AndrewBaker

Wall Street Breakfast: Must-Know News

TARP will be a loss to taxpayers! Surely not! How could this be when we've had so many public spirited bank bosses and politicians working around the clock trying their very best to put money into the pockets of the poor overburdened taxpayer by rescuing the banks and financial companies using their own money (well, the governments really, but they think its their own) and without taking anything for themselves nor wanting any accolades for so doing!

We should all be chastened by their actions and so grateful for all that they have done for us. And let's not be churlish by thinking that they may have some thoughts in the back of their minds that they could get something out of it for themselves. Shame on you!

Macy's: Better than Expected Results Lift Guidance

Christmas is coming and stores may sell more! What analyst worked his butt off evaluating that?

Wall Street Breakfast: Must-Know News

The dollar won't slide catastrophically because there is no other currency to replace it right now, not because it's intrinsically worth holding more than other currencies, but it will decline over time, just as the British pound did from the beginning of the last century and for most of it.

A weaker dollar helps exporters and tourism, which is good, but hinders the growth of emerging economies, which may slow them down a little, but won't stop the trend.

On balance, the US needs a weaker currency to support trade which will help real businesses recover. Not so many people will currently be insistent on spending money on foreign goods or looking to increase their overseas vacationing, so any extra cost there won't hurt much. Imports will be more costly, but the US has a wide internal market that can supply most needs anyway.

Overall, a drop in the dollar will likely be beneficial. Better that than rampant inflation which will destroy value over many years to come, and which worries me will be the result of quantitative easing. If a weaker dollar reduces that process, I will be satisfied.

U.S. Wages Are Out of Balance, As We Well Know

Excessive pay is a problem, and not just in the US. The UK has copied the US here, and I do not believe it is a coincidence that the UK is suffering so badly economically also. The upper echelons not only pay themselves too much but do so on an after-taxes basis, making the gross amount even more exorbitant. This money comes out before profits, depressing performance as a result, as well as being a drain on a company's resources. In good times, it is not so evident, but come the bad times, where we are now, and not only does it become obvious but it makes it that much harder to recover because these costs have still to be covered.

The general workforce is not overpaid, but the bosses most certainly are.

Bear Verdict Should Please Wall Street

Bad judgment and greed aren't crimes: agreed, but the mentality that these people have is no better than that of a criminal, only they don't break laws that will make them that.

The difference between breaking in and stealing someone else's goods, and taking their money in, high risk gambling with it, and telling them it's been lost in a bad investment, is not one of criminal or not criminal but one of morals and ethics. These financial workers have as low if not lower morals and ethics than a criminal when it comes to regard for others and their possessions, and the effect that depriving them of such has on people and their families.

One big difference is a criminal goes to jail, whilst a stupid financier languishes in his expensive home, leaving it only to laugh all the way to the bank.

Wall Street Breakfast: Must-Know News

AIG boss says they can't retain talent under compensation restrictions? Seems to me they shouldn't want to retain the "talent" that got them into the mess they're in in the first place.

This rubbish about excessive pay to retain talent must stop: there are plenty of people out there with real talent who will work for far less than some of the pampered financial workers we've had in the past and still have now; and they are just as good, if not better, and won't constantly moan about pay and threaten to go elsewhere (though who would want them beats me).

Do a fair day's work for a fair day's pay, and then we'll soon see how quickly we can get back to a sound financial footing.

Wall Street Breakfast: Must-Know News

This latest financial crisis has made me think beyond just money and has started me considering more and living more a lifestyle where financial aspects do not rate so highly: and it's more satisfying, though hard to give up on certain behavior. One way to compensate is to deal less with and spend less time on government and regulatory requirements that frankly do me and mine no good at all and cost me time and resources that I begrudge spending on them. Less compliance with officialdom is not only rewarding in the extra time one has, but also very satisfying in itself. I commend it to everyone. Give it a try, and see how good it feels.

Stocks Soar, Unemployment Rises, Dollar Slumps

With less workers to pay, less sales so less stock to pay for, and lower costs generally because less business means less cost of servicing it, profits will go up ... in the short term. So, the stock price rises ... in the short term.

By definition, short term does not last long. Then what?

