Best Place For Cash?

[harrry]

I will put it in Gold and oil, not all of it, but hedge some of my money...

behind what hedge?

This one ? ...hiding a beautiful Bauern Hof.....

LaoPo

But then you have to keep trimming to keep inflation in check

[brahmburgers]

I grew up in Washington state. Washibgton Mutual used to be a super well run saving and loan/building society. It was conservative in it's corporate habits and always paid a nice dividend to it's depositors. The fact that it was so well run mad it an all too vulnerable company for the sharks operating on Wall Street. in the course of a decade they've turned a safe mom and pop establishment into histor's biggest financial failure.

that statement sounds like a contradiction of itself. If WAMU was so well run, then how did it get bamboozled by the sharks on Wall Street? Granted, it only takes one hot shot to cause troubles - even for a big institution. Even so, it sounds as though WAMU, like nearly all the other money manipulating firms, had at least some higher-ups who were dazzled by the easy money to be had through fancy pants loaning schemes - and that, at least partly, led to their meltdown.

[harrry]

I will put it in Gold and oil, not all of it, but hedge some of my money...

behind what hedge?

This one ? ...hiding a beautiful Bauern Hof.....

LaoPo

But then you have to keep trimming to keep inflation in check

Or maybe it can be a hedge fund

[lannarebirth]

I grew up in Washington state. Washibgton Mutual used to be a super well run saving and loan/building society. It was conservative in it's corporate habits and always paid a nice dividend to it's depositors. The fact that it was so well run mad it an all too vulnerable company for the sharks operating on Wall Street. in the course of a decade they've turned a safe mom and pop establishment into histor's biggest financial failure.

that statement sounds like a contradiction of itself. If WAMU was so well run, then how did it get bamboozled by the sharks on Wall Street? Granted, it only takes one hot shot to cause troubles - even for a big institution. Even so, it sounds as though WAMU, like nearly all the other money manipulating firms, had at least some higher-ups who were dazzled by the easy money to be had through fancy pants loaning schemes - and that, at least partly, led to their meltdown.

One only need buy the stock of a company to become an owner. buy enough and you can claim seats on the board, alter corporate objectives, replace executives, etc.

[andyc2006]

I grew up in Washington state. Washibgton Mutual used to be a super well run saving and loan/building society. It was conservative in it's corporate habits and always paid a nice dividend to it's depositors. The fact that it was so well run mad it an all too vulnerable company for the sharks operating on Wall Street. in the course of a decade they've turned a safe mom and pop establishment into histor's biggest financial failure.

I'm not sure why you blame Wall St. for decisions that had to come from inside the company.

WM went under because it loaned money to people who couldn't repay, and bought debt that had been given to people who couldn't repay.

Did WS hold a gun to WM's head and tell them to loan to people without documentation of income?

Did WS hold a gun to WM's head and tell them to loan to people more than 3X their annual income?

Did WS hold a gun to WM's head and tell them to loan to people who couldn't put together a down payment?

Did WS hold a gun to WM's head and tell them to offer loan products with negative amortization -- so that after 5 years of paying on a loan, the borrowers owed MORE than they had originally borrowed?

Or did WM's greed of borrowing at low rates and lending at high rates bring them down, such that they simply ran out of "prime" borrowers, and started looking for any borrowers with a pulse, under the foolish assumption that defaults wouldn't hurt them down the road, since home prices would eternally rise and foreclosures would be profitable?

I'm having trouble understanding how anybody but WM could be responsible for their failure.

But hey, their customer interface convinced you that they were a great company, even on the back-end, so I could be wrong. Then again, I've been make large profits from buying puts on these banks all year, so maybe I'm on to something...

[lannarebirth]

I grew up in Washington state. Washibgton Mutual used to be a super well run saving and loan/building society. It was conservative in it's corporate habits and always paid a nice dividend to it's depositors. The fact that it was so well run mad it an all too vulnerable company for the sharks operating on Wall Street. in the course of a decade they've turned a safe mom and pop establishment into histor's biggest financial failure.

