U.s. Banking Crisis: Capitalism "gone Wild"?

[siamamerican]

To my chagrin, I went back and looked at LaoPo posts over the last 6 months and he has been predominately correct with his global economic forecasts. I also have had quite a good run forecasting the markets, minus the last week. Again, I hate to admit it, but I would have been wise to be patient and stay in cash like LaoPo advised a couple of TV members. The only solace I have for my recent misstep is that the money lost has had little impact on my overall savings.

[Lopburi99]

With the upcoming Obama presidency, there will most likely be additional Democrats in the House and Senate. A veto proof majority could possibly exist, putting even more power into the hands of congressional Democrats like Pelosi, Reid, Frank, and Dodd. This could tie Obama's hands in demanding certain changes/limits. Scary what may happen to U.S. capitalism if THAT happens.

[OriginalPoster]

please forgive my audacity Honourable Vic of Vegas and let me [not so] humbly mention that it was 3-5 years after Jimmy under Rambo Reagan and the continuing stewardship of Paul Volcker when interest rates were raised skyhigh and had their peak.

False. The US prime rate reached it's maximum value, 21.5 percent, in December 1980. Reagan took office in January 1981. Three years into Reagan's presidency, the prime rate was 11 percent. Five years into Reagan's presidency, the prime rate was 9 percent.

[Jingthing]

With the upcoming Obama presidency, there will most likely be additional Democrats in the House and Senate. A veto proof majority could possibly exist, putting even more power into the hands of congressional Democrats like Pelosi, Reid, Frank, and Dodd. This could tie Obama's hands in demanding certain changes/limits. Scary what may happen to U.S. capitalism if THAT happens.

That was illogical. If the congress and senate are veto proof then the total control belongs to all three branches, including Obama in the executive. I find it hilarious that some people fear that Obama is a Hugo Chavez. Only in the US is a middle of the road corporation-loving liberal considered a wild eyed communist radical. Also, Obama in his first term will want to be reelected for two terms and congress in under election every two years, so to expect really radical change (especially as the money is gone) is an irrational fear.

Edited October 11, 2008 by Jingthing

[Naam]

please forgive my audacity Honourable Vic of Vegas and let me [not so] humbly mention that it was 3-5 years after Jimmy under Rambo Reagan and the continuing stewardship of Paul Volcker when interest rates were raised skyhigh and had their peak.

False. The US prime rate reached it's maximum value, 21.5 percent, in December 1980. Reagan took office in January 1981. Three years into Reagan's presidency, the prime rate was 11 percent. Five years into Reagan's presidency, the prime rate was 9 percent.

sorry, it's my mistake that i did not refer to domestic prime rates but to international market rates of USD and yields of US-Treasuries. their highs were well into Reagan's administration. i remember buying 30Y-longbond in autumn 1982 which yielded >14%. here some historical UST yields partly Carter partly Reagan administration.

