Chilly Posted July 15, 2008 Share Posted July 15, 2008 Thanks for that tidbit about the M3 number. I wanted to find out more about that and found information on it on the wiki page dealing with money supply. For others who might be interested (and our friend Ron Paul makes an entrance at the end. I may write this guy in on my ballot in November after all)... http://en.wikipedia.org/wiki/Money_supply Since Paul is not an official write in candidate, any votes for him aren't tallied in the official numbers. I wanted to post this article I saw on RCP today - http://www.realclearpolitics.com/articles/...nd_freddie.html Any comments on that, from our resident economists? Link to comment Share on other sites More sharing options...
bills_fan Posted July 15, 2008 Share Posted July 15, 2008 Since Paul is not an official write in candidate, any votes for him aren't tallied in the official numbers. I wanted to post this article I saw on RCP today - http://www.realclearpolitics.com/articles/...nd_freddie.html Any comments on that, from our resident economists? I couldn't disagree with this more... Wallison says the government should just take control of Fannie and Freddie, making them tightly controlled government agencies with the aim of reducing taxpayer risk, not expanding it. Maybe down the road the two housing banks could be completely privatized, but that no longer looks to be part of the conversation. Here's the opposing viewpoint from David John of the Heritage Foundation. I happen to agree with him. http://www.nypost.com/seven/07152008/posto...m_up_119904.htm I would go the other way....break em up. Too much concentrated risk...spread it out and diversify the risk. Link to comment Share on other sites More sharing options...
GG Posted July 15, 2008 Share Posted July 15, 2008 I couldn't disagree with this more... Here's the opposing viewpoint from David John of the Heritage Foundation. I happen to agree with him. http://www.nypost.com/seven/07152008/posto...m_up_119904.htm I would go the other way....break em up. Too much concentrated risk...spread it out and diversify the risk. Too soon. The market cannot handle that much mortgage paper at this moment. The securitization market needs to come back before you break them up. On the other hand, they're the only ones buying mortgages now, and imagine the scenario if the market was completely illiquid. --- Don't disagree with Kudlow's big picture, but you also have to look at the forest fire that Fed & Treasury have to fight right now. If there was an easy solution, it would have been in place by now. Take your poison, do you fight inflation and throw the economy into a dumpster, potentially causing a depression, or do you try to prop up the economy hoping that housing will rebound soon and you can fight inflation at a later date, when it will be worse? The Fed's choice is helped by the low Treasury rates. Despite the low dollar, no one is venturing beyond Treasuries for safety. The choice would be much harder if inflationary pressures actually had an impact on the cost of issuing new debt to the Treasury. Link to comment Share on other sites More sharing options...
bills_fan Posted July 15, 2008 Share Posted July 15, 2008 Too soon. The market cannot handle that much mortgage paper at this moment. The securitization market needs to come back before you break them up. On the other hand, they're the only ones buying mortgages now, and imagine the scenario if the market was completely illiquid. --- Don't disagree with Kudlow's big picture, but you also have to look at the forest fire that Fed & Treasury have to fight right now. If there was an easy solution, it would have been in place by now. Take your poison, do you fight inflation and throw the economy into a dumpster, potentially causing a depression, or do you try to prop up the economy hoping that housing will rebound soon and you can fight inflation at a later date, when it will be worse? The Fed's choice is helped by the low Treasury rates. Despite the low dollar, no one is venturing beyond Treasuries for safety. The choice would be much harder if inflationary pressures actually had an impact on the cost of issuing new debt to the Treasury. Oh, I agree that its too soon to break them up right now, but as more of a longer term solution. I think the bolded part begins to come true come 4th quarter and into 2009. Link to comment Share on other sites More sharing options...
GG Posted July 15, 2008 Share Posted July 15, 2008 I think the bolded part begins to come true come 4th quarter and into 2009. Perhaps, but if I were a bond trader, given the global economy, I don't know where else I'd park my fixed income holdings over the next couple of years. Link to comment Share on other sites More sharing options...
