds good employment. Let the buyer beware. Consider an associate-degree program at a community college, or such nondegree options as apprenticeship programs (see http://www.khake.com), shorter career-preparation programs at community colleges, the military, and on-the-job training, especially at the elbow of a successful small-business owner.

* If your student is in the top half of her high-school class and is motivated to attend college for reasons other than going to parties and being able to say she went to college, have her apply to perhaps a dozen colleges. Colleges vary less than you might think (at least on factors you can readily discern in the absence of the accountability requirements I advocate above), yet financial-aid awards can vary wildly. It's often wise to choose the college that requires you to pay the least cash and take out the smallest loan. College is among the few products that don't necessarily give you what you pay for — price does not indicate quality.

* If your child is one of the rare breed who knows what he wants to do and isn't unduly attracted to academics or to the Animal House environment that characterizes many college-living arrangements, then take solace in the fact that countless other people have successfully taken the noncollege road less traveled. Some examples: Maya Angelou, David Ben-Gurion, Richard Branson, Coco Chanel, Walter Cronkite, Michael Dell, Walt Disney, Thomas Edison, Henry Ford, Bill Gates, Alex Haley, Ernest Hemingway, Wolfgang Puck, John D. Rockefeller Sr., Ted Turner, Frank Lloyd Wright, and nine U.S. presidents, from Washington to Truman.

College is a wise choice for far fewer people than are currently encouraged to consider it. It's crucial that they evenhandedly weigh the pros and cons of college versus the aforementioned alternatives. The quality of their lives may depend on that choice.

Marty Nemko is a career counselor based in Oakland, Calif., and has been an education consultant to 15 college presidents. He is author of four books, including The All-in-One College Guide: A Consumer Activist's Guide to Choosing a College (Barron's, 2004).

[Kiwon]

Yahoo's down 22% in pre-market quotes.

Let the bloodbath and recriminations begin. :duel:

Yahoo and CEO Yang are a bunch of stupid fucks for not taking the latest Microsoft offer to be bought by a solid company. Google is going to crush Yahoo into a has been.

House cleaning effort underway? Microsoft might yet get another shot at a takeover.

Yahoo shares jump on reports Icahn may try to oust board

SAN FRANCISCO (AP) — Shares of Yahoo (YHOO) jumped more than 5% Tuesday on reports that billionaire investor Carl Icahn is snapping up the Internet company's stock in preparation for a possible attempt to replace Yahoo's board after the directors turned down Microsoft's $47.5 billion takeover offer.

Icahn has bought as many as 50 million Yahoo shares, both CNBC and The Wall Street Journal reported Tuesday. That would give Icahn a 3.6% stake in the Internet pioneer.

The financier, who didn't immediately return calls seeking comment, is known for shaking up slumping companies. He could spearhead a campaign to oust Yahoo's 10 directors for not accepting Microsoft's final offer of $33 a share.

The deadline for nominating an alternate slate of directors to Yahoo's board is Thursday.

Yahoo rose $1.30, or 5.15%, to close at $26.56.

[Kiwon]

ARBA has been looking good lately - $8.50 to $13.50

Check out the one-month chart: ARBA one-month chart (http://www.marketwatch.com/charts/int-basic.chart?symb=ARBA&sid=1776143&time=4&startdate=&enddate=&freq=1&comp=&compidx=aaaaa~0&uf=0&ma=&maval=&type=2&size=1&lf=1&lf2=&lf3=&style=1013&mocktick=1&rand=34110665)

[Kiwon]

LL2,

Do America a favor and vote the pandering demagogue Dick Durbin out of office.

.................................................. ....................................

Truth In Politics: Illinois Gas Prices And Taxes

CHICAGO (CBS) ― Tired of seeing the price at the pump jump every time you need to buy gasoline? Well, the record-high price of gasoline in the Chicago area is linked to a record-high rate of taxation: nearly 20 percent of the Chicago price.

As CBS 2 Political Editor Mike Flannery reports, tax refugees wait in long lines on Indianapolis Boulevard in Northwest Indiana. They jockey for position at a pump, lured by prices that are 20 cents a gallon or more cheaper than just a few blocks away back in Illinois.

"It was $4.20. I can come over here and get it for $3.93," said Tikvah Wadley, one of the many fleeing Illinois taxes.

Illinois Sen. Dick Durbin complained to oil company bosses at a hearing on Capitol Hill about Chicago having the highest gasoline prices in the United States. Largely ignored was the role taxes are playing -- an astounding 10 levels of taxation.

"Does it trouble any of you when you see what you're doing to us?" Durbin asked..

In the city, Motor Fuel Taxes originally for building roads currently go to the Feds, Illinois, Cook County and Chicago. The 9.25 percent sales tax is split among Illinois, Chicago and Cook County's share of the state sales tax; a county home rule tax; RTA transit tax and a Chicago home rule levy.

The watchdog Civic Federation says that on a $4 gallon of gas, the total tax is 79.2 cents. That compares to 77 cents in Los Angeles and 65 cents in New York City.

"Every time the price of gas goes up, the tax goes up with it," said one motorist.

And that, of course, is exactly the point for the politicians. Gov. Blagojevich, for example, is counting on the high price of gasoline to bring at least an extra $220 million in the State Treasury in the fiscal year that begins this July. Most of that will be used to balance the way-out-of-balance budget.

http://cbs2chicago.com/politics/gas.prices.taxes.2.729939.html

[Freak Out]

:cry:

June 1, 2008

It’s Not So Easy Being Less Rich
By CHRISTINE HAUGHNEY

NANCY CHEMTOB, a divorce lawyer in Manhattan, has found that her days have become crammed seeing clients, all worried about how an economic downturn will affect their marriages.

They seem to have nothing to fret about: their net worths range from $5 million to $1 billion. A blip in the markets shouldn’t send their chateau-size Park Avenue co-ops to foreclosure or exile them to Payless Shoes.

But Ms. Chemtob’s clients are concerned all the same, she said, because their incomes have shrunk, say, to $2 million a year from $8 million, and they know that their 2008 bonus checks are likely to be much less impressive.

One of her clients recently confessed that his net worth had decreased to $8 million from more than $20 million, and he thinks that his wife will leave him. He has hidden their fall in fortune by taking on debt to pay for her extravagant clothes and vacations.

“I literally had to sit there and tell him that he had to tell his wife that she had to stop spending,” she said. “He was actually scared she would leave him because their financial situation changed so drastically.”

The wealthy don’t generally speak publicly about their finances, in good times or bad. It’s in poor taste, for one, and their employers could fire them for talking even a little. But people who provide services to the wealthy — lawyers, art advisers, personal trainers and hairstylists — say they are getting an earful about their clients’ financial anxieties.

Interviews with the people who actually see the bank statements, like divorce lawyers and lenders, say their clients are definitely living on less than they did a year ago, regardless of how expansive the definition of “less” may be. Hairstylists and private jet rental companies say the wealthy are cutting back on luxuries like $350 highlights and $10,000-an-hour jet rentals. Even nutritionists and personal trainers notice a problem. The wealthy are eating more and gaining weight because of the stress.

These financial problems — if they can be called that — will hardly elicit tears from the rest of us. But in those gilded living rooms, there is a quiet nervousness about keeping up appearances.

“Even if they’re not in danger of not paying their mortgage, there’s still a psychological change,” said Chris Del Gatto, chief executive of Circa, which has watched its business jump by 50 percent in the last year as wealthy clients sell their spare diamonds and Rolexes. “The economy is an issue even for people who don’t need the money.”

THEIR spouses could leave them when they discover that their net worth has collapsed to eight figures from nine. Friends and business associates could avoid them as they pass their lunchtime tables at Barney’s or the Four Seasons. And these snubs could trickle down to their children.

“They fear their kids won’t get invited to the right birthday parties,” said Michele Kleier, an Upper East Side-based real estate broker. “If they have to give up things that are invisible, they’re O.K. as long as they don’t have give up things visible to the outside world.”

So New York’s very wealthy are addressing their distress in discreet and often awkward ways. They try to move their $165 sessions with personal trainers to a time slot that they know is already taken. They agree to tour multimillion-dollar apartments and then say the spaces don’t match their specifications. They apply for a line of credit before art auctions, supposedly to buy a painting or a sculpture, but use that borrowed money to pay other debts.

