The Financial Thread

[Freitag]

It's 10am. The market's dropped 350 points in an hour. Another 150 and they may suspend trading for the day.

Post your woes, thoughts, etc. here.

[mendyweiss]

The time to make money is when there is blood in the streets

[Jujubees2]

But on January 4th, President Bush said the economy was fine...

http://www.reuters.com/article/topNews/idUSWBT00815520080104

[HBox]

I was going to post something about this last night when the rest of the world's markets took a nose dive.

[Freitag]

The time to make money is when there is blood in the streets

Bingo. If you've got money, this is a definite buy opportunity. You can put your contribution into your IRA and buy a few mutual funds on the cheap.

[A.J.]

I think the Dukes are trying to corner the market.

http://www.dvdbeaver.com/film2/DVDReviews33/a%20trading%20places%20blu-ray/08_TradingPlaces_BD.jpg

[Freitag]

But on January 4th, President Bush said the economy was fine...

http://www.reuters.com/article/topNews/idUSWBT00815520080104

As HBox already noted, this is a worldwide thing, not just a situation with Bush.

[Cleophus James]

Current status of my 401K:
http://j-walkblog.com/images/eggfriedonsidewalk.jpg

[Freitag]

In 12 minutes, since I last posted, the market's bounced back up to 75, but it's still taking a beating.

If Bernake cuts the interest rate... pandemonium.

Although mortgage rates have now dropped to a 5.5 average on a 30 year. It could get lower.

[DiabloSammich]

He's already cut the discount and federal fund rate this morning.

[PhishHead]

He's already cut the discount and federal fund rate this morning.

yes he did thats why i was confused by Tenbats comment

[SatCam]

As HBox already noted, this is a worldwide thing, not just a situation with Bush.

its directly related to his actions though

[Freitag]

I hadn't seen that he had cut it. Ooohfah.

I hate to say it, Cramer might have been right when he melted down on CNBC a few months ago.

[Recyclerz]

Fed cuts discount rate .75%

http://online.wsj.com/article/SB120100837976106391.html?mod=special_coverage

Looks like the big money boys are finally paying attention.

:flush: I'm taking my own advice & not looking at my retirement funds until the Spring.

[Freitag]

its directly related to his actions though

Don't take this as a comment supporting Bush, but is this an example of trickle-down ecnomics, that Bush signed off on every single bad mortgage deal with stupid people to cause the subprime meltdown?

That's the biggest issue here. Bad deals cut by people looking to make a profit and not looking at the bigger picture.

[Tallman388]

I think the Dukes are trying to corner the market.

http://www.dvdbeaver.com/film2/DVDReviews33/a%20trading%20places%20blu-ray/08_TradingPlaces_BD.jpg

Which one is Al?

[Freitag]

I'm taking my own advice & not looking at my retirement funds until the Spring.

Why? Now is the perfect opportunity to look at some low-risk, high-yield funds.

[Freitag]

Market's fighting to make a comeback. It was only down 150 a few minutes ago, but dropped back down to around -190.

[DiabloSammich]

A bulk of my clients are heavy into stocks, one guy even sits on the board of the Philadelphia Stock Exchage.

I have a feeling my phone is gonna get spooky quiet for a little while.


That's trickle down economics spitting in your face.

[Tallman388]

Don't take this as a comment supporting Bush, but is this an example of trickle-down ecnomics, that Bush signed off on every single bad mortgage deal with stupid people to cause the subprime meltdown?

That's the biggest issue here. Bad deals cut by people looking to make a profit and not looking at the bigger picture.

I found a fine example of this on yahoo Finance this morning.

Way to go Lehman Brothers!

http://biz.yahoo.com/fo/080111/51e0b5edb51bbfe8432f2a59b50b18c7.html?.v=1&.pf=real-estate

[PhishHead]

A bulk of my clients are heavy into stocks, one guy even sits on the board of the Philadelphia Stock Exchage.

I have a feeling my phone is gonna get spooky quiet for a little while.


That's trickle down economics spitting in your face.

I had no idea you had a job! I thought you sat around all day eating amazing burgers, posting on rf.net and listening to great music.

[DiabloSammich]

I had no idea you had a job! I thought you sat around all day eating amazing burgers, posting on rf.net and listening to great music.



Those are just perks.

Post whore.

[Freitag]

As a discaimer, I am not a certified financial planner nor do I hold any licenses. Please read and research all prospectuses before buying.