Chef Jim Posted July 15, 2008 Share Posted July 15, 2008 You think people will be honest on the board... Don't you think there would be a sense of embarrassment... What I am saying, would people really be honest and actually raise their hand? And why would the working stiffs be here during the middle of the day? My point is that while nearly 95% of people with mortgages meet their montly obligations is it's the 5% that the media and the sky is falling types blast us with. Link to comment Share on other sites More sharing options...
bills_fan Posted July 15, 2008 Share Posted July 15, 2008 Perhaps, but if I were a bond trader, given the global economy, I don't know where else I'd park my fixed income holdings over the next couple of years. Take the tax-free muni return and be happy? Link to comment Share on other sites More sharing options...
GG Posted July 15, 2008 Share Posted July 15, 2008 Take the tax-free muni return and be happy? Is the muni market big enough for everyone who will flee Treasuries? Talk about creating another bubble Link to comment Share on other sites More sharing options...
Fastback Posted July 16, 2008 Share Posted July 16, 2008 The clock is ticking... http://www.telegraph.co.uk/money/main.jhtm...ccusdebt116.xml Link to comment Share on other sites More sharing options...
bills_fan Posted July 16, 2008 Share Posted July 16, 2008 The clock is ticking... http://www.telegraph.co.uk/money/main.jhtm...ccusdebt116.xml Only issue with that is if China and the Middle East do precipate a run on the dollar and meltdown the US financial system, then both also meltdown their own economies. China buys US debt, but we buy China's goods en masse. No US economy, no market for Chinese goods. Same with Middle Eastern oil. Too much interdependency there. Russia, different story, I think. I am not well versed in Russia's stake in US debt, other than as a store of value or to simply bruise the US when it is convenient for Russia. I also don't know how codependent the US and Russia are. Anyway, it would take a long time to recover from that meltdown, but we would recover. We would have to re-engineeer our own economy in the process, however. Link to comment Share on other sites More sharing options...
GG Posted July 16, 2008 Share Posted July 16, 2008 Only issue with that is if China and the Middle East do precipate a run on the dollar and meltdown the US financial system, then both also meltdown their own economies. China buys US debt, but we buy China's goods en masse. No US economy, no market for Chinese goods. Same with Middle Eastern oil. Too much interdependency there. Russia, different story, I think. I am not well versed in Russia's stake in US debt, other than as a store of value or to simply bruise the US when it is convenient for Russia. I also don't know how codependent the US and Russia are. Anyway, it would take a long time to recover from that meltdown, but we would recover. We would have to re-engineeer our own economy in the process, however. Russia certainly would be more apt to use the dollar as a strategic tool. But they don't own enough to cause major damage. And as everyone pointed out, the BRIC block (Brazil, Russia, India, China) still don't have sound economies to decouple from the US. Many people use the parallel of Eisenhower threatening to dump the British pound in the Suez conflict as the watershed moment. The major difference is that US was already a world power and the dollar could serve as a reserve currency at that time. I still cannot think of another option than the dollar or Treasury for reserve safety. Unless the rest of the world reverts back to bouillon for liquid reserves - and kill their economies in the process. Link to comment Share on other sites More sharing options...
John Adams Posted July 16, 2008 Share Posted July 16, 2008 The clock is ticking... http://www.telegraph.co.uk/money/main.jhtm...ccusdebt116.xml That would be a great way to put an end to communist China. Whatever rose from those ashes would be a different flavor than what is there now. And if you're an Obama-maniac, there's be no better way to bring manufacturing/China jobs back home than melt down our economy. Link to comment Share on other sites More sharing options...
East Brady Posted July 16, 2008 Share Posted July 16, 2008 My point is that while nearly 95% of people with mortgages meet their montly obligations is it's the 5% that the media and the sky is falling types blast us with. No the problem seems to be that 90% of the failures are concentrated in cali. and florida, those are some pretty big numbers to absorb, now if all the failed loans were concentrated in buffalo and cleveland the markets wouldn't give a chit. A while back I also took a small position in GLD and DGP as well as real silver, I'm laughing my ass of now, let me know when I should sell. As for you calling the top in silver, well I guess I should call the bottom in the financials, time to start buying. Give me a call on how that works out for ya. If that blue chit happens to land on the new addition we're building with our sweat equity, I'm going too be really pissssed the ff!@#$ offf. Oh and by the way, hope you guy's are saving for the winter heating cost, natural gas up what 78% this year, mine comes out of the ground up in the woods for FREE and they pay me for the rest of it. Link to comment Share on other sites More sharing options...
