Economic failure impacts even kiteboarders

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Economic failure impacts even kiteboarders

Postby jono » Tue Sep 16, 2008 12:27 am

So Lehman Bros. employees (who are now unemployed or something) could pay $1 to sign a professional painting of their CEO -- I'm checking the comments they left and found this:

Image (see left side of the giant forehead)

Anyway, the full article is here:
http://theannotatedfuld.blogspot.com/20 ... y-one.html

BTW, my recommendation to buy GLD still stands. Oh, and take your money out of the banks and bury it like a bone. WAMU is next (my bank, I'm lookin for a shovel).
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Re: Economic failure impacts even kiteboarders

Postby Sonny » Tue Sep 16, 2008 7:24 am

Have you heard of FDIC?
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Re: Economic failure impacts even kiteboarders

Postby davewsail » Tue Sep 16, 2008 1:14 pm

Dude, don't go there-- go kiteboarding. It is quite natural to be scared during a financial crisis. It is the emotions of greed and fear that lead to bubbles and their eventual spectacular crashes. It is no different this time and it will surely happen again. At the time it always feels like the world is going to end (remember 2001?). So don't do anything rash-- hold tight. You will be much better off in the long runif you don't react. In fact the smart money always takes the opposite bet of the general population. Just as people think the world is ending, the smart money sees the greatest buying opportunity. I'm not saying that is now but if you do something rash, you will probably regret it. If you're scared it's probably because your asset allocation is not something you are comfortable with. If so, change it-- sleep better. The world will not end.

BTW, gold is not a good bet right now. Gold is a good bet during inflationary times. In a world economic slowdown like we are facing, you are better off holding cash. And if all hell breaks loose and a bunch of banks go under and swamp the FDIC, neither money nor gold will be of much use anyway. Then basic necessities will be king. But I don't think we are anywhere near that point. Every major crash in the stock market and bank failure has always been recovered from and then some (S&L scandal , junk bond bubble in the '80s, the Asian contagion and LTCM blow-up in the 90's and of course the dot com bubble bursting in 2001). Watch what savvy investors like Warren Buffet are doing-- they are not panicking. In fact, he's been buying up a lot lately.

So bottom line, don't panic. Think rationally. Stop reading the news if it causes you stress. Go kiteboarding and you'll feel better.
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Re: Economic failure impacts even kiteboarders

Postby pedro » Tue Sep 16, 2008 1:46 pm

Sonny wrote:Have you heard of FDIC?


Sonny, you don't qualify. No FDIC for >$100K.
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Re: Economic failure impacts even kiteboarders

Postby feixaq » Tue Sep 16, 2008 2:46 pm

davewsail wrote:Dude, don't go there-- go kiteboarding. It is quite natural to be scared during a financial crisis. It is the emotions of greed and fear that lead to bubbles and their eventual spectacular crashes. It is no different this time and it will surely happen again. At the time it always feels like the world is going to end (remember 2001?). So don't do anything rash-- hold tight. You will be much better off in the long runif you don't react. In fact the smart money always takes the opposite bet of the general population. Just as people think the world is ending, the smart money sees the greatest buying opportunity. I'm not saying that is now but if you do something rash, you will probably regret it. If you're scared it's probably because your asset allocation is not something you are comfortable with. If so, change it-- sleep better. The world will not end.

BTW, gold is not a good bet right now. Gold is a good bet during inflationary times. In a world economic slowdown like we are facing, you are better off holding cash. And if all hell breaks loose and a bunch of banks go under and swamp the FDIC, neither money nor gold will be of much use anyway. Then basic necessities will be king. But I don't think we are anywhere near that point. Every major crash in the stock market and bank failure has always been recovered from and then some (S&L scandal , junk bond bubble in the '80s, the Asian contagion and LTCM blow-up in the 90's and of course the dot com bubble bursting in 2001). Watch what savvy investors like Warren Buffet are doing-- they are not panicking. In fact, he's been buying up a lot lately.

So bottom line, don't panic. Think rationally. Stop reading the news if it causes you stress. Go kiteboarding and you'll feel better.

