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klarsolo

klarsolo
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  • Back to the fifties? "Once the money gets under the mattress, which it has, it takes a long time to pry it out again."  [View news story]
    They'll pull it out again when the S&P is at 3000 and all magazine covers tell them to invest, it can only go up.
    Mar 25, 2009. 03:16 PM | 3 Likes Like |Link to Comment
  • Even if the Treasury's latest plan to buy up toxic assets works (big if), much of the economy remains broken, banks still haven't addressed the malfunctions that got us where we are, and the auto sector continues to bleed cash. Innovation, which may one day propel us out of this mess, is a gradual process.  [View news story]
    archman, thanks for the reasonable reply. It showed me that you're not one of these billions of other posters here who are quick to tell you how the U.S. is going to be the next third world country, complete with 10 reasons why this is a foregone conclusion.

    I, like you, am 100 % invested, and have been all throughout this crisis, thankfully with similar results. I'm just shaking my head as to all the people who will now tell you that we haven't seen anything yet and that the S&P can easily go to 500 and below. The more I see of that type, the more I gotta think that we're getting closer and closer to an end in the market decline, although not necessarily to an end in our economic problems. As you point out, there are a lot of problems left to solve. Some will be solved, some won't, just as it always has been.

    I guess in many ways we actually are on the same page. Good luck with your investments, it looks like you're doing pretty well.This is hopefully the worst market we'll ever see in our lifetime.
    Mar 24, 2009. 06:01 PM | Likes Like |Link to Comment
  • Even if the Treasury's latest plan to buy up toxic assets works (big if), much of the economy remains broken, banks still haven't addressed the malfunctions that got us where we are, and the auto sector continues to bleed cash. Innovation, which may one day propel us out of this mess, is a gradual process.  [View news story]
    So the question is, is the gloom & doom priced in? If not, when is it priced in? Just pointing out the problems we face doesn't necessarily help people with their investment decisions. We always face a huge amount of problems, but sometimes they are less apparent and stocks rally for years.

    archman82011, my point is, one can complain about anything and everything at any point in time. But for investment decisions it's only helpful when you identify something that is not the consensus view already. Every layman I know is now reading books about the coming crash and how to best invest in gold. My mother-in-law is thinking about pulling all her money out of the banks, because somebody on Fox News told her it's not safe there. We know we've got problems. But when is it priced in?

    For anybody who just sees gloom & doom: to be a successful investor, try for a change to make a case for the opposite point of view, the one that doesn't go with the mainstream.
    Mar 24, 2009. 05:09 PM | Likes Like |Link to Comment
  • Even if the Treasury's latest plan to buy up toxic assets works (big if), much of the economy remains broken, banks still haven't addressed the malfunctions that got us where we are, and the auto sector continues to bleed cash. Innovation, which may one day propel us out of this mess, is a gradual process.  [View news story]
    Neil459, so what would be your plan?
    Mar 24, 2009. 02:03 PM | Likes Like |Link to Comment
  • Even if the Treasury's latest plan to buy up toxic assets works (big if), much of the economy remains broken, banks still haven't addressed the malfunctions that got us where we are, and the auto sector continues to bleed cash. Innovation, which may one day propel us out of this mess, is a gradual process.  [View news story]
    Neil459, I did run a small business when I was in college. And one thing I learned was that you should work with the way the world IS, not the way it ought to be. What all the naysayers do is try to wish for the path they think should be taken, and decry the road we actually picked. Isn't that the definiton of being delusional?
    Mar 24, 2009. 09:51 AM | 1 Like Like |Link to Comment
  • Even if the Treasury's latest plan to buy up toxic assets works (big if), much of the economy remains broken, banks still haven't addressed the malfunctions that got us where we are, and the auto sector continues to bleed cash. Innovation, which may one day propel us out of this mess, is a gradual process.  [View news story]
    archman82011, so how would you really fix things? By nationalizing everything? If you think that there are no very harmful seconary effects (for example by wiping out the debt you hurt insurance companies and investor confidence even more, especially through all the flip flopping going on in politics), then I don't think it's me who is delusional.