“Most people won’t go to their banker and say: ‘You know I’m in desperate trouble. I need funds,’ ” said Andy Augenblick, president of Emigrant Bank Fine Art Finance, which allows clients to borrow against art collections worth more than $2 million. Mr. Augenblick said that the number of requests for these types of loans is five times higher than a year ago. He said that while these borrowers claim that they don’t need the money, their latest financial statements show that their net worth has withered in the past year.

Other wealthy clients are cutting luxuries that they think their friends and relatives won’t notice, according to Mr. Del Gatto of Circa. At Circa’s midtown offices, he said, the seven consultation rooms have been busy with customers selling their precious gems. Some older couples, he said, are selling estate jewelry to help support their children who have lost Wall Street jobs. Bankers are paring down their collections of Patek Philippe watches. Wives from Greenwich and Scarsdale are selling 2-carat to 35-carat single-stone diamond rings. One recent client explained to Mr. Del Gatto that she was selling $2 million in diamonds she rarely wore, because her friends wouldn’t notice that they were gone.

“She said, ‘If I sold my Bentley or my important art, they would notice,’ ” he said. “That we hear, in differing examples, every day.”

Art consultants find that the very wealthy are more receptive to parting with their precious works. Cassie Rosenthal, an owner of the Chelsea gallery Goff & Rosenthal, said that since the subprime crisis hit in the fall, and especially since the new year, some collectors are willing to sell pieces that were off limits in the past. She said that when the deals close quickly, they’re happy.

“Most people will just sort of say: ‘Will you sell this for me? When you can get me payment?’ ” Ms. Rosenthal said. “It’s more about the urgency of getting paid.”

Justin Sullivan, managing director of Regent Jet, which leases private airplanes, said most clients in real estate and on Wall Street are switching to chartered jets over private jets, and cutting their flight budgets by about 25 percent. One New York real estate developer cut his budget to less than $250,000 a year from $1.5 million a year.

“A year ago, he would have only flown Gulfstreams,” Mr. Sullivan said. “Now it’s moving to the point where he’s flying Beech jets and Learjets.”

Some wealthy New Yorkers are even cutting back on relatively smaller things. At J Sisters, a midtown Manhattan salon where celebrities like Naomi Campbell and Gwyneth Paltrow mingle with Wall Street clients, stylists and colorists say they hear about money worries all day. On a spring afternoon, a half-dozen hairstylists to the very wealthy talked about how customers are stretching their $350 highlights and $150 haircuts to every eight weeks instead of six weeks. Some women are cutting out highlights entirely, saying they would “rather be brunettes.”

Jean-François Pilon, a stylist at J Sisters, has seen many women come less frequently and tip less generously. During the subprime crisis last summer, and the collapse of Bear Stearns last March, he said, many clients tried to stretch out their visits. He interprets these changes in behavior as signs that they need to watch their spending.

“You pick up on it very quickly,” he said. “People don’t beg.”

The drop in wealth has also exposed other personal problems, like bad marriages. Money — which bought jewelry or extravagant vacations — helped smooth over many of these difficulties, said Kenneth Mueller, a psychotherapist in the East Village who works with many Wall Street bankers and real estate developers. Now, he said, his clients “catastrophize” smaller bonuses or shriveling stock portfolios. “You have to remind them that there’s something that has always been there,” he said. “All the money helped mask the anxiety.”

The very wealthy can’t hide anything from their nutritionists and personal trainers, because they see the weight gain. Heather Bauer, a dietitian who works with many Wall Street executives who pay $600 to $800 a month for her services, says her clients have been eating and drinking more in the last six months. She sees results of this indulging each time they step on a scale, and in their journals that record what they’ve eaten.

ONE Wall Street executive, Ms. Bauer said, snacks on nuts in her office all day to manage the stress of potentially losing her position, while another confesses to inhaling four bowls of cereal at 10 p.m. Even their sex lives are suffering, Ms. Bauer said, because of the stress or because the weight gain makes them feel unattractive.

Her clients blame the economy for their out-of-control waistlines.

“The number one concern that they have is the state of the financial market,” she said. “There definitely is a correlation between the stock market and weight gain.”

Clay Burwell, a personal trainer to many Wall Street executives, said that his clients were also feeling the toll. A year of eating more, drinking more and working longer hours has started to hurt their health.

“They come into the gym with a dark storm cloud over their head,” he said. “They look like hell.”

[the_idle_threat]

Beech Jets and Learjets instead of Gulfstreams? Oh I cry for you!!! :cry: :cry: :cry: :lol: :lol: :lol:

OK, so which is it? Is the income gap between rich and poor widening(as we argued about weeks ago), or are the rich losing income in the millions of dollars (which would dramatically narrow the gap)?

Of course, the REAL question is: Why should people give a shit either way? People need to take care of their own houses, and stop looking in the neighbors' windows.

[bobblehead]

The standard of living for every american rises every year, rich and poor alike. Punishing a rich person will in no way help poor people. As far as the gap goes, in real dollars of course the rich are increasing the spread, but in terms of percentages the poor have gained ground.

[GrnBay007]

People need to take care of their own houses, and stop looking in the neighbors' windows.

Yeah right! You've haven't seen the good looking guy that lives in my neighborhood!!!! :P

:wink:

[MJZiggy]

You can get arrested for that...(unless, of course he likes it!)

[Kiwon]

ARBA has been looking good lately - $8.50 to $13.50

Check out the one-month chart: ARBA one-month chart (http://www.marketwatch.com/charts/int-basic.chart?symb=ARBA&sid=1776143&time=4&startdate=&enddate=&freq=1&comp=&compidx=aaaaa~0&uf=0&ma=&maval=&type=2&size=1&lf=1&lf2=&lf3=&style=1013&mocktick=1&rand=34110665)

ARBA still looking good at $15.46

[Freak Out]

Holy fuck! No good cock suckers.

[Freak Out]

Nothing like working in the "Iranian risk premium" for about the hundredth time. Crooks.

[Scott Campbell]

Fugly day.

[oregonpackfan]

Today was a triple, bad economic day: the Dow went down 394 points, the price of a barrel of oil went up almost $11, and unemployment rose half a percentage point.

Dow falls 394.64 points on jobless rate, record oil
news-general-20080606-NEWS-MARKETS-STOCKS-DC

Traders work on the floor of the New York Stock Exchange
By Kristina Cooke, Reuters
1 hour ago
Loading... 225 Recommendations

NEW YORK — Stocks plunged on Friday, marking the Dow's worst day in 15 months, after the government said the May unemployment rate jumped the most in 22 years and oil prices shot to another record, renewing fears that the U.S. economy faces 1970s-style stagflation.

The one-two punch of those remarkable catalysts sent investors fleeing from stocks into the safety of government bonds on the worry that corporate profits will remain under siege for longer than currently forecast. The benchmark S&P 500 fell 2.8 percent for the week to close near a two-month low.

U.S. crude's dramatic $11 jump -- its biggest-ever one-day spike in dollar terms -- fueled concerns about inflation and consumers' spending power, a key driver of economic growth.

Oil thundered past the old high hit in late May on the dollar's weakness and tensions in the Middle East.

General Electric Co and other economic bellwethers slid after a Labor Department report showed the unemployment rate rose in May to 5.5 percent -- its highest level since October 2004 -- from April's jobless rate of 5.0 percent. The report also showed the economy shed jobs for a fifth straight month.

Analysts said a backdrop of slowing growth and rising price pressures, known as stagflation, could tie the hands of the Federal Reserve as it seeks to boost a sputtering economy.

"This is the worst economic environment," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams in New York. "I don't see how this is not stagflation."

The Dow Jones industrial average was a sea of red, tumbling 394.64 points, or 3.13 percent, to end at 12,209.81, its biggest drop since February 2007. The blue-chip Dow average was off 3.4 percent for the week. All 30 Dow components finished Friday's session lower.

Only 18 stocks in the Standard & Poor's 500 Index ended the day in the black. The S&P 500 slid 43.37 points, or 3.09 percent, to finish the day at 1,360.68.

The Nasdaq Composite Index lost 75.38 points, or 2.96 percent, to close at 2,474.56, down 1.9 percent for the week.

Both the S&P 500 and the Nasdaq dropped the most in four months on Friday.

Shares of GE, a diversified manufacturer, ranked among the top drags on the S&P 500, down 3.4 percent at $30.02 on the New York Stock Exchange. Exxon Mobil was the heaviest weight on the S&P, down 2.8 percent at $86.79 on the NYSE.

Plane maker Boeing's shares slid 5.4 percent to $73.16 on the NYSE and exerted the biggest drag on the Dow.

Financial services companies' shares were another big casualty, with insurer American International Group Inc down 6.8 percent to $33.93.

