"Three steep market declines in the past month have begun to raise concerns that deteriorating credit in the United States, rising inflation and higher interest rates are finally starting to end a long period of easy money in global markets. " Read more GPTB members Bow to the great kavenger The Great Motorcycle Prophet :)

How W raised your children's taxes without you knowing about it and why you can't afford that Ducati when you retire.

W's recipe for disaster:
*Cut taxes
*Raise spending
*Increase debt and deficits to record levels
*Get into an expensive prolonged war without an exit strategy
*Don't balance the budget. Cheney said deficits don't matter. However, Greenspan, Buffet and 99% of the world's economists disagree. Cheney has no training in economics. By the way Cheney said Saddam had WMD and that there was a connection between Saddam and Bin Laden

*Have government borrowing crowd out corporate borrowing (the government can pay "risk free" interest. Thus setting the floor for interest rates. Companies now have to pay higher interest rate because corporate bonds are perceived to have more risk than government bonds. This discourages companies from investing in new plants and equipment, R&D;, etc. Thus robbing our children's future as well.

*Finance war with deficit spending.
*U.S. spends more money than it makes: i.e. like Warren Buffet says "Like a very wealthy but self-indulgent family, we peeled off a bit of what we owned in order to consume more than we produced."
What happens now:

*Dollar falls in relation to foreign currency this makes oil and ever thing we import (motorcycles, cars, TVs, DVDs, etc.) more expensive. The flip side to that it makes our exports cheaper hmmm but what do we make these days? Airplanes, lumber, grain, bulldozers, etc. We have lost more manufacturers in the last 8 years than the previous 50 years. Oh it's the information economy you say... Well India is good in that industry and has been investing in its people far more than us.

*The world becomes our creditor, our lender or our credit card company. It will want the minimum payment due.

*U.S. will experience “reverse compounding” as will pay ever-increasing amounts of interest on interest.

*If the fed raises interest rates the economy goes into a recession so what does it do it feeds more money into the money supply thus causing inflation. Economist call this debasing the currency. i.e. . Monarchs used to debase the currency by shaving gold and silver off the coins. More money in the system means your dollars are worth less
The wage price spiral we saw in the late 70s and 80s returns with a vengeance.
Corporations are crowded out by government borrowing.

*Foreigners start buying more corporations and assets.

Our children are saddling with paying more and more interest to foreign creditors.
As wages increase to keep pace with inflation folks pay higher and higher taxes due to being launched into higher and higher tax brackets.
Our children will pay for our over consumption. Less disposable income for expensive imported motorcycles i.e. Ducati, Hondas, etc.


I have been contending all the time that we have been spending beyond our means and that bad times were ahead if we continued following W's recipes for disaster. GPTB motorcycle members called me a lunatic and said I used comedians to get my economic advice (Bill Mahr, who happens to be very intelligent). No I was paying attention to men like Alan Greenspan and Warren Buffet. In addition, I was using my economics training to analyze the fundamentals of the economic situation.


__________________________________________________ _____________________________________________




I came across this article on a website sponsored by a motorcycle enthusiast just searching for an update on the DOW today. I agree with some of the authors points. What's your take on the article and the recent drop in the Stock Market. Do you think the Market is re-adjusting for peaks in mid July and is where it should be, or is this temporary and will soon bull again, or is the bear unfortunately out of hibernation, or other?


Bobby

It's another correction.
I believe it got too tall, too fast.
Look long term and don't try day trading or you may jump. Patience.

The reason is cost. Taking all expenses into account, one year of involvement in Iraq costs between $50 billion and $100 billion.

The reason is cost. Taking all expenses into account, one year of involvement in Iraq costs between $50 billion and $100 billion.
Can you cite those stats?
And can you calculate the costs AND the ramifications of not keeping our interests secure in the region?

Can you cite those stats?
And can you calculate the costs AND the ramifications of not keeping our interests secure in the region?
From Peter W. Galbraith, a former US ambassador to Croatia.
How to Get Out of Iraq, Peter W. Galbraith, ThinkingPeace (http://www.thinkingpeace.com/pages/arts2/arts185.html)

I didn’t know we had our interests secure in the region, can you tell me how it is that they are secure?