I'm not sure why you blame Wall St. for decisions that had to come from inside the company.

WM went under because it loaned money to people who couldn't repay, and bought debt that had been given to people who couldn't repay.

Did WS hold a gun to WM's head and tell them to loan to people without documentation of income?

Did WS hold a gun to WM's head and tell them to loan to people more than 3X their annual income?

Did WS hold a gun to WM's head and tell them to loan to people who couldn't put together a down payment?

Did WS hold a gun to WM's head and tell them to offer loan products with negative amortization -- so that after 5 years of paying on a loan, the borrowers owed MORE than they had originally borrowed?

Or did WM's greed of borrowing at low rates and lending at high rates bring them down, such that they simply ran out of "prime" borrowers, and started looking for any borrowers with a pulse, under the foolish assumption that defaults wouldn't hurt them down the road, since home prices would eternally rise and foreclosures would be profitable?

I'm having trouble understanding how anybody but WM could be responsible for their failure.

But hey, their customer interface convinced you that they were a great company, even on the back-end, so I could be wrong. Then again, I've been make large profits from buying puts on these banks all year, so maybe I'm on to something...

I was speaking about the first 110 years of Washington Mutuals existance, while you're focusing on the last 10. In 110 years it never found a reason to leave it's small region of customers/depositors. Because of it's success Wall Strre Investment bankers came knocking and showed them how they could "grow through acquisition", similar to Worldcom. Only difference being, Worldcom has a sham from the beginning and Wash Mut. grew because it never was, till the end.

I don't disagree those decisions had to come fromthe inside, but take a look at how the major shareholders changed and you'll see how the decision making process changed. Hopefully the waMu story and similar ones to come will convince the "investing public" they have absolutely zero business being in the stock market. Their participation has skewed it so badly, they will do tremendous damage to companies and their own financial interests.

[OlRedEyes]

First time ever I would strongly recommend gold. It really is the only safe(ish) haven right now. Oil will depend on demand, and at the moment that looks extremely shaky.

[andyc2006]

First time ever I would strongly recommend gold. It really is the only safe(ish) haven right now. Oil will depend on demand, and at the moment that looks extremely shaky.

Maybe it's the American in me, but I'd recommend arable land, firearms with at least 1000 rounds of ammo, a strong safe, and a month's supply of food & water.

A little gold is fine, but having more physical gold than you can carry is pointless. Having it via an ETF such as "GLD" is equally as pointless.

[lannarebirth]

First time ever I would strongly recommend gold. It really is the only safe(ish) haven right now. Oil will depend on demand, and at the moment that looks extremely shaky.

Maybe it's the American in me, but I'd recommend arable land, firearms with at least 1000 rounds of ammo, a strong safe, and a month's supply of food & water.

A little gold is fine, but having more physical gold than you can carry is pointless. Having it via an ETF such as "GLD" is equally as pointless.

While I think the Second Amendment to the US Constitution is horribly misinterpreted by "gun interests". It's at time like these I take a small measure of comfort, knowing that half the US population is armed to the teeth. Just kidding.

[OlRedEyes]

First time ever I would strongly recommend gold. It really is the only safe(ish) haven right now. Oil will depend on demand, and at the moment that looks extremely shaky.

A little gold is fine, but having more physical gold than you can carry is pointless. Having it via an ETF such as "GLD" is equally as pointless.

That is a silly remark. There are many ways to buy into gold.

Even if gold doesn't go beyond $2000 as I expect, it is still a safe haven at the moment. It's downside is limited, which is something that certainly cannot be said for most other instruments that can be converted to cash easily.

I stand by my previous statement - the shenanigans on the stock markets worldwide is only a precursor of things to come. If I'm wrong, there's not much to lose on gold. If I'm right, there's a lot to be gained in gold, and your underpants to be lost everywhere else.

A no-brainer IMHO.

I have not seen one mention in all these financially-related threads to the fact that stock markets lead, not follow. If a market falls, it is because economies will go down in the near future. It is an indicator of things to come, not a reaction.

