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12/25 |
2009/2/20-22 [Finance/Banking, Finance/Investment] UID:52613 Activity:high |
2/20 Interview with Peter Schiff (economics, 2008) http://blog.mises.org/archives/008039.asp \_ gee, a government-is-evil site has an interview with a government-is-evil guy. how useful. -tom \_ How's that hedge fund going Petie? OOOOPS. \_ Peter wants to go back to the Gold Standard. I agree with that. \_ You mean you agree with Mr. My Hedgefund Completely Imploded? Yeah, he sure seems like a *smart* guy. \_ You can be right about some things and wrong about others. You can also be right but get the timeframe wrong. Hedge funds make bets that are inherently uncertain. \_ He was a consistent bear from 2002 until now, so he was dead wrong for five years. A stopped clock is right twice a day. -tom \_ One could correctly recognize the dot com bubble, oil bubble, and housing bubble. It's much tougher to know when it would pop, and what the world reaction would be. \_ Exactly. I thought <DEAD>dot.com<DEAD>s were overpriced and yet they kept going up and up and up! Eventually, I was proven right but the devil is in the details. \_ Well, I guess that justifies being a fringey Austrian econonomics nutcase. \_ Peter Shiff Was Wrong http://tinyurl.com/ca3gkr (Mish's blog) \_ Yeah, basically, Schiff was wrong about just about everything. |
2009/2/20-22 [Politics/Domestic/Election, Finance/Investment] UID:52608 Activity:high |
2/20 Was just watching Thu's CNBS on tivo. Gosh, Obama has no idea what he's doing, does he? -Dem \_ No, he doesn't. Everyone knew that. That's why I voted for Hilary. However, I expected him to have competent advisors. I think part of the problem is "What happens when you have competent advisors who *disagree*?" as I feel is the case now. Someone has to make the call. \_ And this just occured to you? \_ No. "I voted for Hilary." \_ what happens when Krugman (!advisor), Geithner, Summers, Buffet, and Volcker are all fucking wrong? \_ Greenspan? Bernanke? Roubini? I actually think Buffet is \_ Greenspan? Bernanke? Roubini? I actually think Buffett is right and history will prove it. \_ Buffet has been selling, after he told you to buy http://www.thestreet.com/story/10464539/1/buffett-watch-the-oracle-sells-america.html \_ Bull. Sure, he sold some positions. He's also been buying Intersoll-Rand, Nalco (NLC), and Burlington Northern Ingersoll-Rand, Nalco (NLC), and Burlington Northern since end of 3Q 2008. Most holdings are unchanged. That's in BRK. Buffett's article was talking about his personal holdings, which we don't really know about what's happening there. \_ What is "Thu's CNBS"? \_ Sorry, Thursday CNBC. Specifically about 2-3 segments where Rick Santelli and Steve L. are yelling at each other; also the Meredith Whitney interview. \_ Yeah the CBOE traders are all such great representatives of the common man. How can you take this guy seriously, he was a hedge fund advisor and one of the architects of CDOs? \_ Your use of CNBC as a barometer of anything of substance says more about you than about Obama. \_ See above about specific segments on the bullshit channel; I'm not too impressed with you myself \_ Gibbs has a great response to Santelli's right wing frothing: http://www.talkingpointsmemo.com/archives/2009/02/dude_needs_decaf.php \_ Uh, great response? He's a press secretary, and what I got from that was: - You're a derivatives (actually, bond) trader you motherfucker - By preventing your neighbor's foreclosure, your house will maintain value (Santelli actually addressed this yesterday, saying most people buy a house to live in, not as in investment and the need for house prices to return to normal supply/demand levels overrides subsidy of foreclosed properties) - Really smart people created this plan - Go read the plan, and you'll see it helps a lot of people Once again, Obama has no idea what he's doing -Dem |
2009/2/19-25 [Finance/Banking, Finance/Investment] UID:52599 Activity:moderate |
2/19 "There is no scenario under which you would claim the government was not involved ... -tom" \_ Apparently there is no scenario under which you would agree government policy has a hand in creating financial crises. My point isn't about getting rid of the government itself but the banking system supported by governments around the world. These crises keep happening around the world and yet people always find something to blame except the actual system. It's like building your house next to a flood zone and then blaming the rain when your house inevitably gets trashed. On the surface, you can blame banks in these crises because we always get these situations where banks create massive amounts of debt based on overvalued assets. This is natural because greed is natural. The problem is a) they are shielded from the consequences and b) the govt-sanctioned system allows them to pyramid debt upon debt in a tremendous explosion of newly created money, and a tremendous skewing of the economy's fundamentals (trade balances, capital allocation). In a conservative system (not talking GOP or Dems here) a series of failures would simply not be able to cause such deep problems. After you unwound the failures then you'd still have the same basic money supply in the economy. With the current system, you are putting an impossible regulation task onto the government. The current crisis is really an extension of problems that have been building up for decades. In the latest episode the Fed kept interest rates too low for too long. \_ Not a "conservative system", a "free market system". The free market cannot work unless there's profit AND loss. Oh, and the government shouldn't tell the companies to do something unprofitable and then blame them for it. \_ http://tinyurl.com/c83pfd (The Economist) Your lefty fellow travelers over at The Economist don't seem to agree. Financial crises are as old as capitalism. \_ That article doesn't even touch on the issue of the banking system itself. It's mostly ignored by all mainstream sources as if it must be, always has been, and always will. There's no proof that this credit expansion system is really a benefit. This isn't really a left/right issue either. The only people who talk about this kind of thing are, I guess, libertarians. \_ What are you talking about? Every macro econ class talks about money supply. Read Chapter 13 of Keynes General about money supply. Read Chapter 17 of Keynes General Theory for the first modern discussion of it, but so did Friedman, Von Mises, Krugman, all the greats. It might be true that libertarians (and their fellow travellers, the Austrians) are the only ones who seriously consider that fiat money and franctional lending are a bad idea. Do you notice that no one in the world is on the gold standard? That is because it is a crappy way to run an economy, full of booms and busts far worse than what we are experiencing today. \_ There's no evidence it's a crappy way to run an economy. The real reason is very simple. Government inflation of the currency is a hidden tax on holders of money. Govts used this repeatedly in times of war, though they usually returned to gold afterward. This is just a fact, look at the history of about every major British or US war. They inflated the currency tremendously in WWI, then tried to deflate it again afterwards which was doomed to failure. This is also orthogonal to fractional reserve banking where demand deposits are treated as bank assets, and the money supply is exponentially expanded via debt. There is no evidence this is needed or even beneficial. Most of the historical problems, if you look into it, were either a) not really crises or b) not actually a free market gold standard. The deflationary spiral problem is endemic to fractional reserve inflation, so is the risk of widespread bank failures. Banks today, in general, are not allowed to fail. We pay for their mistakes via the government bailing them out in one way or another. It's private profits socialized losses. But actually this has been the case for hundreds of years... because it wasn't nipped in the bud, it's always been too painful to undo. Govts bailed out banks many times in history. \_ You imply that having a hidden tax on holding money is a bad thing. I would argue that we don't want people hoarding money a'la Scrooge McDuck. \_ Let's see you argue it then. \_ If you are not familiar with the historical poverty of humanity and the many long periods of depression and famine before 1900, then I cannot hope to type enough words to educate you. Go read a history book or something. The explosion of human wealth since the invention of capitalism is really unprecedented. \_ Capitalism is not synonymous with central banking. There are no periods of famine and depression that can be blamed on a lack of central banking. You're also placing credit on "capitalism" when there are so many other technological advances in the same time frame. \_ What do you think that the "capital" in capitalism represents? \_ Not central banking, that's for sure. Why, what do you think it represents? Is this a joke? \_ Do you even know why we went off the gold standard? \_ So that the gov't could inflate the currency whenever they wanted. \_ It all sounds like funny money to me. \_ Is it better when completely random effects inflate the money supply? (Someone discovered gold!) Or, even worse, business as usual deflates the money supply? (Hold amount of gold constant, increase GDP, automatic deflation!) \_ You don't need a gold standard. The money-is-debt, fractional reserve thing is mostly orthogonal to having a gold standard. You could still have fiat money but make it non-debt based (i.e. just directly create X amount of money by fiat). A gold standard is a separate debate. Many arguments against it are bogus though. We left the gold standard so that the government could finance wars without worrying about taxes or voters. \_ Are you getting paid by the word? -tom \_ I should be. My day job is boring, I guess. \_ what is this quote from? \_ an earlier motd thread |
2009/2/19-22 [Finance/Investment] UID:52598 Activity:low |
2/19 The Bush Decade was as bad economically as the Great Depression: http://tinyurl.com/ar9h67 \_ It's only bad if you're the middle class or lower. Wonderful for corporations and stock holders. \_ I'm a stock holder and it hasn't been that great. The NASDAQ never recovered and now the DOW is at 1990 levels. Awesome. \_ Self reliance. Blame yourself for not getting out earlier. \_ I'm not *blaming* anyone. I'm just pointing out that Bush wasn't really favorable to anyone except his oil buddies and defense contractors. The perception is that all those "fat cat stockholders" like, I dunno, just about everyone with a 401k, made out like bandits and we most decidedly did not. \_ Not that bad. More like 1997. \_ Oh, come on. \_ That's about the dumbest thing I've ever seen. The Dow is down 35% IN THE LAST 6 months, forget the last decade. |
2009/2/13-18 [Finance/Banking, Finance/Investment] UID:52566 Activity:nil |
2/13 Bubbles have repeatedly plagued Western finance since its origins in the Italian Rensiassance: http://tinyurl.com/c83pfd (The Economist) (and an explaination why the CDS trades should "net to zero") \_ They won't net to 0 if some people go bankrupt, drops out of the system and can't pay up. Finance is not a zero sum game. \_ Top people to blame for the financial crisis: http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350,00.html http://www.time.com/time/specials/packages/article/0,28804,1877351_1877350_1877320,00.html http://www.time.com/time/specials/packages/article/0,28804,1877351_1878509_1878508,00.html |
2009/2/11-18 [Finance/Banking, Finance/Investment] UID:52555 Activity:high |
2/10 Why tax cuts are a bad way to stimulate demand in a deflationary environment: http://tinyurl.com/ccatun (Freakonomics Blog at NYT) \_ Oh sure, you can't trust people with their own money. http://www.youtube.com/watch?v=zISKoQegbxM \_ No, you can't, when the collective interest is diametrically opposed to the individual's interest. We, collectively, need the economy stimulated. However, we, individually, don't want to spend our However, we, individually, want to save our money money to maximize our personal financial security. So, right now, you can't trust people with their own money. \_ Is this why the fed has racked up debts that work out to over $30,000 per capita? \_ How large are the debts that the private sector has racked up? \_ People know what they need and don't. We've been living in a mode where people spend way beyond their capacity. Retreating from that is normal. Deflation is good. We have tons of immigrants and an inefficient culture of buying tons of cheap crap. "Deficient aggregate demand" isn't a problem. We still have a huge trade imbalance so there are plenty of jobs we could theoretically be doing instead of importing all that shit. But the only way that would happen is if we let conditions move towards equilibrium instead of borrowing trillions to prop up the status quo. \_ You almost make some sense. Good thing you aren't running the Republican party or I'd have to vote for you. \_ Do you think that people knew what they needed and what they didn't need when they decided to leverage up buying McMansions, flipping houses and buying SUVs? How about when they bought all those exotic financial instruments which bet on the housing bubble? Do you know what a deflationary trap is? What you are advocating would put us in one, the same as Japan post-bubble, and would give us our own "lost decade" or two. \_ People did that because it was what makes sense to do given abundant cheap credit. The government's policies steered the market towards cheap imports and housing instead of real industry -- not only our direct policies but how we allowed e.g. China to manipulate our own economy. See: http://blogs.cfr.org/setser/2009/02/02/it-wasnt-just-the-market/#more-4618 Of course long-term deflation is not good. But if it wants to happen there's no point going around trying to ignore the laws of gravity. We should look for ways to cushion the fall and set things up for long term success. The previous economy (dot com then crazy mortgage bubble) was based on a tremendous amount of imaginary wealth. To keep on pretending just prolongs and exacerbates. The ideas you're talking about is the thinking that lead us to where we are. \_ No, it was a deliberate decision by the GOP to deregulate the financial sector which led to the blow- up in available credit, more than anything. There were certainly other contributing factors, but that was number one. To lower the Debt/GDP ratio, you can try to lower debt or raise GDP. Your plan would try and lower debt, but probably lower GDP even more - that is what has happened in the past when debt bubbles have been allowed to pop without any attempt to clean up the mess afterwards. There is a chance that by reallocating capital to more effective uses, we can grow GDP and reduce overall debt that way. Most of the increase in govt debt recently has just been a shift from private to public hands, so has not increased the overall debt burden to the US economy. This is not guaranteed of course, a lot of it depends on how good a job govt does in allocating capital to productive uses. It is hard to imagine that they would do a worse job than the private sector has over the last decade, but anything is possible. \- you can blame the GOP for some crazy tax policies gutting enforcement funding or "capturing" regulatory agencies and most of deregulation, but there is a lot of blame to go around on dereg and mkt fundamentalism. i'd be ok chaining robert rubin and phil gramm together and sending them off into interstellar space. \_ Please see the Commodity Futures Modernization Act of 2000. \_ Even given the deregulated system, there were clear lapses on the part of the regulatory systems that did still exist. And failures on the part of private regulators like S&P. I believe part of that is simply a lack of competition -- the need for government oversight is directly related to market health. Markets don't know what's productive, they just tend to maximize utility in terms of profit. If the environment is skewed the result is skewed. It's like when "kind" people put out food for animals; the animals will base their "economy" on maximizing this free benefit. They don't understand why there is free food, so they can't understand that it might go away, or that the humans might round them up and gas them. Low interest rates, perpetual borrowing, and China's market manipulations are our free food. Even now China keeps investing in overcapacity and trade surplus. The deregulated financial industry made mistakes, but basically it was drunk on the free shit. Cheap credit was influenced by the trade deficit. The Fed also maintained relatively very low interest rates even while the housing bubble was growing insanely fast. Greenspan denied that there was a bubble. The government was basically telling people that housing was the place to be. \_ Look, you ideological nitwit; the housing bubble is *not* the cause of our financial crisis. \_ I rather think it is. If housing recovers then all of these problems instantly go away. Loose credit and low interest rates combined with fraudulent mortgage lending practices and dishonest borrowers are at the heart of the problem. If you want to know where most of the $$$ went, it went to anyone who sold a property in the last 5 years that they had owned more than 5 years prior. Some of it when to speculators and some of it went to people like you and me whose house value doubled in a few years. When salaries and real estate prices match more closely then this will all blow over but not until then. Leverage just made things worse by wiping out capital, but those speculators had a good run prior to that so some should weather this. Some won't. C'est la vie. \_ We have had credit bubbles that did not involve housing and we have had housing cycles (bubbles?) that did not bring down the financial sector. Unregulated and overly risky speculation is what brought down the financial sector, mostly the IBs and hedge funds leveraging 30:1 on their bets. the financial sector. \_ S&L crisis? This isn't the first time Citi has borrowed from the gov't either. Was 1991 the last time? This crisis is more severe because the bubble was bigger, partly because interest rates were lower and other instruments were underperforming or viewed as risky. That's all. CA has had housing bubbles that popped, but this is new to most of the country. Financial institutions leveraging themselves ridiculously is the cause of our financial crisis. Oh, if only the government didn't exist, the invisible hand would have made sure that the banks acted safely! Here's a news flash: The financial crisis *IS* THE FUCKING INVISIBLE HAND. The free market is perfectly happy to drive off a cliff and destroy a society. Government's job is to make sure that doesn't happen. -tom \_ Leveraging wasn't THE cause; misclassifying risk was the cause, and is directly related to the housing bubble. And the mother of all the leveraging is the fed's low interest rates. The financial crisis is not the invisible hand because government was riding shotgun the entire way. Or more accurately, the government was building a bridge to the promised land out from the cliff, but actually it went into thin air. In any case you are arguing a strawman: I am not arguing that gov't regulation is unnecessary. I'm saying it didn't do its job. \_ Yeah, whatever. How about this: Could you describe a possible scenario where the free market, by itself, could cause a financial crisis? Or is that impossible? -tom \_ Obviously yes, with banks: bank runs. Although modern banks are completely married to the government via the central bank, and via the laws that allow them to create money and lend money that they simultaneously owe to their depositors. That's not really the free market; it's inherently unstable, and supposedly the govt is managing this in order to be able to easily stimulate the economy. It is theoretically possible to have banking which is not based on the current scheme. http://mises.org/Books/mysteryofbanking.pdf You can't honestly have a free market without a hard currency and a situation where actors are held accountable for their dealings. A market run on an arbitrary government fiat currency is inherently not free. If banks were required to lend money out of their own capital instead of their customers, or else enter specific contracts with customers to lend their money, you could not have bank runs. \_ Go sell it at Top Dog. -tom \_ The model of modern corporations is too conducive to disaster. Responsibility is abdicated onto a non-person legal entity, and management transfers between speculators who individually do not have full understanding of the business, but neither stand very much to lose. The executives and employees stand to profit greatly from short term schemes which are measured by quarterly results. Then you have the abomination of "government sponsored corporations" like http://en.wikipedia.org/wiki/Fannie_mae How can you say that the fin. crisis is not directly related to the actions of this agency and the govt that created and controlled it? \_ Fannie Mae was a drop in the bucket (and late) compared to the total amount of CDOs written. You should have stopped at "bank runs have happened long before there was government regulation of banks." Tell us how Tulip Mania was big ole' gubmints fault. \_ Fraud and speculation are not limited to the govt, no, but the govt allows for a special depth of scope. Nothing's wrong with a periodic recession. But the govt banking scheme creates vast money supply variances which is what creates a crisis. \_ Prove it. "Whether the U.S. had a central bank or not, the banks were _/ assured that if they inflated together and then got in trouble, government would bail them out and permit them to suspend specie payments for years. Such general suspensions of specie payments occurred in 1819, 1837, 1839, and 1857..." US banks are on the government's credit teat, and mommy government always saves them, or at least the vast majority of them. And it lets them multiply credit exponentially. There's no real benefit to all that credit. It just inflates prices and gives the fed. government a backdoor tax method. Here, listen to FDR trying to explain away banking fraud. http://www.fdic.gov/about/history/FDR_Fireside_Chat_Banking_Situation_03-12-33.mp3 Money as debt. http://video.google.com/videoplay?docid=-9050474362583451279 Mystery of Banking http://mises.org/Books/mysteryofbanking.pdf \_ that's not proof of anything; it's pure assertion. And it very specifically does not address the question, which is whether a crisis can be created without government intervention. (Hint: it is completely obvious that a crisis can be created without government intervention.) -tom \_ I don't need to prove anything, I'm not your slave and your question isn't "the" question. Hint: all the major crises in US history were entangled with the government. Your Tulip example was not a crisis and is anyway half legend. You're going around calling people idiots making assertions but demanding that others "prove" things (hint: no economic theories have ever been "proven"). But you have the status quo mainstream theories which you accept as gospel even though repeatedly they have failed to prevent massive crises. I don't claim that you can't have economic problems, that's not a relevant question; an alternative system does not have to involve 100% protection from recession for example; in fact it's likely that recessions are necessary for healthy economy. Only if some fail is competition meaningful. \_ I didn't mention tulips. "All the major crises in US history were entangled with the government" is tautalogical; the US has a government that ideological morons like you blame for everything. There is no scenario under which you would claim the government was not involved, therefore, the government is always involved, therefore, the goverment is bad. QED. Or not. -tom \_ How ironic that you blame government response to financial crises as being responsible for creating these crises. Do you blame the fire department for fires, too? \_ If you weren't an idiot, you'd realize that's not what I said. |
2009/2/9-17 [Finance/Banking, Finance/Investment] UID:52543 Activity:nil |
2/9 motd finance whizzes, if the total value of CDS last year was 62 trillion, and now it's basically worthless, does that mean somewhere, somehow, someone collectively has lost 62 trillion? thanks \_ Yup. Somehow, somewhere, $62T of money just went with the wind. And what's more, if people suddently decide that CDS is worth something again, that money comes right back. \_ These things are supposed to net out, so for every loser, there should be a winner. Some of the losers are bankrupt though and won't be able to make good on the claim. Your second proposition "now it's basically worthless" is dubious, btw. \_ Who are these 'winners'? Also I'm asking a real question, not being an ass. thanks. \_ I understand that you are not being an ass, but you are repeating some common misperceptions here. If I buy a CDS from you, giving you some cash up front in return for your promise to make me whole if GM goes bankrupt and I lose the money on a bond I just bought, and then GM goes bankrupt, you are the loser and I am the winner. Is that clear enough? Now if I go to redeem my claim and you declare bankruptcy, then we are both losers, which is what people are afraid of now. We don't know what this "counter-party risk" really tallies up to right now, which is why the economy is in such a mess, but it is certainly less than $62T. \_ I disagree with you about this being a "zero sum" game. Here, I definitely think there are losers without there being any winners. Suppose suddenly all stocks are worthless. Who wins? People who just got out of stocks might consider themselves lucky, but they didn't directly benefit from stocks going to zero: they won "otherwise". Short sellers might win, but that's a small fraction of the loss, not a zero sum. \_ Stocks aren't very much like CDSs. If I redeem my CDS to you and you honor it, you lose money and I gain it. The only way there can be an overall loss if via counter-party risk e.g. you don't make good on the contract. \_ Why do you think they are worthless (URL, please)? They are still enforceable contracts, unless written by Lehman. They also aren't "supposed to net out." That was the undoing of the ibanks. They're supposed to be underwritten by people who can price the risk of default accurately. They're like tradeable insurance. \_ Yes, for every person losing a dollar, another person gains a dollar. That is what "net out" means. The $62T didn't just disappear, except in bankruptcy cases, where it can be argued that it never really existed in the first place. \_ Correct me if I am wrong, but the costs of insuring debt fluctuates because these things are traded. Worse, derivatives based on these things were traded. \_ Yes, but their book value is not $62T, just the nominal value. \_ I would argue that most of the value of the 72T CDS market is/was imaginary, and therefore all of the profits and jobs and stock fluctuations based on CDS trade profits are a load o'crap, and this is a huge contributing factor to current financial woe. |
2009/2/2-8 [Finance/Investment] UID:52498 Activity:nil |
2/2 How do smart people put up with idiocy and continue to respond with rational arguments? This is a general question, but responding to people who think $20B is a good idea is a good example. Tom, how do you respond and not spontaneously combust when responding? \_ It's not $20B is a good idea or a bad idea. It's "Is this reasonable?". I do not think it is reasonable if it is spread among 12 CEOs. However, that's not how it is allocated. This is part of the pay package for most employees on Wall Street. Maybe we should cut all Wall Street salaries to zero and eliminate their health insurance. Is that more your speed? \_ I wasn't asking you. I'd go crazy talking to you. I already am. \_ nice straw man. -tom \_ How about we cut all Wall Street salaries to 10X the median income and give everyone in America health insurance. -!op \_ Sounds good, comrade. Do you know how many people could live in one of their expensive Hamptons mansions? \_ No, but I have a funny feeling that in the next decade or so we just might find out. \_ How about we let companies fail intead of bailing them out and not care about exec pay/bonuses if we aren't their employees or stockholders? \_ Banks failing will have far-reaching consequences on the global economy and may cost more money than bailing them out will. |
2009/2/2-3 [Politics/Foreign/Europe, Finance/Investment] UID:52496 Activity:low |
2/2 http://tinyurl.com/buyetf (Jesse's cafe) Stock tip ... what is it, #6? Start with paragraph 6. What the knowledgable and "insiders" are talking about. Note they may be wrong. (fyi, some bozo probably set that tiny URL code earlier) \_ What a waste of time. Many paragraphs to say that they don't know anything and that the situation is fluid. Genius. \_ Sorry, there is no "buy at x" "sell at y" type advice, but isn't identifying what they don't know, and what they think will happen in/around 2010 helpful? \_ This is fearmongering at its worst. |
2009/1/28-2/4 [Finance/Banking, Finance/Investment] UID:52483 Activity:very high |
