RR - the local radio guys said the government would allow people to walk away from upside down mortgages without consequence. No IRS action, in particular.
Maybe no IRS action.... but I'll bet the banks, etc. will still want their money. I remember when that law was passed a couple of years ago, to make it tougher to file bankruptcy. At the time, there seemed to be some 'urgency' to get the legislation passed..... makes me think they very well could see what would be coming in the future....
<< <i>> "In the last 4 decades trillions and trillions of dollars have been spent in this country to eliminate poverty and what is the effect? Hardly anything."
Only from the results of a controlled experiment, eliminating or accounting for all the variables, could this statement be made.
It is too bad that so many emotion-laden and vapid Talking Points are promulgated and believed as "The Truth!"
Kinda like giving the Romans bread and circuses to keep them docile. >>
Poverty has not gone away.... for the simple fact that there will ALWAYS be someone who is on the lower end of the financial spectrum. How could it ever be otherwise???
But one thing that is overlooked very often.... is the fact that 'poverty' is big business. Look how many individuals and entities that make money in the 'poverty' arena, whether it is charities, second hand stores that sell donated items (which by the way, prices aren't that cheap!), and most of all.... politicians that want to 'buy' the 'poverty' votes. There are many that have a vested interest in having poverty around. A good number of these that have the vested interest may say that they want poverty to be eradicated...... sadly may not really want that to happen. They would be out of their jobs, government grant money, and politicians would have to find another platform to run on....
Secured loans like mortgages vs unsecured loans like credit cards are different. The banks have to repo the home, sell it then sue you for the difference. In a glut it make take years to resolve. Walking away does ruin your credit, but so does filing bankruptcy. By the way if you managed to get 5 4% mortgages for houses to flip and they reset to 7%, you may be in bad enough shape to file bankruptcy, even in the new law. If you lied on your mortgage applications, they can actually bust you for fraud and send you to prison.
I'm not sure what the term "big business" means in this case since it hasn't been quantified. I doubt very highly it is 1% or even .01% the size of true Big Businesses like, for example, Big Pharma, the Military Industrial Complex, Big Insurance, Big Construction [i.e, Bechtel], Mining, etc etc etc.
Speaking of the Military Industrial Complex, the original quote about spending so much on poverty and still having it certainly applies 1000-fold to that. We have spent well over 50 trillion dollars on weapons and war - just since WWII - and a few guys with box cutters destroyed a bunch of buildings and killed a bunch of Americans. Quite a return on your investment.
> politicians that want to 'buy' the 'poverty' votes.
It is a matter of record that, in general, the poorer you are the less likely you are to vote. There is much less return on your campaign dollar trying to "buy" poverty votes than there is, say, making promises to increase gov't spending and not raise taxes to pay for it (aka deficit spending).
To keep this post on-thread, I think that Americans, both rich and poor and both Republican and Democrat, should buy as much gold and silver as they can afford
“But one thing that is overlooked very often.... is the fact that 'poverty' is big business. Look how many individuals and entities that make money in the 'poverty' arena, whether it is charities, second hand stores that sell donated items (which by the way, prices aren't that cheap!), and most of all.... politicians that want to 'buy' the 'poverty' votes.”
Tincup, What a great comment! We just never think about how much unemployment it might cause if poverty was done away with.
How about builders and workers building low cost, and government housing?
Just the Federal, state, and local government officials in all the welfare departments, social services, food stamps, etc. would be hundreds of thousands of people.
I wonder how many IRS agents are employed just to keep track of the millions of checks sent out to people each year that paid nothing in?
File Under: Vapid talking point...what ever that is.
Seems that there was a post here and I want to say it was deadhorse, where you should trade gold for silver when the ratio is greater than 55:1. Trade silver for gold when the ratio is under 47:1. Of course, it wasn't stated if that was spot or future delivery contracts so let's say it's daily spot but it does seem like a reasonable approach.
So...Kitco daily spot gold is at $682.50 and silver is at $12.25 so it's at 55.7 so, I'm selling gold? Just seems like this is a good time to look at this theory.
Its not a bad idea to buy/sell according to the ratio. The only down side is the costs associated with each transactions.
I'm also not too sure what the ratios should be so you might look for additional guidance there. If it returns to age old traditional 15:1 you might also be left out in the cold. If it just vacilates around you could pick up some cash while still staying invested in metal..
Is China Quietly Dumping US Treasuries? The Telegraph (UK) 9-5-2007 | Ambrose Evans-Pritchard
A sharp drop in foreign holdings of US Treasury bonds over the last five weeks has raised concerns that China is quietly withdrawing its funds from the United States, leaving the dollar increasingly vulnerable.