Can you cite those stats?
And can you calculate the costs AND the ramifications of not keeping our interests secure in the region?
Our troops couldn’t even protect our interest there.

The National Library, which was looted and burned. Equivalent to our Library of Congress, it held every book published in Iraq, all newspapers from the last century, as well as rare manuscripts. The destruction of the library meant the loss of a historical record going back to Ottoman times.
• The Iraqi National Museum, which was also looted. More than 10,000 objects were stolen or destroyed. The Pentagon has deliberately, and repeatedly, tried to minimize the damage by excluding from its estimates objects stolen from storage as well as displayed treasures that were smashed but not stolen.
• Hospitals and other public health institutions, where looters stole medical equipment, medicines, and even patients' beds.
• Baghdad and Mosul Universities, which were stripped of computers, office furniture, and books. Academic research that took decades to carry out went up in smoke or was scattered.
• The National Theater, which was set ablaze by looters a full three weeks after US forces entered Baghdad.
• On April 16, looters attacked the Iraqi equivalent of the US Centers for Disease Control, stealing live HIV and live black fever bacteria. UNMOVIC and •
The looting demoralized Iraqi professionals, the very people the US looks to in rebuilding the country. University professors, government technocrats, doctors, and researchers all had connections with the looted institutions. Some saw the work of a lifetime quite literally go up in smoke. The looting also exacerbated other problems: the lack of electricity and potable water, the lack of telephones, and the absence of police or other security.
Most importantly, the looting served to undermine Iraqi confidence in, and respect for, the US occupation authorities.

I didn't say that our interests are secure, and I don't know that they will be soon.

But, I'll read what the former ambassador said, and get back to you on that.

BTW: Have you ever considered that many experts, and other formers, are placed as media pawns, simply there to manipulate a different tone to any argument?

Damn, Dark! I said I'd read the formers material...
You popped off, though, like we need to step things up to keep their stuff safe.
I feel the need to point out that you didn't say you saw who or when this was alleged to have occurred.
I mean really... try controlling yourself for a moment.

I've skimmed what Pete wrote, in April of '04, and a lot of what I saw indicated they have less border control than we do. Most of their problem seems to lie in the case of mistaken trust and mistaken identity.

Frankly, and this might get me "noticed" but if you lined up a Kurd and a Saudi and a Croatian and an Iraqi and an Afgani, etc, and asked me to identify them based on their religious beleifs, I'd want to phone a friend!

How do you tell? What's your currency?

And, seriously, you haven't answered my questions yet...

I've skimmed what Pete wrote, in April of '04, and alot of what I saw indicated they have less border control than we do. Most of their problem seems to lie in the case of mistaken trust and mistaken identity.

Frankly, and this might get me "noticed" but if you lined up a Kurd and a Saudi and a Croatian and an Iraqi and an Afgani, etc, and asked me to identify them based on their religious beleifs, I'd want to phone a freind!

How do you tell? What's your currency?

And, seriously, you haven't answered my questions yet...
What question…sorry about ‘stepping it up’ but I posted that before I saw your response and so I was not intentionally ‘stepping it up’. :)

That's fine, Dark. We all get passionate about certain things!

I'm not here to argue, but to discuss.

Q's posted in #4 (scroll up) three parts, and the middle of #9.

We're cool here...

This is hilarious . There is no connection between the market correction and the Iraq war. If there is any cause at all it can be found in the small subsection of the real estate market called the sub-prime rate lenders making some bad loans and the cyclical softening of the real estate market in general .

Months ago I thought the bull market would peak at Dow 1300 pts. Instead; it went up an unbelievable 1000 more points in a very short time. People were looking for an excuse to cash in and take some profits from their gains and the real estate banking industry gave them their excuse.

I do not know how long this correction will last . I see it as a buy opportunity myself.

Btw

No one forced Hedge funds and mortgage lenders to make risky loans and no one forced the home buyers to purchase them if they could not afford them . Banks and Hedge funds profitted from the transactions big time .By all right they should take the loss from bad loans... But they won't . I suspect ;just like during the S&L crisis of the 1980s that there will be some kind of Federal Bail out.The feds set up the RTC and auctioned off all the S&L assets to pay off any of the S&L obligations. It was a good time to buy prime property at discount. If I was a prospective home buyer or investor I would be licking my chops at the possibilities.