Shares of JPMorgan Chase & Co, the No. 3 U.S. bank, shed 4.8 percent to $40.09. The S&P financial index tumbled 5 percent.

Shares of consumer-oriented companies took a beating, with the S&P retail index down 4.3 percent. Shares of Wal-Mart Stores Inc slipped 2.4 percent to $58.37, giving up some of the gains notched on Thursday on a stronger-than-expected May sales report.

The surge in crude prices also hurt airline stocks, with UAL Corp down 14.5 percent at $8.64 on the Nasdaq. The airline index lost almost 7 percent.

The Dow Jones home builders index fell 6.8 percent to 294.49, its lowest since March.

Trading volume was modest on the New York Stock Exchange, with about 1.48 billion shares changing hands, below last year's estimated daily average of roughly 1.90 billion, while on Nasdaq, about 2.21 billion shares traded, above last year's daily average of 2.17 billion.

Declining stocks trounced advancing ones by nearly 5 to 1 on the NYSE and 4 to 1 on the Nasdaq.

(Editing by Jan Paschal)

[the_idle_threat]

And yet we all survived.

[Joemailman]

And surviving is all we can hope for at this point until a new President takes over. This is now the lamest of lame duck administrations. Most Americans have long since lost confidence in this administration's ability to improve the economic health of the country. Hopefully the next administration will understand that policies that weaken the purchasing power of the middle class do not make for a strong economy in the long run, although they may improve profit margins in the short run. McCain is now trying to distance himself from the economic policies of the current administration. Whichever Presidential candidate can inspire confidence in their ability to change the sorry state of our economic situation will have the upper hand in the upcoming election.

[LL2]

Yahoo's down 22% in pre-market quotes.

Let the bloodbath and recriminations begin. :duel:

Yahoo and CEO Yang are a bunch of stupid fucks for not taking the latest Microsoft offer to be bought by a solid company. Google is going to crush Yahoo into a has been.

It's now beginning. Google is now going to make mega millions off of Yahoo without even buying them.

June 12, 2008, 8:07 pm
Yahoo and Google strike a deal
By Yi-Wyn Yen

Yahoo’s shares climbed slightly in after-hours trading on news that the company and Google struck an online advertising partnership.

The Internet portal announced it would begin using Google’s search advertising technology to help grow its profits. The news came just hours after Yahoo (YHOO) said its talks with Microsoft (MSFT) were over. The news that a Microsoft deal had reached a dead-end drove Yahoo’s stock down 12% in afternoon trading Thursday.

Yahoo inked a non-exclusive arrangement with Google (GOOG) to use its text-based ads on its own web properties as well as on its search results. Yahoo said the deal would generate an estimated $250 million to $450 million in operating cash flow in the first year.

[Kiwon]

I think Jerry Yang will be out soon. Shunning MSFT's deep pockets probably have done him in. The stock has been underperforming for so long.

Google used to be the search engine for Yahoo. Now the upstart is devouring the patriarch. The Yahoo! brand is being steadily diminished.

[Freak Out]

Time to break out some good single malt.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.xml

RBS issues global stock and credit crash alert

By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 5:42pm BST 18/06/2008

The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

"Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said.

US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said.

"The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said.

Kit Jukes, RBS's head of debt markets, said Europe would not be immune. "Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

"The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year.

[the_idle_threat]

Talk is cheap. But I do like a nice single malt.

[MJZiggy]

Talk is cheap. But I do like a nice single malt.

Paint thinner. Can I have a margarita please since the bar's open...?

[Freak Out]

U.S. Stocks Tumble, Sending Dow to Worst June Since Depression

By Michael Patterson

June 26 (Bloomberg) -- U.S. stocks tumbled, sending the Dow Jones Industrial Average to its worst June since the Great Depression, as record oil prices, credit-market writedowns and a slowing economy threatened to extend a yearlong profit slump.

General Motors Corp., the largest U.S. automaker, plunged the most in three years as Goldman Sachs Group Inc. advised selling the stock and crude rose by $5 a barrel. Citigroup Inc. led the KBW Bank Index to an almost 10-year low as Goldman said the lender may report an $8.9 billion second-quarter charge and cut its dividend. Research In Motion Ltd., maker of the BlackBerry, posted its biggest drop since 2001 on concern competition with Apple Inc.'s iPhone is reducing earnings.

The Standard & Poor's 500 Index plunged 38.82, or 2.9 percent, to 1,283.15, its biggest drop in three weeks. The Dow decreased 358.41, or 3 percent, to 11,453.42, its lowest since September 2006. The Nasdaq Composite Index sank 79.89, or 3.3 percent, to 2,321.37, its worst loss since January. Almost nine stocks fell for each that rose on the New York Stock Exchange.

``Most investors are going to sit on the sidelines until they're more certain the sharks have left the waters and it's safe to go back in,'' said Bruce McCain, the Cleveland-based head of investment strategy at Key Private Bank, which oversees about $30 billion. ``The write-offs have been far worse than anyone would have imagined.''

Nike Earnings

All 10 industry groups in the S&P 500 retreated at least 1 percent as Nike Inc. said U.S. earnings dropped and Oracle Corp. predicted the slowest sales growth since 2006, adding to concern that consumers and businesses are cutting back as the economy expands at the weakest pace in five years.

Earnings at companies in the S&P 500 slid 18 percent on average in the first quarter, the third straight retreat, according to data compiled by Bloomberg. Analysts project profits will drop 8.9 percent this quarter, according to a Bloomberg survey last week.

The Dow has slumped 9.4 percent this month, its worst June since an 18 percent tumble in 1930 during the Great Depression. All 30 companies have posted losses in the month as oil surged, the unemployment rate jumped to the highest since 2004 and concern grew that global financial firms will add to $400 billion of subprime-related writedowns.

The Dow's retreat today erased all the gains since mid- March that were spurred by JPMorgan Chase & Co.'s rescue of Bear Stearns Cos., a drop in the Federal Reserve's benchmark interest rate to 2 percent and the central bank's new lending programs for securities firms.

Citigroup, Merrill

Citigroup dropped $1.18, or 6.3 percent, to $17.67 today, the lowest level since October 1998. Goldman added the biggest U.S. lender by assets to its ``conviction sell'' list and lowered its recommendation on U.S. brokerages to ``neutral'' from ``attractive,'' saying the pace of deterioration in the industry ``appears to be far worse than'' it originally anticipated.

Merrill Lynch & Co., the third-largest U.S. securities firm, declined $2.41 to $33.05, a five-year low. Goldman analysts predicted the company will post a $3.55-a-share loss in 2008, compared with their previous estimate for an 8-cent profit.

The Financial Select Sector SPDR Fund, a so-called exchange traded fund that tracks U.S. financial stocks, lost 3.6 percent to $20.90, the lowest since March 2003. The shares, known by their XLF ticker, were the fourth most-traded among stocks and ETFs in New York today. The KBW Bank Index of 24 companies dropped 3.9 percent to 60.20, the lowest since October 1998.

`Ugly Day'

``It's another ugly day,'' said James Dunigan, the Philadelphia-based chief investment officer at PNC Advisors, which manages $70 billion. ``Until we get through another round of disclosures and through earnings season, the safest place is on the sidelines.''

Research In Motion plunged $18.88, or 13 percent, to $123.46. Second-quarter earnings will be as low as 84 cents a share, the company said. That missed the average prediction by analysts of 92 cents, according to a Bloomberg survey. The report marked Research In Motion's first earnings disappointment in five quarters.

Apple shares declined $9.13, or 5.2 percent, to $168.26, the lowest since April 23.

GM fell $1.38, or 11 percent, to $11.43, the steepest slide since March 2005 and lowest price since 1974. Lear Corp., the second-largest maker of vehicle seats, lost $2.97, or 16 percent, to $15.15. Goldman downgraded both stocks to ``sell'' from ``neutral.''

`Escalating Headwinds'

``We expect escalating headwinds from volume/mix pressures driven by gas prices, falling confidence and tightening credit,'' Goldman wrote in a research note.

GM and Chrysler LLC may face a cash crunch next year as U.S. sales decline on a slowing economy and rising gasoline prices that push buyers toward more fuel-efficient vehicles, Fitch Ratings said yesterday.

Chrysler spokesman Dave Elshoff said in an interview today that the company has no plans to file for bankruptcy, countering speculation in financial markets.