Data released by the New York Federal Reserve shows that foreign central banks have cut their stash of US Treasuries by $48bn since late July, with falls of $32bn in the last two weeks alone.
"This comes as a big surprise and it is definitely worrying," said Hans Redeker, currency chief at BNP Paribas.
"We won't know if China is behind this until the Treasury releases its TIC data in November, but what it does show is that world central banks are in a hurry to get out of the US. They don't seem to be switching into other currencies, so it is possible they are moving into gold instead. Gold is now gaining momentum across all currencies and has broken through resistance at 500 euros," he said.
David Powell, an economist at IDEAglobal in New York, pointed the finger at Beijing as the main suspect in the sudden bond flight this summer.
In a client note entitled "Has China started to dump US Treasuries?", he said the sales appear to coincide with early moves by Beijing to launch its new $300bn sovereign wealth fund.
Gold may be trying to break out of its 2 year slumber. Although it is a little late in the chart pattern and momentum indicators, there should be little rally.
Well, cruised right on past all the resistance...if it hits the papers, we could see some nice activity. Great to sell into an excited market for a change!
Geopolitical issues do effect the values of precious metals. Do you think that the recent uptik in prices could be, at least in part, by anticipation of the 9/11 anniversary coming up next week and fears of an attack of some sorts?
Saw an interesting news item that the rise was linked to new US employment drop numbers but that seems to be kind of far fetched. The pressure on the metal has been building while everyone was wondering why it didn't spike with the exploding ARM's or the oil, or all the economic things that usually cause the metal to rise. It never moved, hovered around 660 down from 700 earlier in the year. Gold tried to rise over June and July, bumped and kicked back down a number of times from 680 or so. Methinks the prognosticators are puzzled excepting of course cohodk, he seems to have a pretty good handle on it. While everyone here was saying "accumulate" all the boo birds came out and said leave it alone...hee hee, life is good.
Edited to add: All the cheap lib 20's that were "buy it now" on the Heritage site are gone except for the nosebleeds...didn't take long for the scavengers to chew through that play.
Edited again to add: this for those that don't understand carry trade. Yen Carry Trade
<< <i>The dollar index is now below 80 due to the bad payroll numbers. Ug. Time to change the calculation method to exclude manufacturing... >>
More troubling than the dollar under 80 would be the unwinding of the YEN carry trade. There are alot of potential double tops in equity land. Be careful.
More troubling than the dollar under 80 would be the unwinding of the YEN carry trade. There are alot of potential double tops in equity land. Be careful. >>
Watch bonds too. If they behave wrong then gold will strenghten.
I think a lot of the carry trade in metals has already unwound. I could well be wrong and am basing this solely on the fact that gold isn't leaving silver far behind... ...just close behind.
Gold sure seemed strong enough. While it closed down some we've seen a 10% move in the last few weeks. Some of the major gold stocks like Goldcorp are up close to 20%. Not bad for a "little" rally. The stars look well aligned in so many areas at the moment. How many bull markets in metals meander for 16 months and then tank? It seems time to make a run to a new high. Maybe the COT is willing to let gold run to $730-$775 and then slam it hard once they reverse some long positions.
In the last week I picked up some MS65 Saints and a small pile of MS64 $2-1/2 Liberties. This usually means they will go down shortly.
First time in 15 years that the US dollar index closed under 80. Not a good sign. The "great rally" stopped at 82 and caved back in. There is so much bad commerical paper and credit obligations it's scary. And the jobs report for August was a catastrophe. The net birth/death model anticipated 120,000 new jobs...yet was "slightly" off (by -124,000) with 4000 jobs lost. Large downward adjustments were also done for June and July (surprise). See link below.
A question for the bond/equity boys. I was looking to park some of my 401K money into something very safe for the time being. But the only options in my plan are for treasuries or a stable value fund (a mixture of bonds, securities, and other "AAA" paper). After seeing what just happened with many "AAA" Mortgaged back securities and "AAA" commercial paper going to full junk (illiquid) status I really have to wonder if a Stable Value Fund is safe. Who knows what junk could be lurking in bank and insurance company portfolios. "AAA" my a$$. Then aren't treasuries totally dependant on the US dollar value. While you may get 3-4% interest, if the dollar index tanks 10% over a year, aren't you a net 6-7% loser (without inflation even being factored in)? Is there anything really safe out there? I don't think my 401K offers any "safe" option any more. I might as well stick with international funds and contrafunds and hope they run counter to the trends. Sorry, but my 401K doesn't give gold/silver or other Dow/S&P/Nasdaq choices as an option on the entire balance, but only 50% can be placed outside the main fund choices. To me that leaves 50% exposed.
Some of the major gold stocks like Goldcorp are up close to 20%. Not bad for a "little" rally.