This is hilarious . There is no connection between the market correction and the Iraq war. If there is any cause at all it can be found in the small subsection of the real estate market called the sub-prime rate lenders making some bad loans and the cyclical softening of the real estate market in general .

Months ago I thought the bull market would peak at Dow 1300 pts. Instead; it went up an unbelievable 1000 more points in a very short time. People were looking for an excuse to cash in and take some profits from their gains and the real estate banking industry gave them their excuse.

I do not know how long this correction will last . I see it as a buy opportunity myself.

Btw

No one forced Hedge funds and mortage lenders to make risky loans and no one forced the home buyers to purchase them if they could not afford them . Banks and Hedge funds profitted from the transactions big time .By all right they should take the loss from bad loans....But they won't . I suspect ;just like during the S&L crisis of the 1980s that there will be some kind of Federal Bail out.The feds set up the RTC and auctioned off all the S&L assets to pay off any of the S&L obligations. It was a good time to buy prime property at discount. If I was a prospective home buyer or investor I would be licking my chops at the possibilities.
Some very good points. The subprime is a very small factor by itself, but some see their crisis and think it's time to panic.

And nobody knows how long it'll last, from a few weeks to several months, or more.

Ya, I wish I had enough free capital ot pounce on this. It is definitely a buyers market.

First of all, unlike Cheney, I do have training in economics, and I happen to agree that balancing the budget is the LEAST of our problems... in fact it's not really an issue at all.

As to the article itself:

I happen to agree that government pork and earmark spending is too high. The Republican Congress spent like drunken Democrats, and the Democratic Congress is doing no better and spending like drunken communists. We need to cut unnecessary government spending. (BTW, military spending is NOT unnecessary.)

However, the Bush tax cuts have resulted in the highest levels of government income in history. When your income is higher, you can afford to spend more.

Then there's the idea that "debt" is automatically a bad thing. Bobby, you are a credit analyst. As am I. You deal with the retail market, I deal with commercial lending, but the concepts we both learned in credit training apply to both sides of the fence. Is debt always a bad thing? Do you look only at the liabilities portion of a person's PFS, and ignore their assets, their equity, their liquidity, and their income and expenses? I know that most of what you do is FICO scoring which essentially scores debt service ability and liability levels, but your borrowers must give you some sort of asset/liability/equity/income summary. Do you ignore everything except debt levels when reviewing a credit? Because that is what this article is doing.

Debt levels are only one small part of an overall credit picture. What has that debt funded in terms of assets? How has that asset and liability affected capital. What has it done to cash flow? Has income increased relative to debt levels? Is cash flow sufficient to service debt requirements? This article touches on NONE of those topics. Having done the research, I can quite simply say that the US economy is not headed for "disaster" as the author of this article would have you believe. Tax revenues are up. Spending has increased, but at a slower rate than income. Cash flow is stronger than in 2000, as detemined by the low inflation rate compared to the growth of GDP. Debt is up, but has resulted in an increase in employment... an asset called "human resources"... as well as increased military spending... another important asset. Our leverage level is actually pretty low, with the total national debt being much lower than the national equity (a leverage ratio of less than 1:1. I usually lend up to a 3:1 leverage ratio, so 1:1 is pretty darn strong as far as I'm concerned. The capital markets guys lend up to a 9:1 leverage ratio, so they surely don't have a problem with a 1:1 ratio.) Simply put, the article is wrong about the state of the US economy. The so-called budget deficit is going to disappear by 2010, even if nothing is done to "fix" it... and probably faster than that if the economy continues to grow.

The article is also wrong about what will happen to our debt, and how we will become a debtor nation to everyone else, and that all those other nations are going to essentially bankrupt us. Baloney. Do you remember the old saying that if you borrow half a million dollars, the bank owns you, but if you borrow half a billion dollars, you own the bank? If we "default" on any loans to our creditors, those foreign governments' economies will simply collapse. Our debt allows us to CONTROL THEM, not the other way around. That's what happens when a smaller economy lends lots of money to a bigger economy.