Companies in the S&P 500 that rely on discretionary consumer spending lost 3.5 percent as a group after oil prices jumped to $139.64 a barrel on Libya's threat to cut production and OPEC's prediction that prices may reach $170 by the summer.

Nike retreated $6.47, or 9.8 percent, to $59.50, the biggest drop since February 2001. The world's largest athletic- shoe maker said pretax income in the U.S. declined 10 percent to $390.7 million in the three months that ended May 31. U.S. orders through November were unchanged.

Oracle, Lennar

Oracle slipped $1.13 to $21.42. The world's second-largest software maker expects first-quarter profit before some items of 26 cents to 27 cents a share. Analysts predicted 27 cents, according to the average of 16 estimates in a Bloomberg survey. Sales will rise between 18 percent and 20 percent, Oracle said.

Lennar Corp. spurred declines in homebuilders after the company reported a loss that exceeded analysts' estimates as it cut prices to attract buyers. The shares fell $1.23, or 8.4 percent, to $13.34. The S&P Supercomposite Homebuilding Index lost 5.6 percent as all 15 of its companies retreated.

The VIX, as the Chicago Board Options Exchange Volatility Index is known, climbed for the first time this week, gaining 13 percent to 23.93. The index, which measures the cost of using options as insurance against declines in the S&P 500, reached the highest level since June 11. The VIX is still 26 percent below its five-year closing high in March.

Economy Watch

The U.S. economy expanded at an annual rate of 1 percent in the first quarter, capping the weakest six months of growth in five years, the Commerce Department said today. The revised gain in gross domestic product was up from a preliminary estimate of 0.9 percent issued last month.

Initial jobless claims totaled 384,000 in the week ended June 21, unchanged from the previous week's tally that was higher than previously estimated, the Labor Department said. The total number of people collecting benefits rose by 82,000 to 3.139 million in the week ended June 14, the highest since February 2004.

Bed Bath & Beyond Inc. climbed $1.22, or 4.3 percent, to $29.79 for the top gain in the S&P 500. The largest U.S. home- furnishings retailer reported profit that fell less than analysts estimated because of higher sales.

European stocks tumbled, sending the Dow Jones Stoxx 600 Index down 2.6 percent, as Belgium-based lender Fortis scrapped its dividend and said it will sell shares. Asian stocks advanced.

Treasuries rose on speculation credit-market losses will prevent the Fed from increasing borrowing costs later this year. The dollar declined to the weakest level against the euro in more than two weeks.

The Dow Jones Wilshire 5000 Index, the broadest measure of U.S. shares, fell 2.8 percent to 13,125.12. Based on its decline, the value of stocks decreased by $477.5 billion.

``It's the end of the quarter, oil is up and you've got a continued bashing of financials,'' said David Heupel, who helps oversee about $60 billion as a portfolio manager at Thrivent Financial for Lutherans in Minneapolis. ``Plenty of fuel for the fire today.''

To contact the reporter on this story: Michael Patterson in New York at mpatterson10@bloomberg.net.

[Freak Out]

Wow.....GM at $11.46! Who has the sack to buy that? It has to go lower. Woooo doggy.

[Scott Campbell]

What a shit sandwich that was today.

[GoPackGo]

What a shit sandwich that was today.

My 401K is down 11% this year. :x

[Freak Out]

This shit is going to get ugly. Corporate and personal bankruptcies, bond defaults, bank failures, hedge fund meltdowns, rising food and energy prices and slowly rising unemployment. The FED is backed into a corner...catch 22 big time. Far to many people are caught in a credit trap and continue to consume more than they produce.

[mraynrand]

What a shit sandwich that was today.

You can't print that!



http://krug.org/unit/spinal/shark.jpg

http://starlingsonaslipstream.files.wordpress.com/2008/03/nigel_20tufnel.jpg

[Freak Out]

Gold paying off big today.

[mraynrand]

Gold paying off big today.

You're selling your gold?

[Freak Out]

Gold paying off big today.

You're selling your gold?

Hell no.

[Freak Out]

Gold was up $16 or so today and I bought all of mine much lower than that. With the Fed doing nothing to help the dollar gold and silver are pretty safe bets. Until the FED gets serious and raises rates the dollar will continue to tank and commodities will climb.

[mraynrand]

Gold paying off big today.

You're selling your gold?

Hell no.

So when exactly will gold pay off big? If you exchange it now, you just get devalued dollars, right? When are you planning to sell your gold and what do you think it will be worth then?

[the_idle_threat]

This shit is going to get ugly. Corporate and personal bankruptcies, bond defaults, bank failures, hedge fund meltdowns, rising food and energy prices and slowly rising unemployment. The FED is backed into a corner...catch 22 big time. Far to many people are caught in a credit trap and continue to consume more than they produce.

... human sacrifice, dogs and cats living together, mass hysteria! :lol:

And a good time to be dollar cost averaging.

[the_idle_threat]

Gold paying off big today.

You're selling your gold?

Hell no.

So when exactly will gold pay off big? If you exchange it now, you just get devalued dollars, right? When are you planning to sell your gold and what do you think it will be worth then?

Now is the time for people who are holding gold to hype the shit out of it to entice late-to-the-party buyers. Pump and dump.

[Freak Out]

This shit is going to get ugly. Corporate and personal bankruptcies, bond defaults, bank failures, hedge fund meltdowns, rising food and energy prices and slowly rising unemployment. The FED is backed into a corner...catch 22 big time. Far to many people are caught in a credit trap and continue to consume more than they produce.

... human sacrifice, dogs and cats living together, mass hysteria! :lol:

And a good time to be dollar cost averaging.

Food fight!

[Freak Out]

Harvey did you say once you worked for NW? I hope this does not include you.

Northwest Air to Cut 2,500 Jobs to Blunt Fuel Costs (Update2)

By Mary Jane Credeur

July 9 (Bloomberg) -- Northwest Airlines Corp., the carrier being bought Delta Air Lines Inc., will cut 2,500 jobs to counter record fuel costs.

The reductions represent about 8.1 percent of Northwest's 31,000-person workforce. The Eagan, Minnesota-based carrier said today it will rely first on voluntary steps such as leaves to pare the number of dismissals.

Northwest's move means that U.S. carriers will shrink their payrolls by about 20,000 as they park 400 jets after jet fuel's 87 percent surge in the past year. Industrywide losses may top $13 billion in 2008, the Air Transport Association trade group has estimated.

``These reductions are the direct result of our extraordinary fuel costs,'' Chief Executive Officer Doug Steenland said in the statement.

Northwest, the sixth-largest U.S. carrier by traffic, also will begin charging $15 for the first checked bag, joining AMR Corp.'s American Airlines and UAL Corp.'s United Airlines, the two biggest.

A $25 fee will be added to redeem frequent-flier points for domestic tickets, $50 for trans-Atlantic flights and $100 for trans-Pacific trips, Northwest said. Delta and US Airways Group Inc. charge as much as $50 to claim the mileage awards, while American has a $5 processing fee.

The new baggage and frequent-flier fees will generate $250 million to $300 million a year in additional revenue, which will ``help ease the burden of these record high oil prices,'' Steenland said in the statement.

Northwest fell 79 cents, or 11 percent, to $6.68 at 1:54 p.m. in New York Stock Exchange composite trading.

Seating-Capacity Cuts

Northwest plans to cut its seating capacity by as much as 9.5 percent in the fourth quarter as part of its retrenchment. The airline has said it expects to complete its merger with Delta by year's end.

Details of Northwest's ``early-out programs,'' such as whether employees will get a cash payout, haven't been completed, spokeswoman Tammy Lee said. The company said all employee groups will be affected by the reductions.

Delta made cash payouts to 4,000 employees who took its voluntary buyouts, including severance that ranged from 2 to 20 weeks of salary and benefits. The Atlanta-based airline has said it expects second-quarter costs of $95 million for the buyouts.

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.
Last Updated: July 9, 2008 14:01 EDT

[Kiwon]

Harvey did you say once you worked for NW? I hope this does not include you.

Northwest Air to Cut 2,500 Jobs to Blunt Fuel Costs

I was thinking the same thing.

With the proposed Delta - Northwest merger and now NW's job cuts we hope that Harvey's job will be safe. Any updates, Harv?

[Kiwon]

Another government bailout in the works with Fannie and Freddie, sky-high gas prices, a weak dollar, the stock market the lowest its been in two years, on and on. The bad news just doesn't stop.

Of course there are many factors influencing the downturn of the US economy besides politics but as a Federal Republic we hold our representatives accountable for what takes places.

