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Old 04-19-2011, 08:23 AM
 
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While I agree with the executive department/the fed driving inflation (mainly in an effort to devalue national debt), I can't take any article seriously that reads as much like a manifesto as that one.

However, the notion that only the wealthy invest in bonds is foolish. Who do you think manages all of our 401k funds? In addition to that, many, many middle class people hold bonds in their self-managed portfolios.
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Old 04-19-2011, 11:15 AM
 
Location: San Diego California
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Quote:
Originally Posted by hnsq View Post
While I agree with the executive department/the fed driving inflation (mainly in an effort to devalue national debt), I can't take any article seriously that reads as much like a manifesto as that one.

However, the notion that only the wealthy invest in bonds is foolish. Who do you think manages all of our 401k funds? In addition to that, many, many middle class people hold bonds in their self-managed portfolios.
No one is saying that only the wealthy invest in bonds. What it is saying, is that markets are manipulated. People at the top seem to be able to get out before, or in early stages of a crash, and buy back in at the low point.
The Main St investors on the other hand tends to never see the crash coming, get out near or at the bottom and then get back in only after a substantial gain has already been realized.
Goldman Sachs was shorting real estate while at the same time encouraging pension funds to invest in Mortgage Backed Securities just prior to the real estate crash. When the crash came, the average homeowner got his home equity clock cleaned, and Goldman Sachs made a fortune.
All the article does is offer the possible scenario for a similar situation being set up in the bond market.
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Old 04-19-2011, 11:31 AM
 
9,856 posts, read 14,046,979 times
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Originally Posted by jimhcom View Post
No one is saying that only the wealthy invest in bonds. What it is saying, is that markets are manipulated. People at the top seem to be able to get out before, or in early stages of a crash, and buy back in at the low point.
The Main St investors on the other hand tends to never see the crash coming, get out near or at the bottom and then get back in only after a substantial gain has already been realized.
Goldman Sachs was shorting real estate while at the same time encouraging pension funds to invest in Mortgage Backed Securities just prior to the real estate crash. When the crash came, the average homeowner got his home equity clock cleaned, and Goldman Sachs made a fortune.
All the article does is offer the possible scenario for a similar situation being set up in the bond market.
People at the top get out in early stages of a crash because they are the most educated in finance. Anyone who watches market indicators gets out in early stages. If the average middle class American checked market indicators a few times a day, every day (like some of us actually do) they could get out in early stages as well.

Personally - I had my highest yearly rate of return ever in 2008 and I am not wealthy by any stretch of the imagination. It just takes time, dedication and education. The smartest financial minds do well, those with no financial education do not.
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Old 04-19-2011, 11:56 AM
 
58,989 posts, read 46,144,950 times
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Quote:
Originally Posted by jimhcom View Post
No one is saying that only the wealthy invest in bonds. What it is saying, is that markets are manipulated. People at the top seem to be able to get out before, or in early stages of a crash, and buy back in at the low point.
The Main St investors on the other hand tends to never see the crash coming, get out near or at the bottom and then get back in only after a substantial gain has already been realized.
Goldman Sachs was shorting real estate while at the same time encouraging pension funds to invest in Mortgage Backed Securities just prior to the real estate crash. When the crash came, the average homeowner got his home equity clock cleaned, and Goldman Sachs made a fortune.
All the article does is offer the possible scenario for a similar situation being set up in the bond market.
1) There is no question that "pump and dumps" can and do occur. However, I have no sympathy for people that get caught up into "get rich quick" schemes and try to JOIN IN on the speculation only to get clobbered because they were the greedy fool late to the party. Can you say "Day trader Dodo"?

2) The theory DIES a quick but horrible death when you dig past the populist screed. For example, GE got clobbered by CMO's. Swiss Re lost Billions due to the 2008 stock market collapse after engaging in an investment strategy aimed to reap higher yields from equity investments and these are just 2 simple examples. Many "sophisticated" companies etc. hide losses like these as much as possible so as not to scare investors and hurt their stock price.

P.S. Even the phrase "home equity clock cleaned" implies the home is an investment and not shelter....something that is a sobering reminder of some peoples mindset, especially on the coasts. Sorry, just so much of these articles are excuse making for the masses as to why their own greed or stupidity isn't their fault.
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Old 04-19-2011, 12:00 PM
 
85,393 posts, read 82,887,213 times
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OH PLEASE ...any one of any income can learn to take advantage of market swings. .. its easy to say one group manipulates this or that but the reality is the worlds a big place to try to manipulate major markets ... they call it market cycles and no one has learned to repeal them yet......
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Old 04-20-2011, 04:14 AM
 
85,393 posts, read 82,887,213 times
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Quote:
Originally Posted by Mathguy View Post
1) There is no question that "pump and dumps" can and do occur. However, I have no sympathy for people that get caught up into "get rich quick" schemes and try to JOIN IN on the speculation only to get clobbered because they were the greedy fool late to the party. Can you say "Day trader Dodo"?