link: http://federalreserve.gov/releases/h15/dat...y/H15_ED_M6.txt

10/1978, 10.43

11/1978, 11.83

12/1978, 12.03

01/1979, 11.76

02/1979, 11.06

03/1979, 10.90

04/1979, 10.77

05/1979, 10.91

06/1979, 10.52

07/1979, 10.83

08/1979, 11.52

09/1979, 12.64

10/1979, 14.49

11/1979, 14.75

12/1979, 14.28

01/1980, 14.28

02/1980, 15.38

03/1980, 18.64

04/1980, 17.11

05/1980, 11.18

06/1980, 9.47

07/1980, 9.53

08/1980, 11.21

09/1980, 12.45

10/1980, 13.52

11/1980, 15.97

12/1980, 17.82

01/1981, 16.76

02/1981, 17.02

03/1981, 15.38

04/1981, 15.93

05/1981, 18.32

06/1981, 17.03

07/1981, 18.20

08/1981, 18.78

09/1981, 17.99

10/1981, 16.61

11/1981, 13.65

12/1981, 13.99

01/1982, 14.98

02/1982, 15.80

03/1982, 14.95

04/1982, 15.20

05/1982, 14.51

06/1982, 15.59

07/1982, 14.89

08/1982, 12.50

09/1982, 12.58

10/1982, 10.66

11/1982, 9.97

12/1982, 9.71

01/1983, 9.16

02/1983, 9.40

03/1983, 9.38

04/1983, 9.33

05/1983, 9.07

06/1983, 9.92

07/1983, 10.38

08/1983, 10.68

09/1983, 10.07

10/1983, 9.66

11/1983, 9.93

12/1983, 10.26

01/1984, 9.98

02/1984, 10.09

03/1984, 10.68

04/1984, 11.11

05/1984, 12.04

06/1984, 12.31

07/1984, 12.59

08/1984, 12.08

09/1984, 11.90

10/1984, 11.06

[OriginalPoster]

please forgive my audacity Honourable Vic of Vegas and let me [not so] humbly mention that it was 3-5 years after Jimmy under Rambo Reagan and the continuing stewardship of Paul Volcker when interest rates were raised skyhigh and had their peak.

False. The US prime rate reached it's maximum value, 21.5 percent, in December 1980. Reagan took office in January 1981. Three years into Reagan's presidency, the prime rate was 11 percent. Five years into Reagan's presidency, the prime rate was 9 percent.

sorry, it's my mistake that i did not refer to domestic prime rates but to international market rates of USD and yields of US-Treasuries. their highs were well into Reagan's administration. i remember buying 30Y-longbond in autumn 1982 which yielded >14%. here some historical UST yields partly Carter partly Reagan administration.

link: http://federalreserve.gov/releases/h15/dat...y/H15_ED_M6.txt

10/1978, 10.43

11/1978, 11.83

12/1978, 12.03

01/1979, 11.76

02/1979, 11.06

03/1979, 10.90

04/1979, 10.77

05/1979, 10.91

06/1979, 10.52

07/1979, 10.83

08/1979, 11.52

09/1979, 12.64

10/1979, 14.49

11/1979, 14.75

12/1979, 14.28

01/1980, 14.28

02/1980, 15.38

03/1980, 18.64

04/1980, 17.11

05/1980, 11.18

06/1980, 9.47

07/1980, 9.53

08/1980, 11.21

09/1980, 12.45

10/1980, 13.52

11/1980, 15.97

12/1980, 17.82

01/1981, 16.76

02/1981, 17.02

03/1981, 15.38

04/1981, 15.93

05/1981, 18.32

06/1981, 17.03

07/1981, 18.20

08/1981, 18.78

09/1981, 17.99

10/1981, 16.61

11/1981, 13.65

12/1981, 13.99

01/1982, 14.98

02/1982, 15.80

03/1982, 14.95

04/1982, 15.20

05/1982, 14.51

06/1982, 15.59

07/1982, 14.89

08/1982, 12.50

09/1982, 12.58

10/1982, 10.66

11/1982, 9.97

12/1982, 9.71

01/1983, 9.16

02/1983, 9.40

03/1983, 9.38

04/1983, 9.33

05/1983, 9.07

06/1983, 9.92

07/1983, 10.38

08/1983, 10.68

09/1983, 10.07

10/1983, 9.66

11/1983, 9.93

12/1983, 10.26

01/1984, 9.98

02/1984, 10.09

03/1984, 10.68

04/1984, 11.11

05/1984, 12.04

06/1984, 12.31

07/1984, 12.59

08/1984, 12.08

09/1984, 11.90

10/1984, 11.06

Even by that metric, rates were within a percent of their ultimate high one month before Reagan took over and within two years they were about half as much. It's true that Volker was the man behind these rates and that they bridged the Reagan and Carter presidencies, but it's not true that rates had their peak 3 to 5 years into Reagan's presidency regardless of whether one looks at the prime rate or at international market rates.

Edited October 11, 2008 by OriginalPoster

[LaoPo]

Calm down there lao! I can't predict the price of each and every stock or idustry, but my predictions about the SSE, Oil, Gold and the dollar have all been SPOT ON ! Now push yourself away from that keyboard and have your boyfriend make you a nice strong drink and just relax there buddy.