So I'm curious. Who do you hold more responsible for America's current economic problems, President Bush and the Republicans or the Congressional leaders and the Democrats?

[HowardRoark]

Another government bailout in the works with Fannie and Freddie, sky-high gas prices, a weak dollar, the stock market the lowest its been in two years, on and on. The bad news just doesn't stop.

Of course there are many factors influencing the downturn of the US economy besides politics but as a Federal Republic we hold our representatives accountable for what takes places.

So I'm curious. Who do you hold more responsible for America's current economic problems, President Bush and the Republicans or the Congressional leaders and the Democrats?

Al Greenspan.

[MJZiggy]

Another government bailout in the works with Fannie and Freddie, sky-high gas prices, a weak dollar, the stock market the lowest its been in two years, on and on. The bad news just doesn't stop.

Of course there are many factors influencing the downturn of the US economy besides politics but as a Federal Republic we hold our representatives accountable for what takes places.

So I'm curious. Who do you hold more responsible for America's current economic problems, President Bush and the Republicans or the Congressional leaders and the Democrats?

Al Greenspan.

(don't forget OPEC and China)

[Scott Campbell]

Greenspan is a pretty solid answer. You can make a pretty strong case that the cheap discount rate and lax oversight of lending rules did more to put us here than anything else.

[Kiwon]

Another government bailout in the works with Fannie and Freddie, sky-high gas prices, a weak dollar, the stock market the lowest its been in two years, on and on. The bad news just doesn't stop.

Of course there are many factors influencing the downturn of the US economy besides politics but as a Federal Republic we hold our representatives accountable for what takes places.

So I'm curious. Who do you hold more responsible for America's current economic problems, President Bush and the Republicans or the Congressional leaders and the Democrats?

Al Greenspan.

I get the Fed angle. The man held his position for over 19 years so he can't escape his share of the responsibility. (Personally, I can't fully trust anyone who would date Barbara Walters and then marry NBC journalist [if they still have those at NBC] Andrea Mitchell

http://upload.wikimedia.org/wikipedia/commons/9/98/Greenspan.jpg http://upload.wikimedia.org/wikipedia/en/thumb/6/6b/Andrea_Mitchell_LOC.jpg/176px-Andrea_Mitchell_LOC.jpg

I keep hearing how angry and worried the electorate is so what I was trying to get at was who does the average Packer Rat hold more personally responsible for helping to get us into this current situation, the Republicans or the Democrats?

[MJZiggy]

I'm more interested in who's gonna get us out of it and how.

[Freak Out]

The FED is really scared about what is going to happen with the markets and is making some moves to save the MACs before the morning opening. This is going to be wild.

[Freak Out]

I'm getting more pissed as I read about the MAC bailout. If the public is going to assume the risk for all those loans then things need to change starting with the hanging of all the upper management at both of them. The million dollar babies need to go. It's funny how "pleased" Congress is with the bailout plan. No shit fuckers, those sheisters dumped money into most of your campaign coffers.

[Kiwon]

Well, when you are talking about government sponsored enterprises like Fannie, Ginnie, Sallie, and Freddie you are talking about trillions of dollars in loans that the US taxpayer is on the hook for.

It is ridiculous the amounts of monies involved and the relative anonymity of the players involved which is exactly the way the politicans like it. America's future is being pissed away and next to no one even takes notice.

The lobbyists have bought and paid for so many elected officials that they know that they will escape serious scrutiny. We need a citizen's revolt led by whom I don't know but someone needs to expose this crap and get the press to do its job.

The implications of this sucession of bailouts are not being fully discussed in the halls of Washington nor in the media and instead the geniuses in D.C. demonize oil company executives over the price of oil in proceedings broadcast live. What about trillions of dollars in loans that never should have been made?

Congress is at a 9% approval rating and its disgusting to contemplate that elitist public officials doing a lousy job have sizeable control over America's financial future.

[Freak Out]

Well Dubya....you wanted more foreign investment in the US so the weak dollar didn't bother you......well it's starting to bother many Americans.

[bobblehead]

I didn't even read any of the topic ongoing in this thread, but if anyone wants a rock solid play for a shakey market right now IBM ordinary shares should have a very solid year with minimal risk. I don't generally get into recommending single stocks, but IBM is making some really strong moves.

[Freak Out]

Gold paying off big today.

You're selling your gold?

Hell no.

So when exactly will gold pay off big? If you exchange it now, you just get devalued dollars, right? When are you planning to sell your gold and what do you think it will be worth then?

Now is the time for people who are holding gold to hype the shit out of it to entice late-to-the-party buyers. Pump and dump.

I sold some at $960.

[Freak Out]

I didn't even read any of the topic ongoing in this thread, but if anyone wants a rock solid play for a shakey market right now IBM ordinary shares should have a very solid year with minimal risk. I don't generally get into recommending single stocks, but IBM is making some really strong moves.

I feel the same way about Microsoft.

[bobblehead]

I didn't even read any of the topic ongoing in this thread, but if anyone wants a rock solid play for a shakey market right now IBM ordinary shares should have a very solid year with minimal risk. I don't generally get into recommending single stocks, but IBM is making some really strong moves.

I feel the same way about Microsoft.

Could be, gates wasn't an interested CEO for about a year, now they can get back to good business

[the_idle_threat]

Gold paying off big today.

You're selling your gold?

Hell no.

So when exactly will gold pay off big? If you exchange it now, you just get devalued dollars, right? When are you planning to sell your gold and what do you think it will be worth then?

Now is the time for people who are holding gold to hype the shit out of it to entice late-to-the-party buyers. Pump and dump.

I sold some at $960.

Well done. :tup:

[Kiwon]

I didn't even read any of the topic ongoing in this thread, but if anyone wants a rock solid play for a shakey market right now IBM ordinary shares should have a very solid year with minimal risk. I don't generally get into recommending single stocks, but IBM is making some really strong moves.

While I have watched my stocks fall a nice exception, ARBA (Ariba), has been doing very well. $8 to $16 in just a few weeks. Check out the 3 month chart.

[Kiwon]

FINALLY..........

Like the merger or hate the merger of XMSR and SIRI, there is no way that it should have taken 16 MONTHS for this deal to be approved or rejected by the Justice Department and the FCC. It's a crystal clear example that there is way too much special interest lobbying and political interference going on inside government circles. That sound clichéd but it's accurate.

M and A business deals should be decided on the merits alone. Either it benefits the consumer or it doesn't. This one had some legal complexities given their unique industry and charters but still......16 months to make a decision!

I'm no big fan of Howard Stern but I admire his business savvy and have to almost agree with his opinion on this one.

"Sirius Satellite Radio host Howard Stern supports the merger of his network with XM Satelitte Radio and is fuming at Democratic opposition on the Federal Communications Commission (FCC) panel.

After FCC commissioners announced they have reached a deal to approve the merger of Sirius (NASDAQ:SIRI) and XM (NASDAQ:XMSR), Stern ranted about Democrats’ ‘gangsterism’ and ‘communism’ and the obstacles to the merger.

Stern described a phone conversation he had with his agent, who he described as a “liberal Democrat kind of guy.”

“I go, ‘That’s it!’” Stern said. “[I] go, ‘You know what Don, I’ve voted Republican and I’ve voted Democrat. I have vowed I will never vote for a Democrat again. I don’t give a [expletive] – no matter who they are. I don’t care if God becomes a Democrat.’ I said, ‘I backed Hillary Clinton, I backed Al Gore, I backed John Kerry. I am done with them.’”

Stern took it a step even further and called Democrats on the FCC “communists” and referred to their tactics as “gangsterism.”

“The fact that these Democrats on the FCC are communists,” Stern said. “They’re for communism. They don’t want to see companies – this is gangsterism. I said, ‘This is crazy.’”

.................................................. ........................

Feds OK satellite radio merger

WASHINGTON (AP) — Federal regulators have formally approved the merger of the nation's only two satellite radio operators, ending a 16-month-long drama closely watched by Washington and Wall Street.

Sirius Satellite Radio Inc.'s $3.6 billion buyout of rival XM Satellite Radio Holdings Inc. will mean 18 million-plus subscribers will be able to receive programming from both services. Executives say it will mean huge cost savings that will lead to a first-ever profit for the relatively nascent industry.

The Federal Communications Commission voted 3-2 to approve the buyout with the tie-breaking vote coming when the companies agreed to pay $19.7 million to the U.S. Treasury to settle FCC rule violations.

http://www.usatoday.com/money/media/2008-07-25-fcc-xm-sirius-approval_N.htm

[Kiwon]

Just another peachy day on Wall Street. Another 9% knocked off the portfolio.