1/28 Pork bill passes the House, no R's vote for it. \_ which pork bill? \_ Yay, fair and balanced NPR: http://www.npr.org/templates/story/story.php?storyId=99919378 Also, GOP apparently unclear on definition of pork. \_ Even Chris Matthews called it one big earmark. \_ The fact that you think he represents informed liberal opinion says a lot about you. \_ Pell Grants are pork? \_ Apparently the R's haven't heard that old adage about holes, shovels, and digging. \_ Apparently, you're an idiot. \_ Thanks for playing anyway. \_ I think Democrats should of tied the "Pork" bill along with should've or "should have" -- ... TARP and Auto bail out. I failed to understand why money to investment bank / commercial bank (e.g. TARP) is not considered "pork" by Republicans while putting money into infrastructure is. \_ Bankers donate money to the Republican party, but construction workers do not. \_ I wasn't particularly pro-bailout, but there are a few important differences. The bailout money was often used in ways that might come back. (Loans, stock, etc.) The bailout was also a targetted attempt to have an immediate effect on a vital piece of the economy. No capital and capitalism doesn't work. Infrastructure may take years to even begin construction, that's not a quick action. The stimulus bill also also is not particularly targeted. It seems to chuck a billion or two to anyone the dems like. \_ As opposed to $18.4 billion for bonuses for the investment bankers who got us into this mess. -tom \_ tom prefers life in the mud. \_ Yawn. Justify your side's naked corruption by pointing out the other side's flaws. How exciting. \_ what in the stimulus bill is naked corruption? -tom \_ I already told you. Pell Grants. -!op \_ I see: funding golden parachutes for millionaires is OK; funding higher education for the poor is naked corruption. Great. Enjoy losing in 2012. -tom \_ This number is bandied about, but what does it mean? I read it is about 50% less than last year. What is the average size of the bonus awarded and what is the base pay? For instance, if total payroll is $1T (say) then $18.4B in bonuses seems small. Or even if total payroll is $18B then $18B in bonuses can still be small if it is spread over 1M employees. I don't sympathize with the banks, but this number is thrown out there without much explanation. Were these bonuses all cash or was there stock or options also awarded? It costs the bank no cash to award someone $1M in options, for instance. all cash or were stock/options also awarded? It costs the bank no cash to award someone $1M in options, for instance. \_ http://www.nytimes.com/2009/01/29/business/29bonus.html The number is based largely on personal income tax collections. It excludes stock options. -tom \_ It almost doesn't matter what it means, other than this: the guys who ruined our economy, destroyed their companies and lost trillions of dollars are being rewarded with bonuses. \_ I think the word "bonus" is what trips people up. It's just salary. It's more in good years and less in bad years, like you might expect. It will never really be zero any more than you can expect those people to work for free no matter how poorly they are performing. Certain professions earn a significant amount of salary each year in a lump sum "bonus" and it's not quite the same thing as if you or I get a bonus at work. For example, my sister's ex-husband worked for a law firm and every year they got a "Christmas bonus" of 1 week's salary. It's common in law just as in banking. Eliminating the bonus is equivalent to cutting salary. Would it make you feel better if they said they were reducing their "base salary" 50%? That's essentially what is happening. Their salary is tied to performance, but that doesn't mean their poor performance = zero salary any more than yours should be. If they perform poorly enough they will be fired and many have been. BTW, the average bonus was $112K, which was down 36.7%. Sounds like a big pay cut to me. Did you get a 37% pay cut because your company's revenues went down in the poor market? many have been. \_ What was the average base pay? The bonus could go to zero and these losers would still get paid more than enough. Using taxpayer dollars to give incentive-based pay to people who drove their companies into bankruptcy and the entire economy into crisis is absolutely, completely indefensible. And then to attack Pell Grants! I suppose the conservative strategy of asserting things too ridiculous to argue against is still in force. -tom \_ 1. I didn't attack Pell Grants. 2. I like how you say their pay would be "more than enough", comrade. I think you could survive on half your current salary and in a studio apartment instead of a house, but the market values your services more than that. I read that the average Wall Street salary is around $300K with a base salary of $100-250K. So it's reasonable to think a typical package might be $150K base salary and a $150K bonus. If you eliminate the $150K bonus entirely then base pay is still more than enough to live on, but likely far less than what it would take to retain top talent. Heck, you can barely get a sysadmin for City of SF for $150K. Lots of these guys are Harvard Business grad with years of experience who fell prey to the whims of their CEOs who decided to use a lot of leverage. The CEOs should suffer. The rank-and-file traders and bankers are suffering enough if you pay attention to how many are out of work now. \_ No, they haven't suffered enough. The banking sector is still bloated and overpaid. There is no particular reason that a Harvard MBA should make $300k, unless he is contributing that much to society. For the last 10 years, the bankers have disastrously misallocated capital. If they don't like mere $150k salaries, good luck finding an industry that will support them in the lifestyle they think they deserve. \_ http://tinyurl.com/ajf25h (WSJ) \_ People aren't paid according to "what they contribute to society". Most of those guys are very smart and will find something else to do, which would leave the banks run by people less capable. You think it's bad *now*? \_ I don't think there's any evidence that the people running the banks are very capable. If they're so fucking capable, why are they all going bankrupt? The argument about "that's what it costs to retain top talent" is 100% bullshit. The system is rigged. CEOs, VPs and hotshots get to decide who to pay what--and, surprise surprise, they decide that it's vital to the interest of the company to pay CEOs, VPs and hotshots more and more as a function of total revenue and earnings. Until the whole thing comes crashing down and they ask the government to bail them out. The absolute first thing that should happen before any bankrupt institution is bailed out is that all performance-based pay should be immediately suspended until the company is solvent. If that means that executives leave for other companies that managed their assets better and therefore aren't going bankrupt, that's fine; isn't survival of the fittest one of the tenets of the market economists? -tom \_ Lots of free-market cheerleaders seem to forget the basic econ 101 stuff that says what is needed for markets to function. Namely competition and low barriers to entry. What is it about these banks that makes them able to keep fat profits year after year? \_ Somehow society was able to function with a banking sector that was half the current size - as a proportion of the economy - for many decades. All those Ivy geniuses can go find another way to game the system (and ultimately rip off the taxpayer, no doubt). Almost every "invention" of the financial sector in the last 10 years was crap. Is it seriously your contention that these guys deserve lifetime employment on the public dime at $300k/yr, even though what they produce has no value to society whatsover? \_ Somehow society was able to function with a banking sector that was half the current size - as a proportion of the economy - for many decades. All those Ivy geniuses can go find another way to game the system (and ultimately rip off the taxpayer, no doubt). Almost every "invention" of the financial sector in the last 10 years was crap. Is it seriously your contention that these guys deserve lifetime employment on the public dime at $300k/yr, even though what they produce has no value to society whatsoever? \_ I don't think they deserve lifetime employment on the public dime forever. I never said that. However, letting the big banks BK would be a disaster. This whole thing about bonuses is a PR stunt as is Obama's outrage. Banks are going to need $1T and we're worrying about $20B in bonuses that were earned? Do you really contend that banks have no value to society?! A bank that does a good job of allocating _/ capital to productive uses has a value. Do you think that the primary inventions of the financial sector of the last decade or so (CDS, CDOs, SIVs, etc) have had a net positive value? If so, why are all the banks collapsing? If anything, the total contribution to society by the financial sector over the last decade has been strongly negative. This is reflected in the change in their equity value, and in the collapse in value of all the stupid things they allocated capital to (most exurban McMansions, but also the mostly speculative paper instraments used speculative paper instruments used to gamble on them). \_ http://tinyurl.com/ajf25h (WJ) Check out the comments. Even the WSJ readers are getting restless. \_ Just the media stirring up shit and now the rabble is roused. What about bailing out auto workers who made shit cars? I know a lot of people are against that, too, but at some point you have to place blame where it is due, which is management. The auto workers were just building the cars they were told to build. Likewise, the bank employees were just selling the products they were told to sell while the government cheered from the sidelines about how many more people could now afford home ownership while keeping rates insanely low and wasting $$$ in Iraq. Blame Bush for this mess. \_ It is funny that you think that the readership of the WSJ is "the rabble." You can imagine what the actual rabble think of the bank bailouts. \_ Doesn't matter what they think. They don't realize what will happen without lending or credit. For instance, most hospitals use large lines of credit to cover bills during the period between when services are rendered and the insurance companies finally pay. The average consumer relies on banks for a lot more than they realize. \_ In a democracy, what the people think matters. Especially when you coming to the taxpayer, hat in hand, asking for a bailout. The current overleveraged banks could all fail and all that would happen is that new bunch would crop up to take their place. No doubt the economy needs credit. Why do we need Citibank, JPM and all the other crooks? \_ That's why we have a republic. We don't need uninformed citizens making these decisions. \_ I am mostly unimpressed with what our elected representatives have done so far, but you are probably right, a directly democratic response would probably be even worse. \_ automaker bailout is what, 1/100th of the bank bailout? \_ In other industries, you are awarded a bonus for doing well or if the company has done well in that year. There is no sane person who can claim the banking industry did well in 2008. So why did they get bonuses? That's what bugs me. \_ This is not "other industries" and Wall Street and law firms work differently. \_ They work differently because they've stacked the deck in favor of lining their own pockets. The role of government is to protect taxpayer assets, not performance-based compensation for executives of bankrupt companies. Let them try to convince the bankruptcy court that the first priority is to pay them their bonuses. -tom \_ Bankruptcy courts are genrally in favor of companies making payroll. \_ Bonuses != payroll. \_ Except that in the case of certain firms (like banks) they really are almost the same thing. Bonuses are not some optional incentives based on merit or something, although they can be tied to it. Think of bonuses more like tips for a waitress. Sure, you make more if you're good but they aren't really optional. Even bad service results in a tip (or should anyway) because the payscale and taxes are based on that. \_ Bankers don't make $2.80/hr. \_ This is back to the "They make more than *I* think they are worth" argument. We can say that about software engineers or any job, really. However, that's not how salaries are determined in this country. Go back to Soviet Russia. It's much more equitable there. \_ Except software engineers are not asking for handouts from the Federal government. You keep "forgetting" that part. \_ Tangential. You can argue that companies shouldn't be receiving aid, but that's not your argument. Your argument is that the government should dictate salaries in turn for aid. That will leave those companies without any employees, because paying them 50% of market rate for salaries will have them leaving in droves. How will that help anything? The banks may as well BK then. \_ OK. -tom \_ So let's be clear that your issue isn't "bonuses". It's that the banks are receiving any money at all. Why beat around the bush for 6 paragraphs? \_ So let's be clear that you love to beat up straw men rather than paying attention. Fine. I'm not particularly pleased that the banks are receiving money, and I'm outraged that the money they're receiving is going incentive-based pay for the assholes who caused the problem. And it's totally typical for the Republican typical of the Republican disdain for the American public. -tom \_ I seriously doubt that the employees will be leaving in droves, even if they were paid the starvation wages of will be leaving in droves, even if they were paid the starvation wages of $300k/yr. Especially since 100s of thousands of others in their field will be out of work. But it is a risk I am willing to take. \_ Exactly... this is ridiculous. where exactly are they all gonna go? The best they might do is start a new company, or perhaps use their genius to go to one of those other lucrative $500k careers out there, which would be such a terrible loss for America I know, our capital would be so misallocated. \_ One obvious place is to the hedge funds and regional banks, growing them into megabanks of the type they work for now. Of course, only the best will leave. The bad ones will remain to handle the delevering, valuation of assets, and spending of TARP funds. My fear is that the best ones are leaving *anyway*. Wouldn't you? \_ And if they go to a regional bank (probably not making $300k/yr) and grow it into a well-run company that efficiently makes loans, has a well-run risk management department and is not sucking off the taxpayers teat, this is a bad thing how, exactly? \_ The Bad Thing is what happens to the banks they left. Most hedge funds are closing, not hiring, btw. \_ Many are folding b/c investors are withdrawing, but this is a blip on the radar. Mutual funds, pensions, and even hedgies still manage a lot of money. \_ Hedge funds are closing because the returns on their strategy have dropped to 20% of the original, rather small percentage. In fact, according to DeLong it was a large hedge fund getting out of the business, which hosed a number of other highly leveraged hedge funds, which acted as the trigger for the whole liquidity crisis. -tom http://online.wsj.com/article/SB123353536455237761.html "It's just a tough, tough time, and there are a lot of good people out there looking for work." \_ Right, but they aren't going to work for $6.50/hour. Let's not confuse "looking for work" with "looking for any work at any price". \_ I have a friend who does ibanking for UBS, 1st out of biz school, didn't get fired in the 4 rounds of layoffs, I was adding up her base salary (120k) to the bonus she got 140k and wondered what the hell she did that was worth 260k a year. \_ Is she hot? picsP |
12/25 |
2009/1/22-26 [Computer/Companies/Google, Finance/Investment] UID:52443 Activity:kinda low |
1/22 And that's why you should own GOOG. \_ Google reported fourth-quarter net income of $382 million, down 68% from $1.2 billion a year ago. \_ I don't get it. How can you have 68% down but sales going up 18%? Are they getting more sales but with less money per transaction? \_ Profit = (Price - Cost)xQuantity - Fixed Costs Costs went up? \_ They wrote down the value of a few investments. \_ $1.09B \_ Leaving aside the asset write-down, GOOG had $1.48B in operational profit for the quarter, up 23% from last year. In this economy that's amazing. GOOG is still a frieght train. -tom \_ I do own GOOG and I am underwater on it even though I bought at a comparatively low price. Brilliant. \_ AAPL profits are still growing at an increasing rate. $2.3B in adjusted net income ($1.61B GAAP profit) \_ AAPL is another good company to own. |
2009/1/13-22 [Finance/Investment] UID:52374 Activity:nil |
1/13 http://www.cnn.com/2009/CRIME/01/13/missing.pilot.profile/index.html Financial managers are so awesome. People like this makes me want to pull my money out of 401K. You just don't know what kind of people are managing your asset. \_ No. This is not a reason to pull your money out of your 401k. This is the reason why you don't give your financial advisor/wealth manager trading authority in your accounts. The fund managers who run the funds in your 401k are much more stringently regulated than the Bernie Madoffs of the world. The brokerage that holds your account is reasonably regulated as well. This guy is someone people hired as an additional layer on top of that, and gave authority to move assets around as needed. The lesson is that if you hire someone for their investment advice, place the trades yourself (and never give them the authority to do it for you). \_ Or just use low-cost stock/bond index funds for 90% of your 401k and "play" with the other 10%. \_ what about Mervyn's employees with 401(k)'s? It's also the same company that manages a whole lot of other retail employees plans. As I understand it, rollovers have been delayed for a couple months already because of "illiquid assets" in funds with "Stable Value" in the same, and significant "administrative fees" have been nailing them since. |
2009/1/8-12 [Finance/Investment] UID:52345 Activity:nil |
1/8 Financial services industry appears to have been ripping off states and cities for years in the municipal bond business http://www.nytimes.com/2009/01/09/business/09insure.html \- say it with me, "clawback". |
2009/1/8-12 [Finance/Investment] UID:52342 Activity:nil |
1/8 Stock market isn't going anywhere... and I haven't made a penny for a few weeks. It's been dry, but not unexpected. -week trader \_ I am up over 10% since Dec 1. -buy and holder |
2009/1/7 [Finance/Investment] UID:52338 Activity:nil 61%like:52335 |
1/7 http://tinyurl.com/7lzzhv Barron's article warning about Treasuries. \_ Buy corporate bonds while you still can! |
2009/1/7-12 [Finance/Investment] UID:52335 Activity:nil 61%like:52338 |
1/7 http://tinyurl.com/7lzzhv Barron's article warning about Treasuries says to buy TBT and PST. \_ Of course last year Barron's was telling us that the housing crisis would be minor and blow over by mid 2008. \_ CBS Marketwatch commentary says the same: http://tinyurl.com/7swxxd I am not saying this is good advice. It may be a contrarian indicator. However, it is something to consider and do more research on. |
2009/1/5-8 [Finance/Investment] UID:52314 Activity:low |
1/3 Need stock market tip. What is the historic normal for the first quarter of the year? Up, down, random, etc? I had a bunch of limit orders but there were very little movement in the second half of Q4, which was expected but disappointing considering that I make most of the money on big swings -week trader \_ http://www.moneychimp.com/features/monthly_returns.htm In general, the first part of the year is not so great, especially the first year of a new President's term. However, based on history 2008 should have been a great year and we know how that went. That's why past results don't guarantee future returns. Overall, the markets have been more stable and less volatile recently which has been making it harder to trade, but is better for the long-term outlook of the markets. \_ 404 Not Found \_ Typo. Fixed. |
2008/12/22-2009/1/7 [Finance/Investment] UID:52293 Activity:nil |
12/22 link:tinyurl.com/9encrb (usnews.com) Optimist Roubini sez: - Unemployment will continue to increase through 2010 - 33% probability a multi-year economic stagnation continues beyond that http://tinyurl.com/7a72mg (bloomberg.com) NBER member sez: - Unemployment may exceed 10% and could "stay there for a while" - 50% change of calling depression over next three years \_ To some people, a bad economy is good. It weeds out competitors. \_ Welcome to the Great Depression of Barack Obama \_ Didn't Dubya have something to do with it? \_ http://money.cnn.com/2008/11/04/pf/forecast_economy1.moneymag Economy should turn up in Q2 of 2009. \_ You can have GDP being less negative or slightly positive in Q2 of 2009, and all of the above still be true. |
2008/12/15-28 [Finance/Investment] UID:52252 Activity:nil |
12/14 Short-term pop possibility: FDRY is being bought by Brocade. Deal is priced at $16.50 (cash, not tied to BRCD's stock price). FDRY is currently trading at $15.70; shareholder vote is on Wednesday 12/17. FDRY shareholders will gladly take the deal; the only risk is that financing for the deal falls through, but it looks solid to me. Quick 5%. -tom \_ Will look into it, but there's not much room for arbitrage at this point. When would the deal close? \_ Supposed to close by 12/31. There will also be a special dividend to shareholders from sale of auctionable securities. http://biz.yahoo.com/prnews/081208/aqm044.html?.v=61 ($50 million is about 30 cents/share). Looks like pretty easy money to me. -tom \_ Update: Auction rate securities sold, proceeds 24.9 cents per share to be paid as dividends on the sale. -tom \_ this doesn't sound like tom. -tom #1 fan \_ Why not? I am on record as holding FDRY. -tom \_ I didn't think of you as someone who believed that individual investors can effectively act as arbitrageurs. \_ As a general rule, that's true, but I think this market is pretty broken, which leaves some opportunities out there. If the deal fails, FDRY will tank, so you're taking on some risk. If the deal succeeds, the math is pretty obvious. -tom P.S.: Just bought some at 15.50 in my play account. \_ Update: Merger approved, deal expected to close tomorrow, stock at 16.66. Too late to get in now. Brocade might be interesting as a long-term play, if you think adding Foundry improves their business. -tom \_ Good trade. Congrats! That's almost 10% if you include the dividend. You selling now? \_ I'll just wait for the deal to close, they'll be paying out cash. -tom |
2008/12/14-17 [Finance/Investment] UID:52247 Activity:nil |
12/13 I've been reading about this super awesome day trader giving you advice. I'm sure he's good and made a lot of money, but unfortunately, his advice does NOT work for everyone, esp. those who don't have time to stare at the stock market every few hours or so at work, or those who don't have a lot of money, or those who don't like big risks. If you want to trade but want to minimize risk and don't want to stare at motd + ticker, week trading is the way to go. You'll at most spend anywhere between 20min-60min a day, and 0-5 transactions a week. Here is the thing, you can spend a bunch of time staring at the ticker and make transactions, or just take advange of the fact that 1) the stock market isn't going anywhere. It's not going to do down 50% and it's not going to go up 50%. 2) there are a bunch of mini-wave while the market is flat, especially for the next year or so. 3) at any given time, 1/2 of the people will tell you to buy and "just trust me!" and 1/2 of the people will tell you to sell and "just trust me!" Fact of the matter is NOBODY knows what the next day will be, so ignore those people. Just keep putting down a tiny little chunk of money when it goes down 5-10% from what you feel is a low point (hint, when people panic and think it's the end of the world because the Fed did something, THAT is the time to buy), antd sell when it reaches your goal (2-8%). The key is SELL even if you only made a little profit. The market will keep going up and down, but mostly flat. It's *not* going to go up 50% or down 50%. So fuck the day trading advice if you don't have time, or you just don't feel like each day will make a huge gain or huge loss for you. Ride lots of safe little waves, and be happy when you have a little gain. I guarantee that you're not going to do fabulously or get super rich like the super awesome day trader, but I guarantee you that your total gain throughout the year will be moderate (way higher than CDs and bonds), and if you could hold long term (if market tanks for 2-5 more years) you'll never lose a anything. It's safe, stress-free, and it's been working out fabulously for me. Do the week trade with me guys. \_ Now that I get the ticker on my Blackberry it's really easy to watch the markets. Good advice here, though. Invest in whatever way works for you, but invest. Especially now. You will regret it if you don't. Most money is made in a bear market. \_ How is your advice any different than your bog-standard "reversion to mean" strategy? I think you've got a pretty high opinion of yourself. \_ I believe the super duper day trader dude last week has a much much higher opinion of himself than anyone else, including this risk averse week trader. |
2008/12/12 [Finance/Investment] UID:52242 Activity:nil |
12/12 Poor Japanese investor! 25 years and down 18%, excluding inflation. How many more years until he can sell? ob should have bought American stocks! he'd be up 6.8 times, or 8% per year cumulative! |
2008/12/12-17 [Finance/Investment] UID:52238 Activity:moderate |
12/12 $50B Ponzi scheme uncovered: http://finance.yahoo.com/news/Madoff-alleged-50-billion-rb-13819411.html \_ The Invisible Hand should take care of this. \- "We are victims" --hedge fund people http://www.nytimes.com/2008/12/13/business/13damage.html?em This guys need to have an electrode planted in his brain to fry him if he's ever caught pushing deregulation as the solution to everything: "Where were the auditors?" asked Bill Grayson, the president of Falcon Point Capital, a hedge fund based in San Francisco. "Where was his chief compliance officer? Where was the S.E.C.?" \_ I thought the whole point of hedge funds was maximum return for maximum risk -- if it goes belly up, either through fraud or for legitimate reasons, you're supposed to be able to shrug it off because you're a rich fatcat with tons of money to invest and lose. \_ Dave Barry put it best: "If things go well, you take a small profit. If things go badly, you take a plane to Venezuela." -tom \- i prefer "if you owe the bank $100, you have a problem. if you owe the bank $1million, the bank has a problem." --psb \_ Rosalie Goes Shopping? \_ Another waterboarding candidate: http://www.nytimes.com/2008/12/14/nyregion/14lawyer.html |
2008/12/12-17 [Finance/Investment] UID:52234 Activity:high |
12/12 Make sure you buy stocks today. You can thank me later. I am looking at UYG and DIG, but you might have your own favorites. Markets are overreacting to the auto bailout. \_ 1% down? DOW is still above 8000 S&P above 800. \_ I bought UYG at open for 4.79. It is 5.16 now. DIG opened at 28.01 and is now at 28.82. Both have traded higher than that already today, too. (UYG as high as 5.30 and DIG as high as 29.61). That's 10% on UYG and 6% on DIG in 2 hours. (I posted the advice pre-market.) You are welcome. P.S. It is now 9:37am PST and I am still holding these. I think they have more room to run. Good luck with your 0% Treasuries, Treasury Guy. \_ You talking to me ASSHOLE?? Treasury guy sez: 80% in safety, 20% in whatever the hell you want. *snort* \_ making a call on one stock that's +1.14% for the day and another that's -1.16% for the day, and claiming that's a 10% increase, is fairly silly. \_ My silliness is buying me a new 52" LCD TV this weekend. How's yours working out for you? UYG went from 4.79 to 5.49. You need to track stocks from the open, not from yesterday's close like the ticker does. \_ next time I'm awake at 4:00 AM I'll be sure to take your advice. \_ You gotta be up with the market. \_ Your advice was "make sure you buy stocks today", and that "markets are overreacting to the auto bailout." The DJIA is currently up 0.12%, which means that the rationale for your advice was shit; the markets aren't overreacting to anything. Neither of the stocks you suggested have been remarkable performers on the day. Congratulations on making money, if you really did, but it's a lucky call, not a good one. -tom \_ You don't follow the markets that closely, or you would have known that Asia was down heavily last night, as was S&P futures, supposedly on the news that "the market is upset that the automakers were not bailed out." And stocks were down at open. \_ The markets did overreact. Overseas markets tanked greatly and so did the premarket in the US. The market looks like it's up 0.12% *NOW* which is after I made my gains from the pre-market 8% down these picks were at, dude. I acted on it, and you are just a hater. \_ Stop stomping my changes, schmuck. What he said, basically. \_ Woo, the Dow opened down about 1%, and went almost to 2% down before rebounding to flat. Whiplash, I tell you, whiplash! I will stop pointing out the obvious, since you're clearly a brilliant market analyst who regularly uses $100 bills as toilet paper and only deigns to communicate with us out of a feeling of benevolence towards the masses. -tom \_ I didn't tell you to buy the DOW. I gave you picks that were down about 8-10%. I hope you are having fun buying-and-holding, though. How's that GOOG working out for you? \_ Up 5.18% today, thanks. I must be brilliant. You didn't tell me to buy the Dow, but given that the Dow was basically flat, your reasoning has no basis in reality. -tom \_ obviously op is saying you will make at least 5%. Just make sure to tell us when to sell or how much percentage profit to take. \_ That's for you to decide. I'm not giving away all of my secrets. I will say I sold out of DIG already. BTW, I am not doing this to brag as much as because someone here was complaining that I only talked about trades post-facto. So I gave you a cookie, posting the trade before the markets even opened based on pre-market trading and what happened in the international markets overnight. \_ the problem is if you tell people to buy, they hold for a week they're down -10% at some point and sell then and you just they're down -10% at some point and sell, then you just fucked someone. you should have said it was a daytrade imo. \_ I think even if you bought UYG as an intermediate play you will make money. Heck, buy it tomorrow and hold and I bet you will make 10% on it easy if you are willing to hold it and sell when it hits 6. That's why I chose it to spoonfeed people with in case anyone took my advice. It's both a good daytrade *and* a good stock to hold for a week or four or fifty. I trade it and I buy it to keep, which is what I do with a lot of my trades. If I am not willing to own it then I won't trade it. \_ ok great, I think you do both yourself and the ppl you intend to help a favor if you say, "buy uyg at 12/12 market open and sell during day, or hold up to a year for possible 10% profit" \_ I agree with the above poster, if you want to demonstrate your daytrading prowess (which I am impressed with btw) you need to call out when you sell as well as when you buy. What are you worried about, that we will all trade with you and move the market? I appreciate the info though, I was the guy who asked you to tell us when you traded. \_ Worried about giving away information for free that some people pay a lot of money for. I think I've helped CSUA enough for free already. The strategy for selling is "Sell, when you are comfortable with the gain." My comfort level and yours might be different. I have made a lot of money recently and so I am more willing to take some risks than someone trading with their last $5K might be. I also have hedged some positions. So it's not really important when *I* sell. You can figure that part out for yourself. I think a 5-10% gain in a day would've been a good target. Some of my picks (like C) I am *still* holding even though they are up big (and were up bigger). \_ Are you actually getting paid to do this, or is this "some people pay a lot of money for" all in your own mind? \_ No, I am not paid. My point is "Why exactly should I help make you money?" What's in it for me? I'm just trying to help people better understand the market and convince people that the market is the best place to make money. Not cash, not treasuries, not bonds. Too much scared money right now. If you want detailed advice subscribe to a newsletter. If there's enough demand for my advice maybe I'll start my own newsletter and charge for it. But there's no reward in it for me to publish all of my trades. \_ We all contribute to the motd in our own way. I was kind enough to warn people about the housing bubble, for which I was widely ridiculed. If you make enough money daytrading, you can set up your own fund. My advice it to quite while you are ahead, but enjoy your luck while it lasts. \_ No luck involved in being long equities. Luck is for shorts. \_ This is relevant to my interests, but alas, I have no capital whatsoever :( . --toulouse |