[Recyclerz]

Don't take this as a comment supporting Bush, but is this an example of trickle-down ecnomics, that Bush signed off on every single bad mortgage deal with stupid people to cause the subprime meltdown?

That's the biggest issue here. Bad deals cut by people looking to make a profit and not looking at the bigger picture.

If we're starting a hanging party, the most proximate cause of this crisis was Greenspan's failure to step in when the financial industry was sticking wads of cash into the pockets of anybody walking by. The bond rating agencies also deserve a stint in a Turkish prison for rating the bundled sub-prime mortgages as a solid credit risk. But Bush & the Republican Congress layered the ground with more than enough dry brush and open gasoline cans to facilitate this wildfire with their completely irresponsible fiscal policies.

[DiabloSammich]

As a discaimer, I am not a certified financial planner nor do I hold any licenses. Please read and research all prospectuses before buying.


Too late. Fuck.

[HBox]

Every time the market takes a huge dive the bargain hunters come in sooner and sooner.

[DiabloSammich]

Every time the market takes a huge dive the bargain hunters come in sooner and sooner.

A lot of times it plays a big part in the quick rebounds.

[DiabloSammich]

They've made back about half of what they lost this morning.

[HBox]

A lot of times it plays a big part in the quick rebounds.

Yeah. It used to be you had to wait until the next day. Today is took what, an hour, hour and a half?

[Freitag]

See, I'm of two minds. I have liquid money to invest, but that money is also earmarked for a downpayment on a house, which is going to be driven down cheaper and cheaper by a recession + plummeting mortgage rates.

Right now, I'm leaning more and more towards conserving for a house and watching the market.

I'm waiting for the rate to hit 5, which could be sooner than later.

[HBox]

See, I'm of two minds. I have liquid money to invest, but that money is also earmarked for a downpayment on a house, which is going to be driven down cheaper and cheaper by a recession + plummeting mortgage rates.

Right now, I'm leaning more and more towards conserving for a house and watching the market.

I'm waiting for the rate to hit 5, which could be sooner than later.

Stick with the house. If you are going to invest anything don't do enough to significantly delay your house purchase. Less exciting but you'll appreciate it in the long run.

Besides I think this downturn is just the beginning but that's just my opinion and I'm not an expert.

[Freitag]

Too late. Fuck.

You invested in WEN, didn't you?

[DiabloSammich]

You invested in WEN, didn't you?



Citadel.

[Recyclerz]

Why? Now is the perfect opportunity to look at some low-risk, high-yield funds.


If you have play money (or Mad Money in Kramer-speak) i.e. money you don't NEED for many years & can afford to lose, it might be worth it to try some market timing. But the market may recover a bit then drop to lower lows in a few months. It has happened before.

I agree with your idea of throwing in your IRA contribution now if you have the cash. But I'm not sure I agree with what you're proposing to buy. High yield funds (FKA as Junk bond funds) are probably going slide a bit. If you're talking about stock mutual funds that invest in companies that have the cash flow to pay solid & reliable dividends then it is almost always a good time to buy those. Boring but solid.

[DiabloSammich]

See, I'm of two minds. I have liquid money to invest, but that money is also earmarked for a downpayment on a house, which is going to be driven down cheaper and cheaper by a recession + plummeting mortgage rates.

Right now, I'm leaning more and more towards conserving for a house and watching the market.

I'm waiting for the rate to hit 5, which could be sooner than later.



I agree with Box on this, do the house, especially if it's a purchase for you. If it was an investment property then I would be more liberal to play with the numbers. Bite the bullet on a decent rate, and get in a house.

[Jujubees2]

If we're starting a hanging party, the most proximate cause of this crisis was Greenspan's failure to step in when the financial industry was sticking wads of cash into the pockets of anybody walking by. The bond rating agencies also deserve a stint in a Turkish prison for rating the bundled sub-prime mortgages as a solid credit risk. <i>But Bush & the Republican Congress layered the ground with more than enough dry brush and open gasoline cans to facilitate this wildfire with their completely irresponsible fiscal policies.</i>

I agree. The Adminstration has been spending money like drunken sailors (no offense Sailor). I though when the Dems took over Congress it would change but no such luck.