This article is based on doom-and-gloom predictions with no understanding of economics in the real world, and only looking at part of a very complex financial/economic picture of the US economy.

What is driving the market declines we have seen ove the past couple of weeks is concern of Countrywide Financial's cash flow difficulties. The fact that Countrywide is the largest lender to the subprime real estate market lend itself to fears that subprime lenders are having trouble collecting on their loans... the signs of a real-estate bubble burst.

However, there are a few things that people are forgetting.

1) Countrywide drew down $11.5 million on their line of credit yesterday. Many saw that as a bad sign, but I see it differently. What it means is that Countrywide has the cash on hand now to service operations. That is a GOOD thing.

2) Countrywide has not stated that they are having any sort of difficulty collecting on loans to their customers. There is no evidence that their "cash flow problems" have anything to do with troubles in the real estate market.

3) Even if Countrywide were to go belly-up right now, it still would not have the effect on the economy that so many people are fearing. No single industry in the US economy has the power to move the entire economy the way the market investors are fearing... much less a single company in a sub-sector of a single industry. The fears that Countrywide's failure or bankruptcy might cause the entire US economy to collapse is ridiculous. Sorry, they may be the biggest sub-prime RE lender out there, but they ain't all that.

And all of that ignores the strong economic health of the rest of the economy. The strogest level of employment in decades, a steady increase in personal incomes, continued strong retail sales growth in all areas, increases in manufacturing including the auto industry (and who thought that would be true five years ago?), low inflation rates, strong GDP, increased tax revenue for the government, etc.

And let's not talk about the idea that Bush entered a war with "no exit strategy". We've been over all that in many other strings. We don't need to rehash that here.

In short, though, this article is short-sighted, blindered, and looks at only a portion of a very large picture and adds unrealistic doomsday projections to create a false sense of economic weakness. The writer of the article is just plain wrong.

Elliot

Yesterday after the Dow had dropped another 350 pts. It rebounded and ended the day at a couple of points decline. Today as of this posting it is up almost 100 pts. For the day. As wild as the last couple of weeks have been it has still not reached the 10% that people usually refer to as a normal correction ;a correction that many analysts have said we were overdue for .

The sub-prime market is only a small niche in the overall mortgage lending game and only a small percentage of those have defaulted.

I think the panic is a little over stated. The biggest problem I see is that some 25 year old hedge fund "masters of the universe" will have to give up their penthouse apartments in Manhattan and move into the parent's basement in NJ for a while .

Agreed.
But prior to the concerns now facing Country Wide, I was foolishly involved with New Century Mortgage, who shot themselves in the foot because someone there cannot do simple math.
I was lucky to have moved my mortgage quickly because I had learned how to shop for better rates. (I'd jumped on a real estate opportunity and took the first mortgage offer that was presented.)

It is these brokers who are now cash short who are panicking and selling off their stocks for cash. Like I said ;I expect there will be a bail out of some kind They did it for the S&Ls and they did it for the airlines. They will probably in the near future bail out GM and Ford. Possibly it will provide relief for the consumer too .

"Three steep market declines in the past month have begun to raise concerns that deteriorating credit in the United States, rising inflation and higher interest rates are finally starting to end a long period of easy money in global markets. " Read more GPTB members Bow to the great kavenger The Great Motorcycle Prophet :)

How W raised your children's taxes without you knowing about it and why you can't afford that Ducati when you retire.

W's recipe for disaster:
*Cut taxes
*Raise spending
*Increase debt and deficits to record levels
*Get into an expensive prolonged war without an exit strategy
*Don't balance the budget. Cheney said deficits don't matter. However, Greenspan, Buffet and 99% of the world's economists disagree. Cheney has no training in economics. By the way Cheney said Saddam had WMD and that there was a connection between Saddam and Bin Laden

*Have government borrowing crowd out corporate borrowing (the government can pay "risk free" interest. Thus setting the floor for interest rates. Companies now have to pay higher interest rate because corporate bonds are perceived to have more risk than government bonds. This discourages companies from investing in new plants and equipment, R&D;, etc. Thus robbing our children's future as well.