If you try and play markets on a reaction basis, you're lost.

Edited September 30, 2008 by OlRedEyes

[pkrv]

First time ever I would strongly recommend gold. It really is the only safe(ish) haven right now. Oil will depend on demand, and at the moment that looks extremely shaky.

A little gold is fine, but having more physical gold than you can carry is pointless. Having it via an ETF such as "GLD" is equally as pointless.

That is a silly remark. There are many ways to buy into gold.

Even if gold doesn't go beyond $2000 as I expect, it is still a safe haven at the moment. It's downside is limited, which is something that certainly cannot be said for most other instruments that can be converted to cash easily.

I stand by my previous statement - the shenanigans on the stock markets worldwide is only a precursor of things to come. If I'm wrong, there's not much to lose on gold. If I'm right, there's a lot to be gained in gold, and your underpants to be lost everywhere else.

A no-brainer IMHO.

I have not seen one mention in all these financially-related threads to the fact that stock markets lead, not follow. If a market falls, it is because economies will go down in the near future. It is an indicator of things to come, not a reaction.

If you try and play markets on a reaction basis, you're lost.

Now I like the Irish solution

http://news.bbc.co.uk/1/hi/business/7643603.stm

Rather than just give more money to the rich they actually guarentee all bank account deposits full stop no limits.

Will not help with other issues (pensions except UK SIPPS) but will help day to day.

[andyc2006]

First time ever I would strongly recommend gold. It really is the only safe(ish) haven right now. Oil will depend on demand, and at the moment that looks extremely shaky.

A little gold is fine, but having more physical gold than you can carry is pointless. Having it via an ETF such as "GLD" is equally as pointless.

That is a silly remark. There are many ways to buy into gold.

Even if gold doesn't go beyond $2000 as I expect, it is still a safe haven at the moment. It's downside is limited, which is something that certainly cannot be said for most other instruments that can be converted to cash easily.

I stand by my previous statement - the shenanigans on the stock markets worldwide is only a precursor of things to come. If I'm wrong, there's not much to lose on gold. If I'm right, there's a lot to be gained in gold, and your underpants to be lost everywhere else.

A no-brainer IMHO.

I have not seen one mention in all these financially-related threads to the fact that stock markets lead, not follow. If a market falls, it is because economies will go down in the near future. It is an indicator of things to come, not a reaction.

If you try and play markets on a reaction basis, you're lost.

Never hard to drive out the gold bugs.

I'm not "reacting" to the stock markets. I've been short (via puts) the market indexes and financial companies since early this year -- my biggest mistakes have been not holding them long enough (I sold my long-held Wachovia shorts on Friday, 2 days before they went under, and did something similar with Lehman!!!!).

I know there are plenty of ways to buy gold, but it's neither an investment nor something you can eat if the SHTF. Most people who horde it bring up the "Mad Max" scenario -- again, in that scenario, I want a gun and arable land. And in a "Mad Max" scenario, it only helps if you have the gold with you, not if you have some sort of certificate.

There are only 2 other scenarios -- the likely decade-long world-wide deflationary depression, in which case the price of gold will collapse, or the inflationary scenario, where the world's major countries try to print (money) their way out of their current problems.

If the latter worked, Zimbabwe would be a world power. But it's actually so destructive that in the past, it's been a means by which countries try to attack each other (Germany printing the Pound in WW2, Iran currently putting out rather good counterfeit $100 notes, etc...). When countries turn to printing more fiat currency to escape the messes they create, it never turns out good for them. And gold has NOT proved to be the best hedge against inflation anyway.

As for gold's downside... limited? It could easily lose 30%. I guess that's a limit though.

I'll stay short on stocks, until everybody else is capitulating. You can buy gold thinking it'll be worth 250% of what it is down the line. We'll both be happy.

Oh wait, there's a 4th scenario that I forgot about... all the world's economies quickly turn around and everything works out just peachy (in which case, gold wasn't nearly the best investment). Ha! I crack myself up sometimes...