2008/12/11-16 [Finance/Investment] UID:52230 Activity:kinda low |
12/11 http://bailoutwine.com/site/how_it_works.asp \_ Cool I just bought a couple of bottles. I hope it turns out to be good and expensive wine. be both a good and an expensive wine. |
2008/12/8-12 [Finance/Investment] UID:52202 Activity:nil |
12/8 Today was such a good day on the market. I got one great sell triggered from a limit I set last week. I love the stock market. I love week trading. No stress whatsoever. By the way, are you guys expecting the rally for a while? I'm actually a bit of pessimistic. I'm buying a bunch when it drops another 10% |
2008/12/6-10 [Finance/Banking, Finance/Investment] UID:52184 Activity:nil |
12/6 Interesting finance/business story: http://www.businessweek.com/magazine/content/08_49/b4111040876189.htm |
2008/12/5-10 [Finance/Banking, Finance/Investment] UID:52177 Activity:nil |
12/5 http://finance.yahoo.com/news/Bank-Julius-Baer-CEO-dies-rb-13755979.html 52-year-old CEO of Switzerland's largest wealth mgmt fund kills self \_ "wealth management." Nice euphemism. |
2008/12/3-9 [Finance/Investment] UID:52156 Activity:nil |
12/3 Another chief investment strategist says bottom is IN! UBS analyst says S&P may rally to 1,300 by end of 2009! omfg I'm gonna be *RICH*! http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a0pWrGKepx1g http://www.rttnews.com/ArticleView.aspx?Id=792104 \_ Everytime I listen to some "expert" I get screwed. Lately, I've been doing the opposite and have been doing marvolously. Don't listen to the experts man. Do the opposite. -week trader \_ I made 50% this week even with a slightly down day today. Pretty easy when we keep bouncing off of the same lows in a range. When financials tanked on Monday I doubled my position in them (I had bought into Citibank last week). Life is good. It will suck when the markets stabilize and I will have to convince myself that a 12% up year was "good". I can make that in a good day right now. Why wait for 2009? The worst thing for the stock market is for it to stay flat, which thing for the stock market is for it to stay flat, which I is what I think will happen when things settle down after the "big buy back in" that the scared money will do once almost the "big back buy in" that the scared money will do once almost all the big gains have already been made. "You make most of your money in a bear market -- you just don't know it at the time." I am now 88% in equities, holding 12% cash to buy on more dips, although I have no problem trading out for a profit and waiting for a lower re-entry point. I'm also waiting for oil stocks to dip some more before going in there. Almost there, but not quite yet. I think it will take some (negative) earnings reports to scare the prices down more. People are still too bullish on oil. \_ You are just playing the roulette table now. Good to be in the market though, your biggest risk is missing out on a big week. \_ Except this roulette table is guaranteed by the Fed. Up another 6% today. It's good to have skeptics like you, though. When everyone is bullish it will be time to sell. |
2008/12/2-9 [Finance/Investment] UID:52146 Activity:nil |
12/2 http://www.cnbc.com/id/28010476 Chief market strategist says a "very very very strong rally" is coming, +25% to +40% starting ~ Dec 15, ending in July '09. GODDAMMIT I'm going to make BUX!!1 \_ Cool, free money machine! What could go wrong? I am dumping all of my savings into QQQQ right now. \_ ^QQQQ^GOOG \_ http://www.dailykos.com/storyonly/2008/12/2/102214/940/743/668445 The average bull market goes up 40% in its first year. \_ ...if you could predict the day it starts going up, which you can't. -tom |
2008/12/1-6 [Finance/Investment, Recreation/Media] UID:52137 Activity:nil |
12/1 Isn't Star Wars Guy going to give us a quote about today's market? \_ no, one guy hated it more than lulz guy, so ... in any case, last week was all about the torps having gone in and the death star folks still flipping switches as if everything were okay. today: The rumble of a distant explosion begins. \_ Last week was weird because people (like me) were on vacation. I heard the number of shares available for trade was low. \_ Yes, Thanksgiving week is usually very light volume, so h0z3r5 can move prices easily. |
2008/11/26-29 [Politics/Domestic/President/Bush, Finance/Investment] UID:52113 Activity:nil |
11/26 Government bailout represents 60% of GDP! http://www.csua.org/u/n02 (http://www.sfgate.com \_ Thanks Bush! |
2008/11/24-12/1 [Finance/Investment] UID:52094 Activity:nil |
11/23 Investors giving up on the market: http://online.wsj.com/article/SB122748809906051937.html \_ That's weird, I am doing alright doing week trade. That's for spending only 5-10 min a night setting up limit orders, and not looking at the ticker or even thinking about it during the day. I could probably make more if I stare at it during the day but that's over my stress limit and will interfere with my real work. -week trader \_ You have to remember that traders like you and I are not 'investors'. I will dump a stock the minute I make my 10% on it. That's not really 'investing'. \_ That's very very true |
2008/11/24-12/1 [Finance/Banking, Finance/CC, Finance/Investment] UID:52089 Activity:nil |
11/23 http://blog.mint.com/blog/finance-core/a-visual-guide-to-the-financial-crisis \_ bahahahaha most hilarious \_ Whatever happened to all the FREE MARKET IS BETTER vote for GWB drones on motd? |
2008/11/24-12/1 [Finance/Investment] UID:52086 Activity:nil |
11/22 http://news.yahoo.com/s/nm/20081124/bs_nm/us_citigroup_9 Citigroup gets $306B bailout. \- http://tinyurl.com/6fr67u \_ link:preview.tinyurl.com/57u4lo \_ hey econ whizzzzes, Citigroup is worth about 15 billion now. Why doesn't the Government just buy Citigroup completely? \_ What would they do with it afterwards? |
2008/11/22-12/1 [Politics/Domestic/SocialSecurity, Finance/Investment] UID:52079 Activity:moderate |
11/22 Pension gap divides public and private workers: http://www.usatoday.com/news/nation/2007-02-20-pensions-cover_x.htm At what point do we Just Say No? Making more money *after* retiring seems like an issue. I say this as someone with family who retired from the military who makes more now than when active. Ridiculous. \_ Come back when you stay at your crappy public sector job for 20+ \_ have you ever served? \_ Public sector do not get stock options, generally do not get bonuses, they do not get 401k matching, they do not have ESPP options [there are obscure exceptions], they dont have crazy expense accounts, they get most of their income on W-2, so their tax loopholes are limited [compared to say 1099 people]. Sure there are lame public sector employees and there is fraud and corruption, but it's silly to focus as a class on military or say CALPERS pensions. Take a look at something like the finance industry which actively conspires with its elites by structuring compensation [moving income to cap gains], paying for what is clearly private income as corporate expense [car leases, club memberships, subsidized loans], helping individual incorporate etc. [yes, i know there are some exception to the above]. You might looking at how LLNL is doing under public vs private management (when Bechtel took over, people were basically kicked out of CALPERS) ... $280M in cost overrruns and the lab continues to deteriorate. Note also: the quality of "public employee/govt worker" is quie different at a UCB, the National Labs, or the SEC vs say the Port of Oakland. \_ http://en.wikipedia.org/wiki/Executive_Schedule Can you honestly say that these employees are overpaid? I am a mid-level manager in a Fortune 500 company and I make more than the Undersecretary of the Navy. This is nuts. Low level employees, like bus drivers and mechanics, are probably overpaid in the civil service sector though. We need stronger unions in the private sector, obviously. \_ I think people are missing the point here, which is that we are paying certain people more to *not* work than to work. That makes absolutely no sense. So for 20 years of good work \- are you against paid sick leave? how about employer subsidized health care? how about employeer subsidized health care? how about dependent coverage ... i mean that's paying for people who dont even work for you. the person missing the point is you, and the point is "net present value" (of benefits) in this case [although really there are a few other points ... risk and return, at will employment vs public sector terms, and to some extent "the sanctity of contract". \_ "net present value" is too effing high. Only in your socialist utopia does someone make more money at retirement than when working. \- do you understand the difference between when money is "made" and when it is "paid"? the issue is *length of service* i.e. the amount of time over which you are earning the money, not the age/time you are collecting it. there is nothing magically different between your pension being 99% of your income and 101%. there is a big difference between whether you earned it after 20 yrs or 40 yrs or whether you are gettign paid at age 55 or 65. these people get 20-30-40 years of paychecks at, or for more than, the wage they retired at?! That's a sure way to bankruptcy. I am in private sector and I make more, but at age 65 I will get jack shit and that's the way most of industry is. Why should Uncle Sam do any different? \_ Because those people took lower-paying jobs partly because of the retirement benefits and job security. A simple choice of how to run your business, if you're one of the people who thinks government should run like a business (it shouldn't). -tom \_ The jobs are not really that much lower-paying. You might have a point if they were all working for 50% of market rates, but the reality is that government workers are paid pretty well. We've already been over that. \_ we've "been over that", you mean, back when you made ridiculous assertions that were flatly contradicted by the data you were presenting? -tom \_ You mean when I showed you that tree trimmers for LA County were making $70K or something like that? That workers in SF were routinely making over $100K? That crazy sysadmin pulled down something like $120K? The DWP workers pull down big bucks? Please rely on the actual data and not your faulty memory and perceptions. Here's a good start: the link I just posted, which no one bothered to read. \_ Data points with no context are meaningless. The link you just posted is a USA Today story with an editorial slant and similarly context-free numbers. -tom \_ How about the UC article some other kind person dug up? You are always rationalizing. Get your head out of the sand and WAKE UP! \_ The UC article doesn't say anything about compensation relative to the private industry. And I agree that people shouldn't be able to retire and come back to work full time at the same salary; in fact, it's against UC policy to do so, and the article says they're going to crack down on the very small number of cases where it has happened. -tom \_ Those ES level government workers I gave you the wiki link to are making 50% or less what they would make for similary responsible jobs in the private sector. \_ 20 years is an extreme exaggeration, except for the military you don't retire after 20 years and even there you only make 50% of your active duty salary. You don't make your case stronger by exaggeration, you just make yourself look misinformed. \_ Actual data: If I were to retire from UC at age 50, with 24 years of service (I started working here at age 26), I would get less than 30% of my final salary. -tom \_ Actual data: read the article \_ Your confirmation bias is showing. -tom \_ I'm the one who is biased? Check out how your UC colleagues are doing. \_ Did you read the article I posted? \_ Yes, and it said nothing about retiring at 20 years. You just made that part up. \_ How long do you think a police chief worked who retired at age 46? Certainly not 30 years. WTF should someone 46 years old be retired and making $125K/year for the rest of his life to sit on his ass at taxpayer expense? He might make more money not working than he did when he worked over the course of his life. We can't afford those excesses for civil servants. He can collect when he's 65 like everyone else. Getting full salary at that time would be more than generous. I'd support him getting HALF his salary at age 65. To get a raise when retiring at age 46 is beyond the pale. He should still be contributing to society in some way at that young age and not sitting on his ass cashing checks from the public. \_ Once again, you're using one anecdote from an article with an editorial slant and with no context, and suggesting that the issue is meaningful and widespread. It's not. Aren't you suspicious when the article says it will "boost his retirement benefit to *as much as* $125,000 a year"? Why the qualifier? [Here's why--they're not telling you the whole story.] You'll believe what you want to believe, go ahead, but you really are demonstrating complete cluelessness here. -tom \_ http://fireflystudio.com/acton/circle/index.html "Bill Fenniman retired in January 2007 after 27 years in law enforcement, the last 17 as Chief of Police in the City of Dover NH." 35% more than your claim of 20 years, it turns out. And it turns out that he is contributing. I hope to retire at 50 on my 401k and savings, who are you to tell me I can't? I will probably contribute to society in some way afterward, but that is my business, isn't it? \_ 401k and savings is your money. Do as you wish with it. Not the same as getting free checks for life starting at age 46. \_ A worker's pension belongs to that worker just as much as his 401k does. -tom \_ Of course. And how many employers are contributing enough money to their 401k plans such that you are guaranteed to maintain your full-time salary after you retire? Not many. The government is paying A LOT more than market for this. I've been in the workforce 13 years and there's barely 1 year worth of my current salary in my 401k and that counts my money plus my employer's very generous 8.5% contribution. (Most 401ks match a lot less than this.) I read that the average employee has about $100K in his 401k. This dude is getting that each year guaranteed forever starting at age 46. As a taxpayer, I feel ripped off. BTW, EBRI says that the average 401k balance of someone in their 60s with 30 years of tenure is $190,593. link:tinyurl.com/2a8a35 \_ If you don't understand why you can't compare 401k balances directly with pensions, it's not worth wasting any more time on you. -tom \_ You can't compare directly, but you can compare. \_ So you took the gamble of a private sector job with higher pay and lower benefits, it hasn't worked out that well for you, and now you are upset that others who took the safer route are doing better? What a piece of work you are! What is the value of 15k + 7k employer is the value of 15k + 7k employer match invested yearly for 27 years at a 10% (average stock market) gain? Here, I will make it really easy for your: $2.8M. I bet you want to privatize social security, too. Am I right? \_ Most people "take the gamble" of a private sector job with roughly THE SAME pay as the government and end up worse for it. Another way of stating this is that the average person in the private sector is receiving less compensation than the average person in the public sector. You cannot count the $15K, because that's my own money and you should be aware that $7K is hardly the average. So your $2.8M number is bogus. Yes, I do want to privatize SS, but that's neither here nor there. \_ you keep asserting that public sector employees are compensated more, but asserting it over and over doesn't make it true. -tom \_ You are full of it. I showed you the BLS stats that proved that private and public sector pay, including benefits was similar, but you ignored it. \_ Stop stomping my edits. As I was saying, I showed you the BLS data that public and private sector workers are paid similary including benefits and you ignored it. \_ http://tinyurl.com/5klnuo CA says it pays lower than other public sector employees and yet even its salaries are comparable (and sometimes even lead) the private sector. Salaries, not total compensation. \_ ...when you compare the state maximum to the private sector median. \_ Did you read why the State did that? \_ yes. the justification is ridiculous. -tom \_ That is not how I read Table 4. All above average private sector paying jobs\ pay lower than market rate when working for The State (and most below average paying jobs are higher, why might that be do you think?) Managerial jobs are particularly low paying. \_ Sure, and how many Americans are CFOs and MDs? \_ And programmers and accountants, and engineers and nurses and ... \_ Why don't they just work for the government then, if they pay is the same and the benefits higher? \_ Most people, like MOTD, are laboring under the impression that those jobs pay less. \_ you think that "most people" are incapable of reading job postings which list job descriptions and salary ranges? -tom \_ Contract law only applies to private sector employees? |
2008/11/21-28 [Finance/Investment] UID:52073 Activity:nil |
11/21 E*Trade survival depends on TARP funding. Larger brokerages reluctant to acquire company because of its MBS/CDO liabilities (would rather acquire brokerage side only via bankruptcy). http://www.reuters.com/article/ousiv/idUSTRE4AK6NM20081121?sp=true \_ If my online tradng account is with ETrade, how will this affect me? Should I transfer ASAP? Any recommendations? I make ~10-20 trades a year at most. \_ your immediate concern is articles like this leading to a stampede for the door and contributing to a chaotic closure. What do I think? I would close my account today and not take no for an answer. The second this appears as a lead story on http://CNN.com you may be in for a very long wait on the phone. -op \_ You are covered for up to $1/2M by the Federal Govt, so if you have less than this, your biggest inconvenience might be having to wait a few months while your claim is processed. If you have more than this, you should move some to another brokerage. \_ My wife was in the Reserve Primary Fund in her 401(k), they've gotten back 75%, but it's a waiting game while they try to extract funds from the govt and figure out how to liquidate. *Your* nightmare is if your stock portfolio is frozen, the markets are crashing around you, and you can't do shit. All that SIPC covers is return of stock, not value of stock when a brokerage goes boom. Cash should be safe, though, up to the insured amount. -op \_ Not a nightmare if you are a buy and hold investor. But if you want to be able to trade in and out of the market, this could be problematic. \_ Thanks. Any recommendation where to move to for online trading? I only keep $50-$100k for a situation like this. Most of my money I have with my brick and mortar bank and the financial services compnay which manager our defined contribution retirement plan. But I do want access to a way to trade online with low fees. \_ People seem to like Scottrade, though if you are into daytrading you can use http://thinkorswim.com like angry sysadmin. \_ fyi, this showed up on drudge just now, not highlighted though |
2008/11/20-27 [Finance/Banking, Finance/Investment] UID:52054 Activity:nil |
11/19 Remember the 100-age investment rule we learned in grade school? For example, if you're 65, you should put at least 100-65=35% of your savings in stocks. Let's say I'm retiring at 65 today, then effectively I'd have 1/2 of that much than say, 2004-2005, or 35%/2. I've lost nearly 17.5% of my savings because I retired at the wrong time. Buy and hold works well when the market is stable (post 1940 and pre 2008). In the end, do you think the 100-age rule is still applicable in the turbulent market of the 21st century? \_ The average return you get is directly related to the amount of risk you take on. Come back when you've groked that concept. -tom \_ Hell. My 401(k) balance went from $200k a year ago to $120k today. YetI still think stocks is the way to go. Yet I still think stocks is the way to go if you don't need the money in a short time. I've never heard of that investment rule since I didn't attend grade school in this country, but I guess its idea is that you don't need all your money today even if you retire today. \_ We are in basically the same boat here. \_ I think you should be about 75% in equities (25% in bonds) throughout. I don't plan to change that mix just because I'm 60, although I might cash out to buy some property once I can do so without any penalties. \_ No. Even at a relatively young age (under 35), you should be invested >= 50% into safety (CDs and Treasuries). I think this is particularly true for those earning the median or less where they live. For those earning more, you can afford to risk more. particularly true for those earning the median or less for where they live. For those earning more, you can afford to risk more. \_ You are on crack if you put >50% of your retirement into CDs at age 35. You might not even beat inflation. |
2008/11/19-25 [Finance/Investment] UID:52050 Activity:moderate |
11/19 http://market-ticker.denninger.net/archives/664-Ben-Steins-Idiocy.html Angry sysadmin's comments today are pretty good, and extend beyond Ben Stein's idiocy. What he really needs to do is nail Krugman. \_ You need to find yourself a new hero. \_ can you point out what's wrong with his position? \_ besides the complete lack of data backing his own position, and the logical fallacies present in virtually every paragraph? -tom \_ click on November 18. Ignore any discussion of technical indicators--they are not necessary to support his position. \_ click on November 18. Ignore any technical analysis--it isn't necessary to support his position. Yes, I try to ignore the hand-wavy statements. ignore the hand-wavy claims. \_ He is mostly wrong here, too, the credit markets have in fact mostly unfrozen, which you can see by looking at the LIBOR rates. He is just looking at recessionary indicators here. \_ Corporate bond yields. Commercial paper. Securitization market. CDS spreads on BRK. here's a Reuters article saying the "credit markets are still frozen": http://tinyurl.com/5snj6q consensus (which may be wrong) is that credit markets are "thawing" \_ Risk is just being priced appropriately, with a major recession looming. Money is there to be borrowed, the interest rates are just high. \_ what is it called when market rates are so high that the seller of debt can't afford the rate, and therefore doesn't want to sell bonds? and therefore doesn't sell the bonds? consensus is also that central banks are the only entities lending right now (in volume). \_ What do I call it? A return to rationality in lending. Okay, yield spreads are higher than I realized, but plenty of bonds are being issued: http://tinyurl.com/5by2g8 (Reuters) in lending. Non-junk bond yeild spreads are not unusually high. Billions of dollars of commercial paper are being rolled every day, so your "consensus" (which is not what I have seen in places like the WSJ and The Economist) is wrong. \_ "growing signs of a thaw" != "in fact mostly unfrozen" \_ fair enough \_ Recession looming? We're in it. We just haven't made it official yet. \_ Yes, he is a moron with no understanding of economics. We do in fact need inflationary government deficit spending, so as to avoid a deflationary collapse. Pretty much every economist agrees at this point, outside of the Austrian school nutters. \_ I think the misunderstanding here is that deficit spending is not necessarily exclusive of the transparency he is not necessarily exclusive of the transparency/reform he proposes. \_ In this post at least, he mostly claimed that stimulative government spending would lead to hyperinflation, which is plainly wrong. He has some points, but they get lost in the big mistake he makes where he presents the false dilemma of deflation vs. hyperinflation. \_ a huge weakness is he does not forecast an inflection point. sure, we spend like Yermom, but when is it when foreign purchasers decide U.S. Treasuries are not a good bet? This could theoretically last 20 more years or forever for that matter. -op \_ Well, since long term Treasury rates are under 4%, we must be a long way from saturating the demand for US backed bonds, don't you think? \_ the uncertainty here is exactly my point. there is the rumor that the Fed is buying long-term T's to reduce the rate, but I'd consider that tinfoil for now. -op \_ You understand how unlikely that is, right? That would reduce the money supply, which is the exact opposite of what The Fed is trying to do right now. \_ can you please stop repeating what I'm saying back to me and sounding like you made a point? it's irritating. \_ I can agree that transparency would be good, but I don't think he has any data which show that lack of transparency is the root cause of the market problems as he claims. -tom \_ okay, step by step. shadow banking system. SIVs. securitization. major effect on the global market? yes/no. take all the data you know yourself--let's not confine it to this one blog post. \_ Wake me up when he starts talking about ameros. \_ ameros are truly tinfoil -op |
2008/11/17 [Politics/Domestic/California, Finance/Investment] UID:52014 Activity:nil 72%like:51977 |
11/14 http://delong.typepad.com/sdj/2008/11/worst-economic.html PSOTO thinks we're all gonna die. \_ lulz lulz lulz lulz lulz lulz lulz lulz \_ does this sequence converge? \_ That's a pretty terrifying chart \_ "worst downturn since the Great Depression" - duh? we're all gonna die / mad max? I don't see that. |
2008/11/14-26 [Finance/Investment] UID:51983 Activity:low |
11/14 Interesting stock trader psychology I noticed today. The markets were mixed and I was pulling for a huge $$$ day (as opposed to the so-so one I ended up with) but when it became clear that was not going to happen and the rally died then everyone just stopped buying, which led to the bloodbath at the close. If you just looked at the open and close you would think there was a crazy sell-off, but the reality is that most of the eventual losses were over the last 10-15 minutes when the bulls decided to call it a week and the shorts continued to sell. Given that I expect a rally on next week at some point, because "it was not as bad as it looked". That plus the G20 meeting over the weekend. Even though my positions are still positive (and I usually sell at the end of every day) I will hold them overnight. No point selling into the hands of the shorts and I'm still green on the day even after the sell off. \_ I enjoy reading your motd posts about day trading. Do you do this as a full time job? Or do you have your brokerage account web site open at work at all times? I don't have the world's most demanding job, but I would go insane doing my work and managing my account all day like you do. \_ All you have to do is watch a handful of stocks on a ticker. It's not much time at all. I get up before the markets open and see what's up. Then I go about my regular business until 8am or so when I check again. Between then and lunch I just glance at the ticker every few minutes and then at lunch time I really watch intently for a time to get out (if I haven't already and still have a position open). \_ Most day traders end up losing their shorts. \_ This can't be true, because for most of history the market has risen. A rising market erases a lot of mistakes. It's more challenging now than it typically is. If the market is up then you will be up even if your buy and sell signals are goofed and if the market is down then you will be down no matter what you do. \_ No, it is true. Volatility + leverage + frequent trading by an amature leads to most of the money ending up in the hands of the pros, over time. I can show you how this works, but I think you can figure it out for yourself pretty easily. If you have real talent at this, you should try to get a job with a brokerage and use OPM. But they aren't really hiring right now. \_ 1. No one said you need to use leverage. I think it would be foolish to even for buy-and-hold. I don't. 2. You have a point that transaction fees can eat up profits, but I don't pay any and "Lower profit because of fees and taxes" is not the same as "losing your shirt". It's just less profit (all else being equal) - during a rising market, of course. \_ How do you avoid commissions again? \_ Maintain a certain balance in my account \_ All right, both you guys put forth excellent reasons. Is there any data? \_ Yes, but nothing really great and it is contradictory. Part of the problem is defining what a "day trader" is. There are many strategies that involve buying and selling on the same day and many studies are not careful about differentiating. Someone making money on spreads and trading 400 times per day is doing something very different from a person range trading, for instance. Leverage plays a big part in it, too, because you can be wiped out very quickly if you buy $100K of stock with just $25K in your account if it goes against you. That's why I don't use leverage, although I do use margin for legal reasons. |