*Finance war with deficit spending.
*U.S. spends more money than it makes: i.e. like Warren Buffet says "Like a very wealthy but self-indulgent family, we peeled off a bit of what we owned in order to consume more than we produced."
What happens now:

*Dollar falls in relation to foreign currency this makes oil and ever thing we import (motorcycles, cars, TVs, DVDs, etc.) more expensive. The flip side to that it makes our exports cheaper hmmm but what do we make these days? airplanes, lumber, grain, bulldozers, etc. We have lost more manufacturers in the last 8 years than the previous 50 years. Oh it's the information economy you say.... Well India is good in that industry and has been investing in its people far more than us.

*The world becomes our creditor, our lender or our credit card company. It will want the minimum payment due.

*U.S. will experience “reverse compounding” as will pay ever-increasing amounts of interest on interest.

*If the fed raises interest rates the economy goes into a recession so what does it do it feeds more money into the money supply thus causing inflation. Economist call this debasing the currency. i.e. . Monarchs used to debase the currency by shaving gold and silver off the coins. More money in the system means your dollars are worth less
The wage price spiral we saw in the late 70s and 80s returns with a vengeance.
Corporations are crowded out by government borrowing.

*Foreigners start buying more corporations and assets.

Our children are saddling with paying more and more interest to foreign creditors.
As wages increase to keep pace with inflation folks pay higher and higher taxes due to being launched into higher and higher tax brackets.
Our children will pay for our over consumption. Less disposable income for expensive imported motorcycles i.e. Ducati, Hondas, etc.


I have been contending all the time that we have been spending beyond our means and that bad times were ahead if we continued following W's recipes for disaster. GPTB motorcycle members called me a lunatic and said I used comedians to get my economic advice (Bill Mahr, who happens to be very intelligent). No I was paying attention to men like Alan Greenspan and Warren Buffet. In addition, I was using my economics training to analyze the fundamentals of the economic situation.


__________________________________________________ _____________________________________________




I came across this article on a website sponsored by a motorcycle enthusiast just searching for an update on the DOW today. I agree with some of the authors points. What's your take on the article and the recent drop in the Stock Market. Do you think the Market is re-adjusting for peaks in mid July and is where it should be, or is this temporary and will soon bull again, or is the bear unfortunately out of hibernation, or other?


Bobby
Ohhh, Mr. Babram, don't you fret over this, you can trust Uncle Sam to take care of this little unconvinced.

It is these brokers who are now cash short who are panicking and selling off their stocks for cash. Like I said ;I expect there will be a bail out of some kind They did it for the S&Ls and they did it for the airlines. They will probably in the near future bail out GM and Ford. Possibly it will provide relief for the consumer too .

I've heard the Fed has already pumped a bunch of cash into this to slow the spin cause by the ridiculous sell off. But won't cut interest rates, just yet.

And isn't what Dubbya doing called a tax rate cut, not a tax cut? The difference being the resulting stimulation to the spending habits.

.

First of all, unlike Cheney, I do have training in economics, and I happen to agree that balancing the budget is the LEAST of our problems... in fact it's not really an issue at all.

As to the article itself:

I happen to agree that government pork and earmark spending is too high. The Republican Congress spent like drunken Democrats, and the Democratic Congress is doing no better and spending like drunken communists. We need to cut unnecessary government spending. (BTW, military spending is NOT unnecessary.)

However, the Bush tax cuts have resulted in the highest levels of government income in history. When your income is higher, you can afford to spend more.

Then there's the idea that "debt" is automatically a bad thing. Bobby, you are a credit analyst. As am I. You deal with the retail market, I deal with commercial lending, but the concepts we both learned in credit training apply to both sides of the fence. Is debt always a bad thing? Do you look only at the liabilities portion of a person's PFS, and ignore their assets, their equity, their liquidity, and their income and expenses? I know that most of what you do is FICO scoring which essentially scores debt service ability and liability levels, but your borrowers must give you some sort of asset/liability/equity/income summary. Do you ignore everything except debt levels when reviewing a credit? Because that is what this article is doing.

