keith

UK Bank Run: It Could Happen Here

As promised, here is the information on the bank collapse. I was a bit off. It started in 1931. See link

www.futurecasts.com/De...

UK Bank Run: It Could Happen Here

Ben, I am truly sorry to hear about your relatives/family. Yes, I think in this case all will be ok, as the central bank has stepped in.

In this case there is a slight difference. I agree that the US started the sub-prime mess, but we have not had a major bank run. In the case of country wide and the mortgage companies before that, these where not banking institutions. Northern Rock seems to be both. The conversation on the site has revolved around the need to most likely continue to keep these businesses separate, which happened under our Glass-Stegeal Act

Bernanke Actually Laid Out Monetary Policy in Berlin

OK, you raise one of those points, "all things being equal, but". You are correct. If you are in a high inflationary environment and the rate of change is very high, then the consumer will opt to spend now rather than later. However, outside of this scenario, if real interest rates rise and not nominal rates, the consumer will eventually opt for the least risky asset (saving) vs higher risk (stock).

Bernanke Actually Laid Out Monetary Policy in Berlin

People will have to save more/ service debt, which takes away from their discretionary spending. This slows the economy down , but does force people to save and pay down debt loads.
Yes, higher rates does attract more capital all else being equal. That is to say there is not another several countries out there raising their rates at a quicker pace.

I Think the Fed Will Hold Rates Steady

Lee- I appreciate your comments. What people don't get is that a drop in the dollar is actually a good thing given our current economic state. I live in Norway and Florida. There are a lot of foreigners really thinking about buying that ideal vacation property in the states right now. My father in-law is very close to buying hte 2nd home. The amazing thing is R.E. in Norway is still going through the roof. This european growth will help soften the global slow down.

This Will Have Been a Buying Opportunity

Lee- Yes, I do agree 100%. R.E. is a regional factor. I am also based out of Jacksonville, Florida and it is real rough. I have clients in Tampa-Odessa and in Destin, so have been getting lots of feedback. It is a bit funny, but look at the history of Florida and its boom and bust cycles. If memory serves correctly, there was a great run in 27 & 28 before the crash 29 national crash. Accordingly, one of my clients in Jax has a R.E. brokerage firm and happens to own commercial property, as well. They are telling me it is the worst market they have very seen in their 30 years. Secondly, the builder in Florida is weathering the storm, but its not a joy ride. The flip side is my Big Money investors are actually starting to really scout out opportunities. If you have great opportunities, we should talk, as I have clients ready to step in. This is the time when they really clean house. My e-mail keith@lengerassetmanag... or lengerassetmanagement....

This Will Have Been a Buying Opportunity

Lee- If you see my post on a home builders view, I think it is under my profile on seekingalpha.com. I agree about the R.E. There is still time to work through this. Remeber, there is some active management in out investment process. I for one don't see a 29' depression still economy developing. There are opportunities in the market. I think we will have to civily agree to disagree.

A Stealth Fed Rate Cut?

I agree and almost wrote a post on the same thing. Can you believe that foolishness! I can't believe they even published it!!!!!!!!!

Fear in the Market - Time to Buy

Robert Bohrer- I agree with the housing bubble reset of mortgages, but I think you under estimate the power of the FED. As we continue to roll through this reset, what if the FED has dropped the discount rate by 1%-3%? If you take a look at the economic numbers via GDP post 9/11, it was a very shollow economic recession. The market pull back really hurt those on wall street not main street. Further more, I agree that the housing issue will hurt main street, as well as Wall Street on this round. However, the bedrock of the US economy is a bit more solid than you give it credit for (couldn't help the credit bit). I just don't see a 29' type situation developing here.

This Will Have Been a Buying Opportunity

I can appreciate the strong words provoked by this recent post. However, if you read the other post on my site thecapitalinvestor.com, you'll get a better picture. Our investors have been prepared for this correction for some time. I think the stats got a bit messed up in the translation from my site to seeking alpha. It is a bit more clear on my site. You will get a better sense of the on going conversation, if you review my site. Site aggregations, like seeking alpha, don't pick up all post. With a 13% cash weight, 4% weight in none correlated asset to the market, 4% mid cap, 15% EFA, 4% HYG and 60% large cap with growth bias, we are looking well prepared. Yes, we are starting to work money in the market. I think for the long term investor this will be a great time to work into certain sectors!

Dollar-Cost Averaging Is Complete BS

Agreed on the point of dollar cost averaging down over time. The research I have read has pointed out there is a slight advantage to lump sum. Obviously, you could be killing your self with transaction cost over time. However, averaging down (not up) on individual equites can be very rewarding. If you take a position in an equity and the market has over reacted for some reason, but your thesis has not altered.....why not buy more?

More On S&P Short ETF

Sorry, "reason" may not have been the right word. I can appreciate your point on language.

What I am trying to say, poorly enough, is that for a brief moment you are trading on pure short exposure with no interest build. It was distributed. Also, I think we may want to reword ex-date to ex-distribution. If you purchase on that date and hold through quarter by quarter, you will have built up a cushion of distributed interest or looked at another way your break even keeps getting better. Does this make better sense?

Roger, I appreciate your comments. I am a new hand at this, so your comments help my future articles. Also, you have a small fan here, as your blog inspired me to start my own. Call it Roger Wanna be. Keep up the good work!

On S&P Short ETF Action and Chesapeake Corp. Options

sorry about the spelling 2 minutes till Fed. thu = thru and put=out

On S&P Short ETF Action and Chesapeake Corp. Options

The structure is 95% swaps. The div still flows thu the swap from the counter party. The div is invested in over nights. They chooses to pay put a "distribution" quaterly. Had to make a call on this one.

On S&P Short ETF Action and Chesapeake Corp. Options

This one really caught me off gaurd. (SH) is made up differntly and it was the distribution that moved it down. See my blog for full story. Very interesting!

thecapitalinvestor.com...