Thank you Washington cowards for more housing mortage bailouts.

Rule Number #1 in Washington, pay back the special interests and lobbyists before you do the right thing for the average American taxpayer.

[Freak Out]

Just another peachy day on Wall Street. Another 9% knocked off the portfolio.

Thank you Washington cowards for more housing mortage bailouts.

Rule Number #1 in Washington, pay back the special interests and lobbyists before you do the right thing for the average American taxpayer.

SOP for those suckers.

[Kiwon]

Just another peachy day on Wall Street. Another 9% knocked off the portfolio.

Thank you Washington cowards for more housing mortage bailouts.

Rule Number #1 in Washington, pay back the special interests and lobbyists before you do the right thing for the average American taxpayer.

SOP for those suckers.

Yeah, Standard Operating Procedure. Whatever happened to all this "change" and "reform" supposedly coming to DC?

Insanity.

Taxpayers may be on the hook for up to $1 Trillion because 95% of people can pay their mortages and 5% can't. And the foxes running the hen house just put themselves in a private suite with A/C and all the trappings of power, including (GULP), even MORE gov't authority to meddle.

Representative democracy, yeah, right. :x

[Freak Out]

Classic.

http://www.washingtonpost.com/wp-dyn/content/article/2008/07/28/AR2008072802587.html?hpid=topnews

The Extreme Reality Makeover Show

By Hank Stuever
Washington Post Staff Writer
Tuesday, July 29, 2008; C01

Symbolic to our era like a sledgehammer to drywall, the biggest house that ABC's "Extreme Makeover: Home Edition" ever made over -- a sprawling, four-bedroom starter castle, a three-car garage with a turret and all -- has gone into foreclosure, in the 'burbs south of Atlanta.

In that particular episode of the hyper-benevolent reality show, which first aired in February 2005, it took 1,800 volunteers a week to demolish the house with the overflowing septic tank that belonged to Milton and Patricia Harper of Lake City, Ga., and then entirely rebuild a new, larger house, while the Harpers and their three children went away to Disneyland. When they returned, they had the biggest house on Ahyoka Drive, with all the appliances and furnishings, plus enough money to pay taxes on it for decades, plus a fund to send their children to college.

The house will be auctioned off, according to the Atlanta Journal-Constitution, next Tuesday on the steps of the Clayton County Courthouse.

The Harpers had used their home as collateral on a $450,000 loan from JPMorgan Chase and fell in arrears, the newspaper reported. He ran a home security business; she mommed at home. Happy to be on television back then, they declined to be interviewed last week, when a news crew showed up from local station WSB, wanting to know what happened.

The mayor of Lake City, Willie Oswalt, who said he'd helped lift a beam into place in the Harpers living room, told the press that "it's aggravating. It just makes you mad. You do that much work, and they just squander it."

You could (and will) say the Harpers had it coming, but really, we all had this coming. One thing we'll always remember about this decade was the constant home do-over fetish, in real life and in the reality of reality TV -- the constant warping of the consumer's sense of entitlement, the fairy-dust economics, the MasterCard reminder that the experience is priceless. We'll look back and think of all the time we spent watching shows where people flipped houses for easy profit, or traded spaces, or designed it to sell, or were led into rooms blindfolded to experience the paroxysms that came with new paint, new furniture, new life.

All the crying people did for the camera: They cried when television's magic wand touched them, and the hosts always cried, too, while telling the camera how good they felt making the dreams of the sick and wretched owners of substandard tract houses come true. Think of the many tears that were shed on American television over organized closets and new kitchen countertops.

Now comes a long period of tsk-tsk, and tut-tut. The schadenfreude potential is everywhere now in these newly sobered times, and it would be something if the Harpers would make themselves available for an entirely other kind of documented extreme makeover, penny by penny.

Every day, we are greeted with fresh evidence of the great American fire sale. If it was wrong to think the economy could go on forever subsisting on money that no one actually had, then it was wrong to think there was something wonderful about watching shows where people got houses for nothing, and then expect them to live happily ever after. Last week, the new numbers came out: Foreclosures were filed against some 740,000 U.S. homes between March and June alone.

There should be shows on every cable channel about that, hosted by people who don't cry, and who don't have megaphones and plastered-on smiles.

These shows should air only on analog television, after Feb. 17, 2009. A certain kind of television viewer wouldn't mind watching some more of this, please, if certain kinds of television producers are listening.

It's hard to explain, comeuppance. But surely it's as fascinating as installing laminate-wood floors.

Bring on Extreme Failure.

[Bretsky]

Bank stocks seem to be beaten down to the point where they are near a bottom

Anybody got some favorites to throw out for some research ? I'd like to identify a couple to add to the long term portfolio

[mraynrand]

Just another peachy day on Wall Street. Another 9% knocked off the portfolio.

Thank you Washington cowards for more housing mortage bailouts.

Rule Number #1 in Washington, pay back the special interests and lobbyists before you do the right thing for the average American taxpayer.

SOP for those suckers.

Yeah, Standard Operating Procedure. Whatever happened to all this "change" and "reform" supposedly coming to DC?

Insanity.

Taxpayers may be on the hook for up to $1 Trillion because 95% of people can pay their mortages and 5% can't. And the foxes running the hen house just put themselves in a private suite with A/C and all the trappings of power, including (GULP), even MORE gov't authority to meddle.

Representative democracy, yeah, right. :x How about 48 Bil for African AIDS errr....pharmaceutical companies...

[Freak Out]

I bet yahoo shareholders are happy that they didn't take MSs offer now!

DOW just getting hammered again.

[LL2]

I'd be pissed if I was a Yahoo shareholder. I call for Mr ying Yang to be fired!

[Kiwon]

Yep, my stock values hit their all-time lows today.

Very ugly.

[mraynrand]

Yep, my stock values hit their all-time lows today.

Very ugly.

Time to sell.

[Freak Out]

Shit piss fuck. This is going to hurt someone.

United Shares Fall on False Bankruptcy Report
By MICHELINE MAYNARD

Shares of United Airlines lost nearly all their value Monday morning when a false rumor swept financial markets that the struggling carrier had filed for bankruptcy protection.

United shares traded at one cent in late morning on the New York Stock Exchange, down 99.92 percent, or $12.29. Its volume was more than 29 million shares. Trading in United shares was halted at 11:08 a.m., pending news from the company. Trading resumed at 12:30 p.m., and by early afternoon, shares had nearly recovered, down 70 cents, to $11.60.

A United spokeswoman, Jean Medina, denied the bankruptcy rumor.

The circumstances surrounding the rumor were still being sorted out Monday afternoon.

In a statement, United said the rumor occurred when the Web site of The Sun-Sentinel, a Florida newspaper, posted a six-year-old story from The Chicago Tribune archives about United’s previous bankruptcy filing. The airline operated under bankruptcy protection from 2002 through 2006.

“United has demanded a retraction from The Sun Sentinel and is launching an investigation,” the airline said in a statement.

On its Web site, however, The Chicago Tribune reported a different set of events. The Tribune said a reporter for Income Securities Advisors, an investment research firm based in Miami, found a Tribune article in the Sun-Sentinel archives during a search for information about bankruptcy situations. The reporter at Income Securities posted the article to Bloomberg News, and the rumor then spread rapidly, The Tribune said.

The article did not appear on the Web site of The Chicago Tribune or The Sun-Sentinel, people with knowledge of the situation said. The Tribune said it had removed the article from its archives.

The rumor moved rapidly through airline, market and legal circles. Despite United’s denial, it may have had credence because United has struggled in the wake of record fuel costs, posting losses in the first and second quarters.

The airline, which cut jobs and eliminated its pension plans while under bankruptcy protection, has accelerated its cost-cutting this year. Like other airlines, United has announced plans to cut flights and ground aging planes. It will also eliminate 7,000 more positions.

Although some analysts have raised questions about United’s long-term outlook, another bankruptcy filing has not appeared to be imminent. United is in a battle with its pilots’ union, which has called for the resignation of its chief executive, Glenn F. Tilton. In turn, United sued pilots this summer, after they staged a slowdown that caused the airline to cancel hundreds of flights in late July.

[mraynrand]

Shit piss fuck. This is going to hurt someone.



Hopefully the assholes who spread the false rumors. Maybe they could just kill Giuliani to make up for it.

[Freak Out]

Shit piss fuck. This is going to hurt someone.