The stock of mining companies usually move at 3x the move in the underlying metal. Thats why there is no reason to own gold. Just buy the stocks and make 2-3x more $$$$. Several mining companies also pay you a dividend while you wait.
Then aren't treasuries totally dependant on the US dollar value. While you may get 3-4% interest, if the dollar index tanks 10% over a year, aren't you a net 6-7% loser (without inflation even being factored in)?
Only if you plan to take your money out of the country. Think in absolute terms.
I might as well stick with international funds and contrafunds and hope they run counter to the trends
I've said it before and I'll say it again, HOPE has no place in investing. If the US stock market drop 20%, you better damn well believe international funds are going to get hammered also. It is too bad that most 401K plans are so restrictive as there are many, many ways to profit from a down market. I usually trade UID in my IRA as a hedge and in fact own it currently. I bought it on Wednesday after seeing the potenial for several double top chart patterns in many leading technology names. Hopefully these double tops will not be realized as it would mean the Nazdaq will have dropped 20%. But if they are realized then I am protected and should realize a 10% increase in the value of my IRA.
You should check to see if you can purchase into the Rydex or Profunds mutual fund families. They have openended funds that will also appreciate in a down market.
And if equities do selloff, you should expect metals to do the same, as safe havens are only relative. Aluminum is sitting on 2 year support, if it breaks the rest of the industrial metals will follow.
And you have better watch the Chinese market. The 100 million so called "middle class" citizens, could soon find themselves in the "lower class". Watch for the ugly head of societal and political unrest to peek its head out from under the Communist rock. Communism works very well when it citizens are happy, but I have never seen a happy person who just got a lesson in "capital repricing".
I've said it before and I'll say it again, HOPE has no place in investing. If the US stock market drop 20%, you better damn well believe international funds are going to get hammered also. It is too bad that most 401K plans are so restrictive as there are many, many ways to profit from a down market.
Typically, company structured 401k's do not allow one to hedge market downside, at least not to 100%. Hence all you can have is "hope." My 401K allows 50% of your balances to be placed outside the fund in anything you choose. That's a great thing. However that leaves 50% of your holdings subject to the usual growth stock funds (nyet), bonds (in this climate? nyet), in treasuries (nyet, US bonds are headed down as the Chinese and others are now ignoring them). At this point all I got is hope in my 401K. Wouldn't it be grand if a you could select a bear fund? Every 401K should allow us to play the market both ways like the rich guys. But we know why that option is not made available to us because stocks only go up and up and up....at least they basically have since 401K's have become common place.
In today's climate there is no such things as investing unless you play with the big boys who dictate the swings. Anything else is gambling....hence "hope." We just described 95+% of all private stock holders.
Now without TIPs, how does an investment in treasuries maintain value if the dollar goes down? What's the difference in holding a CD with 5% interest? You do get some interest, but your principal value is declining by 10% yoy. Just assume hold gold.
Actually treasuries have been a fantastic investment over the past 3 months. A way to play these are TLT or IEF. Both are up over 10% in this time. If you are afraid, I would rather just park money in CD's as you know what your return will be. You can not say that about any other asset, even gold.
You have to stop thinking that a declining dollar means you have less. If you put 100K into a 1 yr CD at 5% when it comes due you will have 105K. Not 95 or 85. You are only losing purchasing power against foreign curriencies.
Yes, a falling dollar usually means inflation and your 105K may not go so far, but the way you write you could make a uninformed person think they will have fewer dollars, and that just isnt the case.
For some reason you think I hate gold. That is not the case. In fact if you look though my posts you will find that I often stay away from making a prediction in the movement of gold. I just do not consider it to be the bulletproof vest as you do. And the more vehement someone is in their convictions, the more cautious I become. I have said many times that every asset class has its day in the sun. Gold has had it moments of pure exhillaration as well as excruciating boredom over the past 6 years---kind of sounds like marlin fishing. Gold is a relatively small asset class and can be/is easily manipulated. I have a hard enough time dealing with stocks, and I dont need to play in a thin market. You see, to me time is money, and everyday I try to make my money work harder than I do. Some say time is your friend, to me it is my enemy, for I can not simply sit and wait for something that may or may not happen. You have probably found out that it takes more time than it used to get done what you need. The years seem to go by faster and faster. Time is your enemy also.
Scwab allows me to invest in foreign currency bonds. I like the Swiss and Australian. As far as my 401 Im screwed like you. They give me a choice of 6-7 stock or bond funds. Its planned that way to keep the money where Wall Street can all make the most on it.
I can't wait to see what these so-called soothsayers are going to say when they realize what impact on the markets will be from human overpopulation, overuse and misuse of natural resources, harmful environmental practices, etc., etc., etc. It's not going to be tomorrow, but unless things (SOPs) change fairly rapidly, I see shocking and drastic changes ahead. 2c
So what is everyone’s guess as to what the Fed will do with a rate cut?