It's your overwhelming NON-modesty about the few things you were right about and non sense at the same time what was happening right under your desert nose about the real economy and banking industry you did NOT predict or KNOW about what's irritating the members here.

Your messages that it's so bad in China, the UK, Europe, the European real estate and banking industry are irritating because you are NEVER really honest about the utter mess in your own country and completely ignoring the horrible situation the fine criminal experts in your finance industry created and who brought us all here and now in this devastating worldwide economic disaster.

No, you prefer to talk <deleted> about the Baht and the terrible situation the UK, and other countries you never have been to, are in.

Why don't you have a look outside what's happening in your own street, in your own area or are there just retired old grumpies around who don't even know which way New York is, let alone Thailand ?

Wake up Mr. Prediction Genius who predicted Mike Huckabee (approved by Chuck Norris ) would be the next President of the US...yeah, right.

The dumb remark that you mention that my boyfriend should make me a nice strong drink shows you never really read my messages nor know anything about me, otherwise you wouldn't have written something stupid like that.

But, in fact, I'm not even surprised a man like you writes such things; dumb things.

http://nl.youtube.com/watch?v=MDUQW8LUMs8

LaoPo

[Naam]

but it's not true that rates had their peak 3 to 5 years into Reagan's presidency regardless of whether one looks at the prime rate or at international market rates.

i have to admit that "3-5 years" is not correct and reduce the period to 1-2 years. i hope you are happy now

[Lopburi99]

With the upcoming Obama presidency, there will most likely be additional Democrats in the House and Senate. A veto proof majority could possibly exist, putting even more power into the hands of congressional Democrats like Pelosi, Reid, Frank, and Dodd. This could tie Obama's hands in demanding certain changes/limits. Scary what may happen to U.S. capitalism if THAT happens.

That was illogical. If the congress and senate are veto proof then the total control belongs to all three branches, including Obama in the executive. I find it hilarious that some people fear that Obama is a Hugo Chavez. Only in the US is a middle of the road corporation-loving liberal considered a wild eyed communist radical. Also, Obama in his first term will want to be reelected for two terms and congress in under election every two years, so to expect really radical change (especially as the money is gone) is an irrational fear.

You missed my point. My "fear" is not in Obama. To the contrary, I am hopeful, if not confident, he can bring about some significant change. "Obama - For Change" IS his election slogan and people are expecting it. Rhetoric alone was responsible for his first term, but the populace will demand real, major, effective reform, nothing less before considering him for a second. He won't have the luxury of being a 'caretaker" first term president as others have.

It is the Congress I worry about, and in my post I personally named a few, like Barney Frank and Christopher Dodd who many believe are more than a little responsible for the depth of the crisis. Many Americans deeply distrust Congress. I am 100% behind Obama, but not having the important threat of veto is a problem for any president. Therefore, I hope a "veto-proof" majority in Congress does not come to be.

Edited October 11, 2008 by Lopburi99

[OriginalPoster]

but it's not true that rates had their peak 3 to 5 years into Reagan's presidency regardless of whether one looks at the prime rate or at international market rates.

i have to admit that "3-5 years" is not correct and reduce the period to 1-2 years. i hope you are happy now

Either way, and either president, Fed policy at that time was a success story. The high rates weren't the problem with the economy, they were the cure. When Volker came in in 1979, the US economy was analogous to a dog with heart worms and the Fed ratcheting up rates was analagous to a veterarianian medicating the dog with just enough cyanide to kill the worms but not the dog. Risky strategy, but when it works it looks brillant, even though the dog it apt to remeber the cyanide more than the worms.

[Jingthing]

It is the Congress I worry about, and in my post I personally named a few, like Barney Frank and Christopher Dodd who many believe are more than a little responsible for the depth of the crisis. Many Americans deeply distrust Congress. I am 100% behind Obama, but not having the important threat of veto is a problem for any president. Therefore, I hope a "veto-proof" majority in Congress does not come to be.

This is still really silly. Obama and the congress/senate will be on the same side, if the dems have a veto proof majority Obama will be able to get almost everything he wants passed, that isn't a problem, but a historic opportunity.