[DiabloSammich]

If you have play money (or Mad Money in Kramer-speak) i.e. money you don't NEED for many years & can afford to lose, it might be worth it to try some market timing. But the market may recover a bit then drop to lower lows in a few months. It has happened before.

.



Usually we've seen that the market will get to their lowest lows after a steady but slow decline, adn then it takes something like what happened this morning to wake everybody the fuck up. Very few examples stick out where the contrary has happened.

[Freitag]

The good thing, for first time home buyers, is that you have a 10,000 life time exception on taking a distributions from your IRA without a 10% penalty for withdrawing before 59 1/2. If you take that distribution from a Roth, there's no further taxation on that.

[Freitag]

Diablo - WONDERFUL callback on citadel. I lol'ed.

[DiabloSammich]

Diablo - WONDERFUL callback on citadel. I lol'ed.



Thaaaaank you.

[Freitag]

I agree with your idea of throwing in your IRA contribution now if you have the cash. But I'm not sure I agree with what you're proposing to buy. High yield funds (FKA as Junk bond funds) are probably going slide a bit. If you're talking about stock mutual funds that invest in companies that have the cash flow to pay solid & reliable dividends then it is almost always a good time to buy those. Boring but solid.

Indeed, that is what I was referring.

[SatCam]

Don't take this as a comment supporting Bush, but is this an example of trickle-down ecnomics, that Bush signed off on every single bad mortgage deal with stupid people to cause the subprime meltdown?

That's the biggest issue here. Bad deals cut by people looking to make a profit and not looking at the bigger picture.

you are right that bush isnt all that responsible for getting us in this situation. BUT, my point was that yesterday's world market meltdown was a response to his stimulus plan

[DiabloSammich]

Shortly after 11:00 they were only down about 50 points.

I would never be able to work in that business.

[Freitag]

Market's fighting. Now down about -60, after being only down -40.

Still got three hours to go.

[Freitag]

The market swung 6 percent overall today. It was down nearly 3.7% percent, only to close up almost 2%, up close to 300 points.

I took a huge chunk out of my main retirement fund into a cash reserve last night, so I'm kicking myself a bit, but I don't think anyone saw a comeback like this today.

So the question is, a trend? Or just a "correction"?

[HBox]

Correction.

[Freitag]

Correction.

You're a very willful poster, aren't you.

[HBox]

You're a very willful poster, aren't you.

Rather naughty as well.

[Freitag]

Rather naughty as well.

The people who created this market... are bigger crooks... wouldn't you say?

[nate1000]

Indeed, that is what I was referring.

Not to mention, with all this volatility you may pick up a little demand bump from a flight to quality.

[HBox]

The people who created this market... are bigger crooks... wouldn't you say?

I'll put an axe in the backs of these bigger crooks.

[Tenbatsuzen]

I'll put an axe in the backs of these bigger crooks.

You like Ice Cream, Box?

[HBox]

You like Ice Cream, Box?

Sure do! I also stole a box of matches................

[Tenbatsuzen]

...


Heeeeeeeeeeeeeeeeeeeeeeeeeeeereeeeee's Bernanke!!!

[SatCam]

The market swung 6 percent overall today. It was down nearly 3.7% percent, only to close up almost 2%, up close to 300 points.

I took a huge chunk out of my main retirement fund into a cash reserve last night, so I'm kicking myself a bit, but I don't think anyone saw a comeback like this today.

So the question is, a trend? Or just a "correction"?

:bye:

[Cleophus James]

Whose ready for todays rollercoster? :flush:

[Tallman388]

Whose ready for todays rollercoster? :flush:


Who isn't ?

Oh I think that would be Societe Generale.

http://biz.yahoo.com/ap/080124/france_societe_generale_fraud.html

[Cleophus James]

Who isn't ?

Oh I think that would be Societe Generale.

http://biz.yahoo.com/ap/080124/france_societe_generale_fraud.html
One guy, wow

[mendyweiss]

The market swung 6 percent overall today. It was down nearly 3.7% percent, only to close up almost 2%, up close to 300 points.

I took a huge chunk out of my main retirement fund into a cash reserve last night, so I'm kicking myself a bit, but I don't think anyone saw a comeback like this today.