I do not see how they can drop the rate more than ¼ point next week without dropping the dollar and causing more dumping of U.S. Treasuries, and notes.
Here is part of a post to Jim Sinclair from one of his write in posters,
“ In my reading today, I found an article that states the Fed had a meeting with the ECB (European Central Bank) and the BOE (Bank of England) to discuss a simultaneous cut in interest rates to stop a complete collapse in the dollar.”
"In my reading today, I found an article that states the Fed had a meeting with the ECB (European Central Bank) and the BOE (Bank of England) to discuss a simultaneous cut in interest rates to stop a complete collapse in the dollar."
That was also noted on the kitco gold forum site as a deep rumor. There is at least speculation that the meeting did happen, we'll see. Man, if you think we get a little on the doom and gloomy side from time to time, take a look at the kitco forum...if you listened to some of these guys, you would just sell everything and move to the mountains.
“...if you listened to some of these guys, you would just sell everything and move to the mountains.”
It won’t be time to move t o the mountains until January, Ha Ha.
In all seriousness it is foolish not to learn all you can, and protect your assets and family in these very troubling times, but you cannot go nuts, quit your job, store food, guns, and gold and hide.
We must all keep our balance and stay in the middle. If you keep listening to Larry Kudlow and his goldilocks, don’t worry be happy, crowd, you are most likely going to loss a big chunk of your savings, and of course you cannot just drop out of life and live in a cabin.
Larry Kudlow is a globalist and not a country-first inspite of his mantra at the beginning of each show. All you need to know is his immigration stance. He doesn't know what the average-man on the street is going through. I have even seen him concede a little that the USA growth is virtually flat and earnings will come from abroad. There's too much rah! rah! with him and the likes of Hannity. People need a dose a reality and let the markets correct. As painful as it will be it'll be a good exercise for overspending Americans.
The Fed cuts the rate by 1/4% to keep the markets pumping while priming the printing presses at the same time. The dollar will be propped up by the rest of the worlds' currencies as they would not shoot themselves in the foot by letting the dollar crumble.
Rumblings of US putting finishing touches for air and rocket attacks on Iran
US giving massive military aid to allies in Middle East
Three carrier strike force in position
China, Russia and Germany backing away from further sanctions on Iran
Surge troops in place in Iraq
The Arab nations are clearly not supporting Syria and are actively at odds with Iran. It would seem that The Arab Nations and Israel, for the first time ,are becoming allies on the issue of opposing Iranian superiority over the middle east.
It would seem that we are on the verge of a massive and prolonged military action, that will certainly line up our allies and our enemies.
Such developments will shoot up precious metals and oil, while it should drop the DOW to under 11,000. I believe that it will happen before the end of the year. Rather sooner then later, especially with Russia exerting itself on the International scene, again ,as the counter to US interests.
Expect the call up of remaining Reserve and National Guard Units not previously called as well as rationing of gas and oil for the Nation.
Hearing the same thing as fiftycom said...1/4 point cut and international CB collusion to keep the dollar from going down much further against foreign currencies.
Of course, this leaves some questions:
1. When will we see the effects of the Yen carry trade situation in our markets?
2. Did gold withstand a strong effort to bring it back into $660-$680 range today?
3. Is the US dollar stronger in international markets if gold is lower?
4. Is the next point of major resistance for gold after $700-$710 in the $740-$750 range (by December?)?
Bear, you usually come up with limerick or a couple a concise sentences of bare-wisdom...but that was a kick in the nutcracker. I can't really disagree. I didn't hear of a couple of those newsblurs. I would like to add one more though....Putin disolving the Russian government. If anyone has read Epicenter they would know how earth-shaking that is.
I would love to see gold in the $1,000's, I just don't know if I want to live in that world.
Yes...they had a video of that "Father of all bombs" named after our MOAB or Mother of all bombs. That whole gaseous/particle explosion device was developed in the Nazi era and it's a smoke bringer.
<< <i>A 1/4 point cut will cause an immediate drop in the market that is expecting at least .50 and a promise for more.
All these problems in the financial world only leaves the home team one way out, thier usual, distraction.
That means start another war. >>
The problem now is too much cash chasing too few resources. Inflation would be rampant if it weren't for the housing mess.
War would be the worst thing since it would chew up too many resources.
As I've said for years; if Congress spends it, eventually we'll have to inflate it away. This is eventually. The Fed has to cut to prevent an implosion and the easier money will be inflationary.