[OriginalPoster]

It is the Congress I worry about, and in my post I personally named a few, like Barney Frank and Christopher Dodd who many believe are more than a little responsible for the depth of the crisis. Many Americans deeply distrust Congress. I am 100% behind Obama, but not having the important threat of veto is a problem for any president. Therefore, I hope a "veto-proof" majority in Congress does not come to be.

This is still really silly. Obama and the congress/senate will be on the same side, if the dems have a veto proof majority Obama will be able to get almost everything he wants passed, that isn't a problem, but a historic opportunity.

Historic perhaps, but the American system works best when there are bonefide checks & balances.

[Lopburi99]

It is the Congress I worry about, and in my post I personally named a few, like Barney Frank and Christopher Dodd who many believe are more than a little responsible for the depth of the crisis. Many Americans deeply distrust Congress. I am 100% behind Obama, but not having the important threat of veto is a problem for any president. Therefore, I hope a "veto-proof" majority in Congress does not come to be.

This is still really silly. Obama and the congress/senate will be on the same side, if the dems have a veto proof majority Obama will be able to get almost everything he wants passed, that isn't a problem, but a historic opportunity.

Such a gentleman you are, Jingthing! Have a great night!

[Jingthing]

It is the Congress I worry about, and in my post I personally named a few, like Barney Frank and Christopher Dodd who many believe are more than a little responsible for the depth of the crisis. Many Americans deeply distrust Congress. I am 100% behind Obama, but not having the important threat of veto is a problem for any president. Therefore, I hope a "veto-proof" majority in Congress does not come to be.

This is still really silly. Obama and the congress/senate will be on the same side, if the dems have a veto proof majority Obama will be able to get almost everything he wants passed, that isn't a problem, but a historic opportunity.

Historic perhaps, but the American system works best when there are bonefide checks & balances.

That is a myth. Major change happens when there is the power to get things passed. The question with Obama is will what he passes do any good in the long term. We can't really judge what he will do by what he says. He hasn't even seriously acknowledged (McCain either) that the game has completely changed.

Edited October 11, 2008 by Jingthing

[OriginalPoster]

It is the Congress I worry about, and in my post I personally named a few, like Barney Frank and Christopher Dodd who many believe are more than a little responsible for the depth of the crisis. Many Americans deeply distrust Congress. I am 100% behind Obama, but not having the important threat of veto is a problem for any president. Therefore, I hope a "veto-proof" majority in Congress does not come to be.

This is still really silly. Obama and the congress/senate will be on the same side, if the dems have a veto proof majority Obama will be able to get almost everything he wants passed, that isn't a problem, but a historic opportunity.

Historic perhaps, but the American system works best when there are bonefide checks & balances.

That is a myth. Major change happens when there is the power to get things passed. The question with Obama is will what he passes do any good in the long term. We can't really judge what he will do by what he says. He hasn't even seriously acknowledged (McCain either) that the game has completely changed.

Depends upon what you are looking for. If rapid change is the goal, then yes, checks and balances are a detriment.

[LaoPo]

To my chagrin, I went back and looked at LaoPo posts over the last 6 months and he has been predominately correct with his global economic forecasts. I also have had quite a good run forecasting the markets, minus the last week. Again, I hate to admit it, but I would have been wise to be patient and stay in cash like LaoPo advised a couple of TV members. The only solace I have for my recent misstep is that the money lost has had little impact on my overall savings.

Thanks Siamamerican, for your honesty. I realize it's not easy to admit it and that's something I deeply respect.

Some posters mentioned that the bottom has been reached and/or wrote it's time to buy now.

I don't think we have reached the bottom yet and I will stay cash, still, no matter the outcome in Washington with the G7 and IMF meetings this weekend.

There's still too much <deleted> and hidden financial secret debts (not shown on balance sheets) out there we never heard about yet. Those debts has to come afloat first. And they're big I tell you, very big.

Also, the fact that Paulson and his International colleagues are stepping in, buying (parts of) large Banks is a sign that not everything is known, yet.

The pain, debts and HUGE problems the regular economy is facing now tells me that it will be impossible for the governments to save all -larger- companies.

What's going to happen with the Giants of this world if they fall ....? What's going to happen with the millions of people, sent to the streets if they fall ?