GREAT post, I totally agree.
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Re: Economic failure impacts even kiteboarders

Postby OliverG » Tue Sep 16, 2008 6:31 pm

I agree 100% as well. It always baffles me how the public at large reacts. It's emotional and not smart really. There are always upturns and downturns, but if you have the reason and maturity to look at the cycles historically, holding tight and being calm and levelheaded will benefit you in the long run. If you have or can contribute and extra cash to your IRA or 401k, it's actually a good time to get bargains. So many people have money invested in their IRA's and 401k's. What is the reason for that? Tax savings, of course, but to grow your investment on a long-term basis. So why react on a short-term basis? Doing so only perpetuates the dropping of the values of stacks and funds. :?:
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Re: Economic failure impacts even kiteboarders

Postby jono » Tue Sep 16, 2008 11:12 pm

Maturity to ride it out? We've NEVER seen an asset bubble like the current housing market bubble and the bigger the bubble, the harder it blows. Are you guys channeling the housing/stock market cheerleaders on CNBC -- it sure sounds like it ;)

WAMU (the largest mortgage lender in the USA) credit rating just cut to "junk" status?
http://www.reuters.com/article/ousiv/id ... 9120080915

FDIC haha!!! That sign at your bank -- you believe that shit? AIG is the Bank's "FDIC" and handles the credit default swaps (CDS) and it just FAILED and was taken over by a private company -- The Federal Reserve.

I've been talking about housing crash for 5 years now because I knew housing couldn't increase at 20-40%/year and heard about people taking jacked up loans, just waiting to buy since I didn't trust those BS loans they were giving. Now it's hitting harder than even I expected. Luckily we all shorted the home builders, then the financial companies and while it worked well, I got a warning for ya.

Let's see, the USA's biggest financial firms burning 1-2 per month? FDIC says more than 100 banks may fail and not just the "little ones" and you are calling for calm?

No way, I have no reason to trust some bank that tries to get 3$ from me to get my own money. You can leave your stuff sit, but you might want to read about people who got .25 on the dollar from their "insured" FDIC money (did you pay for that insurance?) under 100K before you pass your advice. The proof is in their previous action and trading me 25%:1 does not work for me.

Plus the FDIC system wasn't designed to handle the kind of failure we are seeing now -- 100 year old firms dropping like flys because they ended up with bad home loans?

http://www.fdic.gov/news/news/financial ... 08002.html
Part 2. This part of the proposed rule applies to large FDIC-insured institutions with complex deposit systems. Covered Institutions would be required to adopt mechanisms that would, in the event of the institution's failure:

* Allow automatic posting of provisional holds on large deposit accounts in any percentage specified by the FDIC on the day of failure.
* Provide the FDIC with deposit account data in a standard format.
* Allow automatic removal of the provisional holds and posting of the results of insurance determinations as specified by the FDIC.

FDIC to Add Staff as Bank Failures Loom
http://online.wsj.com/article/SB120398607404892133.html

Two IndyMac customers caught unawares offer lessons for others
http://www.marketwatch.com/news/story/t ... aspx?guid={FCD2E7BE-B77E-48FB-8BDD-4923DCC347F2}&dist=SecMKTW

FDIC Insurance Fund - It Doesn't Actually Exist
http://seekingalpha.com/article/95129-f ... ally-exist

FDIC may borrow money from Treasury: report
http://www.reuters.com/article/newsOne/ ... 0420080827

So please do stay calm, just don't trust something that can't be trusted to manage it's own money -- manage it yourself or it will manage you.
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Re: Economic failure impacts even kiteboarders

Postby OliverG » Tue Sep 16, 2008 11:54 pm

I didn't mention banks in any way, but was referring to securities in the form of stocks and funds residing within IRA's and 401k's.

If you're supporting a run on the banks that won't help. If you think things are bad now, if everyone decided to withdraw their money things would get really ugly.
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Re: Economic failure impacts even kiteboarders

Postby OliverG » Tue Sep 16, 2008 11:59 pm

The glass can be half-full too:

AIG rescue hopes, Morgan Stanley earnings, ease markets

http://www.reuters.com/article/newsOne/ ... 7720080916

RPT-GLOBAL MARKETS-Asia stocks, oil rally on AIG rescue

http://www.reuters.com/article/newsOne/ ... 5820080917
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Re: Economic failure impacts even kiteboarders

Postby jono » Wed Sep 17, 2008 12:06 am

This is more media/CNBC cheerleading -- these new reports don't tell the story.

AIG is getting bailed out at *tax payer expense* by the fed. Doesn't make me feel better, that is corporate welfare if you ask me. Did you know by bailing out Fannie and Freddie we just DOUBLED the national deficit overnight? AIG will just add to that. The FED can't just print money, printing causes inflation (see "helicopter ben" for definition). The FED can bail out huge banks, but can't cough up money to pay the State of CA employees (or teachers a decent wage?)?

Don't believe the hype -- especially when it comes to monetary policy or things most people don't fully understand.

As Obama says: When the Fed acts as an insurance agent, taxpayers have rights to regulate. We need regulators that actually enforce the rules instead of overlooking them.

http://www.youtube.com/watch?v=mp7i66YtOXw
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