You Know the only thing i can add to this is my non nuke is bigger then your non nuke at least at first what a deal what in the double ll's are they or we as a race thinking man you got to wonder
Comments
RR - the local radio guys said the government would allow people to walk away from upside down mortgages without consequence. No IRS action, in particular.
<< <i>> "In the last 4 decades trillions and trillions of dollars have been spent in this country to eliminate poverty and what is the effect? Hardly anything."
Only from the results of a controlled experiment, eliminating or accounting for all the variables, could this statement be made.
It is too bad that so many emotion-laden and vapid Talking Points are promulgated and believed as "The Truth!"
Kinda like giving the Romans bread and circuses to keep them docile.
Poverty has not gone away.... for the simple fact that there will ALWAYS be someone who is on the lower end of the financial spectrum. How could it ever be otherwise???
But one thing that is overlooked very often.... is the fact that 'poverty' is big business. Look how many individuals and entities that make money in the 'poverty' arena, whether it is charities, second hand stores that sell donated items (which by the way, prices aren't that cheap!), and most of all.... politicians that want to 'buy' the 'poverty' votes. There are many that have a vested interest in having poverty around. A good number of these that have the vested interest may say that they want poverty to be eradicated...... sadly may not really want that to happen. They would be out of their jobs, government grant money, and politicians would have to find another platform to run on....
I'm not sure what the term "big business" means in this case since it hasn't been quantified. I doubt very highly it is 1% or even .01% the size of true Big Businesses like, for example, Big Pharma, the Military Industrial Complex, Big Insurance, Big Construction [i.e, Bechtel], Mining, etc etc etc.
Speaking of the Military Industrial Complex, the original quote about spending so much on poverty and still having it certainly applies 1000-fold to that. We have spent well over 50 trillion dollars on weapons and war - just since WWII - and a few guys with box cutters destroyed a bunch of buildings and killed a bunch of Americans. Quite a return on your investment.
> politicians that want to 'buy' the 'poverty' votes.
It is a matter of record that, in general, the poorer you are the less likely you are to vote. There is much less return on your campaign dollar trying to "buy" poverty votes than there is, say, making promises to increase gov't spending and not raise taxes to pay for it (aka deficit spending).
Income and Voting Trends
Poor people vote less
Shifting USA public attitudes
To keep this post on-thread, I think that Americans, both rich and poor and both Republican and Democrat, should buy as much gold and silver as they can afford
Tincup,
What a great comment!
We just never think about how much unemployment it might cause if poverty was done away with.
How about builders and workers building low cost, and government housing?
Just the Federal, state, and local government officials in all the welfare departments, social services, food stamps, etc. would be hundreds of thousands of people.
I wonder how many IRS agents are employed just to keep track of the millions of checks sent out to people each year that paid nothing in?
Seems that there was a post here and I want to say it was deadhorse, where you should trade gold for silver when the ratio is greater than 55:1. Trade silver for gold when the ratio is under 47:1. Of course, it wasn't stated if that was spot or future delivery contracts so let's say it's daily spot but it does seem like a reasonable approach.
So...Kitco daily spot gold is at $682.50 and silver is at $12.25 so it's at 55.7 so, I'm selling gold? Just seems like this is a good time to look at this theory.
I'm also not too sure what the ratios should be so you might look for additional guidance there. If it returns to age old traditional 15:1 you might also be left out in the cold. If it just vacilates around you could pick up some cash while still staying invested in metal..
Is China Quietly Dumping US Treasuries?
The Telegraph (UK) 9-5-2007 | Ambrose Evans-Pritchard
A sharp drop in foreign holdings of US Treasury bonds over the last five weeks has raised concerns that China is quietly withdrawing its funds from the United States, leaving the dollar increasingly vulnerable.
Data released by the New York Federal Reserve shows that foreign central banks have cut their stash of US Treasuries by $48bn since late July, with falls of $32bn in the last two weeks alone.
"This comes as a big surprise and it is definitely worrying," said Hans Redeker, currency chief at BNP Paribas.
"We won't know if China is behind this until the Treasury releases its TIC data in November, but what it does show is that world central banks are in a hurry to get out of the US. They don't seem to be switching into other currencies, so it is possible they are moving into gold instead. Gold is now gaining momentum across all currencies and has broken through resistance at 500 euros," he said.
David Powell, an economist at IDEAglobal in New York, pointed the finger at Beijing as the main suspect in the sudden bond flight this summer.
In a client note entitled "Has China started to dump US Treasuries?", he said the sales appear to coincide with early moves by Beijing to launch its new $300bn sovereign wealth fund.
Knowledge is the enemy of fear
Edited to add: All the cheap lib 20's that were "buy it now" on the Heritage site are gone except for the nosebleeds...didn't take long for the scavengers to chew through that play.
Edited again to add: this for those that don't understand carry trade.
