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It's a Sarcasm Report AND a Musical Tribute? Oh happy day!
Get your 401k back in the game
The stock market is up roughly 45% from the bottom and we're now told to get back into the game? Figures. I'd say punt on 2nd down and head off to the locker room instead, but what do I know?
The research also found that only 31% of mutual-fund owners spoke with a broker or financial adviser on a regular basis.
If I buy a used car do I speak with the used car salesman on a regular basis? Do I value his continued insight on my purchase? It might be different if the typical broker or financial adviser actually offered advice better than a used car salesman I suppose. However, both sets of salesmen tend to say the same thing.
"There's never been a better time to buy."
That's just as true for brokers and financial advisers heading into the worst stock market crash since the Great Depression as it is for used car salesmen heading into the worst unemployment in decades.
Having too little in stocks now means missing out on a recovery.
News flash. You probably already missed it. Sorry!
Best Six-Month Stock Market Rally Since 1933
Those only tend to come around once every century or so. If you did miss it, does now really seem like the best time to plow back into stocks? What are you? A glutton for punishment?
Meanwhile...
Clunker Program Spurred August Sales
That's amazing! Who knew?
“G.M. and Chrysler still have a long recovery ahead of them,” Ms. Lindland said. “The fact is, they have gone as low as a company can go and still survive.”
Oh, I don't know about that. Both GM and Chrysler could go lower. They've already gone bankrupt once this year. What if they went bankrupt again at some point? It isn't like the Cash for Clunkers Program was made permanent. Oh wait. I should be optimistic I suppose.
Having too little in clunkers means missing out on the Cash for Clunkers Program!
There. That seems extremely optimistic, especially since the program has already ended.
Out of Gas
Cash for Clunkers came to a screeching halt at the end of August, prompting still-ongoing debate about just how fruitful the program will be for beleaguered dealers in the long run.
What's that saying about the long run again? Oh yeah, I remember.
"In the long run, we're all dead." - John Maynard Keynes
Keynesian economics
The advent of the global financial crisis in 2007 has caused a resurgence in Keynesian thought.
Heaven help us all.
ICE: Mortgage Delinquency Rate Increased Year-over-year in October
-
From ICE: ICE First Look at Mortgage Performance: Serious delinquencies hit
17-month high while foreclosure activity remains historically muted
• At 3.45% ...
2 hours ago
10 comments:
Stag,
If I buy a used car do I speak with the used car salesman on a regular basis?
There's no need to speak to a money (mis)manager. Just pay the fees and get rich!
Financial "innovation" has made investing as easy as "set it and forget it". What's not to like?
http://www.youtube.com/watch?v=lsY6eaKsFW4
I'll add that the buy and (bag)hold strategy is especially useful during periods of bubble induced over-valuation! You're going to want to be "all in" when market dividend yields are 2% or lower!
Btw, if you like Ronco products, you're going to want to bookmark this site:
http://www.asseenontv.com/
mab,
So what's the best store of value on the As Seen On TV site?
I'm torn between the 6 Second Abs, AB Away 2, Ab Circle Pro, Ab DOer, AB Doer Extreme, Ab Energizer, Ab Energizer Dietary Supplement, Ab Force, AB Revolutionizer, Ab Scissor Ultra, Ab Slide, Ab Swing, Ab Twister, Ab Zone, Abflex, AbTronics Ab Exerciser, SmartAbs, and Walk Away The Pounds For Abs.
I'm leaning towards the SmartAbs. I'd like my Abs to invest on my behalf someday.
Stag,
I'd like my Abs to invest on my behalf someday.
It's obvious that Bernanke and CONgress don't have strong enough stomachs to tell investors and bankers that they have to eat their own losses.
I view the bailouts as a giant Pandora's box. Bernanke opened the box and free money started pouring out. He claims it was necessary to open the box. He claims he'll shut it at the right time. I imagine his view of the "right" time will be viewed by the majority as though rich people were given seats on the Titanic's life boats at their expense.