The burden for the various governments will be so enormous that my brain can't even comprehend the outcome.

LaoPo

[lannarebirth]

You know. I've never been a big fan of Barton Biggs, but one thing he is not, and that's dumb.

http://www.amazon.com/Wealth-War-Wisdom-Ba...s/dp/0470223073

[lannarebirth]

http://www.cnbc.com/id/15840232?video=884476331

[lannarebirth]

Letters of Credit: Going, Going Gone?

Just as the business world is dependent upon commercial paper as its life blood, the world of global trade depends on letters of credit (LOC). Without LOCs, the world of trade quickly freezes up.

If you are a manufacturer of a product and want to sell to someone outside your borders, you typically require a letter of credit from the buyer before you load any cargo at a port. A letter of credit from a prime bank is considered to be proof of your ability to pay. It not only can be a source of ultimate payment, it can be a source of inventory financing while goods are in transit.

And if you are a business which is buying a product, you do not want to release money until you know the product is on the way. There are buyer's and seller's agents who make sure these things happen seamlessly, and world commerce had grown because of it.

Now we are starting to get anecdotal evidence that this extremely vital market is also freezing up. If you think the problems stemming from a meltdown with the commercial paper markets are threatening to the world economy, they are small potatoes when compared to a seizure in the letter of credit markets.

I had been thinking about this for a few weeks. Then an article posted on Naked Capitalist caught my eye. Quoting:

"At the end of the day, if every counterparty is bad then you don't have a market and you don't have an economy. I spoke to another friend of mine this afternoon, whose father has been in the shipping business forever. Pristine credit rating, rock solid balance sheet. He says if he takes his BNP Paribas letter of credit to Citi today for short term funding for his vessels, they won't give it to him. That means he can't ship goods, which means that within the next 2 weeks, physical shortages of commodities begin to show up. THE CENTRAL BANKS CAN'T LET THAT HAPPEN OR WE HAVE NO ECONOMY, LET ALONE A CREDIT SYSTEM."

And they quote the following story from The Financial Post of Canada:

"The credit crisis is spilling over into the grain industry as international buyers find themselves unable to come up with payment, forcing sellers to shoulder often substantial losses.

"Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money. But more deals are falling through as sellers decide they don't trust the financial institution named in the buyer's letter of credit, analysts said.

"'There are all kinds of stuff stacked up on docks right now that can't be shipped because people can't get letters of credit,' said Bill Gary, president of Commodity Information Systems in Oklahoma City. 'The problem is not demand, and it's not supply because we have plenty of supply. It's finding anyone who can come up with the credit to buy.'

"So far the problem is mostly being felt in U.S. and South American ports, but observers say it is only a matter of time before it hits Canada. 'We've got a nightmare in front of us and a lot of people are concerned it's going to get a lot worse,' said Anthony Temple, a grain marketing expert based in Vancouver.

"Access to credit is key to the survival of maritime trade and insiders now say the supply is being severely restricted. More than 90% of the world's trade by volume goes by ship. 'The credit crisis has made banks nervous and the last thing on their minds is making fresh loans,' Omar Nokta, an analyst at investment bank Dahlman Rose, said in an interview with Reuters.

"While shipping has always been a cyclical industry whose fortunes rise and fall with the global economy, analysts said the current crisis over the drying up of credit is something they have never seen before."

If banks are refusing to go into the LIBOR market and lend to each other, then why would they want to take a letter of credit either? At first, it will be a small trickle, which is how the commercial paper meltdown started. Then it will be a flood.

The one good sector in the US is its export sector. Start slowing that down due to a lack of ability to ship or receive payments and see what happens to an already shrinking economy. If anyone wants to see how the credit crisis can affect Main Street, look no further.

It is hard to overstate the problem and the potential for it to create a true economic meltdown. It must be dealt with, and soon.

http://www.frontlinethoughts.com/pdf/mwo101008.pdf

Edited October 11, 2008 by lannarebirth

[VegasVic]

please forgive my audacity Honourable Vic of Vegas and let me [not so] humbly mention that it was 3-5 years after Jimmy under Rambo Reagan and the continuing stewardship of Paul Volcker when interest rates were raised skyhigh and had their peak.