So the question is, a trend? Or just a "correction"?
You made the classsic investing mistake here, selling low, and going to jump back in at a higher price.DOn't worry about these crazy swings, for the long term, say a fifteen year frame., the markethas NEVER had a losing period. REmember, when the price of funds drop, you are buying more shares, just hang in there ,

[Thebazile78]

You made the classsic investing mistake here, selling low, and going to jump back in at a higher price.DOn't worry about these crazy swings, for the long term, say a fifteen year frame., the markethas NEVER had a losing period. REmember, when the price of funds drop, you are buying more shares, just hang in there ,

Investing is a patience game; I know that.

The swings are a key reason why I haven't called my mom this week. . .she & my stepdad do stocks.

[Freitag]

You made the classsic investing mistake here, selling low, and going to jump back in at a higher price.DOn't worry about these crazy swings, for the long term, say a fifteen year frame., the markethas NEVER had a losing period. REmember, when the price of funds drop, you are buying more shares, just hang in there ,

Actually, I don't feel that bad; the fund I punched out of didn't have that big of a tick upwards; a little under a dime a share.

However, the fund I had my eye on jumped nearly THREE DOLLARS a share.

[Recyclerz]

Here's a pretty good primer on what everybody who is not planning to die young should be doing to prepare for retirement:

http://www.fool.com/Retirement/Retirement01.htm

& a personal opinion/observation: I know it's kind of exciting when you start to accumulate some bucks in a 401(k) or other investment vehicle. (Not menage a trois exciting, but exciting nonetheless.) Once this happens, you're going to be tempted to start swinging your stash around into different kind of investment vehicles trying to beat the market. Here's the advice - get this out of your system early when your balances are in the four digit or very low five digit territory. If you get lucky & hit relatively big you'll shave a couple of years off the back end your working career. If, like most, you wind up underperforming the market, you'll have plenty of time to catch up and won't have to live in a cardboard box when you stop working. Once you get settled in with a nice sound investing plan, you'll have to dedicate less time to worrying about the markets day to day performance and you'll have more time to pursue other interests (as alluded to above :wink:).

[HBox]

Here's a pretty good primer on what everybody who is not planning to die young should be doing to prepare for retirement:

I guess I don't need to read further.

[Freitag]

I guess I don't need to read further.

That... that's terrible. I'm sorry.

[Bulldogcakes]

If we're starting a hanging party, the most proximate cause of this crisis was Greenspan's failure to step in when the financial industry was sticking wads of cash into the pockets of anybody walking by. The bond rating agencies also deserve a stint in a Turkish prison for rating the bundled sub-prime mortgages as a solid credit risk. But Bush & the Republican Congress layered the ground with more than enough dry brush and open gasoline cans to facilitate this wildfire with their completely irresponsible fiscal policies.

And much of that was fueled by a desire to get low income people to be able to buy homes. Which sounds like a good liberal thing to do until you wake up and realize that there are reasons beyond the financial ones why thats a bad idea. A person who saves up a 20% down payment has already shown some sense of dicipline and an ability to prioritize expenses. Someone who puts 2% down hasn't. Or at least not for long enough to be considered a good credit risk.

Republicans know that people who own their own home tend to vote for them for more often than not, so they were all for it. So its just another example of political concerns trumping sound economic policy, and another example of Bush administration incompetance and why he is not and never was a conservative in any traditional sense of the term. Conservatives dont spend like he does, and they don't trust government fixes over the marketplace. Especially for political concerns.

His father is still mad to this date at Alan Greenspan NOT lowering interest rates in 1992 to help his presidential bid. He saw it as disloyal. Thats how they do business in banana republics. You might remember the problems Mexico had every 4 years when the PRI was running things. They would pump lots of money into the economy every 4 years. The ecomony would be great in election years, and collapse the next. Thats what led us to bailing out the Mexican peso in 1994.

[Freitag]

Half point rate cut. OOF.

[JPMNICK]

Half point rate cut. OOF.

still at 3%, which is not horrible. still room to move in needed while not putting to much panic into the market.

good news if you want a 30 year fixed rate mortgage, they are about 5 3/8 % right now.

[Freitag]

still at 3%, which is not horrible. still room to move in needed while not putting to much panic into the market.

good news if you want a 30 year fixed rate mortgage, they are about 5 3/8 % right now.

Helloooooooooooooooooooooooooooooooooo


but won't the mortgage drop not be reflected for a few weeks?

