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 magical thinking from you thought process to succeed in this world.
The universe doesn't grant us a free pass. I've received …
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 Plan?
Right now the plan …
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 much debt and no one would lend them any more money for …
Comment by Jeff: "If/when you lose your job, how is your …
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 or household use, as distinguished from Capital Goods or …
Comment by Jeff: … only criticism is the lack of discussion about the value …
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?
Comment by A House is a Consumer Good Part 2 - Wealthy Reader: … Carolyn on Will There be a Second Stimulus Package or …
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 that yes, indeed they are loaning money, and by the way, do I need any. Of course, I don't but …
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 hope for retirement.
I'm fairly fortunate (read smart). I am extremely diversified. Yes my retirement statements are just as …
Oct
6
Are Scandals Inevitable in Regulated Industries?
October 6, 2008 | 1 Comment
As the financial system comes crumbling down, the 20/20 hindsight begins. Of course the casualty of this latest fiasco will be free markets. But when you examine the industries that have had massive scandals, you'll find a list of the most highly regulated industries including telecoms (WorldCom), energy/utilities (Enron, NorthWestern) and banking (too numerous to mention).
This idea came to me …
Comment by Jeff: It's the old chicken or the egg …
Oct
3
Back To Basics
October 3, 2008 | 1 Comment
The major news right now is the so called credit crises. Banks aren't lending to each other so the government is going to spend close to A TRILLION dollars to fix the problem. It's depressing but we can't dwell on it. (Just remember if your congress(wo)man voted for it in November, voting is the best revenge.) What we need to do now if re-focus on the financial matters we can control. …
Comment by Jeff: … good advice…for the vast majority of people following a …
Oct
2
Warren Buffet On the Credit Crises
October 2, 2008 | 2 Comments
When Buffet dies I guess we're all in trouble. Nobody can explain this stuff except him. (end sarcasm)
Warren Buffet is interviewed about the credit crisis on CNBC. You can read some excerpts here: http://mathoda.com/archives/433
One quote I'd like to point out:
Beware of geeks with clever computer models: “I mean they had all these types from Wall Street, you know, and they had …
Comment by Are Scandals Inevitable in Regulated Industries? - Wealthy Reader: … To Basics - Wealthy Reader on Warren Buffet On the …