Debt levels are only one small part of an overall credit picture. What has that debt funded in terms of assets? How has that asset and liability affected capital. What has it done to cash flow? Has income increased relative to debt levels? Is cash flow sufficient to service debt requirements? This article touches on NONE of those topics. Having done the research, I can quite simply say that the US economy is not headed for "disaster" as the author of this article would have you believe. Tax revenues are up. Spending has increased, but at a slower rate than income. Cash flow is stronger than in 2000, as detemined by the low inflation rate compared to the growth of GDP. Debt is up, but has resulted in an increase in employment... an asset called "human resources"... as well as increased military spending... another important asset. Our leverage level is actually pretty low, with the total national debt being much lower than the national equity (a leverage ratio of less than 1:1. I usually lend up to a 3:1 leverage ratio, so 1:1 is pretty darn strong as far as I'm concerned. The capital markets guys lend up to a 9:1 leverage ratio, so they surely don't have a problem with a 1:1 ratio.) Simply put, the article is wrong about the state of the US economy. The so-called budget deficit is going to dissappear by 2010, even if nothing is done to "fix" it... and probably faster than that if the economy continues to grow.

The article is also wrong about what will happen to our debt, and how we will become a debtor nation to everyone else, and that all those other nations are going to essentially bankrupt us. Baloney. Do you remember the old saying that if you borrow half a million dollars, the bank owns you, but if you borrow half a billion dollars, you own the bank? If we "default" on any loans to our creditors, those foreign governments' economies will simply collapse. Our debt allows us to CONTROL THEM, not the other way around. That's what happens when a smaller economy lends lots of money to a bigger economy.

This article is based on doom-and-gloom predictions with no understanding of economics in the real world, and only looking at part of a very complex financial/economic picture of the US economy.

What is driving the market declines we have seen ove the past couple of weeks is concern of Countrywide Financial's cash flow difficulties. The fact that Countrywide is the largest lender to the subprime real estate market lend itself to fears that subprime lenders are having trouble collecting on their loans... the signs of a real-estate bubble burst.

However, there are a few things that people are forgetting.

1) Countrywide drew down $11.5 million on their line of credit yesterday. Many saw that as a bad sign, but I see it differently. What it means is that Countrywide has the cash on hand now to service operations. That is a GOOD thing.

2) Countrywide has not stated that they are having any sort of difficulty collecting on loans to their customers. There is no evidence that their "cash flow problems" have anything to do with troubles in the real estate market.

3) Even if Countrywide were to go belly-up right now, it still would not have the effect on the economy that so many people are fearing. No single industry in the US economy has the power to move the entire economy the way the market investors are fearing... much less a single company in a sub-sector of a single industry. The fears that Countrywide's failure or bankruptcy might cause the entire US economy to collapse is rediculous. Sorry, they may be the biggest sub-prime RE lender out there, but they ain't all that.

And all of that ignores the strong economic health of the rest of the economy. The strogest level of employment in decades, a steady increase in personal incomes, continued strong retail sales growth in all areas, increases in manufacturing including the auto industry (and who thought that would be true five years ago?), low inflation rates, strong GDP, increased tax revenue for the government, etc.

And let's not talk about the idea that Bush entered a war with "no exit strategy". We've been over all that in many other strings. We don't need to rehash that here.

In short, though, this article is short-sighted, blindered, and looks at only a portion of a very large picture and adds unrealistic doomsday projections to create a false sense of economic weakness. The writer of the article is just plain wrong.

Elliot


Somehow I managed to rate your reply earlier without finishing my comments.


BABRAM agrees: Hi Elliot- Thanks. Currently the avg, newer, nice, 3 to 4 bedroom LV home goes for 320K to 380K. I'm thinking that the Vegas housing market will go back to the low 200's sometime in 2009. I'll probably purchase property again then. I'll also probably get back into stocks in '08.

I think the author has some good points. The one point I disagree with the author most about would be on reduction of taxes to increase spending. I think this is the good of capitalism at it's core. I do, however, think he has a point on concerning the deficit with the endorsement of his view backed by Greenspun, Warren Buffet, and 99% of the worlds economists. Exit strategy? Well I have a different view than the author's conclusion. I know Bush has an exit strategy he just can't execute it. I think that plan will eventually be scrapped, perhaps after he leaves office.