[JPMNICK]

Helloooooooooooooooooooooooooooooooooo


but won't the mortgage drop not be reflected for a few weeks?

depends on the bank. some drop it right away to attract new business.

either way mortgage rates being low are not going to prop this falling ship up. fundementals are out of whack. congrats to everyone who was so excited when their houses went up 70% in 3 years. their stupidity in over paying for a house has now put a massive sucking chest wound into this country. couple that with the banks who packaged up these shitty loans and sold them to unregulated hedge funds, and welcome to 2008 year of houses dropping 12% real value.

if anyone is thinking of buying a house, move into a cheap aptartment instead. save a lot of money. wait 18 months and then take your cash reserve and go buy the same house for 15% less plus a cheaper mortgage thanks to your down payment.

obviously my opinion do your own research.

[Recyclerz]

http://online.wsj.com/article/SB120241127282451331.html?mod=hpp_us_whats_news

Senate passes slightly enhanced stimulus package.

[Recyclerz]

Here's a solution to your financial problems

1. Start a private equity firm/hedge fund.
2. Hype said fund as you prepare a IPO
3. Sell shares in IPO for $32/share & pay yourself about $4.5 billion in stock options
4. Allow shares in your public firm to decline about 50% in a year.

(Step 4 is optional.)

http://www.msnbc.msn.com/id/23591813/

[Earlshog]

Gold: Gold prices touched the $1,000 milestone for the first time ever as the dollar plunged amid fears about the health of the U.S. economy.


I used to work in the financial industry, trading mainly base metals, our department only dabbled in precious metals from time to time. One of my buddies on the fx desk said a few days after sept 11 gold would go to USD400 ( it was trading in the USD270 - USD290 range if memory serves). We all laughed at him. I even bet him a dinner on it. Guess its good I got out of that industry in 02. I'm no Lenny Dykstra... Ha Ha

[Freitag]

Market opened down nearly 400, now hovering between 40-60 down. JPM is up over 4 dollars a share. Juan-Pablo Montoya, however, is only worth four dollars.

[Jujubees2]

It's okay. George Bush says he's on top of things. I didn't think he could be any more clueless.

Bush Says White House "on Top of the situation". (http://www.msnbc.msn.com/id/23673100/)

[Cleophus James]

So my student loan provider is asking if I want to change my variable interest rate provider. These are private loans (can't consolidate unless I take a private loan). Also this company does everything they can do to get the most cash out of you. So this is probably to make more money for them.

They are giving me the option to change from the COF index to the 3 month LIBOR rate.

current rate: 7.77
Future rate cofI: 8.42
Libor rate: 6.15

Furture rates: Libor rate + 2.7 or cofI + 2.85

From the reasearch I have seen Libor on average is higher than the COF. But there reasoning is the future of our economy not looking good. BUT I am not going to pay these off soon, so I want the best rate over the next 15 years.

http://www.mortgage-x.com/general/indexes/charts/a_libor.gif


Opinions?

[Thebazile78]

So my student loan provider is asking if I want to change my variable interest rate provider. These are private loans (can't consolidate unless I take a private loan). Also this company does everything they can do to get the most cash out of you. So this is probably to make more money for them.

They are giving me the option to change from the COF index to the 3 month LIBOR rate.

current rate: 7.77
Future rate cofI: 8.42
Libor rate: 6.15

Furture rates: Libor rate + 2.7 or cofI + 2.85

From the reasearch I have seen Libor on average is higher than the COF. But there reasoning is the future of our economy not looking good. BUT I am not going to pay these off soon, so I want the best rate over the next 15 years.

....


Opinions?

It's posts like these that remind me that I am spoiled by only having government loans.

What kind of perks, if any, do you get from paying your bill using auto-debit?
Are there competing consolidation services?
How will consolidating the loans impact your future credit history?

I get something like a 1-2% reduction in interest rates by using auto-debit over paper coupons for my (Federal, subsidized) student loan payments, so I end up paying more of the principal than interest.

[Cleophus James]

I do have subsidized federal loans also. They are at 2.25 %. They are awesome.

But the ones I posted about are private. So they got me by the balls.

[Recyclerz]

Bump. If anybody is interested in hearing an excellent summary/recap of how the subprime mortgage problems became the current credit crisis, check out the most recent version of "This American Life" called "A Giant Pool of Money". The TAL guys took their story-telling techniques of interviewing people caught up in something big and hooked up with the NPR guys who understand economics and business and created a nice show that anybody who is interested in this mess can understand, regardless of your academic training. You can download the podcast from iTunes for free.