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Anyone remember how fast and hard the markets dropped when corporate America realized the bailout would become a reality?
One of many articles that can be found in a 2 second google search.
Republican Opposition to Paulson's Bailout Plan Stalls Talks
Anyone remember how fast and hard the markets dropped when corporate America realized the bailout would become a reality?
Oh snap!
Enjoy the delicious sauce.
Enjoy the delicious sauce.
I'm sure slap is working on some new theory where the republicans only pretended to be against tarp because they knew they could use the jedi mind trick on the democrats to get them to support it.
I haven't tried looking, maybe someone knows...
Did any republicans who voted for TARP in 2008, get reelected?
Yes. Lamar Smith, TX-21.
Funny how the board wing-nuts enjoy setting up straw-men so that they can knock em down...
Fact:
WikiThe Troubled Asset Relief Program, commonly referred to as TARP, is a program of the United States government to purchase assets and equity from financial ins utions to strengthen its financial sector. It is the largest component of the government's measures in 2008 to address the subprime mortgage crisis.
Originally expected to cost the U.S. Government — and, by extension, the U.S. taxpayer — $356 billion, the most recent estimates of the cost, as of April 12, 2010, is down to $89 billion, which is 42% less than the taxpayers' cost of the Savings and loan crisis of the late 1980s.[1] The cost of that crisis amounted to 3.2% of GDP during the Reagan/Bush era, while the the GDP percentage of the current crisis' cost is estimated at less than 1%.[2] While it was once feared the government would be holding companies like GM, AIG and Citigroup for several years, those companies are preparing to buy back the Treasury's stake and emerge from TARP within a year.[3] Of the $245 billion invested in U.S. banks, over $169 billion has been paid back, including $13.7 billion in dividends, interest and other income, along with $4 billion in warrant proceeds as of April 2010. AIG is considered "on track" to pay back $51 billion from dives ures of two units and another $32 billion in securities.[4]
The horror! Reagan was a socialists!
In the final 9 months of the Bush administration, my 401K lost 29.3% of its value. Since Obama took office, it has gained 34.4%.
Since Obama was sworn in, my 401K account has swelled by over $38,000.... . basically restoring all of the losses Bush's last year cost me.
I'm a middle-class guy in a middle-class neighborhood with a middle-class house. I've worked for 20 years to build up my savings. Nearly 50% of the population has a 401K or Roth IRA.
Middle-class families are invested in the stock market through 401ks, pension funds and IRAs....
The Dow was 7,900 the day Obama was sworn in. It's over 11,000 today.
This stuff matters....
John Cornyn too.
You think we're out of the woods?
They just pumped up the bubble again...
There's a disconnect with the real economy. U-6 is still over 16%. How long til it reaches the status quo ante (5.5%)?
And how much will oil cost then?
Pitching TARP as a moneymaker is bull when over $2T in Fed loans is still opaque.
And when ty banks still get to mark their unmarketable assets to a non-existent market...I mean, whatever hasn't already been shuffled off to the US taxpayer, sub rosa, without any disclosure at the emergency Fed pawnshops...
Are you ing kidding, Dan? You're apologizing for the three card monte here...
Follow the queen, follow the queen...
I agree that the bubble is inflating again.
The only thing good about the bubble re-inflating is that it gave a chance to the investors stuck in some of the big hedge funds who took the collapse as an opportunity to close their funds to any redemptions at all (stopped the potential runs on them) to get out of them. Most of the funds are now allowing full or more rapid redemption, so that they are no longer saying to the invester "you cannot have any money you have left in here until I let you".
Believe me, I have gotten out of every one of them, and am sworn never to go back.
My problem now is, what do I do with the redeemed funds?
I trusted this market when the Dow was at about 10,000 and moving laterally. I expected it to do that for about a year.
Now, the Dow is up over 11,000, and has gotten there in less than two months. To me, that is evidence of a bubble, and as you point out correctly, WH, nothing at all has fundamentally changed to stop the bubble burst repeating. I'm staying on the sidelines for this one.
