bigmoney

Why Mortgage Modifications Have Failed

some folks are worried about hyper inflation. With housing, we already had that, so to speak, at least relative to cash. Letting the debt bubble implode, housing will revert to the mean, and the recent inflation + tommorows deflation, it will all be a wash. If a bubble is blown, and government props up the bubble, then inflation isn't coming, its long since arrived.

Index Investing: Pluses and Minuses

probably passive indexing is good to capture trends in macro-economics. active investing might be more fruitful, but it requires high IQ, free time, and motivation to study dry material in during that free time. Thats a tall order for most folks.

Why Did Economists Fail to Predict the Crisis?

this one is easy ~ group think.

personality also factors in. There are perma-bulls (extroverted sales types), and perma-bears (introverted bookish types), but rare are those that can easily move between the camps as conditions change.

This Economy Is Getting Uglier

what inflation? Helicopter Ben was lampooned throwing cash out of helicopters, presumably getting cash into the hands of eager consumers. However, just trucking cash over to bloated banks who just give their execs even fatter bonus's isn't inflationary.

Buy and Hold Is Not the Only Way

the buy & hold'ers seem to think in terms of stocks.

One might own a rental house in a plush neighborhood, that is slowing turning ghetto. More & more houses are rented as Section 8, and increasingly its neighborhood is making the evening news. Is this a buy & hold?

Will Najarian's Prediction of a Stock Market Explosion Come True?

>> If that meeting results in the government relaxing mark-to-market rules

does this mean that home-debtors struggling with mortgages at 10x income can pay their mortgage with re-flating values of GS?

Always Darkest Before Dawn: Why a Panic Rally Can't Be Ruled Out

housing is also something to consider. Supposedly the savings rate is zero, and the consumer economy was supported by people using their houses as cash machines. In addition, how many people out there are sitting in luxury McMansions with granite countertops, waiting for their interest rate to reset?

And how much of the current sag is related to demographics? It may rally, but it may sag again, hard to know. Stock market P/E ratios are in large part optimism and "faith".

Where Will Baby Boomers' Savings Go?

I'm not sure about stocks either. Treating the stock market as a bank account, without corresponding economic expansion just results in pumping up P/E ratios, causing prices to become unstable. Or perhaps the CEO's will just give themselves more & more stock options for lack of anything better to do.

I think relative performance is more important than absolute performance. Even if your net worth is declining, if its declining slower than your neighbors, then its a job well done. If after another decade, you can buy more housing, hamburgers, and health care than your neighbor, then you are winning the race, relatively speaking.

Stocks vs. Commodities: Which is a Better Investment?

I am not sure why this is. Maybe owners of capital have more leverage than owners of commodities, geo-politically speaking.

Three Approaches to Index Weighting

I deployed into equities, using equi-weight, equi-sector for convenience. I much prefer doing that, than getting into mutual funds / ETFs that are top-heavy financials. This likely would have been a much better formula for getting through the 2000 tech bubble. Going into a bubble, its very difficult to determine if "this time is different", so the equi helps me sleep better at night.

Unfortunately the deflating credit bubble seems to be taking down all stocks across the board, so its hard to pick "winners". The only refuge seems to be federal reserve notes, backed by faith & trust and a very low interest rate.