Yen Carry Trade
Ug.
Time to change the calculation method to exclude manufacturing...
<< <i>The dollar index is now below 80 due to the bad payroll numbers.
Ug.
Time to change the calculation method to exclude manufacturing... >>
More troubling than the dollar under 80 would be the unwinding of the YEN carry trade. There are alot of potential double tops in equity land. Be careful.
Knowledge is the enemy of fear
My oil sydr’s are still up 3.5% since I bought them a couple of weeks back, but were up 5% yesterday and dropped 2% just today?
Oil is up now to $76.68 and the Dow is down 237 points.
The Fed put 31 billion in the market yesterday, but something else is going on.
Gold is barley holding on to $700 down from this mornings strong opening.
What a very strange market!!
I agree with cohodk, watch the carry trade.
<< <i>
More troubling than the dollar under 80 would be the unwinding of the YEN carry trade. There are alot of potential double tops in equity land. Be careful. >>
Watch bonds too. If they behave wrong then gold will strenghten.
I think a lot of the carry trade in metals has already unwound. I could well be wrong and am basing this solely on the fact that gold isn't leaving silver far behind... ...just close behind.
The stars look well aligned in so many areas at the moment. How many bull markets in metals meander for 16 months and then tank?
It seems time to make a run to a new high. Maybe the COT is willing to let gold run to $730-$775 and then slam it hard once they reverse some long positions.
In the last week I picked up some MS65 Saints and a small pile of MS64 $2-1/2 Liberties. This usually means they will go down shortly.
First time in 15 years that the US dollar index closed under 80. Not a good sign. The "great rally" stopped at 82 and caved back in.
There is so much bad commerical paper and credit obligations it's scary. And the jobs report for August was a catastrophe. The net birth/death model anticipated 120,000 new jobs...yet was "slightly" off (by -124,000) with 4000 jobs lost. Large downward adjustments were also done for June and July (surprise). See link below.
A question for the bond/equity boys. I was looking to park some of my 401K money into something very safe for the time being. But the only options in my plan are for treasuries or a stable value fund (a mixture of bonds, securities, and other "AAA" paper). After seeing what just happened with many "AAA" Mortgaged back securities and "AAA" commercial paper going to full junk (illiquid) status I really have to wonder if a Stable Value Fund is safe. Who knows what junk could be lurking in bank and insurance company portfolios. "AAA" my a$$. Then aren't treasuries totally dependant on the US dollar value. While you may get 3-4% interest, if the dollar index tanks 10% over a year, aren't you a net 6-7% loser (without inflation even being factored in)? Is there anything really safe out there? I don't think my 401K offers any "safe" option any more. I might as well stick with international funds and contrafunds and hope they run counter to the trends. Sorry, but my 401K doesn't give gold/silver or other Dow/S&P/Nasdaq choices as an option on the entire balance, but only 50% can be placed outside the main fund choices. To me that leaves 50% exposed.
August Jobs report - birth death model finally implodes
Interesting article on the next step in sub-prime fallout.
Mortgage bond contagian will spread further - Jim Willie
roadrunner
The stock of mining companies usually move at 3x the move in the underlying metal. Thats why there is no reason to own gold. Just buy the stocks and make 2-3x more $$$$. Several mining companies also pay you a dividend while you wait.
Then aren't treasuries totally dependant on the US dollar value. While you may get 3-4% interest, if the dollar index tanks 10% over a year, aren't you a net 6-7% loser (without inflation even being factored in)?
Only if you plan to take your money out of the country. Think in absolute terms.
I might as well stick with international funds and contrafunds and hope they run counter to the trends
I've said it before and I'll say it again, HOPE has no place in investing. If the US stock market drop 20%, you better damn well believe international funds are going to get hammered also. It is too bad that most 401K plans are so restrictive as there are many, many ways to profit from a down market. I usually trade UID in my IRA as a hedge and in fact own it currently. I bought it on Wednesday after seeing the potenial for several double top chart patterns in many leading technology names. Hopefully these double tops will not be realized as it would mean the Nazdaq will have dropped 20%. But if they are realized then I am protected and should realize a 10% increase in the value of my IRA.
You should check to see if you can purchase into the Rydex or Profunds mutual fund families. They have openended funds that will also appreciate in a down market.
And if equities do selloff, you should expect metals to do the same, as safe havens are only relative. Aluminum is sitting on 2 year support, if it breaks the rest of the industrial metals will follow.
And you have better watch the Chinese market. The 100 million so called "middle class" citizens, could soon find themselves in the "lower class". Watch for the ugly head of societal and political unrest to peek its head out from under the Communist rock. Communism works very well when it citizens are happy, but I have never seen a happy person who just got a lesson in "capital repricing".