OK. My favorite comments from your reply, "The Republican Congress spent like drunken Democrats, and the Democratic Congress is doing no better and spending like drunken communists. We need to cut unnecessary government spending. (BTW, military spending is NOT unnecessary.)" Yes! I'd say they're drunk on cheap vodka except that I know the overpaid bunch can afford better. Oh! And I agree on the military. A strong well trained, equipped, and fed force is always best for when we need them in the correct managed circumstance.



Bobby

"CaptainRich agrees: As long as the govt doesn't take away my right to bear arms and I can make a fair wage."


Hey! Last time I checked, in December 2006, there were still some track homes for sale in my Davao City community (SE Asia)... just in case. :)


Bobby

"CaptainRich agrees: As long as the govt doesn't take away my right to bear arms and I can make a fair wage."


Hey! Last time I checked, in December 2006, there were still some track homes for sale in my Davao City community (SE Asia)...just in case. :)


Bobby

Davao City sounds a long way from my granddaughter.

I've lived in SE Asia, a long time ago and in a wholly previous lifetime. I live on a hurricane speed bump (Florida) so I'm going to do my final stand from here.

The Sunshine state has the right amount of growth to keep things stimulated, and I'm ten minutes away from scuba diving. Last summer I found a doubloon while doing a beach dive off Vero Beach. Maybe I'll work my retirement there... :p

Davao City sounds a long way from my granddaughter.

I've lived in SE Asia, a long time ago and in a wholly previous lifetime. I live on a hurricane speed bump (Florida) so I'm gonna do my final stand from here.

The Sunshine state has the right amount of growth to keep things stimulated, and I'm ten minutes away from scuba diving. Last summer I found a doubloon while doing a beach dive off Vero Beach. Maybe I'll work my retirement there....:p

I know what you mean about having the relatives around the globe. I have an international family and it's sometimes to difficult to see everyone besides expensive. At my work, I have a lot of clientele that are from Florida. I think Daytona Beach is one the most scenic cleaner beach fronts I've seen in the States.


Bobby

True, Daytona Beach is gorgeous. Vero is south of that. I think the beaches are kept clean because the people care. The water is kept clean by the Gulf Stream. Almost always lots fish around. The treasure hunting/diving is very taunting... I've dove that same beach several times, after storms, and never found any coins since.

On the topic of the "three steep declines", there are a couple of points that we should keep in mind.

Despite the "steep declines" we have seen, the market closed on Friday only about 15 points lower than in the previous month. All of these "declines" have been recovered.

Despite the three declines, the market is still up 18% over last year.

Despite the problems in the sub-prime real estate lending market, the vast majority of Americans still manage to pay their bills on a monthly basis.

Even the failure of the entire sub-prime market (which will not occur) will only effect the finance companies and their owners, not the average American.

Even those with mortgages at those companies that fail won't be adversely affected, as long as they keep making their payments.

Almost every single investment strategist and money manager out there is recommending that people do NOTHING. Don't invest in finance companies, don't DIVEST of finance companies. We are seeing market volatility, not a market crash. Don't panick, stay in for the long haul, and if the daily jumps in the market are making you crazy then stop watching the market and ignore it. The economy is NOT collapsing. The markets are not failing. The real estate industry is not failing. Just ride out the waves, and you'll be fine.

The volatility in the market is being caused by undue panic in the marketplace caused by negative perceptions. These negative perceptions are being caused by the media screaming at the tops of their lungs about the dangers in the marketplace, and how they have all been caused by Bush. The panic is unnecessary and no such dangers exist. Ride out the panic like a professional investor, not an amateur speculator, and you'll do fine.

Elliot

Good sound advice. The market opened slightly up this morning . There was a big change after the Fed. Slightly reduced the discount rate . There will be more when the Fed realizes that the previous Fed regime got over-zealous chasing phantom inflation .

It could very well be that we are at the tail end of a very long bull market. But that doesn't mean there need be a hard fall. This sub-prime issue affects so few . I am not that concerned by hedge fund health .Nor do I think the real estate market will repeat the late 1980s slump . I just hope that those stuck in bad ARMs get a chance to refinance.