Friday, September 19, 2008

It's times like this I'm glad I don't have the cash to invest: or Bob-o speaks out of his ass

Well upon reading the Angry Runner the Economy is in the shitter and it's only going to go deeper into sewers for the short term foreseeable. For people with stock, that's reason to get a gallon of Pepto, pull out your hair and curl up in the fetal position as you agonize whether to hold and ride out the storm or sell in panic and drive the market even deeper into the septic tank (please consult a qualified financial advisor for help and advice as I am a bank teller talking out of his arse.) For folks like me who are paying back debt, and don't have a lot to play with, the lowering interest rates are a help especially with student loan consolidation peaking around the corner and a variable rate private loan that is a regal pain in my side ( man I was dumb, I should have just gone to CCSU or UCONN freshman year.) but regardless lower Prime rates are good for me and others with variable interest rates and for anyone looking to buy real estate/ investment property if your credit is in good shape.(once again consult individuals with experience in this stuff I am not really qualified for this type of advising.)

For guy like me who will hopefully be on the right track in a couple of years ( barring unemployment, but my company is well capitalized at the moment so it looks like we'll survive the storm....I hope....) it looks like Wall Street will be a bargain bin when the dust finally settles the survivors emerge from the piles of dead they will be bloody, bruised and looking for capital, and that will be the time for me to invest. But until then I'll keep watching the real economists and wait and see when this thing is finally going to bottom out and then begin to rebound, granted from what I've been reading at Angry and Co. it might not be until at least 2010-2011.

Unitl then at least from what I'm seeing Government bonds might be a good investment or if the Fed had any common sense they would push them to fund the massive bailouts that they have undertaken in the last month...but regardless I will leave the econ to the economists.



Angry Runner said...

'if the Fed had any common sense they would push them to fund the massive bailouts that they have undertaken in the last month...'

Do you know what you're saying here?

Bob Almighty said...

I'm going off of what was historically done anytime we needed a big project done in the past (ie war, granted then we actually had own own industires in house.) The government usually relied on three major methods to gain revenue 1. Budgeting ( which is unlikely to happen in this administration, or the next.) 2. Raising taxes, and 3 appealing to the people to buy bonds as an investment in the government, this not only helpped to gain some income (granted miniscule at best.)but raised morale. Upon reading the article posted at your sight, it seems the FED and the current and future policy makers have no intent to do anything other than borrow money from China to finance the bailouts. China it seems is taking the role that we took in the Carribean, Central and South America, of not putting the brakes on the credit card getting itself heavily vested in our economy, and then when time comes to pay them back, heavily vested in our economic and forgein essence making us a "banana republic." It would be interesting to see if the Fed or any government enitiy could come up with a domestic solution to genreate revneue, without pissing people off.Encouraging bond sales in a sense could help with this because it would offer the people a more stable savings tool than the market at this juncture, generate some revenue and hopefully lessen the amounts of forgein bailout we would require to bailout our investing houses.

Also the last part of the title states that I was talking out of my ass... because quite frankly you Econ guys know way more about this shit than I do

iron-boyer said...

you can still make money on the stock's called CFD's. Those things you can sell short and make money when the stock is falling.
I am playing with a real life demo-program of an Austrian trader company. It's a lot of fun but scary at the same time. I made a few thousand $$$ with the AIG stock because the Fed couldn't just drop the the stock is coming back up because of their funding and change of management. I THINK but like you I could also just be talking out of my ass.
Can you spare a moment at CCSU and register the club? Otherwise we might lose our budget for the year. that would mean no financial support for IM AZ. I will try to give you a call...I think I have your number but in case I don't...what is it?

Angry Runner said...

1. Budgeting has no effect of raising money whatsoever. I can make all the budgets I want but no money will come in the door unless I'm taxing or borrowing.

2. The government has not appealed to the american people for money in ages. Not how it works here.

3. Spelled "site" as "sight".

4. I'm assuming you don't know the role of the Fed in this whole ordeal, nor understand how the Fed finances itself, nor understand the credit facilities available. I gather this through your usage of "Fed" and "borrow money from China" in the same sentence.

5. We were already a banana republic before China even came into the picture.

6. Domestic sources of revenue= Tax. Go ahead.

7. You tell me who has the excess cash to invest in government securities when the national savings rate is at a historical low.

8. So we borrow from ourselves to bail out...ourselves?

9. Big Picture- The Fed and Treasury are interconnected yet at arms-length of eachother through transactions since the opening of the discount window last year. One does not control the other, yet the two coordinate their actions in a crisis. Saying from the onset that "If the fed...push them to fund...bailouts" makes the entire exercise of understanding the role of the central bank rather...well...incorrect.

Bjorn- You're playing with fire, my friend. Have we not seen the short selling rule lately?