Tuesday, September 30, 2008

What do you think of this proposal?

This isn't my idea....I just read about it in a BLOG which pointed to Dave Ramsey's webpage.

It is called "The Common Sense Plan", and I have heard people mention several of these proposals in the past few days.....I'm not sure I've seen them all put in one place.

I'm certainly no expert on these things.....but it does look like it might do similar things....."solidify" the sick mortgages that exist while not letting the people owing on them or those who they owe them too off the hook.

It seems to do things to "prop-up" the sagging housing market, but making it "profitable" to jump in and grab up things at low prices.

Sounds like an interesting idea....and what we need are ideas.....clever and sound thinking.

Tell me what you think?!!

Market Isn't Very Stable.....time to get to safety perhaps?

Ok, so the equity market is bouncing like a yo-yo....everyone waiting for this magic bullet called the federal bailout plan.

I am not sure if this is a good or bad thing....I mean in the long run. I just don't know...but it seems to me that owning a bunch of defaulted homes can't be a good thing.

I'm also thinking that all that money creation must be causing inflation....but I don't know.

I don't like the general idea of the government bailing out companies and home owners who many of which were involved with loans that were just no viable.....where was their common sense?

On the other hand, I don't like the idea of an economy falling out of control because of panic....and over-reaction. But our country is in a world of hurt, and under a mountain of debt. In general, the USA is "too big to fail"! (where have I heard that before)

My plan.....at the moment, my portfolio is roughly apportioned like this:
77% - BONDS (about 6 funds)
11% - Foreign Currency (Cash in Euro, Yuan, Aust $, Canada $, Swiss Franc)
1% - Gold
5% - Equities (two funds at my work 401K)
5% - CD Fund
1% - US$ Cash

I am thinking of dollar cost averaging out of the bond funds into cash....I'm just afraid that some of these "safe" funds have exposure to some more of the "safe" companies that seem to be falling all around us ever day. (yet to fall that is)

I think I might get out about 10% a week.....and at some point, start dollar cost averaging into TIPS or iBONDS......to the point where I have perhaps 40% of my total money in inflation protected government securities.

I might actually "play" with perhaps some of my money and put it in and out of a couple of bear funds.....but that is kind of like gambling.....and that isn't my style.

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Friday, September 26, 2008

Economy uncertain, the Markets seesaw and PETA is outraged and working overtime!

With the economy stuck in neutral, the financial sector frozen and close to insolvent, the stock market doesn't quite know what to do.....

Yesterday everyone was looking at economic statistics on jobs, housing sales, inflation and factory production. Today no one seems to be looking at the fundamentals and everyone is staring and waiting to see what sort of bailout plan is being passed.....

It seems that equity markets rise and fall on an almost daily basis.....and we see a rapid seesaw action in the big averages.

All of this has resulted in a massive increases in the regular "around the water cooler" discussions of meat, and this have the people at PETA outraged!

Because of the up and down "grinding" of the markets:

  • Bulls get slaughtered
  • Bears get ground into hamburg
  • The position of "cash cows"(sometimes known as Chickens) is slowly getting softened by rising inflation

In an odd turn, PETA might actually be hoping for the bailout, because with it, the Pigs that normally get slaughtered will be saved! (Especially true of the high level piggy CEOs and leaders....but then I should have seen this coming from my reading of Animal Farm!)

It truly is an odd world we live in.....

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Thursday, September 25, 2008

What some others think of our Present Situation and the Bailout.....

Pat Buchanan isn't conviced it is the right approach....he writes "Bailout For the Big and Stupid"

Alan Keyes conference call labels it "...a transformation to Socialism".

Chuck Norris says we need to go back to the values of our countries founding fathers.

Ron Paul isn't happy.....

Jack Welsh...."We need this bailout."

Warren Buffet talks about the bailout and how it might be a windfall for some getting it!

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WaMu Fails.....bailout not quite here....

Washington Mutual has apparently failed.....and tonight it was gobbled up by the FDIC. Well, sort of.....I guess the "good parts" were bought by JPMorgan.

With all the talk of the bailout.....it appears that the financial collapse continues to march along unchecked. (plenty of bad news was released today about rising unemployment, falling factory orders, and other stuff too)

Speaking of the bailout.....that hasn't quite passed yet. I know it isn't easy to spend $700 billion.....but I'd love to just get that chance myself.

Perhaps we will all wake up on Monday to a day of financial certainlty......with everyone smelling the roses.....but I somehow don't think that will be how the next week starts off.

Pray that calm heads prevail in the end.

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Wednesday, September 24, 2008

President Bush Says what others have been saying....does that make it sink in more havinfg the President say it?

The speech by President Bush was actually a lot less emotional than I thought it would be. I wondered exactly how he would approach it...I mean, he certainly made it clear that we are in a heap of trouble....operating in an area we never have.

