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Prime examples of Economic instability

Discussion in 'Political Discussion' started by PatriotsReign, Dec 29, 2009.

  1. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    There are many, for sure. If you truly wish to get an honest perspective of where the US economy is, then all you need to be aware of is the following sample of facts & trends;

    -Bank of America's small-business default rate hit 17.5% in the third quarter of 2009.
    -Credit-Card Delinquencies Rise Again
    -Common assessment of the stock market (as follows)
    20% chance of a durable rally
    20% chance the market meanders nowhere for as long as 5 years
    30% chance of of a hard 25-30% correction
    30% chance the bottom is not even in
    -A 26-mile-long line of idled oil tankers, enough to blockade the English Channel, may signal a 25 percent slump in freight rates next year.
    -The Baltic Dry Index is collapsing

    Source links below;

    Credit-Card Delinquencies Rise Again - WSJ.com

    The Baltic Dry Index Is Collapsing

    Lower modified mortgage payments means fewer redefaults - Dec. 21, 2009

    Mish's Global Economic Trend Analysis: Hussman on Valuation; Stocks Higher? Bulls Dance On Edge Of Cliff

    Stay EXTREMELY cautious on your 401k's. Especially if you've gained a lot in 2009 and/or close to retirement. But please don't take my word for it....consult your investment advisors.
     
    Last edited: Dec 29, 2009
  2. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    I'm real close to moving most of my 401K to Cash but I am greedy and hate to miss one last move up before I do it. I do know that most seem very bearish on bonds and mixed on stocks for the next period of time. When I do my kids' educational savings money for the year next week I really don't know what to do. Bonds look bad, stocks look risky. Money Markets are earning next to nothing.
     
    Last edited: Dec 29, 2009
  3. ljuneau

    ljuneau Rotational Player and Threatening Starter's Job

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    I have a question related to BF's post. When inflation starts poking its ugly head, I understand that the best hedge is owning assets of some type, like gold. Is owning stock, even via mutual funds, considered ownership of assets? I'm just trying to determine if being in the market during an inflationary period is good or bad. PR can you answer that?
     
  4. BelichickFan

    BelichickFan B.O. = Fugazi PatsFans.com Supporter

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    #24 Jersey

    If shmessy is around he can give you the best answer; but commodities are good during inflation and also TIPS (Individual - TIPS In Depth) which you can get through most/all mutual fund companies. I plan to move some of my Vanguard funds to TIPS at some point but I don't think we'll have inflation until the employment thing changes around quite a bit and that looks a way away.
     
    Last edited: Dec 29, 2009
  5. ljuneau

    ljuneau Rotational Player and Threatening Starter's Job

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    I agree, it may be several years before inflation rises, but I'm trying to do my homework now to determine an appropriate course of action.

    Our 401K plan includes about 15 mutual funds - I'll take a look and see which of these hold TIP Securities. Thanks for the link.
     
  6. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    My ego would love to answer that question, but I'm not an investment advisor. If I was one, I would still be nervous about giving advice during times such as these.

    I know that real estate is near the top of the list during heavy inflation. But I'm not biting on your request other than that comment Juneau. no disrespect, but there are many more qualified than I to answer that for you.

    I will also add that inflation prolly won't be seen much at all in 2010. I just saw that BF & I are on pretty much the same page...for whatever that's worth!
     
    Last edited: Dec 29, 2009
  7. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    In many ways, it's like making "one last bet" when you're up at a casino, isn't it?
     
  8. ljuneau

    ljuneau Rotational Player and Threatening Starter's Job

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    Let me rephrase my question a bit then with the understanding that this is not financial advice.

    Is a stock considered an asset? Does it dependant on what type of stock? And do stocks typically rise during inflationary periods?
     
  9. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Stocks typically rise during inflationary periods because inflation "typically" ocurrs during booms. And stocks always (as a whole, not individually) rise in booms. inflation is usually the result of increased demand and that almost always happens when unemployment is low (boom). But there are exceptions such as the early 80's when both inflation & unemployment were high (stagflation or the wage-price spiral).

    All we have are "typical" scenarios based upon history. But there are exceptions to these generalities.

    As for whether a stock is an asset...yes, of course its an asset. But not the same type of asset as real estate or gold. But your getting away from my area of experience and an investment advisor is your best bet to discuss various types of assets.

    I'm discussing the economy and your discussing investments. Stocks aren't the economy...not even close.
     
    Last edited: Dec 30, 2009
  10. NEPatriot

    NEPatriot Banned

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    US banks are in big trouble right now

    Morgan Stanley defrauded investors | Reuters

    UPDATE 1-Chinese firm says won't pay Goldman on options losses | Reuters

    If these news are bad enough, this one is

    http://www.reuters.com/article/idUSTRE5BT06O20091230

    Here is the ending of GMAC after Obama gave them 3.8 billion dollars. It happened within minutes. It's scary!

    http://www.washingtonpost.com/wp-dyn/content/article/2009/12/30/AR2009123002049.html?hpid=topnews

    Here is the SAD part. One bank SCREWED everybody UP BIG TIME. Yes, Obama is allowing this sh!t happening. Do you wonder why everything is so fcked up?

    http://www.nytimes.com/2009/12/24/business/24trading.html?_r=3&scp=1&sq=goldman&st=cse

    Why does Obama let these arsholes do what they want?

    http://www.bignews.biz/?id=804337&keys=Goldman-Obama-profits-manipulation

     
    Last edited: Dec 30, 2009

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