My view is the box was opened due to expediency.
I can't speak for others, but now that they've bailed out so much fraud and foolishness, I've lost all desire to ever perform productive work again. I don't see the point anymore. They tax productive work and un-tax/incentivize/bailout fraud and senseless credit creation. Based on those incentives, I wonder if Bernanke will ever be able to shut his box if he wants to maintain exponential credit growth. People want the growth, but the incentives certainly won't lead them to work productively for it.
The breadth of this huge sham bugs me to no end. Anyway, this article caught my eye:
http://money.cnn.com/galleries/2009/real_estate/0908/gallery.Life_after_foreclosure/3.html
I think we'll be seeing more and more of this kind of self help. What a motivational speech it would make for this newly un-indebted motivational speaker.
Who knew the TIPS market was so wild?:
http://acrossthecurve.com/?p=8416
mab,
From your link...
"Nothing was lost but a big, freaking headache," he says.
I'm somehow reminded of Chris Farley as THE motivational speaker.
GYSC,
From your link...
"There is a gigantic bout of cognitive dissonance striking the markets this day."
It's $1,000 Whack a Mole™! ;)
For what it is worth, my TIP fund closed slightly higher.
Gold is taking yet another stab at $1,000. It is no doubt partly rising due to the AMAZING number of Monex commercials on TV these days. The following is taken straight from their website.
"Or, you may elect financing of your precious metals, using as little as a 20% down payment and taking advantage of investment leverage of as much as 5-to-1, through our exclusive Atlas Account program."
Leverage up that "sure thing" safe haven. Baby needs new shoes. *heavy sarcasm*
Stag,
I just got a great idea for the punzi scheme.
Check out these bargain priced houses the FDIC is trying to unload. All < $10K, OR BEST OFFER.
http://www.fdic.gov/buying/owned/bargain/index.html
Here's my plan. I'm offering negative 100K for each house. Since I'll likely be the ONLY offer, I'll also be the BEST offer. It's a freaking gold mine! Jackpot!
mab,
"I'll likely be the ONLY offer, I'll also be the BEST offer."
You could very well be the ONLY offer on those houses! I feel no great need to out bid you. Take that last house, please! Badum-ching!
1. "Taxes due are Winter taxes in the amount of $1765.84 and 2008 Summer taxes $6,343.40, both now due. 2007 taxes in the amount of $675.28 are now due and delinquent." How does a 2000 square foot house in Detroit with a $6k or best offer manage to have 2008 Summer taxes of $6,343.40? My larger house on a lot nearly 4x as large in the Seattle area doesn't even have property taxes that high.
2. "...subject to any and all outstanding taxes and liens." Liens? What liens? Mystery liens are always my favorite! Really adds some spice to a speculative investment!
3. "The home is currently occupied by a tenant." You will note that the wording on another one of the houses in the list states, "The home is currently occupied by a tenant current on rent." I'm not sure what the "current on rent" additional commentary is worth, but I'm guessing that it is worth something.
4. "Detroit"
You know, I'm only half-joking about not wanting to out bid you. It's a sad day when you offer negative $100k for a house and I'm STILL not sure if it is a good deal.
"It's a freaking gold mine!"
Well, you know what they say about gold mines.
http://online.barrons.com/article/SB124968334615515545.html
MARK TWAIN REPORTEDLY ONCE DESCRIBED A GOLD mine as "a hole in the ground with a liar standing next to it."
...
"There is a lot of liquidity in the system which will find its way to gold," says Denbow, who worked with other USAA funds -- such as its balanced-strategy and value-fund products -- before joining Johnson at USAA as an analyst in 2007 and as co-manager in October 2008. Then, "add to that outlook the rising spectre of inflation, which traditionally piques investor interest in the commodity and gold-mining shares."
I'm actually starting to believe (like you) that the rising inflation that everyone keeps predicting might just be a spectre. They certainly aren't hoarding gold in Detroit by the looks of it. If they had any gold, they'd no doubt be selling it to pay their property taxes and/or their rents!