    How about we stop crying and start working on making the best ouf of this? The plans have been announced. Complaining over and over won't change them. Make the best out of them.
    Mar 24, 2009. 09:18 AM | 1 Like Like |Link to Comment
  • Even if the Treasury's latest plan to buy up toxic assets works (big if), much of the economy remains broken, banks still haven't addressed the malfunctions that got us where we are, and the auto sector continues to bleed cash. Innovation, which may one day propel us out of this mess, is a gradual process.  [View news story]
    A realistic discussion is always appreciated, and I'm certainly nobody who advocates putting your head in the sand, but all this whining and complaining on SeekingAlpha and all over the web is getting on my nerves. Everybody quickly points out every conceivable problem, but nobody comes up with a better solution. So what's the point?
    Mar 24, 2009. 09:15 AM | 1 Like Like |Link to Comment
  • Even if the Treasury's latest plan to buy up toxic assets works (big if), much of the economy remains broken, banks still haven't addressed the malfunctions that got us where we are, and the auto sector continues to bleed cash. Innovation, which may one day propel us out of this mess, is a gradual process.  [View news story]
    I'm glad we have so many people pointing everything that's wrong in this world, so that we never feel too good about things.
    Mar 24, 2009. 08:56 AM | 2 Likes Like |Link to Comment
  • How Will the Geithner Plan for Banks Ever Get Approved? [View article]
    Seriously, who cares about the outrage within the blogosphere. Most bloggers seem to think it's sophisticated and intellectual to crap on everything that comes from the Fed and the Treaury. They complain about single plan that is being floated and implemented. Most offer very detailed explanations on why we're absolutely doomed, but none offer suggestions on how to get out. Not very helpful. And this includes you, Felix Salmon. Other than asking for more wealth destruction by nationalizing left and right you haven't offered many suggestions yourself.
    Mar 23, 2009. 10:21 AM | Likes Like |Link to Comment
  • Current Popular Argument Against AIG Bonuses Takes the Wrong Viewpoint [View article]
    User 373847, what do you think net loss rates on cards are? 2 %? Even if they were that low you'd have to charge over 8 % interest. Also, there are multiple fees involved, for example to the credit card servicer, that need to be paid as well. Believe me, banks are not getting filthy rich from such deals. Keep in mind, credit cards are unsecured. If you don't pay them back, there is not much they can do to recover their money.

    Let's look at auto ABS deals in the market. Auto deals are secured, although cars lose their value rapidly. I'm thinking of a 2007 COAFT deal that is currently trading at 73 cents on the dollar. That implies a cumulative net loss rate of about 30 %. If that is ridiculous, why is the market pricing it that low? Keep in mind, these are cars we're talking about. People need their cars and if they default, the car will be repo'ed and sold off. And yet, the market currently assumes 30 % cum net loss rates.
    Mar 21, 2009. 09:54 PM | Likes Like |Link to Comment
  • Current Popular Argument Against AIG Bonuses Takes the Wrong Viewpoint [View article]
    User 373847, unfortunately it is not ridiculous. It always depends on the deal, but there are several deals in the market that are already approaching this level of delinquency. Cumulative net losses are ticking up rapidly.
    Mar 21, 2009. 09:49 PM | Likes Like |Link to Comment
  • Current Popular Argument Against AIG Bonuses Takes the Wrong Viewpoint [View article]
    RATHER FISH, I see this come up time and time again. People ask: Why do credit card companies charge 20+ %? Is that greed?

    It is not. Here is a small and very simplified calculation. What do you think you need to charge as interest just to make a reasonable return on credit cards?

    Let's assume you want to have a 6 % return and you expect 10 % in cumulative credit card losses (people that charge but don't pay you back, etc.) This means that from the 100 cent per dollar you hand out, you expect to lose 10 cent right away to dead beats and others. However, you'd like to get 106 cent back (the 6 % return on your original investment).

    Now, what kind of percentage you need to charge to get from 90 cent to 106 cent? Answer: around 17.8 %, very close to the average rate charged on credit card balances. And if you expect more delinquencies, you need to charge even more than that. Has nothing to do with greed.
    Mar 21, 2009. 08:44 PM | 1 Like Like |Link to Comment
  • How We Could Let AIG Fail, Sort Of [View article]
    How about we don't come up with new plans every other day, abrogate older plans at whim and instead follow through with one consistent strategy? Wouldn't that maybe be of some help in times of extreme uncertainty? We've already committed all these billions. Backing out and changing everything will not do us any good.
    Mar 21, 2009. 08:08 PM | Likes Like |Link to Comment
  • More than half of the top 23 TARP recipients owe the government taxes, despite signing statements that they owe nothing. "It is a disgrace," says one lawmaker. "The American people are fed up... and they're not going to take it anymore."  [View news story]
    Did they check whether that one lawmaker paid all his taxes?
    Mar 20, 2009. 08:55 AM | 3 Likes Like |Link to Comment
  • Time to Bury the Rotting Carcasses of Dead U.S. Banks [View article]
    Sean, your profile says you are a CFA associate. May I ask what that is? Are you a CFA charterholder or a candidate? As far as I know there are no associates.
    Mar 16, 2009. 09:29 PM | Likes Like |Link to Comment
COMMENTS STATS
706 Comments
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