False. The US prime rate reached it's maximum value, 21.5 percent, in December 1980. Reagan took office in January 1981. Three years into Reagan's presidency, the prime rate was 11 percent. Five years into Reagan's presidency, the prime rate was 9 percent.

O.P., I am glad that I continued reading down the post lists because I was about to correct Naam with the same information that you posted here Mr. Peanut was as clueless then as he is now, and it took a great man like Ronald Reagan to turn the ship around! Its really astounding the misinformation and the disinformation that is disseminated on this board about the U.S.A. I do try and correct some of the major mistakes, misquotes, and out and out false statement like the one you just corrected here. Prsently the European leaders are meeting with Sec. Paulson in Washington D.C., and so far it appears that there is more fighting among the various European countries than there is the will to act as a cohesive unit. I noticed that Ireland got fed up with the disharmony in the E.U. and took unilateral action this past week to support its banking system, which is very admirable because if they waited for the rest of the E.U. leaders to agree on a plan it might have been too late, so kudos the Irish Republic!!! The disorganization and lack of confidence in the E.U.'s ability to get their collective heads around this problem will lead to further weakening of both the Pound and the Euro. It is entirely possible that this crisis could be the undoing of the E.U., time will tell, but I imagine that over the next 12 months we will see the E.U. getting tighter or falling apart even further (my hunch).

[siamamerican]

Thanks Siamamerican, for your honesty. I realize it's not easy to admit it and that's something I deeply respect.

Some posters mentioned that the bottom has been reached and/or wrote it's time to buy now.

I don't think we have reached the bottom yet and I will stay cash, still, no matter the outcome in Washington with the G7 and IMF meetings this weekend.

There's still too much <deleted> and hidden financial secret debts (not shown on balance sheets) out there we never heard about yet. Those debts has to come afloat first. And they're big I tell you, very big.

Also, the fact that Paulson and his International colleagues are stepping in, buying (parts of) large Banks is a sign that not everything is known, yet.

The pain, debts and HUGE problems the regular economy is facing now tells me that it will be impossible for the governments to save all -larger- companies.

What's going to happen with the Giants of this world if they fall ....? What's going to happen with the millions of people, sent to the streets if they fall ?

The burden for the various governments will be so enormous that my brain can't even comprehend the outcome.

LaoPo

I have no problem admitting I was wrong once I take a couple deep breaths and evaluate the data.

I agree, there is still a lot of sht out there. Cash is king an, like yourself, most of my saving are also in fixed income income investments(FDIC). I do own Bank of America and EWY (Korean ETF) shares and am going to hold these. Need $24 for BofA and $33.20 for EWY to break even. Selling and realizing the $19k loss last week might be the wise thing to do, but I'm sticking with both long positions for now.

[OriginalPoster]

please forgive my audacity Honourable Vic of Vegas and let me [not so] humbly mention that it was 3-5 years after Jimmy under Rambo Reagan and the continuing stewardship of Paul Volcker when interest rates were raised skyhigh and had their peak.

False. The US prime rate reached it's maximum value, 21.5 percent, in December 1980. Reagan took office in January 1981. Three years into Reagan's presidency, the prime rate was 11 percent. Five years into Reagan's presidency, the prime rate was 9 percent.

O.P., I am glad that I continued reading down the post lists because I was about to correct Naam with the same information that you posted here Mr. Peanut was as clueless then as he is now, and it took a great man like Ronald Reagan to turn the ship around! Its really astounding the misinformation and the disinformation that is disseminated on this board about the U.S.A. I do try and correct some of the major mistakes, misquotes, and out and out false statement like the one you just corrected here. Prsently the European leaders are meeting with Sec. Paulson in Washington D.C., and so far it appears that there is more fighting among the various European countries than there is the will to act as a cohesive unit. I noticed that Ireland got fed up with the disharmony in the E.U. and took unilateral action this past week to support its banking system, which is very admirable because if they waited for the rest of the E.U. leaders to agree on a plan it might have been too late, so kudos the Irish Republic!!! The disorganization and lack of confidence in the E.U.'s ability to get their collective heads around this problem will lead to further weakening of both the Pound and the Euro. It is entirely possible that this crisis could be the undoing of the E.U., time will tell, but I imagine that over the next 12 months we will see the E.U. getting tighter or falling apart even further (my hunch).