2008/11/14-26 [Politics/Domestic/California, Finance/Investment] UID:51977 Activity:low 72%like:51974 72%like:52014 |
11/14 lulz http://delong.typepad.com/sdj/2008/11/worst-economic.html BDELONG thinks we're all gonna die. \_ lulz lulz lulz lulz lulz lulz lulz lulz \_ does this sequence converge? \_ That's a pretty terrifying chart \_ "worst downturn since the Great Depression" - duh? we're all gonna die / mad max? I don't see that. |
2008/11/14 [Politics/Domestic/California, Finance/Investment] UID:51974 Activity:nil 72%like:51977 |
11/14 http://delong.typepad.com/sdj/2008/11/worst-economic.html BDELONG thinks we're all gonna die. "lulz" |
2008/11/12-26 [Computer/Companies/Google, Finance/Investment] UID:51948 Activity:low |
11/12 Intel warns. Q4 revenue forecast down 10%. At 1996 levels. GOOG afterhours at 285. Time to buy? \_ I think GOOG is a buy under $300 and I bought. --GOOG h8ter \_ how long are you holding for? will you buy more if it gets cheaper? \_ I'll hold until I need the money, however long that is. I'll buy more if it continues to fall as long as nothing significant changes with GOOG's business (like a strong new competitor developing). I'd reconsider buying more shares if it falls below $200, but I wouldn't sell what I own. \_ tnx. i am also trying to figure out when to buy in. \_ Yesterday was a good time. I made 25% today by buying a favorite daytrading stock near the low and selling just before close. I wonder who the morons are who are selling low and buying high? \_ Please post on the motd when you make your trades, not the next day. TIA. \_ GOOG is still low even after today. Buy tomorrow if it opens the same or down. The philosophy is simple: Buy low, sell high. I have made a lot of money the last ~6 weeks using this simple idea. When strong stocks break 52 week lows then by all means BUY. A lot of the pain of the market is behind us. Many stocks are down 50% on the year. They aren't going to fall another 50% IMO. Only the kooky DOW 5000 people think that and you know what, even if they are right, I will be there on that DOW 5000 day buying. I am holding very few positions long and overnight, although GOOG is one of them. |
2008/11/12-13 [Finance/Investment] UID:51939 Activity:nil |
11/12 angry lol poker guy says wall street is doomed http://www.portfolio.com/news-markets/national-news/portfoli o/2008/11/11/The-End-of-Wall-Streets-Boom?print=true http://preview.tinyurl.com/5vj34l |
2008/11/12-13 [Finance/Investment] UID:51933 Activity:nil |
11/12 I am renaming myself Dow 7000 Guy \_ Optimist \_ Should I Move To Emerging Market Country Guy? \_ between the 2x bush elections and prop8 passing and the dow tanking you'd think there'd be nobody living in the BA, but i guess that moving talk is just.. talk. |
2008/11/11-26 [Finance/Investment] UID:51902 Activity:nil |
11/10 As an employee of a company, I'm prohibited to short my own company's stock. I'm also prohibited to trade during blackout period. But am I prohibited to day trade my own company's stock during open period? Thanks for any help! \_ If you were prohibited during open period, why have a blackout period at all? \_ You are always prohibited from trading stock if you have material insider information, but otherwise, you should be allowed to trade in your own companies stock during open trading periods. Why not ask your company instead of the motd? \_ Vader's wingman panics at the sight of the oncoming pirate starship and veers radically to one side, colliding with Vader's TIE fighter (MMIFF delayed) |
2008/11/10-26 [Health/Disease/AIDS, Reference/Tax, Finance/Investment] UID:51901 Activity:nil |
11/10 lolz when your 401k is gone, heroin will look pretty attractive http://www.lectlaw.com/files/drg23.htm \_ Hardly, that crap's expensive! Now, crank maybe... \_ shooting heroin leaves you VERY constipated. seriously. sometimes when i shoot junk i don't have to shit for 2 weeks. |
2008/11/10-26 [Finance/Investment] UID:51896 Activity:nil |
11/10 What is the difference between QQQQ and SPY? How should I decide which one to buy? \_ punch them into yahoo finance, click on Profile \_ I trade QQQQ all the time, betting that it's going nowhere but will have a lot of mini waves (up down 5-7% in a week), and I've been riding on QQQQ and doing well based on this guess. I've been monitoring SPY and see that both waves are so similar, that it's most likely not worth trading both. DIA on the other hand is like QQQQ, but more gentle mini-waves. I also do DIA. I've been doing VERY conservative week trades. -week trader \_ If that's your belief, look at butterfly spreads. http://en.wikipedia.org/wiki/Options_strategy \_ Can you post to the motd each time you trade? TIA. \_ Check out QLD. It basically follows QQQQ, but the returns are ~2x QQQQ (up or down). \_ Leverage, leverage, leverage! What could possibly go wrong? |
2008/11/5 [Finance/Investment] UID:51843 Activity:high |
11/5 When Bush talks, stock prices go down. That is a perfect time to buy more stocks. I've been doing pretty well with this simple yet effective strategy. -week trader \_ DEATH STAR INTERCOM VOICE: Commence primary ignition. |
2008/11/4 [Finance/Investment] UID:51830 Activity:nil |
11/4 What is KFC's stock symbol? How do I buy it BEFORE tomorrow's market opens (e.g. how do I do off-hour trading)? \_ It's awesome how quickly you went from annoying to just plain pathetic. Have a great 4 years! |
2008/11/4 [Finance/Investment] UID:51813 Activity:nil |
11/4 It's time for CHANGE!!! Watch the stock market swing wildly in either direction. Good luck guys. -super hedge guy \_ A large burst of Vader's laserfire engulfs Artoo. The arms go limp limp on the smoking little droid as he makes a high-pitched sound. |
2008/10/30 [Finance/Investment] UID:51734 Activity:nil |
10/29 Dear motd Republicans: you're about to lose. You should take some time and look in the mirror. The majority wants change. Look in the mirror, and think why your ideology is dated, and what you need to change. Better luck next time! \_ Congratulations on getting more than 50.1% of the popular vote for the first time since 1964. Even a broken clock is right twice a day. \_ The Republicans had to preside over a stock market crash, dragged-out war, and nominate a 70-year old geezer with an airhead sidekick to get to this point, and it's still in doubt. \_ LOL |
2008/10/29 [Finance/Investment] UID:51728 Activity:high 80%like:51723 |
10/29 wtf is going on with the last 5 minutes of trading? \_ automatic trading? \_ do you mean: (a) lots of market-close orders (b) i've got a lot of shorts that need to be worth something \_ no idea \_ as i understand it GE just warned on earnings -op \_ Not true. DOW reported it, but it's a fabrication. \_ the ceo said something wishy-washy at a speech and the company said it was "taken out of context" \_ I dunno but I sold some stuff in the afternoon high point so I'm happy. \_ Did you buy puts like I told you? \_ have you heard of the VIX/volatility crush \_ You mean the high premiums on options right now because of the high VIX? If so, yes. If not, do tell. \_ So you should be selling calls, not buying puts. |
2008/10/29 [Finance/Investment] UID:51718 Activity:high |
10/28 Angry sysadmin says: "Buy and hold for decades" is the most dangerous piece of shit advice anyone can give anyone. You have no fucking idea where the market will be when you need the money. Buy and hold for decades presumes you will be in one of the "up cycles" when you need out. This is frequently not true, and when its not true you get it in both holes. That is an ASININE market strategy. If the last 20 years have taught you ANYTHING, its this. \_ You should put money into stocks when you do NOT need the money immediately. Long term means 20 or more years, and if you need money or anticipate the money you put into stock market, don't. Why would you anyways? \_ Who gave you such an advice? The standard advice for 401(k) is to gradually move from high-risk high-yield items (e.g. tech stock) to low-risk low-yield items (e.g. CD) as you approach retirement age. There are even funds that automatically does this for you according to your age and projected retirement age. \_ http://www.denninger.net/resume.html \_ Do you want resume of timecube guy \_ Now we know why he is so angry, he lost all his money in the stock market. \_ actually ... \_ I am guessing this guy got crushed in 2001, he has it written all over his face. \_ actually ... \_ VTIVX baby! Ride it for the next 30 years... |
2008/10/28-31 [Finance/Investment] UID:51713 Activity:low |
10/28 Biggest DJIA up days (ob past history does not guarantee future reslts) 1. March 15, 1933 15.34% 2. Oct. 6, 1931 14.87% 3. Oct. 30, 1929 12.34% 4. Sept. 21, 1932 11.36% 5. Oct. 13, 2008 11.08% <-- 6. Oct. 28, 2008 10.88% <-- 7. Oct. 21, 1987 10.15% 8. Aug. 3, 1932 9.52% 9. Feb. 11, 1932 9.47% 10. Nov. 14, 1929 9.36% 11. Dec. 18, 1931 9.35% \_ Interesting, where did you get this data? I'd like to find out how much they declined (or even rise) the next day. My feeling is that most of the activities will be profit taking. \_ http://tinyurl.com/682ytf \_ Also interesting is where they went the previous day. The stock market recently looks like a rubber ball, bouncing up after selloffs pass a certain threshold. Then it all gets sold off again at the next excuse. It *seems* like at some point it should start trending up again. A lot of cash was pulled out of the market and is apparently itching to get back in. \_ that's funny. my impression is that there's a lot of money still in the market waiting to get out at higher prices. \_ Well, you can say that about all the money in the market, ultimately. ultimately. If these guys are waiting to get out then they must implicitly think that current values are ok and stocks will go up. If they have some better place place to put their money then they should get out now and put it there. and put it there. So those signs point to current valuations being at some approximate floor. \_ they must be thinking, "I have so much money in the market, I can't sell it all at once. Hope I can sell it over time at decent prices before things really go in the crapper." Not counting pension funds. \_ That would imply they think the market will first go up significantly, then go down even more significantly. That's kind of an odd scenario. \_ but it would be the best scenario for me if I were stuck and wanted out at good prices \_ an ideal scenario if I were in that position \_ I am sure the market is going to up or down and then move the other way and then turn around and do something else for a while. \_ No you idiot, it is going to do the exact opposite. \_ Note that 30s and 87 were really ROUGH financial times. \_ and we have FDIC-backed deposits. '87 was a one-time affair. -op \_ If you had invested on Day #1, you would have doubled your money in three months and tripled it in a year. \_ super \_ If you had invested on Day #2, you would have been down 60% within nine months. \_ :-( |
2008/10/28-29 [Reference/RealEstate, Finance/Investment] UID:51712 Activity:nil |
10/28 http://tinyurl.com/6l3kpr (wsj.com) http://tinyurl.com/364bdv (boston.com) Oldies but goodies, Greenspan sez: - More H-1Bs -> Buy more overpriced homes -> Home prices stabilize -> Overpaid engineers/professionals make less -> PROFIT! |
2008/10/28-30 [Finance/Investment] UID:51702 Activity:nil |
10/28 Dow up 10% today. This is not healthy. \_ now that we are healthy again Obama can tax us all \_ You aren't taxed? How did you pull that off? \_ No indeed. Volatility is bad. \_ Stop whining and make some money like the rest of us. Now is a good time to buy puts, because Thursday's GDP report has a good chance of sending the markets back down. \_ thanks for your advice. What stocks/indices are your personal favorites and what do you think may go down by (5%? 10%)? Note that I'm asking for YOUR opinion that's all. \_ I'd buy puts on the DOW. DOW is heavy financials which are not out of the woods yets. \- if you were investing today, you have have implicily (or explicitly) been betting on what the fed will do tomorrow. |
2008/10/27-31 [Finance/Investment] UID:51697 Activity:nil |
10/27 In housing markets, why is high prices associated with high number of transactions, and low prices associated with low number of transactions? From my simplistic view using supply and demand curves, the prices and the number of transactions should be independent. Thx. \_ Doesn't that indicate that more people buy houses as investments, rather than as a place to live in? Sad sad world. \_ Gee, "supply and demand curves" are not as gospel as the little Invisible Hand is Everything brains believe. Here's a hint, simple rules for complex systems are never right. \_ simple rules often are correct for statics or equillibrium conditions, e.g. conservations rules, but often you are interested in dynamics or out of equillbirum situations. analogous to the great conservation rules in physics are the "great" accounting identities in econ. "great" accounting identities in econ. the simp;est explanation of higher prices being postiives correlated with higher transactions is liqudiy preference, but there are some subtler issues that are difficult to summarize here. it involves modeling some asymmetries between the buyers and sellers, modelling the growth of the housing stock in an area and the change in demand in that area etc. \_ The economy is *not* an equilibrium system, despite what traditional econ teaches you (and then attempts to un-teach you at the graduate level). Check out "The Origin of Wealth" for a good overview. \- yes, and the same is true of "real world physics". but the point is that you first learn simple normative stuff [PV=nRT, F=ma, GDP=C+I+X-M], and than add increasingly complicated boundary conditions and complicating factors. these simple rules are often quite powerful when thinking about problems, e.g. the parition of energy, energy conservation etc. it cant answer all questions ... like the positive effect on trade vs loss of purchasing power when your currency goes down, but it's a necessary starting point. BTW, you want wish to see the "new growth theory" whichs seems to try an account for some of the stuff in the book you mention. the "king" of new growth theory is PROMER, formerly of ucb dept econ, currently at the 'Fraud, not related to DROMER and CROMER currently still at UCB Econ. (whoa, according to wikipedia PROMER is the son of RROMER. "i did not know that."). \_ Agreed, but at least in Physics the simplifying assumptions and abstractions allow you to make predictions which are still borne out when you introduce complicating factors. The issue with the assumptions made in traditional econ is that they often don't hold up in the real world. Thanks for the pointers, btw. \- there are some areas where "economics" most definitey is in equillibirum: cross-currency arbitrage for example. now you are right, long term currency rates are uncertain. and yes that is why in advanced econ classes you study stuff like dornbusch overshooting, CIP, UIP, PPP etc. and the other thing is some of these "simple normaitve statements" do lauch research agendas, like the efficient markets hypothesis ... you dont have to believe in that has a description of the mkt but it is a starting point just like "rational economic man" is a point of departure from normative to behavioral economics. OK TNX. |
2008/10/24-28 [Finance/Investment] UID:51668 Activity:nil |
10/24 Week trade guy, what brokerage do you use? I'm curious about how you are trading indexes. \_ I'm using Etrade. It's very expensive, at $10 a trade. But since my volume is super low, it's not a big deal. Also I have Etrade bank at 3.3% interest rate and that's where my paycheck goes. I only trade 2 things right now: DIA and QQQQ. I make it VERY SIMPLE and only use limit orders. If it goes down 10-15% more, limit trigger buys more. If it go up 10-15%, trigger sell and I simply wait till the next market panic. At one time I only have 4 limit orders to worry about: sell DIA/QQQQ if high, buy more DIA/QQQQ if low. My life is very carefree. I don't run all that number crunching bullshit. It's meaningless in a recession where anything goes. KEEP IT SIMPLE and your life will be carefree... My typical day is just 5 min research, adjust limit, then go to sleep. I go to work without having to stare at the stock market ticker. It's been carefree and profitable. I like week trading. \_ Is it possible to trade VIX? |
2008/10/23-28 [Finance/Investment] UID:51661 Activity:kinda low |
10/23 So, day trader guy, what's your method? What are you trading? \_ BIGGS: (over headset) Hurry up, Luke! \_ I'm doing week trade. I trade index like DIA and QQQQ, which don't have as big of a movement. I set my expectations to be low (5-8% up down). I set limit (if up, sell 1/2, if down, buy more). I don't like day trade anymore, it's too stressful. Week trade is the way to go. \_ This sounds like the old coin-flip double-down strategy. If the index trends downward, won't you lose money this way? Or, actually you'll end up with all your money in the index, which I guess will eventually go back up if you wait long enough... -op \_ You'll never time it perfectly. You'll always miss opportunities. The hardest thing is getting in at the right time. When people panic and all is gloom, that's when I go in. By doing so, I don't make big bucks, but I don't lose much either. By the way, I only use this strategy when I anticipate the market to be flat (recession), where you can ride a lot of micro-waves. \_ Interesting, when things are up you just buy and hold? That's actually pretty reasonable... How long have you been doing this? \_ Been doing it this year, with anticipation of a long recession. My dad did the same thing in the housing slump and recession of the 90s (1994-1998). You can't do this when the economy is booming/rising... only when it's slumping and flat. When everyone panics, that's a good time to buy. Look at 911 and the stock prices during that time. Note that there are some index that I bought that are higher than it is now, and I'm just holding them on till the next boom, maybe in 5-8 years. The key is to not tie a lot of money that you'll need, and instead break it up into a bunch of chunks and *ladder* it so that you'll always have an in/out flow of capitals. And also expect to not see 1/2 of that money till the next boom. You'll make it really well, it's just a matter of time (1-2 decades). way? -op \_ I'm a different guy, but I was trading MS until recently. Still am sometimes. Been doing WFT, but it has been scarier and I'm rethinking that. Also sometimes GS and GE. GE is not a great trade, but the advantage is that if you get stuck it will usually work its way back and it's not a terrible stock to own if you become a bagholder. Trade stocks you wouldn't mind buying and holding. (Except MS, which is purely speculative on my part, I do.) My method involves buying in on weakness and selling high. Duh. Find a stock with a lot of volatility (just about everything right now), a decent volume, and a recent history of wide swings in *both* directions. (Don't buy something just working its way down except to short.) I adjust my stops so that I never lose more than my goal (usually 10% but in this volatile market, even 10% stops me out too early sometimes). I try not to hold overnight. Occasionally I do. It's a good way to: 1) Get screwed, or 2) Score a big gain, and 3) Die young of heart failure. Another rule: Never trade in the first hour the market opens unless you are liquidating an overnight position. I use a lot of technical indicator mumbo jumbo, but I find it relatively useless in this market. Just buy low, sell high. If the trade turns against you sell for a loss and live to fight another day, but don't sell too early. Set your stops so that the stock has room to wiggle. Sell short *and* long to make money both ways. Buy options for leverage. I tend to do this more for short plays, because options have a fixed downside compared to a short sale, margin is a bitch, and lots of stocks have had short restrictions lately (if you can find shares to short!) Also, be keenly aware of the federal regulations involving day trading (e.g. settled money, minimum balances, buying power). I learned a lot of these the hard way. Profits have been down this week but I am still green for the week and overall. The market tends to move *very* quickly when it does move and my biggest failing over the week has been being away from my computer during the day's high/low and not having a sell order in place because I wanted to "let it run" and it runs against me in a matter of minutes. This is why I've had small gains when I could have had large ones. Example: Stock opens at 14. Buy stock at 13.50. Stock drops to 12.50 (still not 10%). Keep holding. Stock moves to 14.50. Adjust Example: Stock opens at 14. Buy stock at 13. Stock drops to 12 (still not 10% from 13). Keep holding. Stock moves to 14.50. Adjust bottom stop all the way to, say 14, but don't have a limit sell in because I want to see if it hits 15 and "I can always sell on the way down". Go make coffee (or something) secure that my profit is "locked in" (it's not going to fall .50 in 15 minutes and I have a sell in at 14). Get back and see that it's trading at have a stop sell in at 14). Get back and see that it's trading at 14.30. Shit. Okay. Just sell. Type type type. Order in. Buy the time it executes stock is at 14.20. Take small(er) profit and be thankful. Stock closes at 14 again. Realize that SOB stock actually went all the way to 14.70 while I was away. Curse fricking $500 cup of coffee. This has happened more than once and I need to pay more careful attention. Daytrading is sometimes all about a few moments in a long trading day. \_ Where do you read about the federal rules? I understand there is a 3-day settlement period on trades (ie, the money from is not available for buying for 3 days) , but trading on margin takes care of this? \_ Yes, you pretty much need a margin account or else you need to trade less frequently or with a smaller % of your capital. This is because of Reg T (free ride). You will also need a $25K minimum balance and be aware that buying power for daytrading is 4x but if you hold overnight it is only 2x. Calculating exactly how much $$$ you can trade with without a call cqn be nasty. Your broker can help you and I understand some online brokerages do this math for you but mine doesn't. \_ You are daytrading on margin?? Please post to the motd the day you go broke, which will probably be sooner rather than later. \_ You pretty much *have* to daytrade on margin, brainiac. This is because of the regulations mentioned above. However, it doesn't mean what you think it does. Trading on margin doesn't necessarily mean I: 1) Trade more than the cash value of my account, or 2) Pay interest. For example, let us say I have $100K in my account. I buy stock XYZ for $40K. I sell it later that day for $60K. Then I buy ABC for $40K and sell it for $60K the same day. Using a cash account I can only execute one more trade that day (for $20K) and indeed for the next 3 days until settlement even though I made $40K because you have to use settled funds to trade. A margin account avoids all of that, because when you buy on margin you don't have to wait for settlement. Anything else you don't know that I can help you with? \_ MS as in Morgan Stanley or Microsoft? \_ If you have to ask this you are not ready for my advice. \_ Ah, get off yer high horse. This is the motd. Not that I was planning to day trade anyway. |
2008/10/23-28 [Finance/Investment] UID:51649 Activity:nil |
10/23 http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ8os6vTknLk&refer=home Greenspan Concedes He `Found a Flaw' in His Free-Market Ideology Oh man, I can't wait to socialize the entire nation. I'm tired of people who got rich by the virtue of being lucky. \_ You're such a player-hater. Being rich from being lucky, that's something we should tolerate (maybe envy) but tolerate. Being rich by crushing those beneath them, intolerable. Being rich and avoiding paying reasonable taxes, intolerable. Being rich through theft, intolerable. We should work toward leveling opportunities, not unreasonable confiscation. \_ How about being rich by winning the sperm lottery? Or is that just another variant of being rich by being lucky? \_ I addressed that by saying we should work toward leveling opportunities. Sizeable inheritance tax is in order. \_ Troll+++ |
2008/10/20-21 [Finance/Investment] UID:51585 Activity:nil |
10/19 Oldie but goodie: Don't borrow (leverage up) to buy stocks http://www.youtube.com/watch?v=MTCKxye9_so |
2008/10/19-21 [Finance/Investment] UID:51583 Activity:nil |
10/19 MacGruber checks his stock portfolio http://tinyurl.com/5c9e2b (hulu.com) |
2008/10/19-21 [Finance/Investment] UID:51576 Activity:moderate |
10/18 http://www.chrismartenson.com/blog/money-stampeding-out-market/7452 \_ All that cash just sitting on the sidelines now getting 3% is going to end up being put to use somewhere. What do you think investors are going to do with it, buy houses? \_ what's the next bubble? \_ Guns and canned food? \_ I don't know. I think "alternative energy" is probably a good candidate. What about you, what do you think? |
2008/10/19-23 [Finance/Investment] UID:51574 Activity:nil |
10/19 http://tinyurl.com/5nhbdg (fool.com) Response to Buffet's "buy equities you fucks" op-ed letter |
2008/10/17-21 [Finance/Investment] UID:51571 Activity:kinda low |
10/17 http://www.chicagobusiness.com/cgi-bin/news.pl?id=31449 44-year-old veteran trader kills self after losing several million daytrading S&P 500 futures on Wed. \_ And we should pity gamblers because ...... \_ Because he worked very hard like many Americans do. \_ Most Americans don't live on gambling. \_ What's fundamentally different between a Math PhD at Goldman Sachs doing numerical analysis to beat the market vs. a stock broker who uses his superior understanding of psychology to beat the market? \_ Neither of them are doing anything particularly useful, so no, not fundamendally different. \_ who says we are pitying da foo'? \- nouriel roubini has killed himself: http://gawker.com/5064429/nick-denton-is-an-anti+semite-with-a-nazi-mind |
2008/10/17-20 [Finance/Investment] UID:51567 Activity:nil |
10/17 Up up and away: http://www.theatlantic.com/issues/99sep/9909dow.htm |
2008/10/17-20 [Finance/Investment] UID:51561 Activity:nil |
10/17 Buffet: Buy stocks now you fucks </troll> \_ http://www.nytimes.com/2008/10/17/opinion/17buffett.html \_ I was about to post this as well. "I've been buying American stocks. This is my personal account I'm talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities." |
2008/10/17-22 [Finance/Investment] UID:51559 Activity:kinda low |
10/22 How many people here still day trade (compared to the dot-com days when almost everyone played)? \_ it's too dangerous right now. \_ looks like only Thu was an OpEx up day - but expectation was met \_ Dude, I just *started* day trading. It's an awesome environment to trade in. These wild, crazy swings up and down are great for trading! I can make $1000/day easy. I can see why some people get overconfident and quit their day jobs. I'm just enjoying it while it lasts. \_ What are you betting on these days? I'm too chicken so I only do QQQQ and DIA and I'm actually doing OK with the predictable fluctuations. In addition I'm trading such low volume that if I get screwed, I'll just hold on for 5-20 years and will still be ok. \_ Just close out your position at the end of each day and you'll never be screwed. I place stops to limit losses. The bad part is that I miss big gaps up at open. The good part is that I miss big gaps down at open. \_ But you end up paying transaction fees. \_ 1. I get free trades through my broker. 2. Even if I didn't, you think I am going to sweat a $20 fee to make $1000+? It's not as many trades as you think. 2-4 per day is all I need. You can keep changing the stops and limits all you want and it's still the same "trade" if it doesn't execute. \_ Doesn't the capital gains tax make your gains go away for the most part? \_ No more than it does for other income. |
2008/10/17-20 [Finance/Investment] UID:51557 Activity:nil |
10/16 http://www.dnaindia.com/report.asp?newsid=1198779&pageid=0 Okay, here's one emerging mkts article. I'm not offering it to support my case--just take it as a data point. \_ There is no evidence of leverage here, just a flight to quality, which is occuring in markets worldwide. |
2008/10/15-20 [Finance/Investment] UID:51535 Activity:moderate |