Knowledge is the enemy of fear
Typically, company structured 401k's do not allow one to hedge market downside, at least not to 100%. Hence all you can have is "hope." My 401K allows 50% of your balances to be placed outside the fund in anything you choose. That's a great thing.
However that leaves 50% of your holdings subject to the usual growth stock funds (nyet), bonds (in this climate? nyet), in treasuries (nyet, US bonds are headed down as the Chinese and others are now ignoring them). At this point all I got is hope in my 401K. Wouldn't it be grand if a you could select a bear fund? Every 401K should allow us to play the market both ways like the rich guys. But we know why that option is not made available to us because stocks only go up and up and up....at least they basically have since 401K's have become common place.
In today's climate there is no such things as investing unless you play with the big boys who dictate the swings. Anything else is gambling....hence "hope." We just described 95+% of all private stock holders.
Now without TIPs, how does an investment in treasuries maintain value if the dollar goes down? What's the difference in holding a CD with 5% interest? You do get some interest, but your principal value is declining by 10% yoy. Just assume hold gold.
roadrunner
You have to stop thinking that a declining dollar means you have less. If you put 100K into a 1 yr CD at 5% when it comes due you will have 105K. Not 95 or 85. You are only losing purchasing power against foreign curriencies.
Yes, a falling dollar usually means inflation and your 105K may not go so far, but the way you write you could make a uninformed person think they will have fewer dollars, and that just isnt the case.
For some reason you think I hate gold. That is not the case. In fact if you look though my posts you will find that I often stay away from making a prediction in the movement of gold. I just do not consider it to be the bulletproof vest as you do. And the more vehement someone is in their convictions, the more cautious I become. I have said many times that every asset class has its day in the sun. Gold has had it moments of pure exhillaration as well as excruciating boredom over the past 6 years---kind of sounds like marlin fishing. Gold is a relatively small asset class and can be/is easily manipulated. I have a hard enough time dealing with stocks, and I dont need to play in a thin market. You see, to me time is money, and everyday I try to make my money work harder than I do. Some say time is your friend, to me it is my enemy, for I can not simply sit and wait for something that may or may not happen. You have probably found out that it takes more time than it used to get done what you need. The years seem to go by faster and faster. Time is your enemy also.
Knowledge is the enemy of fear
Scwab allows me to invest in foreign currency bonds. I like the Swiss and Australian. As far as my 401 Im screwed like you. They give me a choice of 6-7 stock or bond funds. Its planned that way to keep the money where Wall Street can all make the most on it.
I do not see how they can drop the rate more than ¼ point next week without dropping the dollar and causing more dumping of U.S. Treasuries, and notes.
Here is part of a post to Jim Sinclair from one of his write in posters,
“ In my reading today, I found an article that states the Fed had a meeting with the ECB (European Central Bank) and the BOE (Bank of England) to discuss a simultaneous cut in interest rates to stop a complete collapse in the dollar.”
That was also noted on the kitco gold forum site as a deep rumor. There is at least speculation that the meeting did happen, we'll see. Man, if you think we get a little on the doom and gloomy side from time to time, take a look at the kitco forum...if you listened to some of these guys, you would just sell everything and move to the mountains.
“...if you listened to some of these guys, you would just sell everything and move to the mountains.”
It won’t be time to move t o the mountains until January, Ha Ha.
In all seriousness it is foolish not to learn all you can, and protect your assets and family in these very troubling times, but you cannot go nuts, quit your job, store food, guns, and gold and hide.
We must all keep our balance and stay in the middle. If you keep listening to Larry Kudlow and his goldilocks, don’t worry be happy, crowd, you are most likely going to loss a big chunk of your savings, and of course you cannot just drop out of life and live in a cabin.
Now, whats the guess on the rate cut?
my 1/2c worth,
Ren
<< <i>Now, whats the guess on the rate cut? >>
The Fed cuts the rate by 1/4% to keep the markets pumping while priming the printing presses at the same time. The dollar will be propped up by the rest of the worlds' currencies as they would not shoot themselves in the foot by letting the dollar crumble.
Buying top quality Seated Dimes in Gem BU and Proof.
Buying great coins - monster eye appeal only.
British troops moved to Iran/ Iraq Border
Israel bombs a site deep in Syria
Rumblings of US putting finishing touches for
air and rocket attacks on Iran
US giving massive military aid to allies in Middle East
Three carrier strike force in position
China, Russia and Germany backing away from further
sanctions on Iran
Surge troops in place in Iraq
The Arab nations are clearly not supporting Syria and are actively
at odds with Iran. It would seem that The Arab Nations and Israel,
for the first time ,are becoming allies on the issue of opposing Iranian
superiority over the middle east.
