axelrod608

2009: Healing Starts with Credit, Not Equities

If your underlying assumption is that a recovery is immanent, perhaps buying corp bonds is smart. If the economy proceeds as it did post 1929, it's probably a really, supremely bad idea.

Based on the underlying data I see, I wouldn't buy a corp bond if it paid 15%. Especially when I can get a better yield on a royalty trust.

It's Time for the Fed to Get Serious - Barron's

The Fed under the direction of Alan "Bubbles" Greenspin and his tsunami of easy, cheap, unlimited credit CAUSED this whole mess. Without his flood of money, more money, and even more money, there would not have been money available to make all those liar's loans and to buy all those bizarre derivatives on which the nation and the world are now choking.

The result is clear and obvious to any objective observer. The companies that grew fat on the flood of free money are a bunch of bloated dinosaurs. They are unsustainable. The financial companies and the retail companies we brought into the 21st century are (almost) ALL unsustainable. Corporations, individuals, families and government at all levels are drowning in debt. The idea that reinflating the credit bubble will get everyone borrowing and consuming again is ludicrous.

Albert Einstein - a pretty bright guy - observed that doing the same thing the same way and expecting a different result was a definition of insanity. The idea that the Fed can reinflate the credit bubble and fix everything is patently insane. Absurd.

Also, American financial institutions are holding some $130+ trillion in losses on their derivatives. The Fed doesn't have that kind of money. The Fed CANNOT fix this mess. It can only postpone the inevitable crash and increase the losses by the amount of additional money it pours into failing businesses.

Aretha Franklin perhaps put it best, singing "Who's zoomin' who ?" All this talk about "fixing" this mess is just the ramblings of born again zealots, whose faith in their economic theory is beyond question, uncriticizable. They are the economic 'terrorists' who are willing to destroy whatever they disagree with.

The only wise thing to do with the Fed is dismantle it. It is an unConstitutional construct that causes more trouble than it's worth and can't fix the messes it makes. Put it and the bloated companies it created out of their misery. Before they do more harm.

Credit Crisis Watch: Are the Markets Thawing?

I regain faith in Americans when I read comments like the above. There are clearer heads out in investorland than in DC.

The thesis of the article is based on a faulty assumption - that the credit markets of 2006 were "normal". Nothing could be further from the truth. After a decade of a flood of cheap, easy, unlimited credit by Alan "Bubbles" Greenspin, the nation's financial markets were awash in excessive credit exuberance. And the assumption that returning credit markets to that bloated condition will somehow "fix" the economy is ludicrous.

The credit markets and the bloated financial corporations we brought into the 21st century were and still are unsustainable. The bubble can no more be reinflated than can the Hindenburg. And there's Hank and Ben pouring gas onto the fire.

Change ? Hope ? Based on the choices other than Volker that the next Pres has made, I see a future of seamless policy to keep shoveling dollars by the cubic yard into the inferno. I am skeptical of these functionaries' grasp of the underlying problem

The rules need to change. The dinosaurs need to be allowed to die. And if federal money is to be thrown around, let it go to small and mid-size businesses with hands on owners, reasonably compensatesd officers and employees, not to the goons that once called themselves "masters of the universe" who, it turns out, can't run a company anywhere but into the ground.

The unfixable cannot be fixed. The 2006 credit market was Humpty Dumpty. He fell.

Bye-Bye Dividends

Just a thought - yes, the Roth IRA is a great vehicle, but one can only put a limited amount into one each year. Therefore, it is not suitable for all your money. I put the max in each year, but still have to find other ways to end-run the taxman.

Bye-Bye Dividends

With interest rates less than inflation and dividends falling, one wonders what, if any, incentive there is to save and invest. If the government were serious about turning this financial mess around, they would encourage saving and investment by CUTTING taxes on interest and dividends. It makes far more sense to have private sector funds going into the marketplace than to "inject" federal funds to increase liquidity and lending.

There are still some real steals out in dividend land. The Canadian oil royalties have been hammered in price and current yields are 20%+. Adjusted for currency exchange and withholding tax the yields are still over 15%. And there are many American Master Limited Partnerships paying tax-favored dividends of 10% and more.

This is NOT you father's stock market.....

Perhaps they're just pushing all of us with substantial savings/investment toward annuities. At least there you can get guaranteed interest rates.