10/14 DJIA and S&P500 suffer worst 1-day percentage declines since 1987 Black Monday crash. \_ It's all ACORN's fault. \_ You laugh, but the market is clearly terrified that there is going to be Obama Socialism in America. \_ Clearly! Why just the other day the market and I were having dinner and after it had a few too many glasses of wine it sheepishly admitted that while things may have been rough lately, what with the housing market and all, what really was worrying it, deep down inside, was the prospect of Obama Socialism in America. really kept it up at night was the prospect of Obama Socialism in America. It took real willpower not to pat it on the hand and say "It's ok, we've all known this about you for a while now. There's nothing to be ashamed of." \_ Yeah, that damn socialist might bail out the largest insurance company in the world, or *nationalize the banks*! Oh wait... \_ sorry about my earlier post where I had written something like "get rid of 50% more on some multi-week rally". I had originally meant to write "get rid of 50% on some rally which may last from 1 day to a few months". I'm sticking to my original thesis: this fucker can collapse at ANY moment, and, you may see REAL panic selling, and panic or not, the strong likelihood is it's going down. -op \_ I bought today. If tomorrow is a bad day I will buy more. I'm making money with these fluctuations by trading, but I still have the majority of my $$$ "buy and hold". I'm down on the year because of that, but I'm not 64 so I don't sweat it. \_ an excellent way to approach this. as long as you have a model. i'm all in favor of keeping 80% in "safety", and 20% doing whatever the hell you want. although I would have liquidated that 80% a few weeks ago when I mentioned it and had it ready to buy now at lower prices. \_ "Had it ready" is not the same as buying. Or is it? \_ let's put it this way: if you had sold when I said, you would currently be very right. \_ I don't believe you (or anyone else) can time the markets. However, you can do an analysis and realize that a global recession isn't the end of corporate earnings for many, many businesses and that the markets are reacting to fear and uncertainty instead of acting rationally. That's the time to make smart purchases. Many companies might see growth slow or sales decline, but that doesn't necessarily dictate a 50% drop in stock value. I wouldn't touch most banks with a 10 foot pole right now, but people are still going to drink beer, get laid, buy aspirin, etc. KO (which I do not own) fell 34% this year because why? No good reason. Even if sales slowed a little (which they didn't) you've got to be kidding me... You wait for the rally to buy. I'll buy before the rally and lock in some really nice dividend yields while I'm at it. I figure in another 10-15 years my dividends will be yielding double figures based on what I bought some stocks for. Some are already close. Sure, the dividends might be cut some near-term, but I don't sweat that. \_ see my post "clearly what I am saying". I agree with you on many points, actually. the biggest place where we differ is what "timing the market" means, but we can agree to disagree. \_ What do Soros and Buffett do except time the market? \_ I don't know about Soros, but Buffett looks at long-term potential and doesn't worry about what the markets overall will do tomorrow or 3 months from now. \_ He holds onto his cash and waits to buy when he sees good values. I don't know how you can call that anything but "timing." \_ I'm on the same boat as you are, and I can hold for a very long time, though if the market goes down 15% more, I'd be a little bit worried because I'd have to keep buying until... I run out, and god knows how low it's gonna get. My gutsy feeling is that we're already hitting the bottom, though, if it goes down say, 30-50% more, I'd be very very anxious. But like you said, I'm not 64 so I got a few decades to wait, so that is good news. \_ This is called "testing the bottom." \_ clearly what I am saying is that there is a strong likelihood that bottom will fail from 1 day to x months from now. that's a thesis that may be totally wrong, but i do believe it. I also believe there is great merit to the "buy well- diversified value stocks in businesses you understand" model of investment--there's nothing wrong with that. Index and targeted retirement funds though ... of investment--there's nothing wrong with that. to put it most clearly, the conclusion one could have reached not too long ago was: "My investments are excellent and diversified. The stock will outperform. However, the market is overleveraged, and as funds and other financial entities delever out of the market to raise cash in a multi-year, global credit deleveraging (with all its associated nastiness) I will move out into cash and replace it into the same stocks at a lower entry point, maximizing my long-term compounded gains. When is that entry point? Well, let's start with the idea that it's a multi-year slow down ..." btw, I'm also the guy who posted about traders expecting a bounce tomorrow, Fri, or both, as Fri is OpEx day. Yes, I'm playing with my 20% money. bounce tomorrow, Fri, or both, as Fri is OpEx day. today, funds shat out of overlevered energy and commodity based equity investments at a "high price", because they believe in the multi-year thesis too. I wonder how long it will take to purge all the levered emerging market bets. \_ What makes you believe that there are levered EM bets? To me, China looks like it has the healthiest balance sheet of any economy period right now. \_ EM in general will continue to get super-smacked by credit deleveraging. as far as fund investment, "hot" areas, like energy, commods and EM, were all levered up. what i said was that, of these 3, EM has furthest to go \_ Why do you think that EM is levered? You still have not answered this question, just restated that you are convinced that it is true. Stocks generally are hard to leverage, unlike those other asset classes. \_ okay you got me there. all i've got is that general feeling based on the forums I troll. |
2008/10/15-17 [Finance/Investment] UID:51534 Activity:nil |
10/14 Stocks down further. Are you avoiding a falling knife, or or going in because it may have bottomed out already? Discuss. \_ You worry about those fighters! I'll worry about the tower! <groan> \_ Millenium Falcon == bond traders/market \_ Traders are expecting Thu, Fri, or both to be significant "up" days as Fri is an OpEx day. Sticksave announcements or significant LIBOR contraction therefore need to happen from now through Monday morning for us to keep this propped up. (what we do not need is another bank/country going critical). Economic numbers were horrible this morning. \_ What does OpEx mean? Options Expiry? |
2008/10/14-17 [Finance, Finance/Investment] UID:51515 Activity:low |
10/14 Too much debt from law school? Be a prostitute! link:www.mercurynews.com/crime/ci_10622483?nclick_check=1 \_ This link is not working? \_ Clearly the lesson here is that you should only study something if you're rich! \_ heard of "Go to grad school only if you can afford it" ? \_ In what way does your statement contradict mine? \_ At least it's honest work. \_ Bah, they're getting her on tax evasion! Fer chrissake. \_ I love how she ended up marrying a rich Dot Commer. I personally would have liked to hit that. http://preview.tinyurl.com/473r48 (NSFW) \_ That link doesn't work. This does: http://insiderescortsecrets.com/wordpress/tag/touchofbrazilnet It would be nice to screw a lawyer instead of the opposite for a change. \_ Weird, it worked this morning. Someone must have gotten it pulled. |
2008/10/13-15 [Finance/Investment] UID:51495 Activity:nil 63%like:51494 |
10/13 Paul Krugman's Nobel Prize, you heard it here first: *Boredcast Message from 'psb': Tue Oct 7 13:13:54 2008 || i wonder if the nobel people will give PKRUGMAN the econ prize || as a way of sticking it to BUSHCO || well the econ nobel people || http://nobelprize.org/nobel_prizes/economics/laureates/2008 Good informal commentary at: http://tinyurl.com/3ewln8 [tyler cowan] This is also an intereting essay for PK fans: http://web.mit.edu/krugman/www/howiwork.html Given all the yammering from Ben Stein lately, it is time to recycle this: http://delong.typepad.com/sdj/2005/06/a_missing_piece.html \_ The already insane have gone insane: http://delong.typepad.com/sdj/2008/10/crooked-timber.html |
2008/10/13-15 [Politics/Foreign/Canada, Finance/Investment] UID:51492 Activity:low |
10/12 Is http://kitco.com a good website to trade precious metal with? \_ How many manhole covers did you steal today? :-) \_ Are you trying to be funny? How is this "clever" or "funny"? |
2008/10/11-15 [Industry/Startup, Finance/Investment] UID:51477 Activity:nil |
10/11 "Firms Try to Shore Up Incentive Pay" http://online.wsj.com/article/SB122358951896420723.html?mod=yhoofront Good news for us. |
2008/10/10-15 [Finance/Banking, Finance/Investment] UID:51472 Activity:nil |
10/10 http://www.nytimes.com/2008/10/10/opinion/10mulligan.html The Economy is just fine, really. |
2008/10/8-9 [Finance/Investment] UID:51439 Activity:nil |
10/8 Stock market finally getting to about where it should be http://captaincapitalism.blogspot.com/2008/10/stock-market-is-about-where-it-should.html \_ This person is an idiot. Even he is right about this (which I doubt). For instance he also is a global warming denier. \_ So should I buy stocks now? It's so low and tempting... |
2008/10/8-9 [Reference/RealEstate, Finance/Investment] UID:51438 Activity:nil |
10/8 Fed cuts interest rate by 1.5%. It's going to save the housing market! Yeah baby! Good job! Make America an ownership society! http://www.bankrate.com/brm/news/fed/main-surprise.asp http://www.bankrate.com/brm/news/fed/winners-losers_surprise.asp |
2008/10/8-9 [Finance, Finance/Investment] UID:51437 Activity:low |
10/8 Curious, how does our economy today compare to Japan's economy 10-15 years ago? I heard that they had a housing crises as well in the old days where home values dropped over 50% of the value and had an extended (decade long) recession. Is this true? What are some similarities and differences between our current economy and Japan's economy 10-15 years ago? \_ U.S.: No savers, reserve currency, natural resources, WMDs Japan: Savers, carry currency, export driven, no WMDs Common: Housing bubble, equity bubble, zombie banks \_ Not bad. You get a B+. \_ A big difference is that Japan has declining population, with low birth rates and virtually no immigration. -tom \_ Japan has no gay people, just like Iran. \_ http://www.japanboyz.com BTW what does this have to do with their economy anyway? \_ We should be able to export gay porn and build our economy that way, an option that was not open to the Japanese. \_ Have you heard of yaoi? |
2008/10/8-9 [Finance/Banking, Finance/Investment] UID:51429 Activity:kinda low 80%like:51427 |
10/8 Coordinated intl rate cuts Ten year note up significantly even though equities down -> potential "game over" (or ass-raping) scenario In case anyone didn't see it yet, please see "Stock tip 3" from two days ago \_ I asked and he doesn't know what he's talking about. Now what? You didn't give a single advice. \_ well, my advice from 3 weeks ago was for the desired safe part of your portfolio to be out 33% at 11388. I said back then that this market could shitnap at any time so it was time to sell the pop the next day. My advice in "Stock tip 3" is: Don't go "all-in long" now in case you're thinking about it. Should you sell now, now that we're down to 9,270? It's your call, but do your research and ask me a fundamentals question. At this point I won't tell you to sell (but I will tell you to "don't buy" index funds or the equivalent). Actually, I will say I would go 80% into safe money right the fuck now, but I'm not going to tell you to do that. It's your money. \_ I think it's time to buy. The market has overreacted. \_ dude, the tip is: LEH CDS settlement in TWO FUCKING DAYS. you don't hear this in mainstream news. i haven't been playing a game with you guys for the last three months. \_ what is LEH CDS \_ lehman credit default swap settlement financial institutions (including insurance co.'s) will need significant cash to pay off insurance on Lehman debt and other securities as a result of LEH bankruptcy. these swaps are held around the world. \_ oh i thought that all got sold to barclays \_ only brokerage piece, because that has a whole bunch of regular-investor money, I believe \_ This is already priced in, imho. \_ okay, I'm glad you're thinking though. IMO you stand a better chance than people who haven't done enough research to confidently say that. \_ do you think the solvent finance firms will ask for a gov. loan to help cover the costs of buying the former assets of Lehman at firesale prices? that would be ironic. \_ if no one objects, sure! solvent financial entities will be getting a whole lot of free money. -op \_ Well, I thought so last week and I was obviously wrong. I am about 90% in right now and really itching to go "all in" but the 10% that is still out is my wife's IRA and she won't give the go ahead. At some point I will start selling bonds and buying stock, but I will probably wait until Q1 for that. To clarify, I mean "all in" for the 65% of my capital that I risk in the equity markets. I always keep about 6 months cash (that works out to about 10%) 10% in US Bonds and 15% in CA munis. \_ marital bliss >> possible equity gain besides, you already are 90% in. you'll be a hero if you can sell at a good price. a hero if you can sell at profit. \_ I am pretty sure that by the time I retire the stock market will be higher than it is today. \_ ^will be higher^return better than CD rates -op \_ Since the dividend yield on the SPY alone is equal to current CD alone is close to current CD rates, it is hard to imagine how I could go wrong. I guess all the companies in the S&P 500 could cut or eliminate dividends. |
2008/10/8-9 [Finance/Investment] UID:51428 Activity:nil |
10/8 By the time the next president takes office, President George W. Bush may have earned the dubious honor of being the first president to see the Dow Jones Industrial Average fall, on a percentage basis, during his two terms of service, in almost 90 years. http://preview.tinyurl.com/4wzjws \) what's the point of saying "on a percentage basis"? \_ what's the point of saying "on a percentage basis"? \_ The Dow never fell before? |
2008/10/8 [Finance/Investment] UID:51427 Activity:nil 80%like:51429 |
10/8 Coordinated intl rate cuts In case anyone didn't see it yet, please see "Stock tip 3" from two days ago \_ I asked and he doesn't know what he's talking about. Now what? You didn't give a single advice. \_ well, my advice from two weeks ago was for the desired safe part of your portfolio to be out 33% at 11388. |
2008/10/7-9 [Finance/Investment] UID:51412 Activity:nil |
10/6 Stock prices are really low. Is now a good time to buy stocks? GOOG is only $350 now. What do you guys think? \_ I think it's going to go lower. \_ If you're going to invest in stocks right now, your primary consideration should be that the companies you invest in should be companies which are likely to survive or thrive in an extended economic downturn. My guess would be that this market is going to go down more before it goes up, but I wouldn't bother trying to time it; invest in good companies and you'll be OK. -tom \_ like tom wrote, just see how TM did relative to the Nikkei 225 from it's peak. use http://finance.yahoo.com. its peak. use http://finance.yahoo.com. ob TM != GOOG, but someone find a better example. |
2008/10/7-9 [Finance/Investment] UID:51411 Activity:nil |
10/6 Financial advice from our good 'ol Ben Stein: http://finance.yahoo.com/expert/article/yourlife/112984 \_ Finally a reason to agree with Ben Stein, at least mostly. \_ A broken clock is right twice a day. I'm sure Stein supported most of the things he's now decrying. -tom \_ ob the asspounding he was getting for the last year or so on finance segments \_ Total agreement. -pp |
2008/10/6-9 [Finance/Investment, Finance/Banking] UID:51397 Activity:nil |
10/6 Stock tip 3: Ask your professional financial advisor how "LEH CDS settlement this Friday might affect my portfolio". If he doesn't know what you're talking about ... |
2008/10/6-9 [Finance/Investment] UID:51395 Activity:nil |
10/6 Jim Cramer: All Your Stock Are Belong To Us http://www.msnbc.msn.com/id/27045699 \_ Any money you need in the next five years does not belong in the stock market. This is always true, not just today. |
2008/10/6-9 [Finance/Investment] UID:51393 Activity:low |
10/5 http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQdenm7JAur8 35-year-old former Goldman VP Neel Kashkari to head new dept in charge of $700B bailout fund - known as The Office of Financial Stability \_ ob he worked in the IT department! -op \_ did he really? \_ http://www.reuters.com/article/newsOne/idUSTRE4950BS20081006 \_ No. He worked in IT investment securities. \_ He should hire Angry Sysadmin to help him. |
2008/10/6-9 [Finance/Investment] UID:51392 Activity:nil |
10/5 This American Life has a great (and extremely scary) podcast on the commercial paper market, credit default swaps, and the current financial armageddon. Worth an hour of your time... http://www.thislife.org/Radio_Episode.aspx?episode=365 \_ one important mistake early in the program: the host says no one wants to buy MBS/CDO. This is not correct. the banks don't want to sell them at market prices, because then they wouldn't have assets to mark to model with. so, the govt gives them free money and everyone's golden. \_ Most of the program was about CDS, not MBS. This is an important distinction. \_ true. but he can't fuck up the MBS/CDO intro. \_ also, if you have iTunes go look up Bloomberg on the Economy podcast, the one with Nouriel Roubini last week. It's even better IMO. \_ Is that the NYU economist who thinks we're all headed for the Stone Age next year? That guy is really depressing. I hope he's not right. \_ Stone Age? He said in the show that he's long equities and does not believe in timing the market. Go listen. What have you learned about trading stocks if not: Don't get emotional. |
2008/10/5-9 [Recreation/Dating, Finance/Investment] UID:51385 Activity:nil |
10/5 http://tinyurl.com/3l6dsz Behold, the list of companies affected by LEH bankruptcy and the cash amounts. CDS settlement this Friday! |
2008/10/3-6 [Industry/Startup, Finance/Investment] UID:51367 Activity:nil |
10/3 Stock tip 2: Lifetime of this pump will be much more short lived than people might expect. (I.e., do not go all in long, although you could do so if you put in some stops--but that isn't long, is it? times like this are where the phrase "don't try to time the market" originate from) \_ Stock tip A: VIX levels like this are only seen at the top or the bottom of the market. We know we are not at the top, so... \_ Stock tip mu: Ignore stock advice based on technical factors given by random hosers. \_ VIX is a measure of put and call options based on volume and difference from fair value. Notice how shorts are prohibited for about a 1,000 stocks? They're all in options now. Stock tip mu guy is right--you'd be hosed if you didn't understand this. -op \_ VIX has nothing to do with "fair value" whatever that means: http://preview.tinyurl.com/4exdqx \_ http://www.investopedia.com/terms/f/fairvalue.asp ok, probably the wrong term, but let's just say, "the current market price of the underlying" \_ Lifetime of the pump after House passage was assured: 0 minutes. -op |
2008/10/3-6 [Finance/Banking, Finance/Investment] UID:51363 Activity:nil |
10/3 House passes bailout by significant margin. Guys, THINK about your long-term equity investments. You'll have PLENTY of people to blame in the near future, but where will your money have gone? Please consider the advice of a professional financial advisor, too, but in the end, it's YOUR MONEY. Practical advice: If you're not sure, move part into safety. \_ Coherence isn't your strong point is it? \_ WHAT is your problem dude? \_ At 3% CD rates, subtracting taxes and inflation, you are losing about 2%/yr with your cash position. This is a guaranteed way to end up poor in your old age. Is that what you want? I have gone from 0->$1M in 10 years, how have you done? \_ Past performance is not a predictor of future results. The specific reasons why have been what all my posts for the last two months have been about. I won't argue with you if you are confident in what you're doing. Good luck. I sincerely hope you do well in your investments. \_ Good luck to you, too. I think you should spend some more time thinking about how to hedge against what imho is the inevitable dollar devaluation to come. Sitting in Treasuries is not going to cut it. \_ thanks. fyi, that's exactly what I'm working on. \_ I am buying lots of TIPS and have for a while now. If the dollar falls then inflation should rise. \_ This is not a bad call, but I assume you know about the "upfront tax" costs of a TIP. This is not an issue in a IRA. |
2008/10/2-6 [Finance/Investment] UID:51355 Activity:low |
10/2 Prison Mackerel economics http://online.wsj.com/article/SB122290720439096481.html \- hello the famous paper in this spirit is: http://www.albany.edu/~mirer/eco110/pow.html it is somewhat odd that paper is not referenced in the article. http://www.jstor.org/pss/2550133 it is somewhat odd that paper is not referenced in the article. tnx. \_ I'd love to pay strippers with mackerels \_ I love the idea that it was chosen as currency because noone actually wants to eat that crap. \_ I don't get that part. Cigs were used because they were extremely valuable to many people. Why would you use something with no particular value, that isn't backed up by anything? \_ If you think of cigs as the gold standard, mackerels are now more of a free-floating economy. That said, they're very similar to greenbacks: they're not in infinite supply; they have no intrinsic value by themselves, though they _can_ be eaten if it comes to that (much as you _can_ heat or wall- paper your house with dollar bills if it comes to that); and they can be traded for services because there are people who will pretend that they have value. Added bonus: they're of use and value as themselves to people who want to build muscle, so you're getting in the good graces of big dudes when you trade them to them. Big dudes are their own kind of currency in the joint. \_ So wait, smokers who go to prison my immediately go cold turkey now? |
2008/10/2-6 [Finance/Investment] UID:51348 Activity:low |
10/2 Why is it I see on TV about all the J6P's talking about how their 401(k) has blown up implying they couldn't do anything about it. Like they didn't realize they could login (or call their broker) and transfer some or all into the 401(k)'s money market fund? Well, you guys, Berkeley grads, know you can do that right? I'm talking about 401(k), not IRA or your personal stock portfolio. \_ Yes they can transfer, but isn't it too late to transfer after it has blown up? \_ well, guess it was more of a rhetorical question. I already have my own answer. anyways, investment tip guys: "repricing of U.S. credit" - you may be hearing this in the future. I have not read this phrase anywhere else, yet. (in fact there are 0 phrase matches on google) (disclaimer: this is not a suggestion to plow everything into random foreign stock markets. instead, you are all berkeley grads and can create your own model about how this will evidence itself in market indicators and impacts your investments.) \_ What do you think this will do to the value of the dollar? \_ in the short term, the value of the dollar is being driven up by financial entities delevering dollar-denom investments and fear that more european banks won't survive the delevering. in the medium term ... also keep in mind that smart money right now is trying to figure out if there is anything safer than long-term U.S. Treasuries (and there may not be--but the general hedge of reallocation has been going on for some time) hedge of reallocation has been going on for ~1-2 yrs) \_ The "smart money" was busy buying MBS last year. \_ and the 3-5 years before that (volume wise). the topic is not whether this is "smart", but how you stay ahead of the game. \_ Not every 401k is the same. For instance, at my old company the only 401k option was company stock. Not all are so restrictive, but there are at least some without a money market or equivalent fund. |
2008/10/2-4 [Finance, Finance/Investment] UID:51344 Activity:nil |
10/1 "Maria Sharapova could be yours for a cool $10,000" - Y! Sports Blogs http://www.csua.org/u/mi8 So affordable. I wonder what the rate is for not-cute-but-busty Serena Williams. |
2008/9/30-10/4 [Finance/Investment] UID:51332 Activity:nil |
9/30 Mommy, why is GOOG closing at 320 in my brokerage account and why is http://finance.yahoo.com showing it real-time as 298, both with spike volume at the close? At least NASDAQ is investigating ... ob GOOG to 100 guy, was that you? \_ official closing price of 341 -op \_ NASDAQ busts all trades below $400 at close. Official close is $400.52. -op \_ Yeah, I finally covered my short at a small gain. Damn that NASDAQ! |
2008/9/24-29 [Finance/Investment] UID:51274 Activity:nil |
9/23 btw, the 9/23 video for http://market-ticker.denninger.net is pretty good |
2008/9/23-29 [Finance/Investment] UID:51268 Activity:nil |
9/23 hey bought GS @ 100 guy. Mr. Buffett is buying preferreds. Time to sell before everyone realizes that preferreds are dilutative. (Good job.) \_ You know, I might just do that. I was buying an IB, not a bank. \_ Should have sold at $135. \_ It is trading at $135 in afterhours, you know. \_ It is trading at $135 in afterhours, you know. I'll call my broker and dump it. \_ I didn't know, but sounds like a good time to get out. You can always buy back in if you feel this is a long-term hold, but if you just wanted a trade I'd bail with the 35% gain. |
2008/9/23-29 [Finance/Banking, Finance/Investment] UID:51267 Activity:nil |
9/22 Roaring 20s --> Great Depression Roaring Millenium --> Great Depression II \_ does our state have a BUDGET yet? More concerning is we are about to hand $700B to one person and our Fed chief Ben Bernanke fully supports this idea--and if you Dems, Republicans, and libertarians haven't figured out by now: He who controls the money has the power. \_ Oh, I get it! In our crisis, we're appointing a Dictator. \_ but he knows much more about finances than you do and he wants to help you \_ Right after he helps himself and his former i-banking buddies. \_ but Ben Bernanke supports the plan, and he has a Ph.D. in Economics from MIT, did his dissertation on the Great Depression, got his B.S. in Economics from Harvard, was class valedictorian and got the highest score on the SAT in his state when he took it. He wrote three books on macroeconomics! He chaired the Princeton Economics dept for 7 years before joining the Fed! \_ Obviously smart and probably knows much more about economics than I do. Perhaps not very wise, though. \_ the idea that turning ONE knob in a stereo system to make it sound pleasing to everyone, is ridiculous. \_ huh? \_ Hey, we could have had Harriet Miers. \_ Should he have seen this coming? He sure didn't seem to from his past comments. Not that I'm blaming him per se, since this is really complicated and unpredictable stuff, but I don't feel like any of these guys are sure how this plan is really going to turn out. So it's basically a $700 B hunch/prayer. \_ "Large amounts of risk, particularly credit risk, have become concentrated in the hands of relatively few derivatives dealers, who in addition trade extensively with one other. The troubles of one could quickly infect the others.... [leveraged] derivatives severely curtail the ability of regulators to curb leverage and generally get their arms around the risk profiles of banks, insurers and other financial institutions. Similarly, even experienced investors and analysts encounter major problems in analyzing the financial condition of firms that are heavily involved with derivatives contracts. The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal." --Warren Buffett, 2002 [Yes, he should have seen it coming. -tom] \_ Predictions are all fine and good, and someone is bound to get it right, but I don't think anyone really saw it coming to this extent. \_ Buffett wasn't making a prediction; he was describing a risk. A large portion of his business is managing risk, and he's very good at it. He didn't say "in fall 2007, some weird activity by hedge funds will trigger a liquidity crisis which will eventually cause multiple major financial institutions to fail during calendar 2008." He simply pointed out that the proliferation of derivitive contracts in a deregulated financial market set up a situation where numerous institutions were taking on risks they could not measure, and declaring assets they could not quantify, and that it was likely that some trigger event would cause massive problems for the entire industry. And it's not like there wasn't any warning; the LTCM bailout was a foreshock that was pretty much ignored. -tom \_ He described a risk and predicted it would cause pain in the industry. I'm just saying no one really thought it would cause this much pain. Anyway, back to the real point -- if the guys on top didn't clearly see this coming, then they probably don't clearly see a way out. \_ Or more likely, they just didn't care, since it's "not my problem." \_ The Invisible Hand will take care of it. |
2008/9/22-29 [Finance/Investment] UID:51259 Activity:nil |
9/22 What caused the Great Depression? Is it happening now? http://yanswersblog.com/index.php/archives/2008/09/19/ask-mike-what-caused-the-great-depression |
2008/9/22-23 [Finance/Banking, Finance/Investment] UID:51254 Activity:kinda low |
9/21 Krugman on the Paulson "Plan": http://www.nytimes.com/2008/09/22/opinion/22krugman.html "... it will be crippled by inadequate capital unless the federal government hugely overpays for the assets it buys, giving financial firms  and their stockholders and executives  a giant windfall at taxpayer expense....if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to  a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place." \- i dont think PAULSON is too bad, but this clearly has to be decided by more than 1-2 people no matter who they are. and this is one case where diversity would be a good thing, i.e. not ideal if the dems say shoved RRUBIN into the process [also a GS elite then to citgroup] ... better to have LSUMMERS, NROUBINI, PVOLKER, JSTIGLITZ and various other non-tainted, not-super-ideological finance or macro academics ... probably cant involve people now in the private sector like MDELRAN]. \_ I'd be all for this if they included a provision limiting the pay of every employee of these firms to 100k, just this year. |