It would seem that we are on the verge of a massive and prolonged
military action, that will certainly line up our allies and our enemies.
Such developments will shoot up precious metals and oil, while it should
drop the DOW to under 11,000. I believe that it will happen before the end
of the year. Rather sooner then later, especially with Russia exerting itself
on the International scene, again ,as the counter to US interests.
Expect the call up of remaining Reserve and National Guard Units not previously called
as well as rationing of gas and oil for the Nation.
Camelot
Camelot
Of course, this leaves some questions:
1. When will we see the effects of the Yen carry trade situation in our markets?
2. Did gold withstand a strong effort to bring it back into $660-$680 range today?
3. Is the US dollar stronger in international markets if gold is lower?
4. Is the next point of major resistance for gold after $700-$710 in the $740-$750 range (by December?)?
All these questions.
British troops moved to Iran/ Iraq Border
Israel bombs a site deep in Syria
Rumblings of US putting finishing touches for
air and rocket attacks on Iran
US giving massive military aid to allies in Middle East
Three carrier strike force in position
China, Russia and Germany backing away from further
sanctions on Iran
Kinda sounds like 1979.
Nothing new here. The Fed cuts 1/4 pt. Market rallies 70pts within minutes, then begins a quick decline ending the day down 125. But, WTFDIK?
Knowledge is the enemy of fear
I would love to see gold in the $1,000's, I just don't know if I want to live in that world.
Ren
Coins (silver/gold)
Guns/Ammo
Condoms
and......Lip Balm
My philosophy is: If I cannot buy, shoot or hump my way out of a situation - I'll at least have good looking lips.
All these problems in the financial world only leaves the home team one way out, thier usual, distraction.
That means start another war.
<< <i>A 1/4 point cut will cause an immediate drop in the market that is expecting at least .50 and a promise for more.
All these problems in the financial world only leaves the home team one way out, thier usual, distraction.
That means start another war. >>
Distraction! Yes!
It'll be hard to stress about making your note when the media conjures up a nuclear war holocaust.
Wag the dog syndrom.
Ren
<TABLE cellSpacing=0 cellPadding=0 width=629 border=0>
<TR>
<TD colSpan=3>
<DIV class=mxb>
<DIV class=sh>Russia tests giant fuel-air bomb </DIV></DIV></TD></TR>
<TR>
<TD vAlign=top width=416><FONT size=2><!-- S BO --><!-- S IBOX -->
<TABLE cellSpacing=0 cellPadding=0 width=208 align=right border=0>
<TR>
<TD width=5><IMG height=1 alt="" hspace=0 src="http://newsimg.bbc.co.uk/shared/img/o.gif" width=5 border=0></TD>
<TD class=sibtbg>
<DIV class=o><IMG height=152 alt="The bomb blast shown on Russian Channel One TV" hspace=0 src="http://newsimg.bbc.co.uk/media/images/44111000/jpg/_44111322_explosion_203.jpg" width=203 border=0> </DIV>
<DIV class=mva>Russia's main TV channels carried reports on the test </DIV>
<DIV class=o><IMG height=1 alt="" hspace=0 src="http://newsimg.bbc.co.uk/nol/shared/img/v3/inline_dashed_line.gif" width=203 vspace=2 border=0>
</DIV>
<DIV><!-- S IMED -->
<DIV class=mvtb><A onclick="javascript:newsi.utils.av.launch({el:this});return false;" href="http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6990000/newsid_6991000?redirect=6991006.stm&news=1&nbwm=1&bbram=1&bbwm=1&nbram=1&asb=1"><IMG height=13 alt="" src="http://newsimg.bbc.co.uk/nol/shared/img/v3/icons/video_text.gif" align=left border=0><B>Launch and aftermath</B> </DIV><!-- E IMED --></DIV></TD></TR></TABLE><!-- E IBOX --><!-- S SF --><B>The Russian air force has tested a giant fuel-air bomb which the military says is the biggest non-nuclear explosive device in the world.</B> </FONT></TD></TR></TABLE>
Oil rises before gold...more strategic.
Damn, I'm outta lip balm too.
FOAB Video
Edited to add vid.
<< <i>A 1/4 point cut will cause an immediate drop in the market that is expecting at least .50 and a promise for more.
All these problems in the financial world only leaves the home team one way out, thier usual, distraction.
That means start another war. >>
The problem now is too much cash chasing too few resources. Inflation would
be rampant if it weren't for the housing mess.
War would be the worst thing since it would chew up too many resources.
As I've said for years; if Congress spends it, eventually we'll have to inflate it
away. This is eventually. The Fed has to cut to prevent an implosion and the
easier money will be inflationary.
at least at first what a deal
what in the double ll's are they or we as a race thinking
man
you got to wonder