Oct
30
The Right Time To Save Money
October 30, 2008 | 3 Comments
So the economy has taken a down turn. You've decided you might need to start saving some money. Well, it's too late. You should have been saving five years ago. But there's hope.
There's a Chinese proverb about the best time to plant a tree.
The best time to plant a tree was twenty years ago.
The second [...]
Oct
29
Securitization - Good Idea Gone Bad or What Just Happened
October 29, 2008 | Leave a Comment
I used to work for a credit card/finance/mortgage company. I always wonders how they got around the capital requirements I learned about in Money and Banking class. Well know I finally understand the big picture. Most of the expansion in the last 20 years has been a result of securitization.
What the Heck is Securitization?
The government [...]
Oct
27
Time to Buy Gold?
October 27, 2008 | Leave a Comment
With financial hysteria setting it, some might wonder if it's time to buy gold or other commodities. Gold has been marketed as a "store of value" in uncertain times. But is gold (or other commodities) a good investment?
The rumor is that many hedge funds are liquidating their holdings to raise cash. This liquidation is bringing [...]
Oct
23
Magical Thinking
October 23, 2008 | 1 Comment
Do you blame your problems on somebody else? The sub-prime mess is either Clinton's, Bush's or Congress's fault depending on who you believe. Most of our problems are caused by magical thinking. Magical thinking is 1 + 1 = 3. Magical thinking says giving poor people houses is a good idea. You need to remove [...]
Oct
22
Fed Chief Pushes for Another Stimulus Package
October 22, 2008 | 2 Comments
Ben Bernanke, Chairman of the Federal Reserve (the bank's bank) told Congress he supports another stimulus package. What does this mean for you?
In testimony before congress Bernanke said that he supported another stimulus package. President push also supported another stimulus package. However, Bush wants the new package to be "targeted, temporary and timely."
What is the [...]
Oct
15
Why A Mortgage Increases Your Risk
October 15, 2008 | 1 Comment
Or rather, why does any debt increase risk? Take a look at Wall Street now. Debt (over leveraging) and randomness wiped out every independent investment bank on Wall Street. Those that didn't fail are probably going to get nationalized (thank you comrade Bush).
The banks failed ultimately because they ran out of capital. They had too [...]
Oct
14
A House is a Consumer Good Part 2
October 14, 2008 | 2 Comments
I published an article about house as consumer goods over the weekend that was meant as a draft. So instead of fixing that post, I'll finish my thought in this post. Houses are consumer goods.
A house is not an investment. A house is a place to live.
Definition of Consumer Goods From Answers.com:
Goods bought for personal [...]
Oct
11
A House is a Consumer Good
October 11, 2008 | 2 Comments
Thought Experiment: Would you rather have a $1 million home or a $1 million dollars in stocks/bonds/CD's/Land?
When's the last time you had to water your stock?
Oct
9
Bank Loans Have Not 'Dried Up'
October 9, 2008 | Leave a Comment
It's important to note that even though the hysterics of Washington bureaucrats indicate otherwise, lending has not stopped. It may cost you a little more, and you might have to actually, well, you know, qualify for the loan, but the banks are still lending money.
I talked to a banker buddy of mine and he confirms [...]
Oct
8
Were You Diversified?
October 8, 2008 | Leave a Comment
Every morning in the locker room I hear the same thing. People talking about how much money they just lost in the stock market. The problem is these people are OLD. I really want to walk up to one of them and ask if they were diversified or if the stock market was their only [...]