Monday, October 6, 2008

Thanks for the bailout, dumbasses.

Wall Street to all the rest of us: we got ours, we're getting out of Dodge. Suckers!

Appaloosa was pretty fun, more laconic and leisurely than I expected between the shoot-em ups. But I had this funny, weird reaction every time they'd spout one of their folksy-isms. I couldn't help but think of Sarah Palin.

The October Fest did us some good this weekend. I'm slowly coming around about these events. Though I've always thought they were more useful on in the slow season.

Every time I drive by the big, empty corner downtown with the signs, BOOMTOWN, I can't help but think it apropos.

Is it just me, or are all the money measures doomed this November? Some of us have been trying to warn the city of Bend to pull back from their ambitions. Maintenance. The gravy train is stalled at the bottom of the hill.

10 comments:

RDC said...

DuncaStick to managing your store. You really don't have a clue about Wall Street. Now what exaclty are your basing your lead in comment on? What exactly have they gotten and how exactly are they getting out.

The rest of the world is getting hit harder than the US today. It shows that the leverage issues are not just a US problem. You have similar problems with over valued real estate in most of Europe, New Zealand and Australia as well.

The Asian markets are getting creamed just because they depend upon the US and Europe to buy things and the economies in both of those areas are going down severely. The EU does not have a clear strategy at this time and that is severely impacting their financial sector.

The down turn in the US is primarily because of overseas issues today, and the recessions impact on other, not financial industries.

What we are going to see now and for the next year or so is the recession that was delayed due to the housing bubble. What we have seen so far was the impact of houseing adjusting, now what you are going to see is more of a normal recession pattern layered on top of the housing makret problems. Keep in mind that in the past housing down turns have always been led by a recession so you will see the recession also reinforcing the housing down turn.


so tell me exactly what is your logic supporitng your opening comment or is it just more of wall street must be evil mind set.

Duncan McGeary said...

Right on schedule, RDC.

Sure, I know all that.

But my reaction is going to be universal, you wait and see.

RDC said...

It is also why small investors tend to lag the market. They get out when they should be getting in, they pay too much in fees and they tend to have knee jerk reactions without understanding (or for that matter, even trying to understand) what is going on.

Duncan McGeary said...

Maybe, but I'll throw this out at you.

On the way up, the most positive wins (profits); on the way down, the most negative wins (survives.)

I mean, I hate to say, I told you so, but it may be the only satisfaction I'll get out of this.

A year or two ago, people were telling me I was way too pessimistic, but my projections were much less dire than what has actually transpired.

Just last Christmas, I made a 5.00 bet with my brother-in-law that Bend housing prices would drop.

I'd try to collect, except he's now my ex brother-in-law; and he's lost his job.

Pretty brutal.

Duncan McGeary said...

DuncaStick?

RDC said...

nope, in both cases the realist wins. Both the most positive and the most negative overshoot the transistions. They also won't recognize the transition in order to take advantage of it.

The winner is the person that can take emotion out of their financial decisions, interprete the situation with an open mind, and plan for the future.

The overly negative person will pull all of their money out of the market and put it under a mattress. A pragmatic person adjusts their investment portfolio (really well before now) and have cash to take advantage of the opportunities. I indicated a week or so back that I was starting to average back into the market. Nothing that is occuring is changing that view. If anything the larger the drops the faster I average in.

The market is down 30%+ from the peak. It may still experience substantial drops. It could drop more than it has already for that matter. It would not change my direction, it would only mean that I get more shares for each dollar invested.

RDC said...

It should have said

Duncan,

Stick to...

Not sure how the lines merged it did not apear that way in the preview.

Duncan McGeary said...

RDC, you keep saying this is happening around the world. I'm not sure why this makes it any less alarming.

To me, it makes it more alarming.

Not panic. But...sobering.

RDC said...

Oh it is serious.

The main point about the around the world aspect is that it is not just a US problem. Our banks have problems, guess what so do all of the banks in Europe. Our people over brought real estate so did people in other countries.

The point is that many people just like to sit and point fingers. It is wall street, it is the banks, its is the administration, it is the borrowers, etc.

Well if it oour regulators it is also the regulators in Europe (ones that already have some of the regulations some are asking to be put on in the US). If it is our administration well then it is also the administrations and governments around the world as well.

The point is that for all of those that get their entertainment from pointing fingers, you just plain do not have enough so you need to take your shoes off as well.

Michael said...

RDC,

You are making many assumptions based on the current financial systems continuing in their present form. The changes taking place though out the worlds financial systems and institutions are far reaching and the the implications are little understood.

I will assert we have a serious depression heading our way. I will also assert the stock market will continue to fall due to the fact there is not a healthy economy too support any growth.

Here's some light reading that paints a world in transition. I would recommend instead of investing in stocks that will ultimately be worthless or even worse be valued in a currency that no longer exists, you buy real assets that will ensure the survival of you and yours. Fiat currency always fails, this is a mathematical certainty. Currency based on debt needs growth to continue. I do not foresee a future where growth is possible.

The bubbles have all been blown and burst. Green energy is being touted as the next bubble but the capital necessary is being used to prop up a failed system. Duncan has a good point in thanking our leadership for being scared into a poor choice of our resources.

I also wonder how you can continue to support a system where the rules have been changed and all free market principles shown to be a sham? I seriously question your perspective and objectivity.

http://www.imf.org/external/pubs/ft/gfsr/2008/02/pdf/text.pdf