2008/9/19-23 [Politics/Foreign/Europe, Finance/Investment] UID:51240 Activity:nil |
9/19 bumped for discussion: \_ My financial advisor says to not try and time the market. \_ what else did your financial advisor say? did you ask them about getting more of your portfolio into safer, lower yielding assets? \_ No, actually he told me that the latest recommendations for someone my age was to be 50% in overseas stocks. He also seems to think that I have a bit too much in dividend paying blue chips and that I should buy more small caps, but he hasn't said anything like that in a few months. He also said that there was no reason to be concerned about Pimco Total Return anymore, since the Fed guaranteed all the FNM debt. \_ re PIMCO Total Return: - ask him why funds seem to be selling agency paper this week if there is no risk - ask him what about the MBSs inside re overseas: - what is the breakdown by country/region? (Europe/UK/Japan/China/India/etc.?) \_ Can regular individual give PIMCO money to manage or is it just for the super-rich and institutions? \_ Anyone can buy Pimco Total Return, it is the largest fund overall, in terms of assets. Ticker is PTRAX. \_ Get him as your advisor yourself and ask him all these questions if you are so curious. Who told you that funds are selling all this agency paper? I just looked and it looks like PTRAX is 80% in cash right now anyway. I will eventually ask him the country by country breakdown, probably by email next week. If you are curious, I can post it to the motd. |
2008/9/18-23 [Finance/Investment] UID:51230 Activity:kinda low |
9/18 Here's your pop. This may last from 1 to x days/months. Please consult a professional financial advisor. (I personally would sell ~15% of whatever I wanted to end up being safe on tomorrow's peak, and more later if the market continued up. This RTC plan is going to levitate the market again for an undetermined amount of time *if* it gets implemented. if it gets held up ...) \_ When will be the peak tomorrow? \_ Today was +3.86% in DJIA. Expect up to +4%, then look for resistance on upward movement. Largest volume occurs in the last 1-2 hours, so you could wait for that too. Then again, remember I said we can shitnap at any time, starting \_ Today was +3.86% in DJIA. Expect +0 to +4%, then look for resistance on upward movement. Finally, largest volume occurs in the last 1-2 hours, so you could wait for that too. Then again, remember I said we can shitnap at anytime, starting tomorrow. My personal opinion based on what I know and not based on technical analysis is "the dislocation is going to happen sooner than people think". What this means is I would be out 16% tomorrow on a +2% pop and 16% every other day there is a +2% pop from my last sale price, six times, until I am 100% safe. That is, if I wanted 80% safe I would be moving 16% of that 80% on each move. And my 20% whatever the hell I wanted to do with it. fyi if you do the math this means I would be completely done with my 80% safety portfolio at DJIA 12,388. I hope you will get the chance to liquidate 66% (4 moves out of 6). You can modify to suit your tastes, but the generail idea is: - You believe this will be a temporary uptrend - You have a disciplined plan to re-allocate - You don't swing in and out of trades - You're not putting MORE money into stocks other than in the speculative side of your portfolio - You have some model of where you will re-enter markets again, like the 50DMA/200DMA +1% cross that I mentioned All of the above is worth what you paid for it: Please consult a professional financial advisor. \_ My financial advisor says to not try and time the market. |
2008/9/18-19 [Computer/Rants, Finance/Investment] UID:51223 Activity:kinda low |
9/18 Easy advice 2. If you have PIMCO, please consult a professional financial advisor about whether to move ALL of that PIMCO money into cash or a mostly Treasury-backed bond fund (note to avoid agency paper, MBS, and swaps with major banks, ESPECIALLY investment banks). I got my wife to sell all her PIMCO today; I originally said to sell after the FNM/FRE bailout. Also read today's latest PIMCO news and how Bill Gross is feeling. Yes, a lot of institutional funds (including pension/retirement) have PIMCO. \_ There are a lot of different Pimco funds, what are you talking about? All of them? \_ the ones with lots of MBS and agency paper. Total Return is one. \_ I see your point, though this stuff looks like it is backed by the US government at this point. How is it different than a T-Bill? |
2008/9/17-19 [Finance/Investment] UID:51207 Activity:high |
9/17 Guys, several days ago I posted (not on soda) that confidence was severely shaken in the financial markets and this effect would be long-lasting. Today, there is almost a sense of panic among U.S. investment bankers, traders, and politicians in the finance/banking committees. You know what white collar workers are thinking by virtue of being one. Note I am not telling you what to do, just giving you data points. \_ I believe in the 2G currency in our new economy: gold and guns \_ What exactly will this lower confidence mean? What exactly does "confidence in the financial markets" mean? \_ http://market-ticker.denninger.net -op \_ Ok, America government is totally fucked. What is new? Should we stock up food and ammos? What's your advice? \_ you've been given the tools. i posted to motd at least three times on 8/21, 8/22, and 9/10 about this, and I got yelled at then and I got yelled at after the market dropped. i posted because i would've felt guilty if i didn't give you guys a warning. i did, three times. i have not gloated at all. what should you do? do some research, and come back in a few days with a proposal -op \_ 1) Liquidate 2} Buy bonds 3) open up Swiss accounts \_ I like the Find Your Russian Beauty ad to the right. \_ I bought 100 shares of GS for $100 today. All kinds of stocks are on discount, I can barely contain myself. "Be greedy when others are fearful." -Warren Buffet on discount, I can barely contain myself. Anyone with half a brain takes this as an opportunity to buy. "Be Greedy When Others Are Fearful" - Warren Buffet \_ That assumes you know something other people don't. Investors are punishing all financials now because no one knows who's telling the truth anymore. Do you have inside sources or do a lot of your own research? Otherwise you might want to stick to a more diversified strategy. \_ hey, he's up $14. Well, only $10 if you count afterhours. who knows, if the stock goes up to $130 tomorrow that's a $30K profit. \_ You added a zero. \_ oops, should be $3K. silly me I thought he put in $100K into GS. \_ I know that Paulson, who is an ex-CEO of GS, is the Secretary of the Treasury. I know enough about how Wall Street (and the world in general) to know that he won't let his former pals down. I also know that it is better to move contrary to the herd, having sold my overinflated <DEAD>dot.com<DEAD> stock in 2000. But I sometimes move early, I admit. \_ You might be interested to know that Warren Buffet is not buying investment banks right now. The rumor is that he called them a "falling knife". I considered buying GS, but I think their prospects are uncertain. People on Wall Street think we are not near the end of this mess. As far as GS fell, they are still only at a 3 year low. What you need to do is buy stocks that fell because of sheer sympathy and I don't think that qualifies GS. \_ Yeah, this one is "mad money" and is already down again today. I am mostly in boring dividend paying stocks like KO and PM and GE. Got any other suggestions? \_ MON? \_ I heard GE gets over 50% of its profits, revenue, or something from its finance divisions. Which is probably why it got punished more than you'd otherwise expect. \- are you thinking of GE capital? GE capital isnt finance in teh sense of retail loans and such. for example they used to own a huge fraction of shipping containers in the world. \_ Where did you hear that? I read in the WSJ that they got 25% of their profits from that division last year, so that part might be down. It is still a steal at current prices. I just bought some EWG, too. \_ I'd say GS starts to get interesting in the low 90s and is a definite buy at 85. \_ How did you calculate those price points? \_ It's up to $135 now. WTF in their right mind would buy at $135 in this market? Sure, it's lower than it was but no effing way. I am curious if the guy who bought at $100 is out now. \_ No, I am just happy that I got some stock in such a great institution at such a low price. Though I am temted to sell some calls at this level to lock in some of my gain. |
2008/9/17-19 [Finance/Investment] UID:51204 Activity:nil |
9/17 Okay, easy stuff first. If you are invested in a "targeted retirement" fund (where it auto-allocates into stocks/bonds/money markets depending on your age), it is currently cornholing you in both eye sockets and will assfuck you for years to come. As of this year, new employees are auto-enrolled into the 401(k), typically with 100% allocation to this type of fund. This is a SCAM. Also, I have NOT seen a single news article (and I read a lot) criticizing the safety of this type of fund. \_ What's your gripe? My only gripe with these types of funds is that they are too conservative. I want to be 80% equities now, 10 years from now, and 10 years into retirement. \_ what KIND of equities and bonds are these funds buying ... \_ The same kind that other funds are buying. A lot of these targeted funds are "funds of funds". \_ so we're saying the equities ultimately bought should perform at least as well as a DJI or S&P index? (minus fees or if they're being run in a riskier fashion, some amount above or below a DJI/S&P index? by riskier, I mean you are in a retire-in-30 years fund, so conventional wisdom is not only can they allocate you to more stocks, but they can allocate you into "growth stocks" and "emerging market") |
2008/9/15 [Finance/Banking, Industry/Startup, Finance/Investment] UID:51169 Activity:nil 58%like:51173 |
9/15 Fed now accepts equity (company stock) as collateral for loans. Yay! |
2008/9/11-17 [Finance/Investment] UID:51132 Activity:nil |
9/10 Guys, have you moved 50% of your 401(k) and IRA out of equities and into high quality bonds or Treasury-based money markets? I'm not kidding. Here you are, arguing about Obama, McCain, and Palin, and your money is disappearing. \_ What are you talking about? My portfolio looks fine. \_ good. now what about the rest of you? all the equity-based choices in my 401(k) plan are all negative 3-month and 1-year. \_ You're an idiot. \_ are you angry about something? \_ You don't think the President has influence over the economy? \_ I don't either can stop the multi-year move in equities. \_ I don't think either can stop the multi-year move in equities. \_ No, I have the same allocation I always have, which is 6 mos living expenses in CDs, 20% of my total investment portfolio in CA Munis (taxable part, of course) about 10% more in high quality bonds and 70% in stocks. I am leaning way toward blue chip dividend paying stocks though, but I have been in a multi-year move in that direction. I saw the financials ready to blow up over a year ago. I am down a bit from the top, but not losing any sleep over it. Oh, I also am heavily invested overseas and I recommend you do the same. \_ IMO, your equity allocation is too high (assuming you are in index funds), and I personally have been shorting emerging markets. I do agree that you aren't too far away from what a professional financial advisor would suggest; but I'm saying CFPs are wrong. \_ I am not in index funds, as I said, I am leaning heavily towards profitable companies with little debt who pay a big dividend and are either located outside the US or do most of their business outside the US. I am starting to doubt the "great decoupling" theory though. \_ ok. i hope your portfolio does not get pulled down with the rest of the market (even if they are profitable blue chips with little debt). FYI, China and Japan are going in the toilet. European, especially UK banks are arguably in more trouble than the U.S. financial system. \_ I hope you are not still sitting out the month the market goes up 20%, which it inevitably will, sooner or later. How are you going to decide to jump back in? \_ when the 50DMA increases past the 200DMA by 1% |
2008/9/11-18 [Finance/Investment] UID:51130 Activity:nil |
9/11 Thanks Bushies, for nationalizing F&F to bail out China: http://preview.tinyurl.com/65a5lz (WSJ) \_ I think it was a bipartisan failure. \_ Congress gave Hank the gun, but isn't Hank the one who fired it? Guns don't kill people--people do! |
2008/9/8-14 [Finance/Investment] UID:51098 Activity:nil |
9/8 My company stock is really low right now and I'd like to buy stocks. However, I think I am subject to this "Quiet Period" contract I signed. Does the quiet period prohibit me from buying, selling, shorting, or all of the above? Where do I find out more information? Thanks. \_ Read the contract. -tom \_ what tom said. but generally, if you are not an officer, director, or have >= 10% of the company's shares but are a regular employee, it is STILL insider trading if you trade based on "material non-public information". In practice this means squishing depends on: - how closely your bet was to some major product announcement/ buy-out/order/etc. - e-mail evidence of your receipt of non-public info - magnitude and rate of stock price change - how much money you made - how many other people traded on the inside information - one data point: an nvidia engineer got nailed for a $60K profit on a trade from ~ $76 -> $118 in which the deal announcement was made within 1 week of the buy. 14 other nvidia employees were also charged. that was in 2000. \_ you cant but CEO can and that is what he is doing right now then he'll buy them back toward the end after you all sold your stocks.. then buy them and put out good news to raise stock price \_ According to tom CEOs don't buy stock because they are already compensated in stock. |
2008/8/29-9/3 [Recreation/Food, Finance/Investment] UID:50999 Activity:nil |
8/29 I'm a Googler. I'm also one of the most senior Googlers and I barely joined in 2005. A bunch of old timers, esp. those before 2003 dumped their options a while ago. One guy I know became a real estate developer. Another started his own coffee shop. Another guy is traveling around the world. There were also quite a few who went in stealth mode trying to start their own companies. Ya know, when a bunch of old farts realized they could pursue their lifelong dreams without financial worries, they simply dumped their stocks and did what anyone else would do. Pursuing their dreams. Most of them loved pre 2004 Google but wanted to pursue their dreams even more. I presume this is common everywhere else even Microsoft in the heydays. People may call the liquidation of stocks "insider trading." I think it's normal in a successful company that has become too successful. Ya know, I joined late and I'm not a millionaire, but if I were in their shoes, I'd do the exact same thing. I'd love to open up my own coffee shop. I hate tech. Fuck tech. Bye for now. \_ Coffee shops are not capital intensive enterprises. You probably can own one if you want to. Joe Blow employee is not usually an insider, by the way. We're talking about officers, directors, board members, and so on. \_ But living well on the income from a coffee shop is hard. It is nice to be able to do somthing you want to do and not have to worry about making money. |
2008/8/26-9/3 [Finance/Investment, Industry/Startup] UID:50970 Activity:moderate |
8/26 I just bought GOOG at 500 last week, WHY IS IT DOWN??? What's up? I don't see any news that would indicate that it's in trouble. Argh! -newbie investor \_ http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=324097 Opinion: Why Google has lost its mojo -- and why you should care Sorry. You should have shorted it. \_ that article is awful. \_ if you're going to freak out every time a stock you own goes down, you shouldn't be investing in the stock market. What's your time horizon on GOOG? -tom \_ I'm looking at maybe 5 years? -op \_ So don't worry about the stock price. Do you think the company has changed since last week? -tom \_ No, but it's possible sentiment has. GOOG was driven to heights by investor sentiment more than by any actual quantitative analysis. Number of insider buys over the last year: 0. 399 sells, though. \_ GOOG was driven to heights by making enormous gobs of money. They appear to still be making enormous gobs of money. If you believe they will stop making money, sell. If you believe they'll continue to grow and make more money, don't worry about the stock price. "In the short term, the stock market is a voting machine, in the long term, it's a weighing machine. --Buffett". -tom \_ Interesting that insiders don't see it as a buy, but as a sell. As for the long term, how did GOOG do 5 years ago? Oh wait, it wasn't around. Nice quote from Buffett. I doubt he owns GOOG. \_ Isn't this what they mean when they say "X continues to defy analysts expectations"? \_ Why would insiders buy, when they already have stock built into their compensation package? And of course insiders sell; that's what happens when you use stock or stock options as part of compensation. Microsoft had 77k shares purchased, 40 million shares sold by insiders. That has nothing to do with the propsects of the company; it just has to do with whether people's options are above water or not. -tom \_ Would you buy if you strongly felt it would double in a year and the market was undervaluing it? I'm not saying it's a predictor necessarily, but 399 sells and 0 buys doesn't fill me with warm fuzzies. \_ you really have no idea what you're talking about. -tom \_ Nice rebuttal. Did you spend all day coming up with that? Maybe you should read some of these papers: http://tinyurl.com/5ahs5d One of his conclusions: "This paper provides evidence that insiders possess, and trade upon, knowledge of specific and economically-significant forthcoming accounting disclosures as long as two years prior to the disclosure. Stock sales by insiders increase three to nine quarters prior to a break in a string of consecutive increases in quarterly earnings. Insider stock sales are greater for growth firms, before a longer period of declining earnings, and when the earnings decline the break is greater. Consistent with avoiding an established legal jeopardy, there is little abnormal selling in the two quarters immediately prior to the break." Another addressing the <DEAD>dot.com<DEAD> bubble: "Furthermore, stock corrections after the bubble burst are strongly negatively associated with estimated levels of earnings management and insider selling during the bubble." \_ how about this: find a technology company that uses stock-based compensation, that has gone up in stock price over the past year, that doesn't have a huge amount of insider selling. -tom \_ That's the catch. If the stock went up significantly then why would they buy? It's already higher than their built-in price target. If you only look at companies whose stock has gone up of course you will find few buyers: It's overpriced! Why not find one which has few sales, or at least a better ratio than 399:0? AAPL has had some inside buyers. I am not sure GOOG has ever had an insider buy. (Not that I could find.) Are you implying this guy's research is garbage? It implies that insiders trade on knowledge they have, which anyone with common sense would think is a sound conclusion. Compare AAPL to GOOG. AAPL has some buyers. I am not sure GOOG has ever had an inside buy. conclusion. \_ In the last 6 months Apple has zero insider purchases and > 1 million shares sold by insiders (14.6% of the total insider holdings). That's just what happens when stocks go up. That doesn't mean the stock is overpriced; it means that people are exercising options and having to sell to cover taxes, or just taking profits. If you are getting stock-based compensation, it's probably a stupid idea to buy more stock in your company; you should be diversifying. -tom \_ AAPL has had zero insider buys and over 1 million shares sold in the past 6 months (16% of insider holdings). That's just what happens when you have stock-based compensation; people sell to cover taxes on their option exercises, or they just take profits. It is generally stupid to buy stock in your company when you already get paid partly in stock; you should diversify. -tom \_ shouldn't you be shorting GOOG at 100 ? \_ I'm not the short GOOG at 100 guy -op, different guy |
2008/8/26-9/3 [Finance/Investment] UID:50969 Activity:nil |
8/26 I just place limit buy on Etrade for X amount worth of $$$ but I don't actually have X amount in the trading account. What would happen if the order actually executes? Do I owe Etrade a steep % of interest or it gets taken out magically from my savings/checking accounts? \_ The buy probably doesn't execute, unless you have a margin account with them. \_ I'm going to guess that you get as many shares as you have $$$ for, but it's possible it will execute and you will have to fund the account ASAP (plus fees, I'm sure). This will depend on your brokerage, so ask them and not us. |
2008/8/15-21 [Finance/Investment, Science/GlobalWarming] UID:50873 Activity:nil |
8/14 http://preview.tinyurl.com/5frn2e He buried the lede: "The purchasing power of the typical worker has now fallen back to 1998 levels, despite a 29% increase in productivity over that period." \_ It's just another sign of the ongoing third-worldization of the US. Concentration of wealth in the hands of the elite, less social mobility, no middle class, decreased access to medicine and education. Third-worldization. \_ *yawn* \_ Excellent ... - mr. burns \_ This only happens when the Republicans are in power. Hopefully not for too much longer. |
2008/8/12-18 [Finance/CC, Finance/Investment] UID:50852 Activity:high |
8/11 Our Phony Economy http://harpers.org/archive/2008/06/0082042 \_ This is an outstanding article. My hope for Obama is that he could become the first serious politician on either side of the aisle to challenge the assumption that GDP growth shoulds of the aisle to challenge the assumption that GDP growth should be our primary metric of success. -tom \_ Success is how many countries we can free from TYRANTS and AXIS OF EVIL in this world. \_ Given the success of a $ measurement of "the economy", perhaps the fix is to provide $ values for the things that have been left out? Estimates of the value of "health", "environment" and "resources"? \_ This article doesn't mention any concepts not taught in Econ 1. Every economist knows these things. I'm not sure what's so great about the article or how it really addresses what's wrong with measuring the growth of the economy via GDP. An $800 pair of shoes *does* contribute 40x more to the economy than a $20 pair of shoes. \_ Proving you don't know what you are talking about. If I buy an 800 dollar pair of shoes and wear them once or twice less is added to the economy then if 40 people buy 20 dollar shoes and use them to be more productive as people with shoes can contribute more to the economy than people without shoes, they can walk longer distances, are less likely to hurt themselves, etc etc. Big luxury items don't create as much wealth as a simaler level of basic needs. That's not to say they don't contribute ANYTHING. \_ You have it BACKWARDS. It's called Demand and Supply (or it should have been). How are you going to make those other people buy the 40 pairs of shoes because you've given up the $800 pair? People make their own decisions about what to buy, which leads to demand, which is fulfilled by supply. Now if you think 40 x $20 shoes >> $800, then you let us know when you come up with a new mathematical model that is internally consistent, which somehow awards bonus dollars for having been bought by the noble and now magically more productive. Also, do you think people buy a $20 pair of shoes and then say, oh, I can be so much more productive now. No, poor people without shoes with an entrepreneurial bent decide to take a chance and make some money, then realize they can be more productive with shoes, and so buy a pair. The whole theory is backwards. \_ Why are you assuming people are attacking capatalism? Noone is trying to say people shouldn't buy luxuries. People are saying when the economy becomes too geared towards buying and selling luxuries that do not generate work in and of themselves that an economy suffers, even if the GDP is still going up. \_ This doesn't make sense. Nothing generates work in and of themselves. "Real GDP" going up means there is more overall value in the country, regardless of what it was. The market is better at deciding value than you are. A real problem that is mentioned in the article is when "commons" damage is not accounted for. \_ Please provide some proof that the market is "better at deciding value than you are." That's merely an assertion. -tom \_ America = free market, the strongest nation in the world. You're an idiot. Go back to Russia. \_ America = democracy, the largst government in the world, therefore the most central control of spending. I see you are totally incapable of arguing your point. -tom \_ Well, is it just a coincidence that market- based economies outperform planned economies? Were those planned economies just unfortunately saddled with the wrong planners? But let me put it another way: it's not so important that the market is better at it. It's that *I* am better at deciding what's valuable *to me* than you are. And when we all do that it's called a market. \_ Is Bernake a market planner? There are aspects of planning in all Western countries, and aspects of market economies in Cuba and China. Are we outperforming China right now? By what metric? It has already \_ China mysteriously has been doing *far* better since they reformed their system to incorporate market principles beginning in 1978. Chinese people are the biggest fans of the free market in the world. http://preview.tinyurl.com/bgprg been proven that groups of individuals making "rational" decisions for them as individuals can produce negative results for the entire system. And the use of GDP as a proxy for success has problems well beyond the problems of the commons or of incomplete information; the use of GDP as a proxy for success places a value judgement on monetary transactions-- monetary transactions are inherently more valuable than non-monetary transactions. Buying food is valued more highly than growing your own. Paying $1000 for a cat is valued more highly than adopting a stray. It is clear that dialog and politics in the US are beholden to these values, but it is not at all clear that they produce good results for the society. -tom \_ If you have $1000 and you adopt a stray cat then you have $1000 to spend on something else. The $1000 doesn't go away unless you stuff it in your mattress. \_ All economies are planned, to a certain extent. The best performing economies over the long run are mixed economies, apparently ones with a bit more central planning than in the US. See Sweden vs. US long term median per capita salary growth. Even in per capita GDP they pretty much equal us, with a more evenly distributed income structure and less income volatility. \_ Sweden and the US still have roughly similar economic structures: market based democracy plus socialist programs. Sweden and the US have too many other differences... the US gets huge numbers of poor immigrants. \_ I don't really disagree, but then again the Democrats and Republicans don't really disagree either. What's 30% vs. 40% state control of the economy? Mostly, a tempest in a teapot, but listening to FOX NEWS, you would think it was the difference between liberty and slavery. \_ Who says what's more productive? That's USSR mentality. If someone wants $800 shoes, why not? The money doesn't disappear: the shoe makers profit and buy stuff from others etc. and people are happier. That guy had to first come up with the $800 somewhere too, probably doing something productive somewhere in that chain. \_ Do you have a problem with reading comprehension? Noone said you shouldn't be able to buy 800 dollar shoes. But 800 dollar shoes do not help the economy as much as 40 $20 shoes, assuming 40 $20 shoes are used in the manner most people use them. Just like buying a 500k supercar doesn't help as much 30 people buying middle of the road vehicles that let them be more productive. If you don't understand that you have no bussiness saying the article writer doesn't know what they are talking about. \_ Can you prove that people are happier because they have $800 shoes? Because all the attempts to measure how happy people are have found little or no correlation between the number of luxury items someone has and their level of happiness. America has gotten ridiculously wealthy in the past 60 years and has not gotten any happier. I think discussing what is or isn't more "productive" is totally missing the point; the purpose of our country isn't to produce as much as it possibly can, the purpose is to promote the general welfare of the people. The assumption built into much of our discussion is that growing the GDP is equivalent to promoting the general welfare, but there is really no evidence that the two are equivalent or even correlated. -tom \_ Says Comrade Tom \_ You have no substance. -tom \_ ,. ^_^ ., <-------- tom _ .' '. _ /\) (/\ / / \ \ ( Y) (Y ) \_ The point is people buy what they want. Whether they are happy or not is beside the point. It might be found that slaves were happier as slaves than free men. \_ Actually, whether we are happy is exactly the point. Would you prefer a large and growing economy where everyone is unhappy, or a static economy where everyone is happy? Getting rid of weekends would