I'm torn. I agree with you and WH about a new bubble forming, but on the other hand companies have been spending the last 18 months shoring up their balance sheets. If/when this new bubble pops I don't think stocks are going to take nearly the hit that they did in 08. That being said, I'm not sure enough that I'm right about that, so when in doubt, sit it out. Other than my 401k contributions my savings/investment income these days is going towards paying off my mortgage early.
Yep. Even the stories about the loans that are transparent are being distorted. AIG for example. Dan's article says they're on track to repay a total of $83 billion. That would be something to feel good about if $83 billion was all that we gave them. It's like saying "if you don't count the money we're not going to get back, we're going to get all our money back".
Some would say the big shoe hasn't dropped yet. Between now and 2013, something like 1 trillion in commercial real estate loans will come due. I've read where anywhere between 1/3 to 1/2 half of those have been converted into securities.
Commercial real estate is another thing that has me confused. It seems like we've been hearing "commerical real estate is next" for well over a year now, and the crash never seems to get here. Not saying it never will, but I'm beginning to wonder if it's possible that the banks and commerical borrowers are finding a way to work things out. I've got a REIT index fund in my 401k and it's been my best performer over the last year.
Smart move in paying down the mortgage these days, I think.
You have to do what you think is best, man. Me? I'm too scared right now.
I agree that the economy is poised for a slow but generally steady, jobless recovery, but my fear is that the market is becoming disconnected from the economy again, and could bring it down.
Good luck with the REIT thing. I'm serious. I hope you do well with it. Younger people should have some confidence in their investments, but I'm too old to take another hit like the last one. I'm not touching them (REITS, I mean).
It's not sexy, but it's a guaranteed safe return. These days, I'll take it.
With 20+ years to go I do have time on my side. Plus I only started putting money into it 18 months ago. Figured I was buying in at or near the bottom, and even if I wasn't, I wasn't losing much. I've just been surprised that over that 18 months it's outperformed my large cap, small cap and international funds.
I really don't know what I'd do if I was right up against retirement though, so I see your dilemma. Nothing but bonds and cash I guess.
If you have a good time horizon, make bets now on companies that stand to benefit from higher energy/oil prices.
GE being one, despite their finance arm. They stand to gain massively from growth in wind/solar power, as well as any new nukes.
Coke because it is so globally diversified.
Both offer divendend reinvestment, which provides a good way to keep money working without broker fees or worrying if the market goes down.
I think there is still plenty of stuff out there, if you are looking long-term.
Bet on energy overall, especially oil, getting more expensive. The most money to be made in any market is to get in on a rapidly growing small sector.
Given that humanity gets precious little of our energy today from wind/solar, that sector of the energy market seems to fit the bill. We will likely never really get all, or even most of our energy from such sources, don't believe the hype about that.
BUT
What WILL happen is that as other forms of energy get COMPARATIVELY more expensive, money/capital will flow into renewables, and the proportion of our energy gotten from them will grow. The cool thing about that is that since it starts from such a small base to begin with, it doesn't take much to get some pretty astounding gains.
Personally, if I had to bet the farm, I would bet on concentrating solar thermal, and any company that stands to benefit from "smart grids" and expanding eletrical transmission capacity. (did I mention GE?)
Good luck for whenever you do dip your toes back in.
International has been the best for me over the same time horizon, and has actually done quite well, but you're exactly right on where I've landed...'protected' munis and cash, with the exception of a gas pipeline partnership I've gotten into because I think that fuel costs going up (oil and/or natural gas) will carry the pipeline companies with them without the same level of volatility as oil alone.
For what it's worth (and you know what free advice is worth)...be smart about your 18 month horizon. I directed a mammoth study of the stock markets in the late 80s in an attempt to test the efficient market hypothesis, and found out that the market is efficient, but it takes stocks about 18 months to move from one or so standard deviations back to the mean.
In other words, the market is only efficient over a period of about 18 months, and that was prior to all the derivatives and credit-swaps etc. that took over the market in the 90's and recently.
Best of luck to you, though.
I believe in America and her eventual win-through...just nervous about the times right now.
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