Vic, PBS runs a biography & history series called "American Experience" that you might enjoy. They recently ran a 3 hour episode on the rise and demise of Jimmy Carter and a separate one on Nixon. They can be watched on-line for free if you don't have another means of watching US TV. The Carter one, in particular, was quite well done. While it was clearly written from a sympathetic point of view, it was quite candid and insightful about his his strength & weaknesses and gave a plausible take about how the very charateristics that allowed him to rise out of nowhere to be president of the US made him illsuited for the job once he got it. Especially interesting was it's take on his relationship with the congress, which was controlled by the Democrats. Basically Carter saw them Repulicans and Democrats alike) to be as corrupt as the old-boy politicians he battled with in Georgia and they saw him as hopelessly non-undestanding and unconcerned about how the system worked. Interesting too was some footage of him toasting the Shah of Iran at a State dinner and praising him as a great friend and allie -- that was one of the few things PBS dug up where his actions were in clear violation of his espoused principles (maybe Washington was finally starting to wear him down). A one sentence summary of the show probably would be the same as the usual decription of Carter though -- that he was a true American success story and probably the most moral, honest, and principled man who ever held the presidency, but a man who was in way over his head, a man who always wanted to do what was right but who became near non-functional when presented with situtations where it was necessary to choose the lesser of two evils.

Edited October 12, 2008 by OriginalPoster

[Naam]

I agree, there is still a lot of sht out there. Cash is king an, like yourself, most of my saving are also in fixed income income investments(FDIC). I do own Bank of America and EWY (Korean ETF) shares and am going to hold these. Need $24 for BofA and $33.20 for EWY to break even. Selling and realizing the $19k loss last week might be the wise thing to do, but I'm sticking with both long positions for now.

YES, cash is king IF "FDIC". but when you sit on a pile of cash which is not insured/guaranteed then the only thing guaranteed is insomnia. the only way to have a proper sleep again is buying treasuries or "bunds" which yield a pittance but render peace of mind.

[OriginalPoster]

I agree, there is still a lot of sht out there. Cash is king an, like yourself, most of my saving are also in fixed income income investments(FDIC). I do own Bank of America and EWY (Korean ETF) shares and am going to hold these. Need $24 for BofA and $33.20 for EWY to break even. Selling and realizing the $19k loss last week might be the wise thing to do, but I'm sticking with both long positions for now.

YES, cash is king IF "FDIC". but when you sit on a pile of cash which is not insured/guaranteed then the only thing guaranteed is insomnia. the only way to have a proper sleep again is buying treasuries or "bunds" which yield a pittance but render peace of mind.

What do you think of US Treasury TIPS (Inflation Protected Securities) bonds as a safe haven? Right now, 10 year TIPS are yielding 2.96% plus an amount equal to whatever inflation rate the US government admits to (in other words, equal to the CPI). The 5 year TIPS are presently yielding 2.46% plus the CPI rate. The ones originally issued earlier this year are below par now when bought on the secondary market but are guaranteed to pay out at at least par ($1000) upon maturity even in the event of deflation; and more than par if the CPI is higher on the bond's maturity date than it is now.

[flying]

What do you think of US Treasury TIPS (Inflation Protected Securities) bonds as a safe haven? Right now, 10 year TIPS are yielding 2.96% plus an amount equal to whatever inflation rate the US government admits to (in other words, equal to the CPI). The 5 year TIPS are presently yielding 2.46% plus the CPI rate. The ones originally issued earlier this year are below par now when bought on the secondary market but are guaranteed to pay out at at least par ($1000) upon maturity even in the event of deflation; and more than par if the CPI is higher on the bond's maturity date than it is now.

Just curious why not some of the FDIC insured CD's at 4% or close for a year?

[gonzobrains]

It is not capitalism gone wild. It is interventionalism and socialistic american policy. Free market economics are simply returning to b!tch slap all the greed swindlers into reality.