do a great job of growing the economy, but it would not be of societal benefit. The point is that growth of the economy is not equivalent to improvement of the country. -tom \_ Getting rid of weekends would be a planned totalitarian move, not a market action. Would it really grow the economy, I'm not so sure... people need days off for errands, shopping, and recreation which generates a lot of GDP. Of course it's better if we're happy. Maybe we should put antidepressant drugs in municipal water supplies? You can't make everyone happy though. Which country is so ideal in this regard? This country has a highly stressed cultural fabric. We have many different races and cultures which contributes to isolation and lack of unity. This is just the nature of our nation and has little to do with markets. Anyway, people seem pretty happy to me. \_ You know that the "free market" didn't invent the weekend, right? -tom \_ Huh? That $800 already exists in the pocket of someone. Whichever way they spend it is going to put $800 in the pocket of the shoe company (for sake of argument let's say the same company makes $800 snakeskin boots and $20 rubber shoes) which will be used to pay wages and investors who will then spend the money as they see fit. It doesn't really matter what they buy with that $800 as long as they spend it instead of saving it. In fact, since luxury items have a higher markup you might argue that luxury items have an environmental benefit because it's less harm to the environment to make one pair of snakeskin boots versus 40 pairs of rubber shoes. Same with your car example. One supercar is better for the environment. \_ Wealthy people spend money on vehicles that pollute more. Look at Larry and Sergey. They got 2 Prii but decided to get a modified 757 instead of LearJet/CitationX which are more efficient. Also jets carrying 2-4 people have horrible mileage compared to automobiles, yet, they choose to fly frequently. $$$ = more usage = more waste = more pollution. \_ side note: it is fucking stupid to pluralize "prius" as "prii". -tom \_ Priusen \_ But shoes have value. If you take a man with no shoes and give him a pair of cheap shoes he is better equiped to create wealth. Probably more wealth than those shoes cost in the first place. Luxury goods, on the other hand, don't add as much beyond their purchase price. You know the whole concept that money makes money? It's not as productive if all that money is being spent on is luxuries. That millionaire is going to spend his $$$ on something and 30 middle-of-the-road vehicle is not as efficient. He's not going to give the $500K to someone else, which is an assumption you seem to make. However, the $500K ends up in the economy in either case where it gets spent on other goods and services, perhaps on middle-of-the-road vehicles purchased by the people who made the supercar. \_ Sure it is, because it ends up in the same place either way - in the pockets of the people who made the goods. How does a millionaire buying 40 pairs of $20 shoes contribute more to the economy than the same millionaire buying one pair of $800 shoes? It doesn't. \_ Generally utilitarian items are used more productivly than luxuries. Are you really this stupid? Items used friviously have less benefit to an economy than items used productivly. Expensive luxuries are much more likely to be used friviously. And that's a problem in economies where the wealth is concentrated among a small portion. Yes, they will spend money. Yes that money will go to people who spend money. But most of the money stays in the small percentage it will be spent on luxuries it won't be as beneficial to the economy as a whole creating less wealth than if the money was being spent productivly. \_ Virtually all shoes are luxuries. You can buy sturdy utilitarian shoes for $10 on sale or $20 new. People choose fashionable ones as luxuries. Luxuries make people's lives happier. This is good: we're not all working for the glory of the fatherland. Demand for luxuries creates demand for productive stuff to make those luxuries and people jobs. We're far past the point of struggling for really basic stuff like a pair of shoes (most of us anyway). It's all about improving quality of life now. Wealth concentration is a separate issue from whether GDP growth in luxuries is somehow bad for the economy. Trade imbalances are bad, wealth concentration is bad. Economic activity good. \_ You have a hard time with reading comprehension. \_ No, this person is apparently just missing the point.. Hey you! Another, hopefully clearer, analogy: is $10k of medicine which keeps a scientist alive, who makes a key breakthrough that makes cars 10% more efficient MORE or LESS "economically beneficial" than some rich doofus spending $10k on designer toilet paper? Which is the better Hey you! Another, hopefully clearer, analogy: is $10k of medicine which keeps a scientist alive, who makes a key breakthrough that makes cars 10% more efficient MORE or LESS "economically beneficial" than some rich doofus spending $10k on designer toilet paper? Which is the better allocation of the $10k resource? Which benefits society in general more? Which individual is "happier"? YES, the $10k is given to someone either way, and is "recycled", but the HUMAN EFFORT required to earn the $10k is WASTED in one case and BENEFITS SOCIETY in the other. more? Which individual is "happier"? YES, the $10k is given to someone either way, and is "recycled", but the HUMAN EFFORT required to earn the $10k is WASTED in one case and BENEFITS SOCIETY in the other. \_ This is fallacious. The $10k is not either spent on saving a scientist or someone's luxury. There are enough resources for both things to happen. You also \_ But there are not resources enough for EVERYTHING to happen. The key point is to maximize benefit of resources expended. $10k designer toilet paper is of less benefit than $10k of beneficial preventative immunizations, since you apparently don't like scientists. Same with $800 pair of luxury shoes vs. 40 pair of $20 utility shoes. The market sometimes does a very poor job of maximizing benefit. \_ The market does a better job than any other method can. It's not 100% efficient, but as close to it as one can get. \_ Maybe, or maybe not, but GDB does not measure many economic goods with value, as this article points out. It is broken. points out. It is broken. \_ Your theory says this. But the reality is that the market is better at optimizing distribution of some resources and that community decision making (democracy) is better in other cases. don't know ahead of time whether medical spending will keep someone alive or that someone will do something good. Maybe scientist will actually go nuts and SHOOT everyone in his lab thereby HARMING SOCIETY. And at the end of the day, what do we get out of the efficient cars? Cars are luxuries too. They are mostly conveniences for people. Aren't we all supposed to move to the city and use mass transit? \_ Look, you don't know what you talking about and you are either trolling or stupid. You also seem to think that our point is that everyone should live in a communist society with no luxuries. That's not what anyone is saying. So take off your blinders and read the whole thread again or just please die. \_ Here we go with ad hominem SPLUTTERING. Nice job, fuckface. Your argument is totally disingenuous. What you're really getting at is wealth equalization, and hinting at some sort of eugenics- based resource allocation. The guy buying ridiculous luxuries is doing that because he's an EVIL RICH BASTARD. \_ How did you ever pass the reading comprehension CAT tests? \_ Maybe you just don't get it. What is the point of all the "productive spending"? what is it all for? at the top of the food chain is luxury. You don't even make sense. "most of the money stays in the small percentage it will be spent on luxuries" What? speak English. \_ 30-40% of growth in healthcare doesn't have to mean we're getting more sick. It may mean we're just more and more focused on being healthier. \_ Or getting ripped off more and more by the insurance companies. \_ And this is the point of the article: GDP, by itself, with no analysis of where the money is going, is not itself an indicator of efficiency or success. A more meaningful figure would include an analysis of American health, and corruption and inefficiency in the healthcare industry. \_ That's a straw man argument. No one claimed GDP growth measures efficiency, quality of life, or "success" (whatever that means). However, a larger GDP almost by definition means a larger economy and a larger economy means, again almost by definition, more goods and services produced. Think of it as "economic capacity" or "economic capability". A larger GDP nation can outproduce a smaller one, whether all those goods and services go to one individual (dictatorship), everyone (communism), or are distributed by the free market (capitalism). \_ Read the article. The author argues that when the govt. says that the economy is strong based solely on GDP, that is a meaningless simplification. Yes, a _significantly_ higher GDP demonstrates the difference between a modern industrialized nation and a third-world developing nation. However, if the President says the economy is strong because GDP has increased half a percent, what does that mean? Does it mean people paid more money for the same amount of gas (money that goes directly into the pockets of the House of Saud)? Does it mean more people are eating out? Does it mean that it was hotter this summer so ice cream sales are on the rise? It might mean any of the above or none at all. At small levels of difference, it's a meaningless stat. \_ But it's a straw man argument, because no one is saying that GDP by itself is so incredibly meaningful. This is mentioned in Econ 1, as are externalities. Real GDP versus nominal GDP are also basic concepts. So this genius author points out something every Econ 1 student learns - that there are limitations and caveats when measuring economic output and that GDP (even Real GDP) alone doesn't tell the whole story. BFD. Even the Wikipedia article on GDP talks about its limitations. There was nothing interesting or novel in that article. \_ Sweet mother of god, this guy is not talking about people who've taken Econ 101, he's talking about politicians who wave around a 1-point increase in GDP as if it's the holy fucking grail. \_ So you're damning a statistic and centuries of economics on measuring econ output because Bush and other policticians are abusing the term? and other politicians are abusing the term? \_ Did you read the article? \_ I don't know if he did, but I did and it was full of crap like (coming full circle) the specious argument about $800 shoes somehow contributing less than 40 pairs of $20 shoes. He worries that "[t]he money in the big pot could be going to cancer treatments or casinos, violent video games or usurious credit-card rates." Yes, it could. So what? It's still economic output. Somehow "violent video games" are a lesser form of economic output or something? It sounds like he wants to characterize what is "good spending" and what is not. In fact, he goes so far as to say that people are not rational with their expenditures. Presumably they would be a lot happier if he made their expenditures for them? He speculates that marriage is a threat to GDP because there's no divorce spending? Is he on crack? The money that isn't spent on divorce will be spent on something else (or invested). It doesn't disappear and will be reflected in the GDP either way as the person who receives it will then make his own economic decisions. Economics is not about value judgements. His article boils down to: "People don't spend their money the way I think they should." No wonder Tom likes it. \_ His point was that touting an increase in the GDP as some sort of indicator of the health of the nation is overly simplistic and meaningless. We're measuring throughput while ignoring destination. We don't know if the end result is investment in our own economy (yay!) or pools full of diamonds in Riyadh (boo). He's saying that we \_ GDP includes an exports minus imports in the equation. Consumption isn't a one way street. To pay for diamonds in Riyadh requires spending money. need to assess more than just the amount of money that trades hands. That's not the same as a "planned economy" a la Stalin or Mao; it's arming the consumer with tools for making more informed choices. His point about divorce was an obvious exaggeration designed to show that an activity which increases money flowing from one set of hands to another is not necessarily an indicator of a a healthy economy; it's an indicator of nothing more than money moving. I don't see where you see this ominous shadow of socialism that seems to have you in a tizzy. I don't see anything anti- capitalism in wanting to know where the money's flowing; if anything, I think it's the basis for the purest capitalism. \_ Nothing wrong with knowing where the money is flowing, but what does it matter? His undertone is that it's not necessarily flowing where it should be. He can't make that call. Divorces make plenty of people happy. Recall the days before they were common. I can sell you a service and then you can sell me one back. It's not "nothing more than money moving". Two services were performed. \_ Do you think that having two parents working and paying a nanny to raise the kids is inherently better for the country than having one parent stay home? -tom \_ No idea and, unlike you, I don't profess to know. However, if parents are doing it then they must feel it benefits them and their family. \_ The problem is, because we are measuring our success by GDP, we create political, economic, and social incentives to make the choice to outsource parenting. Prior to Keynes, families with two working parents were virtually unheard of; now they are the common case. It's fallacious to consider this the result of the free market, except insofar as free market ideology values monetary transactions and thus encourages them. You get what you measure. -tom \_ Uh, that's not due to measuring GDP. Those incentives exist anyway. Prior to Keynes women couldn't even vote in general and their economic opportunities were culturally limited. How do you propose to "get the women back in the kitchen"? \_ Look, it's simple; the metric you use to measure success has effects on behavior. This is self-evident. The primary measure we have used to measure success of the country in the past 60 years has been GDP. It is not at all coincidental that the society we have built in that time values consumption, planned osbolescence, and outsourcing. Those are predictable effects of using GDP to measure success. The point is, no one ever bothered to prove that we'd be better off with GDP as our primary success metric. And it's not clear that we are. -tom \_ Dude, you are way out on a wobbly limb here. The BEA uses GDP as a measurement of economic strength. You'll have a hard time proving that individual purchasing and business decisions are somehow tied to that measuring stick. Consumers and corporations aren't making decisions based on how they affect GDP. GDP reflects the decisions. It doesn't drive them. \_ The incentives our society puts in place are based on how they affect GDP. Individual decisions are skewed based on those incentives. -tom \_ I assume you are referring to interest rates when you say incentives? I think your position is untenable. Rates are determined by a lot more than just GDP and it's not clear to what extent monetary policy affects the economy. (See Japan's 0% rates and yet sluggish economy.) You are reaching. _/ Why would you assume I'm referring to interest rates? I'm referring to an enormous number of decisions around taxation, subsidy, and policy. For example, farm subsidies for factory farms. "Get big or get out." Subsidy for the road system, while passenger rail is starved. Oil subsidies. The military- industrial complex. Allowing obnoxious advertising virtually everywhere. Christ, the week after 9/11 there were press conferences that weren't about terrorism or security, they were about "America: Open For Business!" All these things are in support of the idea that more consumption is better. You can't go through an election cycle without hearing virtually every politician talk about "growing the economy" and "creating jobs"; no one even suggests that growing the economy might not be the right goal. -tom \_ Please provide proof that any of these are tied to a large extent to the way that GDP is measured. I mean, seriously, how does the way GDP is measured lead to the decision (if it's even true, which is its own argument) to subsidize roads versus rail? How would you change the way GDP is measured in order to get the "correct" result? mean, seriously, how does the way GDP is measured lead to the decision (if it's even true, which is its own discussion) to subsidize roads versus rail? How would you change the way GDP is measured in order to get the "correct" result? \_ hi dim! \_ I'm not talking about changing the way GDP is measured, I'm talking about changing the way *success* is measured. Success is measured in the US by GDP growth, therefore politicians make decisions which encourage GDP growth. An auto-based culture has many more transactions than a transit-based culture; its inefficiency "creates jobs" and therefore is good if you're measuring success by GDP. -tom good if y good if you measure success by GDP. -tom \_ What you are missing, just like before, is that *if* a mass-transit-based culture has fewer transactions and/or smaller transactions (not necessarily true) then that leaves more resources to spend on other projects, which makes the GDP pretty much unchanged as compared to auto-based. These are not decisions that affect the size of GDP. These are distribution decisions: how do we spend the GDP that we are capable of generating. \_ What *you* are missing is that GDP is the result of labor, and that the US systematically encourages choices which result in increased labor. For example, if someone stays home with the kids, that family will have less income and spend less money. If someone decides to take a lower-paying job so he doesn't have to commute an hour each way, the family will have less income. If someone decides to work a part-time job because he really enjoys working in the garden, and is able to provide a good percentage of the food the family consumes, the family will have less income. In all these scenarios, the family spends less and thus contributes less to GDP. It's not a zero-sum game. Why should Americans work more hours and have less vacation than Europeans? Shouldn't our excees capacity be used at least partly to give people more leisure time? -tom \_ That's not some official policy. That's just economics. Yes, choosing to work less results in less output. If you work a good job you can afford to have lots of free time if you want. Maybe our capacity isn't as excess as it seems... tons of people are in debt. Maybe it's a function of our banking industry which idolizes debt. Debt pushes up money supply and inflates everything. We have to go into debt to compete for resources against everyone else who is in debt, working off their monthly payments. We're all indentured to banks. people are in debt. Americans don't like to "do without". \_ Our use of GDP as a measure for success is not merely an official policy; it is deeply ingrained in our culture. The idea that more is always better has been so effectively sold to us that most Americans accept the idea as axiomatic. It's not. There is no reason why Americans need to use 2-3 times more resources per capita than Europeans; we just assume that the ways we do things are the best ways, because that's the way we've "always" done it. -tom \_ It's not just us. Immigrants who come here lap it up. And they all use GDP to measure their econs. \_ GDP is a decent measurement of the size of an economy. It's not clear it's a good measurement of the *success* of an economy. -tom \_ You are just wrong about there being centuries of measuring economic statistics. This stuff was practically invented by FDR and his economists. Keynes is considered the father of Macroeconomics. |
2008/8/7-10 [Finance/Banking, Finance/Investment] UID:50808 Activity:nil |
8/6 The Financial Times has published an excellent series of articles on the root causes of the current financial crises and suggestions of what to do next (not light reading): http://www.ft.com/cms/s/0/a09f751e-6187-11dd-af94-000077b07658.html http://www.ft.com/cms/s/0/cc160f46-624f-11dd-9ff9-000077b07658.html http://www.ft.com/cms/s/0/d13db7bc-638a-11dd-844f-0000779fd18c.html http://www.ft.com/cms/s/0/794801a8-63e8-11dd-844f-0000779fd18c.html \_ didn't the FT publish an article a few months ago about ROGUE COMPUTERS that forced Moodys to grade bonds as AAA ? \- people you want to read and listen to who are not as well-known as WBUFFET: Bill Gross, Martin Wolf, Md El-Erian. \_ root cause == real estate bubble, infection of monetary institutions with bonds backed by real estate solution == stuff the bad bonds and future mortgages into FNM/FRE and bill the taxpayer for any losses who benefited == finance guys, real estate agents, mortgage brokers \_ also: conservative ideologues who use the governmental debt they manufactured as an excuse to cut government services. -tom \_ There are more government services now than ever before. |
2008/7/24-28 [Finance/Banking, Finance/Investment] UID:50680 Activity:nil |
7/24 Hope none of you or your relatives have > $100K in checking+savings+ CDs or any bonds/stock in Downey S&L or WaMu. Friday night is bank failure night. \_ URL? \_ http://preview.tinyurl.com/6m9suj (NYT) S.E.C. Warns Wall Street: Stop Spreading the False Rumors \_ This says nothing about Downey or WaMu. More URL? |
2008/7/16-23 [Politics/Domestic/President/Bush, Finance/Investment] UID:50595 Activity:nil |
7/16 Yes let's start making interest rate super low and make it super easy to get loans so that every American can own a home! Go for it Greenspan, and keep it up Bernanke. "We're creating...an ownership society in this country, where more Americans than ever will be able to open up their door where they live and say, welcome to my house, welcome to my piece of property," Bush said in October 2004. http://www.thenation.com/doc/20080218/klein http://www.tompaine.com/articles/what_ownership_society.php http://query.nytimes.com/gst/fullpage.html?res=9B03E6DE153FF933A15751C1A9659C8B63 Please don't f***ing paste your f***ing CATO links here, thank you. \_ All of that started in 1996. \_ It is all Bill Clinton's fault. \_ related to the carbon emission thread above. This is the perfect time for US to curb consumer behaviors. we can now impose heavy taxes on housing that has sq.feet per person larger than a a preset limit, *AND* we can impose rules on developers that mediem house size to a fixed sq feet. China has similiar regulation already in place to curb large houses. Time for US to do something similiar. |
2008/7/16-23 [Politics/Domestic/SocialSecurity, Finance/Investment] UID:50587 Activity:nil |
7/15 My mom's fixed annuity is maturing and we're wondering what we should be doing with it. She's 70 and we gotta put the money where it is safe (no stock market, no 401k). What are some good choices to make now, considering that the US economy is failing and the banking industry is fubar? \_ I would buy another fixed annuity with enough of it so that annuity + SS = bare bones enough to live off of, put half the rest into a CA Muni ladder (or bond fund, if you have less than $1/4M to do this right) and buy an index fund with the rest. She is still too young to get 100% out of the market. What is wrong with an annuity? \_ I thought if you have over $3000 then you're not eligible for SS? Or is that something else? \_ I think this is related to SSI (Supplemental Security Income) for low income, not the Retirement SS. SSI allows a higher paycheck from the government. \_ No, even Warren Buffett gets SS. It is for everyone who has contributed for at least five years. Maybe you are thinking of the bankruptcy code. I think you are allowed to keep a car worth $3000 in a bankruptcy. \_ Ok so I tried to Google for Social Security but it seems complex, is there a SS for Dummies web site? Thanks! \_ http://encarta.msn.com/encyclopedia_761561113_2/Social_Security.html Courtesy of Bill Gates |
2008/7/14-16 [Finance, Finance/Investment] UID:50567 Activity:nil |
7/14 Onion once again more like reality than "real news" http://www.theonion.com/content/news/recession_plagued_nation_demands |
2008/7/11-13 [Finance/Investment] UID:50538 Activity:nil |
7/11 Private the gains, socialize the losses. Thanks for the billions, now I am going to retire suckahs, says the financial sector! http://preview.tinyurl.com/5ta8n7 \_ You missed the "force the losses" |
2008/7/9-13 [Science/Space, Finance/Investment] UID:50514 Activity:nil |
7/8 http://www.msnbc.msn.com/id/25517085 Economy today is very very healthy compared to say, the 70s and 80s. However the problem today is very different. Over-leveraging. Thanks to deregulation, commercial and investment banks used ridiculous degrees of leverage on investments that turned out to have much less value than they thought. Yay to deregulation!!! Let's deregulate EVERYTHING in the name of PROFIT! Deregulate electricity, healthcare, education, transportation, water, air, etc etc \_ Please list all of the successful planned economies of the last 100 years. \_ Straw man. Regulation != "planned economy". For that matter, list all of the successful free markets of the last 100 years. (I know, all market failures are due to government regulation). \_ Sweden, Norway, Luxemborg... need I go on? \_ Norway is a mixed economy. So probably is Sweden, although I'm not sure. You're already down to Luxembourg? What's next Monaco? Please do go on. |
2008/7/8 [Politics/Domestic/President/Reagan, Finance/Investment] UID:50492 Activity:nil |
7/7 The Failures of Neoliberalism: http://dailystaregypt.com/article.aspx?ArticleID=14905 (Stiglitz) |
2008/6/19-23 [Finance/Investment] UID:50313 Activity:nil |
6/19 If I place a limit order to buy 500 shares at $20, is it always all or nothing? Meaning I will end up with 0 rather than 300 shares if the price doesn't stick around at $20 long enough for an order of 500 to be filled? I obviously don't want to break it up into a lot of transactions to save on fees. \_ No, it is not always all or nothing, though you can usually contact your broker and make it that way, usually for a fee. In practice, they always get filled for me anyway, even if it is in a few tranches. \_ So you are saying I might end up with only 300 shares? I don't want to end up only with a really small number filled since then the transaction fees will swamp my gains. Is this a realitic concern with a $2000-$5000 trade? \_ Your broker should have some kind of document that explains what they do when an order is not completely filled. You probably won't run into this problem if you trade stocks that have reasonable volume. |
2008/6/10-13 [Politics/Domestic/California, Finance/Investment] UID:50215 Activity:low |
6/10 Millions Paid to Dead CEOs Outrage Over 'Golden Coffins': Tech T: http://www.csua.org/u/lqh (finance.yahoo.com) "Among the more outrageous posthumous packages: * $298.1 million for Comcast CEO Brian Roberts * $288 million for Nabors CEO Eugene Isenberg * $115.6 million for Occidental CEO Ray Irani * $17 million for Shaw Group CEO J.M. Bernhard to not compete with the firm after he dies" I wonder if J.M. Bernhard is thinking about breaching the contract. \_ Why should you care what someone's compensation is? \_ It's just funny that a firm is willing to pay a CEO to not compete with the firm after he dies. --- OP \_ That's the wording of the author, not of the contract. \_ see the WSJ link; it's a non-compete clause in the contract, which still pays off if he's dead. -tom \_ Correct. Which is different than the wording of the author. -pp \_ I understand now. Thx. -- OP \_ it's still pretty lame to have a non-compete clause pay off in the case of death. -tom \_ duh. It is just to make sure his family gets the money if he leaves the company by dying instead of by leaving. It is to encourage him to stay until he dies and not leave early to cash in on the non-compete when he's otherwise doing a good job. It is not lame if you accept that any non-compete clause was worth that number. Why is it necessary to explain such a simple concept? \_ What better way to guarantee fulfillment of the non-compete side of a contract than to die? |
2008/6/8-10 [Finance/Investment] UID:50184 Activity:nil |
6/8 How many different mutual funds should I have in my roth IRA? I know there are many factors, but I want to know shoudl I just invest all my roth IRA money into one mutual fund, or divide it up into 2, 5, 10, whatever. thanks in advance. \_ It's not about how many funds you have, it's about what's in them. Consider diversifying your assets. If you buy a small-cap fund, for example, you'll want to also buy at least one large-cap fund to spread the risk. On the other hand, if you buy just one target-date fund (which contains an asset allocation mix that the fund company judges is appropriate for your age), that may be all you need. This sounds like the best option for you, at least until you learn more about asset allocation and decide that you would rather do your own management. |
2008/6/1-2 [Finance/Banking, Finance/Investment] UID:50109 Activity:nil |
6/1 No comment: http://www.nytimes.com/2008/06/01/fashion/01rich.html \_ Why does the NY Times not include their postal address so I can send them my feces? |
2008/5/26-30 [Science/GlobalWarming, Finance/Investment] UID:50054 Activity:nil |
5/25 http://preview.tinyurl.com/4rheqx The WSJ on the commodity "bubble." |
2008/5/24-30 [Finance/Investment] UID:50049 Activity:nil |