Hopefully the assholes who spread the false rumors. Maybe they could just kill Giuliani to make up for it.

:lol: Are you a lover of his? Family member? Rudy is a scumbag as far as I'm concerned..do I wish him dead? No...if he was hit by a truck would I shed a tear? No.

[mraynrand]

Shit piss fuck. This is going to hurt someone.



Hopefully the assholes who spread the false rumors. Maybe they could just kill Giuliani to make up for it.

:lol: Are you a lover of his? Family member? Rudy is a scumbag as far as I'm concerned..do I wish him dead? No...if he was hit by a truck would I shed a tear? No.

You already are on record as wishing him dead in the WTC collapse. Sorry, not letting you off the hook. Giuliani = effective politician and leader with flaws.

[Freak Out]

Shit piss fuck. This is going to hurt someone.



Hopefully the assholes who spread the false rumors. Maybe they could just kill Giuliani to make up for it.

:lol: Are you a lover of his? Family member? Rudy is a scumbag as far as I'm concerned..do I wish him dead? No...if he was hit by a truck would I shed a tear? No.

You already are on record as wishing him dead in the WTC collapse. Sorry, not letting you off the hook. Giuliani = effective politician and leader with flaws.

Flaws? You sure America's Mayor has flaws?

[bobblehead]

Bank stocks seem to be beaten down to the point where they are near a bottom

Anybody got some favorites to throw out for some research ? I'd like to identify a couple to add to the long term portfolio

For the love of god, don't buy anything financial sector.

[Kiwon]

CEO: Fannie/Freddie Bailout Makes America 'More Communist than China'

http://businessandmedia.org/articles/2008/20080908171808.aspx

Jim Rodgers is definitely someone who is often swimming upstream. He's not afraid of stating his position whether popular or not. I respect him for it even though I may not agree.

In this case, though, I hate what the government is doing and I can't disregard his opinion.

The last few months have been a nightmare: The Farm Bill, Banking bailout, Mortgage bailout, now the Fannie, Freddie bailout with the auto manufacturers also looking for help from Uncle Sam.

Whatever happened to "the free market" with its corrections, risks and rewards?

[mraynrand]

“Bank stocks around the world are going through the roof, that’s because they’ve all been bailed out. You don’t see the homeowners in Kansas going through the roof because they’re not being bailed out.”

----

Bobble says no bank stocks. This guy says bank stocks are great. Don't homeowners in Kansas and elsewhere also own banckstocks?

I'm confused. What is going to happen with Fanny and Freddie with this bailout. Are we (US govt.) just going to back them up, no matter what, forever?

[HowardRoark]

Wells Fargo wrote down around $500 million of Fannie/Freddy Preferred stocks on their balnce sheets yesterday....more banks will have to follow.

The Pfds. were down big yesterday trading around $3 down from $15 or more.

[mraynrand]

Wells Fargo wrote down around $500 million of Fannie/Freddy Preferred stocks on their balnce sheets yesterday....more banks will have to follow.

The Pfds. were down big yesterday trading around $3 down from $15 or more.

Wasn't Wells Fargo one of the banks that was in excellent financial health before during and after the housing bubble? I suspect they'll do well throughout. Bobble?

[LL2]

Oil is almost back under $100 a barrel...soon people will be buying SUV's again! Now if the stock market would start going back up!

[Maxie the Taxi]

Oil is almost back under $100 a barrel...soon people will be buying SUV's again! Now if the stock market would start going back up!

I would expect the stock market to rise with every inflow of Fed cash, like it did after the Freddie/Fannie bailout. If/When Lehman Bros. and the big three automakers get slopped at the Fed trough, expect short term gains.

Bad news is it's likely to fall again right after because the fundamentals are so bad.

[HowardRoark]

Oil is almost back under $100 a barrel...soon people will be buying SUV's again! Now if the stock market would start going back up!

I would expect the stock market to rise with every inflow of Fed cash, like it did after the Freddie/Fannie bailout. If/When Lehman Bros. and the big three automakers get slopped at the Fed trough, expect short term gains.

Bad news is it's likely to fall again right after because the fundamentals are so bad.

I think they are going to let Lehman die......

[Maxie the Taxi]

Oil is almost back under $100 a barrel...soon people will be buying SUV's again! Now if the stock market would start going back up!

I would expect the stock market to rise with every inflow of Fed cash, like it did after the Freddie/Fannie bailout. If/When Lehman Bros. and the big three automakers get slopped at the Fed trough, expect short term gains.

Bad news is it's likely to fall again right after because the fundamentals are so bad.

I think they are going to let Lehman die......

I'd be surprised. The discount window's open, so Lehman (or a purchaser) can mop up directly on Fed "loans." Would fly beneath the media radar.

[HowardRoark]

Oil is almost back under $100 a barrel...soon people will be buying SUV's again! Now if the stock market would start going back up!

I would expect the stock market to rise with every inflow of Fed cash, like it did after the Freddie/Fannie bailout. If/When Lehman Bros. and the big three automakers get slopped at the Fed trough, expect short term gains.

Bad news is it's likely to fall again right after because the fundamentals are so bad.

I think they are going to let Lehman die......

I'd be surprised. The discount window's open, so Lehman (or a purchaser) can mop up directly on Fed "loans." Would fly beneath the media radar.

That's true on the window, but I think they are cooked. The ultimate margin call, they have to sell all they have left...Neuberger Berman.

It almost seems as though the Fed has to let one fail, and they have indicated they would let firms fail, in order to prove they aren't bailing out the whole country.

[Maxie the Taxi]

Very scary. I think I read somewhere this morning the nation's largest S&L is on the brink of failure.

[Kiwon]

Is anyone else here of the opinion that the U.S. Federal Reserve and Treasury Departments are in complete disarray?

I've never seen anything like it. It's like we have no capable leadership whatsoever.

This stuff isn't Monopoly money. It represents the hard-earned income of the American people. The enormous financial commitments that the Fed is assuming will affect the wealth of families for generations.

What's taking place isn't receiving the scrutiny that it deserves because it's currently an election cycle, however, the financial policy decisions being made now will be felt for decades.

I have zero confidence in the Fed's leadership right now. It is reactionary and very unprincipled and we are going to be the poorer for it.

[Scott Campbell]

The last few months have been a nightmare: The Farm Bill, Banking bailout, Mortgage bailout, now the Fannie, Freddie bailout with the auto manufacturers also looking for help from Uncle Sam.



I'm lobbying the Feds to bail me out of my cable bill.

[Kiwon]

The last few months have been a nightmare: The Farm Bill, Banking bailout, Mortgage bailout, now the Fannie, Freddie bailout with the auto manufacturers also looking for help from Uncle Sam.



I'm lobbying the Feds to bail me out of my cable bill.


That's exactly the mentality that they are fostering.

Privatizing profits while socializing losses and risk is schizophrenic.

What's the point of working hard when you can't keep what you earn and what's taken from you to given to the non-productive or mismanaged parts of society?

[Freak Out]

Things could get very ugly in the morning.....look out below!

[HowardRoark]

Looks as though Merrill is going to be bought out by Bank of America at $29.

Also looks like LEH is history:


NEW YORK (Reuters) - A rare emergency trading session opened Sunday afternoon to allow Wall Street dealers in the $455 trillion derivatives market reduce their exposure to a potential bankruptcy filing by Lehman Brothers.

U.S. regulators and bankers were making last-ditch efforts on Sunday to prevent toxic assets from ailing Lehman Brothers spilling into global markets and rupturing investor faith in the international financial system.

"This is an extremely, and I stress extremely, rare event. It also speaks to the more general notion that, in today's highly disrupted financial markets, the unthinkable is thinkable," said Mohamed El-Erian, the chief executive of Pimco, the world's biggest bond fund, based in Newport Beach , California .

The session opened at 2 p.m. and was due to run until 4 p.m. New York time (1800 to 2000 GMT), according to the International Swaps and Derivatives Association. See text. ISDA later extended it for another two hours.

Trading involved credit, equity, rates, foreign exchange and commodity derivatives. ISDA confirmed a "netting trading session" was taking place for over-the-counter derivatives, in which trades that offset each other are settled.

ISDA estimates the OTC derivatives market excluding commodities has a value of $455 trillion.

Market sources said the special session was initiated by the Federal Reserve. Which means they are going to let them fail and want to reduce the damage.

The aim is to reduce risk associated with a potential bankruptcy filing by Lehman Brothers Holdings Inc.

