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Wonder how good the rest of marksmen's prognostication will be...
let's look at today's news:
On Page 4 of the FDIC's Quarterly banking report for Q4 '08 and Q4 2009.
When you to click over to the report here and down about 3/4's of the way look for the line item "Notional Amount of Derivatives" where you will see Q4 of 2008 was listed as $212-trillion m (just 14.93 times 2008 GDP).
But Q4 2009 shows the notional value of derivatives at what?
$213,568,137,000,000
The bank consolidation continues to: "The number of institutions on the FDIC’s “Problem List” rose to 702 at the end of 2009, from 552 at the end of the third quarter and 252 at the end of 2008. Total assets of “problem” institutions were $402.8 billion at yearend 2009, compared with $345.9 billion at the end of September and $159.0 billion at the end of 2008. Both the number and assets of “problem” institutions are at the highest level since June 30, 1993."
so we have the (previously reported) troubled banks up 27.2%, derivatives are still growing, mass layoffs are back, and new home sales are the lowest recorded.
Here is a man who made his wealth during the Great Depression. He thought the market was unsustainable and sold most of his stock before the crash so he was sitting with cash.
He then used that cash to buy up companies on pennies to the dollar.
When debt is high and money is tight you bet cash is king. Right now in RE cash is king and beats out buyers who need a mortgage. Even at a lower price than those who have to apply for financing cash is king.
Neat story about Floyd Odlum, never heard it before.
Somehow I doubt that such a plan would work today, I mean seriously it is not just that $14M in cash is probably less than the starting line-up of the NY Knicks keeps in their "cribs", it is that given the pervasive negativity that is routinely on display here and other places I think that if a hedge fund tried to say "Our strategy will be to have a massive pile of cash, get advice from Warren Buffet, Peter Lynch and John Bogle, buy up companies on the cheap as things crumble and make a fortune on the way up" the chorus of dunder heads would scream "but you don't understand THIS IS DIFFERENT. things WILL NEVER GO BACK UP, WE'RE AS DOOMED AS DOOMED CAN BE, the Russians & the Chinese & the Malyasian will CRUSH US FOR SURE..." We need GOLD AND BULLETS AND MREs...
Whaddya think?
Last edited by chet everett; 02-24-2010 at 06:54 PM..
In all seriousness, I don't subscribe to the fearmongering that Tightwad is known to link to, but I also don't believe that America can borrow and print their way out of every financial disaster caused by boom/bust pseudo wealth.
What some call "fear mongering" is really an awareness of what goes on in the world today. The saying...."keep you friends close but your enemies closer" applies all to well today.
That said, I'd rather be labeled as a "fear monger" since that would mean that I'm not afraid to speak my mind even if some naysayer disagrees with me. Much is done during the silent times of a fearful people. I seek to break that silence.........
Neat story about Floyd Odlum, never heard it before.
Somehow I doubt that such a plan would work today, I mean seriously it is not just that $14M in cash is probably less than the starting line-up of the NY Knicks keeps in their "cribs", it is that given the pervasive negativity that is routinely on display here and other places I think that if a hedge fund tried to say "Our strategy will be to have a massive pile of cash, get advice from Warren Buffet, Peter Lynch and John Bogle, buy up companies on the cheap as things crumble and make a fortune on the way up" the chorus of dunder heads would scream "but you don't understand THIS IS DIFFERENT. things WILL NEVER GO BACK UP, WE'RE AS DOOMED AS DOOMED CAN BE, the Russians & the Chinese & the Malyasian will CRUSH US FOR SURE..." We need GOLD AND BULLETS AND MREs...
Whaddya think?
Not at the level you speak of. But at an individual level, sure it's possible.
Think outside of the box.
There's RE..duplex, triplex - buy dirt cheap and rent out
Small business - do what Floyd did, buy for the assets.
On an individual level I'd stick to local stuff, RE and local small business/mfg in the area. Great place to start.
Also buying some stocks at bottom prices. The ones with a solid balance sheet will be the ones to survive. Think..what industries would survive a crash and depression ? Rail, food, light mfg. Now..what has Warren Buffet been buying up ?
I could care less about the boyz on Wall Street and what they would do with their money.
Staying liquid in the short term won't hurt too much; let's you sleep at night and gives you a big edge if something good comes along to buy.
I did just recently buy some Berkshire Hathaway at the 50-1 split. As long as Buffet is alive I'll hold onto it as investment. Buffet has a good track record considering.
Not at the level you speak of. But at an individual level, sure it's possible.
Think outside of the box.
There's RE..duplex, triplex - buy dirt cheap and rent out
Small business - do what Floyd did, buy for the assets.
On an individual level I'd stick to local stuff, RE and local small business/mfg in the area. Great place to start.
Also buying some stocks at bottom prices. The ones with a solid balance sheet will be the ones to survive. Think..what industries would survive a crash and depression ? Rail, food, light mfg. Now..what has Warren Buffet been buying up ?
I could care less about the boyz on Wall Street and what they would do with their money.
Staying liquid in the short term won't hurt too much; let's you sleep at night and gives you a big edge if something good comes along to buy.
I did just recently buy some Berkshire Hathaway at the 50-1 split. As long as Buffet is alive I'll hold onto it as investment. Buffet has a good track record considering.
It'll be interesting to see what happens when Warren is gone -- NYSE will probably have to halt trading and there will a taped message from the Fed Chairmen that the Berkshire Hathaway leadership succession plan has secretly been in place for the last several years, the person that looks like WB is just an audioanimatronic from Disney...
Neat story about Floyd Odlum, never heard it before.
Somehow I doubt that such a plan would work today, I mean seriously it is not just that $14M in cash is probably less than the starting line-up of the NY Knicks keeps in their "cribs", it is that given the pervasive negativity that is routinely on display here and other places I think that if a hedge fund tried to say "Our strategy will be to have a massive pile of cash, get advice from Warren Buffet, Peter Lynch and John Bogle, buy up companies on the cheap as things crumble and make a fortune on the way up" the chorus of dunder heads would scream "but you don't understand THIS IS DIFFERENT. things WILL NEVER GO BACK UP, WE'RE AS DOOMED AS DOOMED CAN BE, the Russians & the Chinese & the Malyasian will CRUSH US FOR SURE..." We need GOLD AND BULLETS AND MREs...
known to link to, but I also don't believe that America can borrow and print their way out of every financial disaster caused by boom/bust pseudo wealth.
The only options are printing money or raising taxes. The latter is not going to be popular and will also have devastating consequences on demand, it's been proven many times that raising taxes actually reduces revenues because it destroys business growth and lowers consumer demand (Laffer analysis).
We definitely have interesting times ahead, the government has repeatedly tried to kick the can down the road and called that a solution, you can only do that for so long.
Cash is worthless paper. Gold is shiny metal for monkeys and racoons. You need FOOD AND BULLETS, didn't you get my super secret emails? FOOD! Dehydrated, canned, vaccuum sealed. MREs and twinkies. And bottle water in those big bladder things the Navy has down in Hati. The make a better matteress than anything stuffed with mioney. Very relaxing. Good for the spine.
Chet, don't forget a can opener. Shooting the tops off food cans makes for a horrible mess!
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I can go along with that...
