Interesting how many people -- so called experts -- are predicting an economic recovery in 2010.
"You know, we've written off 2009, what more do you want?"
"So we've been wrong about every prediction so far, but how can you doubt us?"
Strangely, the local real estate group who heard Dana Bratton predict an imminent recovery last spring, from this year's speakers heard a 3 year time-line ....but, you know, keep a stiff upper lip and soldier on.
Three years is a longgggg time. I wonder how many of these real estate types really have the patience. I wonder how many of them can hold out that long?
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Truth is a funny thing, and most don't want the damn truth.
They want fiction, they want miracles, and they want easy answers.
Since the 1980's MOST USA corporations, ... like GM, GE, ... MOST didn't make money on product, US auto had been making 5% ROI on autos back in 1980's, and they found out in early 1980's that they could do 15% ROI on credit cards and loans. Auto found they could make more on credit than on manufacturing, and so did GE retail, so did everyone, ...
For 25 years credit was how people made money, lots of money, and the Stock Market loved the 15% ROI, that's 3X price right there on EPS ratio.
Then along comes the credit confidence collapse, and the entire house of cards collapses.
Bush paid for the IRAQ war by looting the social-security trust-fund and filling it with IOU's.
GE,GM,FORD, ... et-al got CASH to loan in the 1980's ... from 'borrowing from pension obligations' and filling with IOU's.
Today the problem with the Auto-Union is NOT big-auto BK, nobody gives a fuck, the problem is that PENSION obligation money is BEND-GONE. So the unions want OBAMA to use US taxpayer dollars to make good on 100's of billions of obligation. Yeh, right.
The stock market is FUCKED for years to come, the entire CREDIT scam is over for a long time. Sure they would like to 'fix' banking first, .e.g. put the credit-humpty back on the wall, but humpty is good and broken, and 'confidence' matters. Like yesterday with HRC begging the Chinese to keep buying T-Bills, today even our 'AAA' paper is look like 'bbb' by the rest of the world.
People like me bitched like hell in the early 1980's when this CASH to IOU conversion of private companys took place, a two guys name 'Barlette & Steele' even wrote a book called "America, what went wrong' back in 1988 about the rape of the US pension system, what's most interesting is that it was financed by our own KKR, that used OR-PERS ( public employees union Oregon ) money to seed the KKR buyout, so they could buy companys for almost zero down, and then raid the pension cash with IOU replacement, and then use that cash to buy more companys. So successful that KKR went on to become the #1 junk-bond firm in the world.
Everybody loves a winner, so now its 25 yrs later, and the chickens are coming home to roost. Names like GM&GE are worthless, as well as FORD, and most of fortune 500 USA.
Nobody likes the truth, but its been there all along.
The funny thing today, given that PUBLIC-UNIONS robbed private-unions for the past 20+ years is that while states like cali go BK, is that there will be a call to bail-out public union obligations, ... but nobody will care, just like today, nobody cares that DETROIT big auto employees stood by and LET their pension cash be stolen years ago.
Malcolm-X always called this shit, "Just a case of chickens coming home to roost".
All is a ponzi US stocks, and BEND-RE, ...
Chickens are back, and for a long time.
I read somewhere the airline industry -- as a whole -- hasn't made any money in decades...
Meanwhile, Rising Star: I'm impressed that so many businesses can sustain 20-30% drops, though that remains to be seen over the long haul.
Another 30% drop on top of that? Almost no business, up to and including mine, can withstand 60% drops...(in the back of my mind, I think I probably could, but it would be tough -- and it would mean everyone else is falling like flies, so I'd have some wiggle room....)
I've planned for a 50% drop, I don't really expect it to go there.
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Keep your hands off your traditional IRA or 401(k) until the very last moment. "You'll not only have to pay taxes on those withdrawals, but you'll also pay penalties," says Mr. Houston. "You'll lose all of the compounding interest and yield. Plus, the probability of you replacing those dollars down the road is pretty remote, since the tendency for most is to spend instead of replace."
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People quite often like 'dunc' yesterday going on about IRA's ( or equiv ), but the government has it setup very nice, for BAD economy's people will TAP this money, and end up PAYING MORE tax, rather than had they never put money into these tax-traps.
Just a fact and something to think about, when the 'experts' start talking about what they're doing with their money.
If there's ANY chance in hell that you'll need the fucking money, don't put it into an IRA (or equiv).
Daily update is up at http://bend-gazette.blogspot.com/
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