Like the crazy girls on the bus, many "Gone Wild" characteristics: lack of scruples, manic-driven behavior, minimal oversight, borderline lawlessness, organized chaos, disregard for decency, questionable morality, anything-goes attitude, look the other way, if it feels good it's OK, lack of accountability - add to all these an intense greed factor and is THIS what results?

"Capitalism Gone Wild?"

Now the U.S. populace must protect capitalism from itself. Unbelievable. Greatest nation in the world?

[gonzobrains]

the only "proper" way to sleep is with gold and a loaded .45 under your mattress.

and a bomb-ass isaan girl that knows how to cook, forage for ants, and use non-powered carpenter tools.

head for the hills!

I agree, there is still a lot of sht out there. Cash is king an, like yourself, most of my saving are also in fixed income income investments(FDIC). I do own Bank of America and EWY (Korean ETF) shares and am going to hold these. Need $24 for BofA and $33.20 for EWY to break even. Selling and realizing the $19k loss last week might be the wise thing to do, but I'm sticking with both long positions for now.

YES, cash is king IF "FDIC". but when you sit on a pile of cash which is not insured/guaranteed then the only thing guaranteed is insomnia. the only way to have a proper sleep again is buying treasuries or "bunds" which yield a pittance but render peace of mind.

[OriginalPoster]

What do you think of US Treasury TIPS (Inflation Protected Securities) bonds as a safe haven? Right now, 10 year TIPS are yielding 2.96% plus an amount equal to whatever inflation rate the US government admits to (in other words, equal to the CPI). The 5 year TIPS are presently yielding 2.46% plus the CPI rate. The ones originally issued earlier this year are below par now when bought on the secondary market but are guaranteed to pay out at at least par ($1000) upon maturity even in the event of deflation; and more than par if the CPI is higher on the bond's maturity date than it is now.

Just curious why not some of the FDIC insured CD's at 4% or close for a year?

That's an option too, especially for short-term money. My credit union in the States is presently offering 5% annual rate on FDIC insured CD's with a 5 month term; I'm planning to put some money in that as well. But on the surface it appears that the TIPS would yield more, albeit with a longer term, and be equally safe. Also, unlike FDIC insured accounts, TIPS have no US$250K limit to the government backing.

Edited October 12, 2008 by OriginalPoster

[flying]

That's an option too, especially for short-term money. My credit union in the States is presently offering 5% annual rate on FDIC insured CD's with a 5 month term; I'm planning to put some money in that as well. But on the surface it appears that the TIPS would yield more, albeit with a longer term, and be equally safe.

Same here Credit unions. Also NCUA insured for 250k & 4% per year seems ok.

I like the fact that the early withdrawal penalty is only 1 month interest. So in case of need you can pull out without really getting hit.

[Naam]

I agree, there is still a lot of sht out there. Cash is king an, like yourself, most of my saving are also in fixed income income investments(FDIC). I do own Bank of America and EWY (Korean ETF) shares and am going to hold these. Need $24 for BofA and $33.20 for EWY to break even. Selling and realizing the $19k loss last week might be the wise thing to do, but I'm sticking with both long positions for now.

YES, cash is king IF "FDIC". but when you sit on a pile of cash which is not insured/guaranteed then the only thing guaranteed is insomnia. the only way to have a proper sleep again is buying treasuries or "bunds" which yield a pittance but render peace of mind.

What do you think of US Treasury TIPS (Inflation Protected Securities) bonds as a safe haven? Right now, 10 year TIPS are yielding 2.96% plus an amount equal to whatever inflation rate the US government admits to (in other words, equal to the CPI). The 5 year TIPS are presently yielding 2.46% plus the CPI rate. The ones originally issued earlier this year are below par now when bought on the secondary market but are guaranteed to pay out at at least par ($1000) upon maturity even in the event of deflation; and more than par if the CPI is higher on the bond's maturity date than it is now.

TIPS are indeed not a bad idea. but i rather forego yield instead of buying maturities longer than 12 months. question: "do short maturity TIPS exist and if yes what is their yield?"