"Trades are contingent on a bankruptcy filing at or before 11:59 p.m. New York time Sunday (0359 GMT)," said the statement. "If there is no filing, the trades cease to exist."

Futures are down 253.

[Kiwon]

"Lehman Brothers....How the 158-year-year institution came to this is a tale of hubris and overreaching -- and a big dose of bad luck.

Lehman's fall from grace was brutally fast. Until June, it had never even reported a quarterly loss as a public company."

Unreal. Now it's on the verge of collapse. Chapter 11 Bankruptcy. I wonder how many of my mutual funds have Lehman as part of their portfolios. :(


http://www.reuters.com/article/reutersEdge/idUSN1341059120080914

[Kiwon]

Freak Out,

Old pal, old buddy, got any gold that you want to share?

[Freak Out]

Freak Out,

Old pal, old buddy, got any gold that you want to share?

I sold all my paper awhile back ($960) and a little hard stock to the local assayer...but still have some buried in the back yard. Holding for now.

[LL2]

I was hoping for an end of the year rebound in the market, but that is looking less and less likely. Thank God I still have 25 years before I hit retirement age, but my goal is to do it in 15 years.

[texaspackerbacker]

I've steered clear of this thread up to now.

What are Bear Stearns, Lehman Brothers, and Merrill Lynch anyway? What is the business that makes them most of their income?

They all three are/were stock brokerage houses. Their business is basically RETAIL SALES--earning commissions by selling shares of stock to individuals.

WHY are they now going belly up? I would content that it isn't an economic thing so much as it is a MARKETING thing. These are old line companies that have NOT adjusted to modern trends.

Ameritrade, Scottrade, E-trade, Charles Schwab, etc. are in the same business, and they are doing very well. Why? Because they have been innovative, and they have offered people extremely low-commission trading, mainly on the internet. TD Waterhouse--another old line company, merged with Ameritrade, thus keeping its name alive.

To the extent that these firms are in banking at all, it is INVESTMENT BANKING--which basically means marketing bonds for corporations. It is a fiction to claim life savings are being lost, etc. with failure of these companies--unless somebody has their savings directly invested in the stock of the failing firm.

Failure to identify trends and keep up with the times is NOT a justification for a government bailout.

[HowardRoark]

I've steered clear of this thread up to now.

What are Bear Stearns, Lehman Brothers, and Merrill Lynch anyway? What is the business that makes them most of their income?

They all three are/were stock brokerage houses. Their business is basically RETAIL SALES--earning commissions by selling shares of stock to individuals.

WHY are they now going belly up? I would content that it isn't an economic thing so much as it is a MARKETING thing. These are old line companies that have NOT adjusted to modern trends.

Ameritrade, Scottrade, E-trade, Charles Schwab, etc. are in the same business, and they are doing very well. Why? Because they have been innovative, and they have offered people extremely low-commission trading, mainly on the internet. TD Waterhouse--another old line company, merged with Ameritrade, thus keeping its name alive.

To the extent that these firms are in banking at all, it is INVESTMENT BANKING--which basically means marketing bonds for corporations. It is a fiction to claim life savings are being lost, etc. with failure of these companies--unless somebody has their savings directly invested in the stock of the failing firm.

Failure to identify trends and keep up with the times is NOT a justification for a government bailout.

This is basically wrong. Bear Stearns and Lehman did NOT have a retail "wealth management" division. Merrill did/does....which is really the only thing they had of value, BUT it did allow them to survive.

The investment banking side of the business is the side that went belly up. Because they leveraged 30-40 times securitized toxic mortgages. That crap had to be "marked to market" on their balance sheets.....they imploded.

[texaspackerbacker]

Investment banking basically IS retail--but with bonds rather than common stock. You may be right about Bear Stearns and Lehman Brothers being out of the retail stock brokerage business in recent times, but go back far enough, and that was their bread and butter too.

The only connection of this with mortgage banking is the secondary market--providing funding through bonds to the mortgage providers. As those primary mortgage companies suffer, their bonds may go into default. Even that, though, shouldn't fall back on these companies, as they are not bondholders so much as bond sellers.

[HowardRoark]

Investment banking basically IS retail--but with bonds rather than common stock. You may be right about Bear Stearns and Lehman Brothers being out of the retail stock brokerage business in recent times, but go back far enough, and that was their bread and butter too.

The only connection of this with mortgage banking is the secondary market--providing funding through bonds to the mortgage providers. As those primary mortgage companies suffer, their bonds may go into default. Even that, though, shouldn't fall back on these companies, as they are not bondholders so much as bond sellers.

There are a million articles describing what has gone on out there over the past 14 months.......read one of them. I am not being a smart ass, but just about everything you said above is misguided.

Read one by Meredith Whitney....she's easy on the eyes.

[texaspackerbacker]

Try being a little bit specific. It's hard to counter sweeping generalities.

Investment banking is what it is. That is a factual matter.

I looked up Lehman Brothers, and it's roots are in retail sales of commodities rather than common stock. I stand corrected on that, but it's still retail.

[HowardRoark]

Try being a little bit specific. It's hard to counter sweeping generalities.

Investment banking is what it is. That is a factual matter.

I looked up Lehman Brothers, and it's roots are in retail sales of commodities rather than common stock. I stand corrected on that, but it's still retail.

In cotton, 158 years ago........not very relevent today. I will try to find an old thread and bump it.

[texaspackerbacker]

I don't really remember what the point of this was, but that logic would imply that investment banking--which they got into in 1906--isn't relevant also. They are--or still have been until recently, of course, into both.

I messed around with commodities in the late 70s and 80s, and the commissions, as with stocks, were brutal back then. A new generation of commodities brokers also has beat back the old-line companies in marketing commodities.

I think that Lehman Brothers is failing for that reason--and that they are using the current perceived mortgage crisis as an excuse to grab some government money. Paulson was just on for a press conference and said as much--that this is drastically different than the Fannie Mae and Freddie Mac bailout which in fact DID result from the downturn in real estate prices, and WAS necessary to keep the capital market healthy for mortgage financing.

Now, Howard, if you disagree with any of that, please be specific about what.

I'm a little bit bored with this, and am ready to get back to arguing politics--both more significant and more interesting.

[HowardRoark]

I don't really remember what the point of this was, but that logic would imply that investment banking--which they got into in 1906--isn't relevant also. They are--or still have been until recently, of course, into both.

I messed around with commodities in the late 70s and 80s, and the commissions, as with stocks, were brutal back then. A new generation of commodities brokers also has beat back the old-line companies in marketing commodities.

I think that Lehman Brothers is failing for that reason--and that they are using the current perceived mortgage crisis as an excuse to grab some government money. Paulson was just on for a press conference and said as much--that this is drastically different than the Fannie Mae and Freddie Mac bailout which in fact DID result from the downturn in real estate prices, and WAS necessary to keep the capital market healthy for mortgage financing.

Now, Howard, if you disagree with any of that, please be specific about what.

I'm a little bit bored with this, and am ready to get back to arguing politics--both more significant and more interesting.

I bumped th Edwards thread......I am bored too. Just Google "subprime" and "meredith whitney" and read.

[GoPackGo]

DOW down 500+ pts today. How does that one taste? Is anyone close to retirement losing there ass right now??

[LL2]

DOW down 500+ pts today. How does that one taste? Is anyone close to retirement losing there ass right now??

I'm not remotely close to retiring....down 500 pts....DAMN! A bunch of Chicken Little's running around right now!

[Kiwon]

DOW down 500+ pts today. How does that one taste? Is anyone close to retirement losing there ass right now??

I'm not remotely close to retiring....down 500 pts....DAMN! A bunch of Chicken Little's running around right now!

Which means there is some serious money to be made if you choose the right stocks and buy now.

Anyone with some cash that they can afford to risk should look carefully into stocks that have positive cash flow, reasonable debt, and are down in sympathy with the market and not for any particular reason.

I invested fairly soon after 9/11 and it paid off well. This banking crisis provides the investor a chance to get stock in a quality company while the market gets beaten down.

I've been executing a personal investment strategy and concentrating on building up a few "rainy day" resources the last few years before I look at individual stocks again but it may be time to call an audible.

[Scott Campbell]

DOW down 500+ pts today. How does that one taste? Is anyone close to retirement losing there ass right now??



I've been through way worse than this.

[mmmdk]

DOW down 500+ pts today. How does that one taste? Is anyone close to retirement losing there ass right now??



I've been through way worse than this.

Yeah, a Vikings win would be it!

[HowardRoark]

AIG now.

The fan was plugged in today.....now watch the shit hit it.