I offer you a Wall Street "sure thing" alternative to your investment idea. Do not use your own (negative) money!
MAB'S "Sure Thing" FDIC Housing Investment Fund
Simply describe what you've told me as a way to attract investors, then charge 2% annual expenses on the fund that speculates on Detroit housing!
If they ask why you need their money when you are only bidding negative $100k on houses then point out that it is the same reason Wall Street needs our money. Then nod and chuckle. Hope that they will feel too silly to not nod and chuckle with you. Then quickly point out how rich they will be as a way to change the subject.
I'm actually starting to believe (like you) that the rising inflation that everyone keeps predicting might just be a spectre.
I just don't see runaway or high inflation, at least for the next few years. But you can never be certain so TIPS make sense given how inexpensive the inflation insurance is.
Anyhow, I look at it this way. We have ~ $53 TRILLION in outstanding debt against only ~$780 BILLION (pre crisis) fiat dollars. That's some serious leverage, way beyond the typical 10 to 1 fractional reserve limit. It may have started out as a fiat based credit system, but the initial relationship is clearly broken. I don't see too many fiat dollars, I see to few against too much debt.
Much of the $53 trillion in credit is now rightly under suspicion. Is doubling the amount of fiat money going to make that credit more valuable?
In a credit money system (not a fiat money system) what does it take to have inflation? I'd say it takes:
1. End demand (from households).
2. Ability to borrow (incomes & collateral).
3. Ability to lend (banks/savings).
4. Pricing power (demand vs. supply.
The dynamics of all four look poor to me. Really poor. Bernanke can swap cash for trash but that seems like it will only marginally improve #3 as collateral values and existing asset prices are declining. Arguably, foreign demand could be strong, but since we are already borrowing foreign capital it's hard to see how that will make us wealthier.
Quite frankly, Greenspan and Bernanke were fools for allowing so much credit to be created. Economic theories and common sense were corrupted by free lunch financial profits. The damage has been done - we have too much non-economic debt.
So many are so screwed. I see no way more borrowing/debt will make the majority more prosperous.
mab,
Consumer Credit: The Next Crisis
June 2009
http://hbr.harvardbusiness.org/2009/06/the-next-crisis/ar/1
"Scale up this scenario even a little bit, and it starts to be clear that the degree to which consumers have come to depend on easy, inexpensive credit is a far bigger threat to the economy than most people realize. Few companies are immune to the risks. Consumers are using record levels of debt to purchase goods and services, leaving the corporations selling to them greatly exposed, sometimes fatally."
For what it is worth, I don't think it is a "far bigger threat to the economy" than we realize. I'd say we're doing fairly well spotting serious threats these days. I did not turn bearish in 2004 because of oil. It was always the debt. Oil was an afterthought. It apparently ends up being the straw that breaks the camel's back though.
I see no obvious flaws in your deflationary analysis.
Here's another way to think about it.
Should a wise man max out his platinum credit card to buy platinum right now?
I would argue no. I'm not saying I am wise. I could be wrong. It's exactly what a hyperinflationist should do though. The debt would vanish and the platinum would remain.
Here's a few more questions.
How many people have maxed out their credit cards or took out a new mortgage assuming that ongoing inflation would make their painful debt eventually go away?
How many people traded in their clunker for cash and now regret it?
Buyers Feel Regret as Cash for Clunkers Final Tally Is Released
http://www.edmunds.com/insideline/do/News/articleId=155907
"The new survey by CNW Purchase Path, of Bandon, Oregon, finds that of nearly 1,000 Cash for Clunkers participants, 17 percent say they have some or serious doubts that they should have made the new-vehicle acquisition."
"Primary reason: They are now facing a $275-$350-per-month car payment that didn't exist prior to acquiring the car or truck," said the report. "That amount, they say, could negatively impact the total family budget more than expected prior to buying the new vehicle."
How many of these new cars will eventually find their way to a repossession auction?
What will happen to the auto industry once they do?
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