Wall Street Breakfast: Must-Know News

So stimulus measures will be maintained perpetuating the stock market gamble of riding the uptrend and getting off in time at the right stop. Experts can't get this right, so most people have no chance, and little choice except to carry on investing and hoping the reversal will not be too savage.

So, Main Street pays the stake money and takes the loss if utopia does not come good. Nothing's changed.

Friday Outlook: Commodities, Global Markets

The rolling over of banks and financials is infuriatingly slow, but rolling over they are: I am waiting for the big drop, but other parties are doing their best to hold these up, and they will probably succeed for a whiles longer. This means, IMHO, that that big drop will be even harsher than it need be; giving the bears a nice return for going short at the appropriate time. And that is the problem: when is that?

Wall Street: Dumb as It Ever Was

Investment is nearly all about predicting the future: only psychological aspects have as much an effect as unbiased numbers, which is one good reason why it's so hard to get it right even as much as half the time.

Nearly all, if not all, of us have a belief about the direction of a market or security, and even if we think we trade unemotionally on numbers or other criteria, our selection process is derived through human thoughts and feelings. Trading blindly on a system can lose money through overtrading or undertrading as well as getting it right or wrong, and backing hunches is not much different.

In other words, there is no golden panacea or holy grail of investment. The most we can do is to beat the average, and by definition, many of us will have average performance. This is an art, not a science, and you've got to love doing it yourself to keep doing it. I do, and I know that if I had left it to others over the years I may have done better: but I would not have had nearly as much enjoyment and pleasure as I have had and continue to have from handling my own investments. Whatever happens and whatever the outcome, I am the master of my own destiny. And that is worth a lot.

America's Overheated Printing Presses and Huge Debts Helping Drive Gold Higher

Yes, gold is headed higher, but there's a correction due; so I sold out this week, and will wait it out until the correction has appeared to bottom. I was in leveraged before, but my next buy will be unleveraged as the swings in price are likely to increase, which hurts a leveraged longer term position.

Wall Street Breakfast: Must-Know News

Those who can, do; those who can't, teach; and those who can't teach become politicians and grease the palms of those that live off those that can, and in return receive contributions towards election expenses and endorsements of their ability, enabling them - they hope - to stay on the political gravy train for a very long ride.

Cynical? Remember the cynics believed in virtue and shunned materialism, which is IMHO, a better philosophy and lifestyle than our glorious leaders of today demonstrate.

Brits More Critical About 'Quantitative Easing' than Americans

QE is a big con trick. The eventual result - not apparent until the government that initiated it has long gone - will be high inflation which will destroy the value of our savings, investments, pensions, and, for those lucky enough to own one, our home (which won't be too bad as long as we continue to live in it, but will be if we want to raise cash on it).

Those responsible for QE and in those cahoots will ensure that they are protected by using various means, including selling their stocks on to us at way over value prices, taking inordinate pay rises through salary, bonus, pension contributions and other manipulations, and holding their own assets in forms where inflation proofing is the expectation.

This is one reason why stocks will fall in price soon and commodities will increase. And why most steeples will be much poorer for a very long time to come.

Are We Becoming a Nation of Renters? Investing for the New Housing Dynamic

Renting is a good option for many. Pouring cash into a home and looking at it as an investment is both contradictory in that one lives in one's home and therefore it is not available to "spend" as are investment funds, and also dangerous in that one is putting too much into one quite illiquid asset thus reducing diversification and becoming dependent on the vagaries of one non-predictable market should a sale be required to raise funds. And this situation often occurs in a period of economic problems which may well mean that the value available is less than anticipated.

Agreed, having cash on deposit doesn't pay much right now, but not much is still better than a reducing value. Corporate bonds and convertibles can provide a better income return for paying rent, and a foray back into the housing ownership market deferred, if ownership is wanted in the future.

Other countries (eg: UK) have schemes where capital can be drawn down from the equity in a home and interest rolled up until death and with a no negative equity guarantee (meaning the estate cannot be liable for interest greater than the realized sale value). These schemes though are not so popular as people see it as giving their home away to the mortgage company and denying an inheritance to their loved ones. So, why not sell, invest the proceeds and rent?

The bottom line is that home ownership is not necessarily the best thing, especially in retirement when funds to enjoy life are wanted.