2) The theory DIES a quick but horrible death when you dig past the populist screed. For example, GE got clobbered by CMO's. Swiss Re lost Billions due to the 2008 stock market collapse after engaging in an investment strategy aimed to reap higher yields from equity investments and these are just 2 simple examples. Many "sophisticated" companies etc. hide losses like these as much as possible so as not to scare investors and hurt their stock price.

P.S. Even the phrase "home equity clock cleaned" implies the home is an investment and not shelter....something that is a sobering reminder of some peoples mindset, especially on the coasts. Sorry, just so much of these articles are excuse making for the masses as to why their own greed or stupidity isn't their fault.
its more a case of those who werent financially savy enough or had any money themselves to be successful at investing or even life that try to make themselves feel better about their own story by pointing fingers.

its always someone elses fault is the reason they cant or didnt do well. its the rich,its the banks, its the brokerages , the list is endless. its never their own stupidity, lack of nerves , lack of knowledge and believong the myths , lazyness to learn how to invest money in any scenerio..

funny though many others are very successful at what they do in the very same world. hand them lemons and they make lemonade.

i grew up in a nyc housing project in a low income family. early on i learned about investing and markets and strategy's. i started saving and investing as a teen and i never let myself believe for one second i wasnt going to do well because of the rich, the political parties or even the economic market cycles.

there is always a bull market somewhere and if a group creates an opportunity ill be right there too committing a little cash, and i mean a little. it was all i earned as an office boy at a financial company while going to college.. .....

bill gross may have dumped a few billion in treasuries in hopes of shifting rates higher but who's money was it? its everyones money in that fund from the poor guy next door in his pension fund to wealthy speculators. its all a mix.

thats what investment strategies do.

by the way who was on the other side of the coin bidding those rates down causing bills plan to not take hold? it wasnt the poor of the world. it was again a mass of everyones money on the other side of the trade being invested in treasuries that undermined bills sell off and shorting.


sorry folks but that is exactley how markets are supposed to work.


look inside yourself as to why you aint got no dough and others your equal have done very nicely.. anything and everything someone or some group does is open to anyone else to join along for the ride.


but of course its easier to do nothing play it what you think is safe and have nothing and just complain how manipulated everything is.


ill tell you what the con of the decade is .... its articles like this and folks that spread myths like it that try to make you believe your doomed to have nothing because of the rich man.......

Last edited by mathjak107; 04-20-2011 at 04:34 AM..
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Old 04-20-2011, 04:38 AM
 
Location: Happy wherever I am - Florida now
3,360 posts, read 11,349,563 times
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Treasuries are bonds.
Anybody who couldn't see the housing bubble coming when prices were doubling every year or two, or sometimes monthly, must have been blind. I don't believe they will be able to sensibly raise interest rates until real estate prices stabilize, which means the majority of foreclosures have worked through the system, without causing a larger problem in that sector.
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Old 04-20-2011, 04:47 AM
 
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you doubt they will raise rates? just who is "they"? where have you been because "they" already did...... rates were 2.4 on the 10 year before the feds buying spree , now they are over 3.5%. the 30 year climbed to 4.5%.
"they" is investors and central banks around the world that want to be compensated with higher rates for the perception of higher inflation.

there is no they in bonds , those are controlled by bidding. the fed determines short term rates not long term... they can try to influence things like they have by doing some bidding themselves but the fact is rates rose over 1% as bond investors wrestled those rates away from the fed and bid them up higher

.it shows even the fed can not manipulate that market.

Last edited by mathjak107; 04-20-2011 at 05:00 AM..
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Old 04-20-2011, 08:02 AM
 
Location: San Diego California
6,797 posts, read 6,626,572 times
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Quote:
Originally Posted by mathjak107 View Post
you doubt they will raise rates? just who is "they"? where have you been because "they" already did...... rates were 2.4 on the 10 year before the feds buying spree , now they are over 3.5%. the 30 year climbed to 4.5%.
"they" is investors and central banks around the world that want to be compensated with higher rates for the perception of higher inflation.

there is no they in bonds , those are controlled by bidding. the fed determines short term rates not long term... they can try to influence things like they have by doing some bidding themselves but the fact is rates rose over 1% as bond investors wrestled those rates away from the fed and bid them up higher

.it shows even the fed can not manipulate that market.


This must be one of the most naive statements I have heard this week.
The Fed cannot manipulate the market?
Just what do you believe the interest rate on bonds would be if the Fed was not the majority of the market?
Let the Fed stop buying the lion’s share of Treasuries and interest rates will begin to reflect the devaluation of the dollar and skyrocket.
The fact that it has risen 2% in the face of massive Fed intervention just proves that the dollar is much weaker than what is generally perceived.
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Old 04-20-2011, 08:22 AM
 
85,393 posts, read 82,887,213 times
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rates may actually drop when they stop the purchasing... the fear of continued dumping of money into those bonds already forced them to go higher not lower. read that again, they went higher on the purchases..... thats why this thread is rediculous. you have investors of all walks of life on both sides of the fence.

we dont know which way they ultimately go as its a coin toss at best....
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