5/24 I'm looking for a financial advisor/planner to help guide me with where to invest my money. I have the foundation set up (Roth IRA and 401(k)) but I want someone to recommend good funds to invest them in. I prefer one that doesn't get a commission if I buy from a certain company. I see lots of ads for Charles Schwab. Would they be what I want? Thanks. \_ Their fee for service consultation seem reasonably priced. If they recommend "Schwab" funds, run for hills. For 401k, you can do this yourself by finding recommended Asset Allocation for your age, then mapping the categories therein to the limited options you have in yer 401k. Asset Allocation says put 10% in a small-cap US stock fund -> Hey, I only have one fund to choose from in this category. Easy as cake. Repeat. \_ Their fee for service consultation seem reasonably priced. If they recommend "Schwab" funds, run for hills. For 401k, you can do this yourself by finding recommended Asset Allocation for your age, then mapping the categories therein to the limited options you have in yer 401k. Asset Allocation says put 10% in a small-cap US stock fund -> Hey, I only have one fund to choose from in this category. Easy as cake. Repeat. \_ Email me and I will hook you up with my guy. -ausman \_ GAAAAAYYY. \_ Gay hooking. |
2008/5/23 [Finance/Investment] UID:50038 Activity:moderate |
5/23 http://cij.inspiriting.com/?p=455 Who is to blame for surging food and energy prices? \_ No! It's India and China and anyone who says otherwise is an idiot! Peak oil! |
2008/5/23-24 [Computer, Finance/Investment] UID:50036 Activity:nil |
5/23 Erroneous computer programs made Moodys incorrectly give AAA ratings to crazy weirdo debt CDO stuff I really do not understand: http://www.ft.com/cms/s/0/0c82561a-2697-11dd-9c95-000077b07658.html |
2008/5/10-16 [Finance, Finance/Investment] UID:49927 Activity:nil |
5/10 psb are you Fair and Handsome Modern Indian Man? http://tinyurl.com/446m8s \- Bachnaa ae haseenon lo main aa gayaa [see below] |
2008/5/1-8 [Finance/Investment] UID:49870 Activity:kinda low |
5/1 Assuming a depreciating dollar, does that really mean foreign stocks would be more attractive? After all, the inherent value of any given company should be independent of the denomination -- if the dollar is worth less, the company is worth more dollars. And revenue goes up as prices go up. It would depend on whether there is something about a stronger dollar that the individual company depends on. \_ Value of foreign stocks and value of the dollar are not entirely orthogonal. Any company that exports to the US would suffer from a stronger dollar. Still, I would expect, and have observed, ^ by "stronger" i meant "weaker". a general trend that investing in foreign stocks during a time of a declining dollar has limited the damage from the recent wall street bloodbath on my overall portfolio. \_ What bloodbath? The drops that happened earlier were not related to value of the dollar, but fears about the US and/or world economy, which is somewhat orthogonal to exchange rates. \_ If the US economy craters, overseas companies will take less of a hit than US companies, but they'll still take a hit. Companies which rely heavily on US consumerism will be hit hardest, of the overseas companies. -tom hit than US companies, but they'll still take a hit. Of the overseas companies, those which rely heavily on US consumerism will be hit hardest. -tom \_ I'm more asking about the inflation/exchange rate issue, not cratering of the US market itself. I saw a couple people imply that a falling dollar implies foreign stocks, which sounded like the way someone would advise moving into foreign currency instruments, but I think that's fallacious for stocks. \_ It depends on the company. Owning stock in foreign companies is a hedge against the weak dollar; my foreign holdings have done very well since the dollar has tanked. But there are also foreign companies which will have business problems due to a weak dollar. -tom \_ It is a good hedge against the dollar falling, similar to the hedge you get from foreign currency. Foreign stocks are demoninated in their home currency, I hope that is obvious. You also get the added effect of any stock market: more volatility combined with more potential for gain. \_ But my point is that stocks != holding currency. Currency will just go down because it has no other value than itself. But say, GE as a company has some real world value in terms of physical and intellectual property, and its products have a value independent of the currency (so if dollars were worth 2x less, that refrigerator will cost 2x more dollars, basically.) Well, I guess it depends if the dollar is worth less due to inflation or due to exchange rates... so US companies which sell stuff overseas seem safe enough.) \_ You realize that NOTHING has a fixed "intrinsic" value? Things are "worth" what you can trade for it. If people woke up one morning and decided they didn't want gold anymore, it would lose nearly all it's "value". That is perhaps not too likely to happen to gold, but it happens to companies *all the time*. All markets and currencies are pretty much imaginary constructs. And imaginations sometimes run away. \_ Nothing you said here appears to conflict with what I said. \_ It's a multivariate, chaotic system; you can't isolate one variable like that. There are fundamental problems in the US economy which are leading to the dollar's fall; those problems affect US companies more than they do foreign companies. -tom \_ The simple answer is: no that is not how it works. A company that only sells products in the US, with no overseas competition, is not going to be able to raise their price. The dollar is worth about 1/2 what it was in 2001, but prices are not double, except for the price of oil, which is a fungable commodity. Most goods are only up 25% or so. a fungible commodity. Most goods are only up 25% or so. A bunch of stuff (mostly made in China) has actually gone down in price. \_ But the US company's revenue will not show a 50% drop, it is denominated in dollars. The US stock might rise if it becomes more attractive for foreign investors. If costs go up (oil, inflation-hit production inputs) then they can raise their price, because they have to and so does everyone else. Foreign companies can't come in and undercut the US company if the exchange rate cheapens the dollar and oil prices are high globally. So I still don't see why falling dollar and/or inflation is, in and of itself, bad for US stocks. Economic slowness due to related factors might be a reason. \_ There's no such thing as a falling dollar "in and of itself." \_ Okay. But the associated factors are not clearly bad for the US stocks either. For example: low interest rates tends to devalue a currency, but low interest rates tend to make stocks more attractive. \_ Okay, I agree with your reasoning. But you can see how stocks in a foreign market would tend to outperform ones denominated in a local depreciating currency, right? \_ Yeah, obviously if nothing else changed then you are gaining the exchange rate on top of the stock growth. I guess there are too many variables as tom implied. I should look at how NASDAQ or the DOW performed relative to various international indices on a dollar-basis over the last 5 years. But there have been many many variables besides exchange rate. |
2008/4/30 [Finance/Investment] UID:49858 Activity:high |
4/30 James Bond arrested for threatening to kill someone http://www.mercurynews.com/ci_9106606?source=rss \_ It was a KGB consparicy. \_ Dude, it's SPECTOR. \_ More like KAOS. |
2008/4/16-23 [Finance/Banking, Finance/Investment] UID:49765 Activity:high |
4/16 You thought gasoline was expensive now? You ain't seen nothing yet! link:www.csua.org/u/las (Yahoo Finance, includes video) \_ The free market will solve our energy crisis -dimwit #1 fan \_ PEAK OIL alert. Also 'rationing by price' -- gotta love it. \_ If the govt doesn't step in and do rationing, rationing by price is how the market would do it. \_ How many of you recall the gas lines of the 70s? Without rationing by price we'll have lines *and* expensive gas, if you can get it. Or oh hey we can do that whole even/odd numbered plate thing again, yeah that was great. And don't forget to ticket/fine/arrest any private citizen who dares to give gas to anyone on the side of the road who runs out, that was good for a laugh back then too. \_ Dld that latter actually ever happen? I lived through this, though I was quite young, but I don't remember anything like that. \_ Huh? What's wrong with 'rationing by price?' That's what the market is FOR. \_ Because when you ration nesseccities by price poor people die. Old people die all the time in cold climates because they can't afford heating oil. \_ So how do you determine how much food/oil/whatever is necessary and how much is beyond necessary? If you are concerned about the poor then give them $$$ and let them choose where to spend the $$$. That's still rationing by price. I disagree with the idea that every American should get a similar bundle of goods that is "necessary". \_ that's because you're an overprivileged twerp \_ I forgot that you know what's best for people more than they do. It's the leftist way to boss people around. \_ How do you "know" that freezing to death is what is best for someone? Did they tell you that? \_ Can you read? "let them choose where to spend the $$$" -!pp \_ Nonono, the soviet style command economy is clearly superior to western style economics. \_ We actually live in a mixed economy. But you probably already know that. \_ Sorry, missed that. \_ Being able to survive a cold winter is pretty high on the list. \_ Some people have more tolerance for cold and would prefer to spend the heating oil credit on something more important to them like strippers or booze or HDTV or whatever. \_ Just wear a jacket at home. That's how I save on gas bill. \_ Cause where you live it regularly gets below 0F \_ No, sorry. Government rationing will cause even worse shortages and hurt even more people. Where do you central control command economy guys get the idea the government can actually make anything better? With gvt imposed rationing you'll get a Soviet style system where the rich and powerful get everything and the poor and middle classes get nothing. \_ And with no regulation, you get booms and panics like in the 1880s. Why argue against the Straw Man of a Soviet economy? Is your position so weak that can't make your point any other way? Is there more or less wealth inequality in Sweden or the US? \_ A system in which everyone is equally poor is a possible result and that wouldn't be a good system. We can see examples of that in the China of a couple decades ago, Soviet Russia, Cuba, and so on. I don't think it matters how much of the pie you get if it's a big enough pie. Everyone sharing a small pie isn't a great alternative. \_ That may be true, but it's a well known psychological finding that people (a) care about relative equality and (b) care specifically about inequality of transferable assets, much more so than other, much more 'unfair' and blatant kinds of inequality. (There are some interesting theories about how our attitudes about fairness may have evolved which explain (a) and (b)). -- ilyas \_ I think most people in the USA don't care or there would have been riots already. I think people here assume (correctly) that a rising tide lifts all boats. A wealthy, powerful USA is something most Americans desire and so far it has made us by far the largest consumers in the world. \_ Funny you should claim that right now. Here is a front page article from the WSJ that argues otherwise: http://www.csua.org/u/lbj (WSJ) (The rising boats opinion, not the wealthy powerful America comment.) \_ Do you think that people in Sweden, Denmark, The Netherlands, etc are "poor"? Do you think that they think of themselves as poor? The countries are much more egalitarian than the US and people are in general happier. And no one goes hungry or lacks for housing or medical care. Netherlands, etc are "poor"? Do you think that they think of themselves as poor? The countries are much more egalitarian than the US and people are in general happier. And no one goes hungry or lacks for housing or medical care. \_ The Netherlands is a wealthy nation, but the individuals are poor by American standards. I say this as someone with a Dutch mother and most of my family still living in Holland. Sure, they aren't lacking in necessities. On the other hand, they don't have any of the luxuries people here have. I wouldn't eagerly live their lifestyle nor that of my godfather's Swedish ex-wife. Of course, someone who is homeless would disagree. However, I think overall the middle class in the USA is better off than the middle class there. The rich are rich both places. GDP per capita US is #2 in the world behind Luxembourg. Holland is #16. Sweden is #25. I think our system, while "unequal" benefits the citizenry more than any other even though it's not "fair". \_ But don't Dutch people consistently have a higher "happiness" rating than Americans? Food for thought. I believe Switzerland comes out on top in that list, although America is pretty high at number 20. \_ Happiness can be acheieved with drugs. It's not really something I aspire to. YMMV. \_ -1 to you, +1 to me. \_ I am just saying that happiness is a state of mind. I wouldn't want to live in Third World conditions just because the people that do claim they are happy about it. \_ You were doing so good there for a while too, after you dropped the "a slightest bit of tax increase is exactly equal to Stalinism" line of argument, too. Though you may in fact be Stalinism" line of argument, too. Though you may in fact be another person, since your tone is so different. But do you really think that Swedes live in "Third World" conditions? I do not. The Dutch seem to have quite pleasant lives and I have been there many times. What you say about the relative prosperity of the middle class is no doubt true, but all that junk that Americans have doesn't seem to improve their lives any. say about the relative prosperity of the middle class is no doubt true, but all that junk that Americans have doesn't seem to improve their lives any. \_ That's pretty paternalistic. -- ilyas \_ I am one of those liberal elitists you keep hearing about. \_ Good luck in the next election! People LOVE elitists! \_ I am not running for office. \_ There may not be much of an oil trading system left by 2020 since the "global economy" might be totally wrecked by nonstop warfare. \_ Nonstop warfare? Caused by what? And fighting over what? \_ Time to get a high gas mileage vehicle before manufacturers put an SUV-like premium on them. \_ Haven't they already? \_ Yes on the hybrid ones, not yet on the regular engine ones. \_ Get a bike as well! |
2008/4/15-23 [Reference/RealEstate, Finance/Investment] UID:49754 Activity:nil |
4/15 Massive numbers of homes with negative equity http://www.sfgate.com/cgi-bin/object/article?f=/c/a/2008/04/15/BULE105CR4.DTL&o=0 and the associated article: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/15/BULE105CR4.DTL I had no idea the negative equity problem was as widespread as the first link would suggest. \_ It's "Number of homes purchased in 2006"! \_ It's "homes ***purchased in 2006*** with negative equity"! \_ well taht certainly lowers the scale of the problem, but its still pretty big. \_ "most affected are those who bought recently with little or no money down". hahah, damn fools. \_ I'd rather be negative equity with no money down than in the same situation but 20% commited. \_ Well, with 20% down and the same price they would be in a better situation with the mortgage. The example woman seemed to still want to live in the house she bought. She bought more house than she could afford, relying on unreasonable price increases. \_ ObSuburbsSuck |
2008/4/13-19 [Politics/Domestic/California, Finance/Investment] UID:49744 Activity:low |
4/14 The Conservative solution to the housing mess: print lots of money. http://www.csua.org/u/l9t (WSJ) \_ And the solution to the federal deficit. What is a better solution to cut your deficit by 1/2 than inflation? MORE TAX? \_ LESS SPENDING? \_ Let's cut social programs. \_ Agree. Let the homeless people go rampant on the street, and let the desperate and starving ones carry their struggle in their 'hood. Let's put them away somewhere far so that we don't have to deal with them, ever. \_ (inflation is, effectively, a tax on people with savings) Let's designate that place as Southern California. \_ Can we put them in all the empty McMansions in the exurbs \_ I think these places are called SF, Berkeley, Oakland, Hollywood, Venice, and Santa Monica. \_ Sadly, criminals don't stay in one place. Therefore a better solution is to put them far away from the civilized world (e.g. putting criminals in S Cal) \_ Northern Cal seems to have more of an affinity for these people based on voting trends and anecodotal evidence. Southern Cal on the other hand (e.g. Orange County) does not except for the cities I mentioned. \_ You have obviously never been to downtown Los Angeles. \_ Skid row? Skid row is a perfect example of how poorly the homeless in SoCal are treated and how unwelcome they are. For example: ordinances against camping on the street, ordinances against sleeping on the sidewalk during the day, and so on. The ACLU and LA constantly clash. \_ (inflation is, effectively, a tax) |
2008/4/11-16 [Politics/Domestic/Election, Finance/Investment] UID:49721 Activity:nil |
4/11 McCain campaign attacks George Soros for funding third party groups, even though Soros has funded McCain's own causes: http://tpmelectioncentral.talkingpointsmemo.com/2008/04/mccain_attacked_sorosfunded_de.php \_ What's the betting pool like for odds on McCain self-destucting or having a stroke before the election? \_ "I was for George Soros before I was against him" |
2008/4/10-12 [Industry/Startup, Finance/Investment] UID:49709 Activity:nil |
4/10 Can an impartial stock investor please clarify the following statement for me so that I can vote to the best of MY interest and not the interest of the CEO/CTO/CFO? "Approval of an amendment to X's 200X Stock Plan to increase the number of authorized share of Class A common stock issuable thereunfer by 6,500,000"? \_ It is hard to say, without knowing more about the companies condition. They are trying to increase the amount of preferred shares available to sell, in case they need to raise capital. This generally dilutes existing shares, but might be needed, if they are low on cash or something. \_ If I give you more details would that help? The company has between 10-20K employees, their stock was inflated to ridiculously high in Q4 2008 but has since then tanked about 40%. \_ They might also be supplying shares for stock options and ESPP. -- !OP |
2008/3/27-28 [Reference/RealEstate, Finance/Investment] UID:49585 Activity:nil |
3/27 "Ten Days That Changed Capitalism" http://online.wsj.com/article/SB120657397294066915.html |
2008/3/26-28 [Science/GlobalWarming, Finance/Investment] UID:49568 Activity:nil |
3/25 http://www.bankaholic.com/2008/federal-reserve-is-failure Federal Reserve is a Failure while the White House praise America's new society of ownership during the housing boom. |
2008/3/25-28 [Reference/Tax, Finance/Investment] UID:49563 Activity:low |
3/25 How much are you guys expecting from GWBush's tax rebates? \_ $0. Combined income of my wife and me is probably over the limit. \_ So you're the wealthy? \_ $600, a whole lot of money for a poor grad student.. \_ $1200 tax deduction, which, since we already overpaid through withholding, means a $1200 bonus to our refund. \_ $0. My income is too high. \_ How do you figure this out based on your income? \_ More than $75K if single or $150K if married and you're probably getting nothing. I imagine most s/w engineers are getting nothing, like me. \_ 75K taxable income. (Post 401k, post all deductions.) And it doesn't go away at 75k, although it does go down pretty fast. If you have a house you probably will get a refund. \_ You mean if you have a MORTGAGE with a lot of interests to deduct? \_ Yes I did. See you knew exactly what I meant. \_ ...the fact that it is wrong notwithstanding \_ No, it's based on adjusted gross income. No mortgage (or other itemized) deductions. \_ None of you have actually explained how I would calculate it. \_ Learn to use google. \_ Nothing. We make too much. |
2008/3/20-25 [Finance/Investment] UID:49519 Activity:nil |
3/20 Huge money flows out of equities as stock indexes rocket higher http://tinyurl.com/2wzcfx (wsj.com) (Look at the Money Flow column, then click Find Historical Data, choose any another date, compare to today) \_ Look at the "Buying on Weakness" link. What's your point? \_ did you check the historical data? do you know how to count? \_ What's your point? \_ The stock market appears to be recovering. Why does this upset you? |
2008/3/19-21 [Finance/Investment] UID:49495 Activity:nil |
3/18 Fed cuts the interest rate by another 3/4% and saves the housing market. Moral of the story: BUY THAT HOME NOW! Bush promises to make the economy good no matter the cost! \_ PS: US to Yen went from 120 to 98 from 2007 to now. |
2008/3/18-21 [Finance/Banking, Finance/Investment] UID:49491 Activity:nil |
3/18 Tent cities springing up in LA: http://www.youtube.com/watch?v=CnnOOo6tRs8 \_ lazy people = poor people, proof that we shouldn't waste any more money on social programs and handouts! -Republican \_ You can go and give them your money. Why don't you? \_ America! Fuck yeah! |
2008/3/17-21 [Finance, Finance/Investment] UID:49479 Activity:nil |
3/17 So, are we or are we not in a recession? \_ A rule of thumb is "two consecutive quarters of declining GDP." We may not have actually hit that yet, but it seems obvious we will. -tom \_ it's not a rule of thumb, it's the definition used in the field. \_ there are two definitions: (a) what you guys said (b) NBER defined, to summarize: significant economic slowdown as measured by a combination of factors, including (a) \- on a local note, of these people: http://www.nber.org/cycles/recessions.html frankel is ex-ucb dept econ, c. romer and d. romer are ucb dept econ. |
2008/3/17-21 [Finance/Investment] UID:49471 Activity:nil |
3/17 BSC chart for last 5 days, making dot com bubble stocks proud! http://finance.yahoo.com/q/bc?s=BSC&t=5d \_ "Unless derivatives contracts are collateralized or guaranteed, their ultimate value also depends on the creditworthiness of the counter-parties to them. But before a contract is settled, the counter-parties record profits and losses--often huge in amount--in their current earnings statements without so much as a penny changing hands. Reported earnings on derivatives are often wildly overstated. That's because today's earnings are in a significant way based on estimates whose inaccuracy may not be exposed for many years. The errors usually reflect the human tendency to take an optimistic view of one's commitments. But the parties to derivatives also have enormous incentives to cheat in accounting for them...The two parties to the contract might well use differing models allowing both to show substantial profits for many years. Another problem about derivatives is that they can exacerbate trouble that a corporation has run into for completely unrelated reasons. This pile-on effect occurs because many derivatives contracts require that a company suffering a credit downgrade immediately supply collateral to counter-parties...The need to meet this demand can then throw the company into a liquidity crisis that may, in some cases, trigger still more downgrades. It all becomes a spiral that can lead to a corporate meltdown. A participant may see himself as prudent, believing his large credit exposures to be diversified and therefore not dangerous. However under certain circumstances, an exogenous event that causes the receivable from Company A to go bad will also affect those from Companies B through Z. The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear...In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal." --Warren Buffett, 2002 http://www.fintools.com/docs/Warren%20Buffet%20on%20Derivatives.pdf -tom |
2008/3/16-21 [Finance/Investment] UID:49469 Activity:moderate |
3/16 JPM buys BSC at $2/share in stock swap (pending shareholder approval). Fed agrees to take BSC collateral for $30B cash and will eat any loss. Stock had been trading at $85/share in Jan. Fed allows investment banks to borrow directly from Fed (previously only banks with traditional checking/savings accounts were allowed). Fed discount rate cut 0.25%. All action announced just prior to Tokyo Stock Exchange open. Scheduled Fed meeting this Tuesday, futures expecting 0.5 to 1.25% cut to fed funds target. Now at 97 Yen = 1 USD. \_ Bush = Hero \_ It is pretty weird that JP Morgan was able to buy all assets of Bear Stearns, today, for 1/100th of what Bear Stearns was worth a week ago. \_ More like 1/30th, but still. \_ if you also consider the Fed threw in $30B non-recourse on BSC collateral, and the purchase price was $240M, you might say JPM was GIVEN money to buy BSC -op \_ That is what the markets think too, since JPM's stock went up about ~$10B today, while most of their rivals went down. \_ I went to a career fair once where JPM brought in a lot of 'real live employees' (as opposed to recruiters) from NYC to man the booth. I cannot believe how incredibly beautiful these women were. I guess JPM management has good judgement in all things. (Actually, my mom worked there after a merger and at First USA under Jamie Dimon and Mr. Dimon is a very well-regarded CEO, but JPM kind of sucked to work for. Yes, my mom was a hottie back in the day.) \_ ObYerMomJoke \_ The Bear Stearns buyout was engineered to hide the fact that a GIGANTIC portion of the assets of these investment houses are "innovative financial instruments" that have even less value than subprime mortgages. Most of the wealth is hallucinated credit with no attachment to any tangible economic activity. \_ It is just a big giant casino. \_ Well, it is if you daytrade, but it's not to guys like Buffett. \_ Well, it is if you daytrade, but it's not to guys like Buffett. \_ Not just for the day traders. For the derivatives guys, the LBO guys, the foreign exchange guys, the CDOs, the SIVs, the entire economy is run like one big slot machine. |
2008/3/15-17 [Politics/Foreign/Asia/Japan, Finance/Investment] UID:49464 Activity:nil |
3/14 Is it GDP growth or GDP/person that is the best measure of an economies growth? http://www.economist.com/finance/displaystory.cfm?story_id=10852462 |
2008/3/14-17 [Finance/Banking, Finance/Investment] UID:49457 Activity:high |
3/14 Fed provides emergency financing to BSC via JPM as other banks refuse to lend to BSC at fed funds target Fed to take on all credit risk for BSC collateral used to obtain financing http://online.wsj.com/article/SB120550108028136579.html On Monday, BSC said in a statement, "there is absolutely no truth to the rumors of liquidity problems" http://www.bloomberg.com/apps/news?pid=20601087&sid=aa874wpC8wcg \_ Someone please translate this to plain English? \_ You went to Cal? \_ Read the WSJ article. WSJ = Wall Street Journal. If you have q's, come back. \_ The wsj article seems reasonable clear. In any event, here is my understanding: Bear Stearns Co. (BSC), a large NY investment bank, may not have enough money to meet its obligations. J.P. Morgan (JPM) has borrowed money from the Federal Reserve Bank (Fed) and loaned it to BSC to ensure that BSC has enough money to meet its obligations. JPM, unlike BSC, is not technically an investment bank, and therefore it may borrow money directly from the Fed. JPM is merely acting as a conduit for the Fed's loan to BSC. BSC has pleged its assets to the Fed as security for the loan. If BSC's asserts drop in value, then the Fed, and the loan. If BSC's assets drop in value, then the Fed, and the taxpayers, will take the loss; JPM is not taking on any risk. \_ Why would we care? I mean, we're already borrowing a lot of money and our deficit is huge, why can't we just borrow more? I mean, if you owe the bank $1 million dollars, the bank owns you. But if you owe the bank $100 trillion dollars, then you own the bank. \_ Which is why the dollar is doing oh so well on the international market right now. \_ 99 yen to 1 dollar! \_ Personally I am concerned about the level of debt the government takes on. I do not know if bailing out BSC is better than the alternative, which is to let if fail. I guess we have to trust that the Fed knows what it is doing. \_ The Fed is in panic mode: "The Fed's role in the deal suggests federal officials fear a systemic collapse of the U.S. financial system were Bear Stearns to fail. The fear stems from Bear central role in a multitrillion-dollar web of interconnecting derivative contracts." \_ Probably. Something about this situation reminds me of the LTCM fiasco a few years back. \- I dunno how old you were in 1998, but the funny part of this is Bear Stearns is the banks that part of this is Bear Stearns is the bank that refused to play ball ... the scrappy outsider... during the "genteel" bailout of LTCM. It's also amazing to read about the arrogance of the LTCM insiders dictating terms of the bailout. Just unfucking believable. \- I dunno how old you were when LTCM happened, but the funny part of this is Bear Stearns is the bank that refused to play ball ... the scrappy outsider ... during the "genteel" bailout of LTCM. It's also amazing to read about the arrogance of the LTCM insiders dictating terms of the bailout. Just unfucking believable. \_ I didn't remember that BSC was one of the hold outs during the LTCM bailout. That is so ironic. Re arrogance of LTCM insiders - Being a nobel prize winner and 'furd prof goes to some people heads. \- it's not just merton and scholes. YMWTR: http://tinyurl.com/rcrv8 \_ Deregulating the financial system was a mistake. \_ Libural socialist rant! Why do you hate America? \_ Yeah, me and FDR. Known America haters. \_ FDR hated America, not only did he sell out this country at Yalta, he also instigated the New Deal which was pratically communist. was practically communist. \_ Whoa! When the did the Birchers show up on the motd?! \_ Time to return to a gold and/or silver standard! -rpaul \_ Time to put Glass-Stiegel back in place. Though it is too late for this recession, at least it will keep the next one from being as bad. I fear we will see a New Deal style nationalization of the banking system before this is all said and done. |
12/25 |