John Adams Posted July 16, 2008 Share Posted July 16, 2008 East Brady is dreamy. Link to comment Share on other sites More sharing options...
Chef Jim Posted July 16, 2008 Share Posted July 16, 2008 (edited) A while back I also took a small position in GLD and DGP as well as real silver, I'm laughing my ass of now, let me know when I should sell. As for you calling the top in silver, well I guess I should call the bottom in the financials, time to start buying. Give me a call on how that works out for ya. Now you're starting to get it. There are a lot of great financial companies whose prices have been driven way down. I think there are some incredible value plays in financials right now and I'll give you a call in 12 months to let you know how that works out for me. Have fun chasing returns. Oh lookie, WF's up 25% today. Edited July 16, 2008 by Chef Jim Link to comment Share on other sites More sharing options...
SD Jarhead Posted July 16, 2008 Share Posted July 16, 2008 Chef- There are quite a few people out there who are bearish on gold. Do you think they're wrong? Do you have any holdings in metals or do you stay away from them? Just curious... http://www.telegraph.co.uk/money/main.jhtm.../bcngold103.xml Link to comment Share on other sites More sharing options...
Chef Jim Posted July 16, 2008 Share Posted July 16, 2008 Chef- There are quite a few people out there who are bearish on gold. Do you think they're wrong? Do you have any holdings in metals or do you stay away from them? Just curious... http://www.telegraph.co.uk/money/main.jhtm.../bcngold103.xml Because I don't invest based on headlines or for the short term. Investing in not a get rich quick scheme. I create a well diversified portfolio hold for the long term and rebalance annually. I do not hold any metals. Long term returns on gold for instance are nothing exciting. I think gold has averaged less than 6% over the last 30 years. Link to comment Share on other sites More sharing options...
John Adams Posted July 16, 2008 Share Posted July 16, 2008 Chef- There are quite a few people out there who are bearish on gold. Do you think they're wrong? Do you have any holdings in metals or do you stay away from them? Just curious... http://www.telegraph.co.uk/money/main.jhtm.../bcngold103.xml In bear markets, all the goldbugs come out and do their "I told you so" dance. Then when the economy picks up, they all say, "gold is set for a big rise"...and they do that for 7 years until it finally happens and then they say "I told you so" again. I worked closely with a few gold bugs for about 15 years and they were annoying as !@#$. Like a guy who goes to the casinos, they claimed to always be making a killing in gold, and yet the price of gold is usually pretty steady and the casinos seem to make money--so someone's lying. If you own gold right now, it's a nice safe place to be. If you're like Chef and me, you stick with the balancing method and weather the storm, knowing that now's the buying time and soon (we hope) will be the growth time. Link to comment Share on other sites More sharing options...
SD Jarhead Posted July 16, 2008 Share Posted July 16, 2008 I understand both of your positions, and quite frankly, my approach is very similar. DCA'ing into funds is the way to go for me. I don't buy individual stocks (with a few exceptions) because I don't have the time or interest to thoroughly research them individually. I do move money around in the funds available in my and my wife's 401k though. When the DOW hit 14k I pulled a large chunk of our investments into Stable Value funds. In the near future I'll probably move them back into index based funds. They say not to try to time the market and in some ways that is what I'm doing, but at this point it looks like a wise move. WRT metals, I don't qualify as a 'gold bug', but may be a silver bug. I bought 10k worth to hold as a hedge. If as many are predicting, we go hit hyperinflation or stagflation and the dollar continues to fall, it will pay off as a good bet. We'll see. Either way it serves as piece of mind in uncertain times. Link to comment Share on other sites More sharing options...
SD Jarhead Posted July 16, 2008 Share Posted July 16, 2008 I really don't envy Ben Bernanke right about now. He literally has the weight of the world sitting on his shoulders. Correct me if I'm being melodramatic, but the dam is cracked and looks to be leaking. I hope he can shore it up... http://www.ft.com/cms/s/0/fc250ac2-5361-11...?nclick_check=1 Link to comment Share on other sites More sharing options...
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