But for my money, he was almost monotonic....non-emotional about the whole thing. I expected one of two things....I expected a worried, tone....or a "Let's pull together and win one for the gipper" sort of approach.

I heard the words....and they are the same words I have heard over the past few days from all kinds of other economists and others close to the situation. The USA, in fact the global economy is sitting at a point where things could go very very badly....and no one is really sure if what we are about to do will really fix things.

But even so, they also know that doing NOTHING will clearly end up in a meltdown.....so as my father used to say, "do something even if it is wrong.....just try!"

So this is our government trying.....and I suppose it might be such an important point in history, that approaching it calmly and with focus and thought might be far better than with worry or bull-headed action. Maybe the President approached it perfectly....only our future will be able to properly judge that.

I hope he did for all our sakes.

On another program, I saw Jack Welsh, former superstar head of GE getting all charged up and demanding government action. He wasn't sure that $700 billion was the right amount, but he was sure that inaction was no solution....not just no solution, but EXACTLY the wrong solution.

He sure seemed excited about the problem....if anyone wasn't sure we were in need of action, all you need to do it watch Jack Welsh talk about the problem for about 30 seconds, and you will be convinced that this isn't a small run of the mill issue.

What do people like you and I do in the mean time? That is the $64,000 question I suppose.

I'd say you watch the economic situation unfold and try to jump into the right place at the right time. I think this kind of spending means printing money. I think this means inflation...devalued dollars.

I have some money in foreign currency and CDs at Everbank. I also have some Gold....all told, about 12% of my investments are there....with about 80% in about 5 high quality bond funds....and a smattering of money at my work 401K in money markets, bonds and some stocks.

I have Chinese Yuan, Euro, Swiss Francs and as I noted, some gold.

Is the the right thing to do.....I have not a clue, but it fits the several visions of what I think will happen now....this isn't a business as usual time.

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Thursday, September 18, 2008

Oh brother.....is this a reply of the Crash in 1929?

Ok...so this isn't exactly the same.....but perhaps in scope. I hope not because if it is, then four years from now we will be seeing 25% unemployment.

Gold had it's largest single day increase EVER yesterday...and the dollar is again beginning to devalue.

Hang on tight.....it is going to be a rough ride.

Looks as though Warren Brussee was right!

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Wednesday, September 17, 2008

FDIC is running out of cash.....but who guarentee's them....why ALL of us of course!

I just read an article that suggests that if WaMu (Washington Mutual) bank goes under today that that FDIC will NOT have the money to cover the losses.

What to do....well, tap into the treasury of course.....which means deficit spending, higher taxes, or simply turning on the printing presses. None of those options are good for us regular tax payers......the last one is really bad for the value of the dollar.

What is WaMu falls, and there are others behind them? There have been 11 banks who have folded so far this year.....I guess it has been OK because they have been smaller institutions.

We certainly are at a very difficult inflection point in our lives right now. Let's pray for calm heads and compassionate hearts for all of us.

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Tuesday, September 16, 2008

OMG: 504 Point loss in the DOW....what to do?

Today was another in a string of busy days at work.....it has been this way for about 2 weeks now, and it is both hectic and exciting. Exciting because issues and problems just seem to be piled up everywhere I look....and potential "stop ship" situations have presented themselves more than a handful of times in that time. (and given the time we are at nearing the end of the quarter, this would be the WORST timing if they happened....our product is selling very well, and we need to maximize revenue!)

So Busy I Missed A Big Day On Wallstreet:
I was so "preoccupied" with work that I never really got to look at the stock market today....and I'm glad I didn't look because it was apparently very messy. The market ended up down 504 points, and headlines like those below were posted at the end of it all:

Paulson: Americans Should Remain Confident in U.S. Financial System
Meltdown in US finance system pummels stock market
Dow Down 500: It Could Have Been Worse, but 'Crash' Risk Remains, Roubini says
Big Risk: Surging Debt Makes U.S. More Dependent on China, Russia, Gulf States

Not Meant as a Negative Post:
I know this is a pretty negative post, and I don't mean that. I like to keep this Journal positive.....one might consider my Personal Finance Blog to be negative....but even there, I try NOT to be negative, but try to reason my way in and around my investment ideas. It is true that I have been very down on the US debt in this world....and our outsourcing flood over the last decade.....but even so, I try hard NOT to be negative there.

Learn To Be A Saver:
What to do....well, that's probably a matter better handled in my money BLOG, but I would say that it is time to stay away from debt....become a saver if you are not already. Where to put your savings is the question....well, I was feeling really bad about my move of about 20% of my portfolio into international currency two weeks ago...the dollar seemed to keep strengthening and it looked like a BAD MOVE....but in one 504 point loss day, I feel like an Einstein....I think the USA will have to start up the printing presses and a devaluing dollar might again be in the cards.

Either way....credit will be tight, debt will be messy....and savings is in style again. (IMHO)

Check out this video made by the maker of the Mad Money Machine Podcast.

Check out this video.....pretty scary prediction.

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