Lemur Posted February 16, 2008 Report Share Posted February 16, 2008 MaSSive Wealth Creation and Joy from Housing DipSome U.S. Americans are racking up tremendous profits from the minor dippy-doo in house prices. Others are enjoying a return to a happier, simpler lifestyle. 645489[/snapback] Hey wonderful stuff shorty. You make me laugh every day. Your comments are among the best I have seen on the net (both for humor & insight). Link to comment Share on other sites More sharing options...
Mies van der Rump Posted February 16, 2008 Report Share Posted February 16, 2008 The shit has finally started to hit home. It is regrettable that I am going to share this story with you. I thought I have done all that I can to warn friends and family about what is happening in the economy and markets. Apparently it is not enough. Realistically, there is no way to avoid this. My best friend from college is president of his family business. They make chalk boards, marker boards, computer stands, and some miscellaneous furniture. My friend?s mom started the business, built it up, and was ready to retire. They debated over the future of the company last year. I thought I was helping him to decide to sell as a ?last chance? before the economy collapsed. Even though they are not consumer dependant, corporate spending on their products was bound to fall as the consumer died. They decided it was the right time to sell. Great. His mom has a great success story and now she can retire with wads of cash and easy living ahead of her. My friend, however, was required to keep half of his shares invested while he continued his employment. That?s the good news. When my friend found himself with cash from the sale of half his stock, he didn?t know what to do with it. I advised him to (1) buy gold (2) keep the rest in cash for the time being, and (3) if possible, diversify into Swiss a/o Euro denominated assets. This was in Q3 and Q4. I have told him everything I could about what was happening with the economy and especially the credit markets. I even shared some of Doc?s missives and suggested he subscribe. He appreciated the insight. Every time I talked with him he said he was in cash. He never bought gold or divested into foreign currencies, but at least he told me he was in cash. Until today. Today he called because he has $5m at Goldman Sachs tied-up in a municipal bond investment. It is illiquid, and he has been told that he can?t get his money because no one will buy the municipal bonds. His money is in limbo. I had to offer sympathy and hope that GS will absorb the loss. Maybe they will. Maybe someone else will bail it out. I hope so. Otherwise, half of his life?s work and savings will go down the drain. He has a short timeframe also, because his taxes on the sale are due in a couple of months. He doesn?t have the cash, and can?t get it. I am pissed at him and this whole situation. His money was invested in the Philadelphia school system which was paying 12%. He is an idiot for not recognizing that that high rate of return carried commensurate risk. He swears the financial advisor at GS told him it was ?as safe as cash.? He also says he has the documents to prove those claims. He is getting a lawyer and barking loudly, but the fact still remains he can?t get his money. You can spare me the ridicule for his stupidity. I know it and he now knows it now. What no one knew, however, was that this problem would finally hit home. I could care less about the idiots that are in financial trouble because they are over-extended on home-related loans. I know quite a few of those stories and the numbers are growing. But when a best friend takes half of his life?s work, cashes it in, and tries to be smart and safe (he really thought he was safe and in a liquid position), I can?t help but feel sympathy for him and anger towards an ignorant financial advisor. My advice is to do what you can to persuade people whom you care about to cut their risk on all investments. This shit will hit home eventually, right or wrong. GYMTFO NOW! Find a safe bank (if there is such a thing), get some gold and some cash on hand now, and pray that the contagion doesn?t spread. FWIW, I don?t think the praying part matters much, as the contagion is feeding upon itself and it doesn't appear that it can be stopped. Now I know your pain, MD. Porter. Let?s spread the word and hope others can dodge the bullets. 645492[/snapback] This is the kind of thing that revolutions are eventually made of. I feel horrible for your friend, but i suspect the prospects are not great. If this is the front end of this phenomena, the investment houses will defend the ramparts vehemently until their collusion is obvious to all. Unless the market loosens, it will cost your friend 7 figures to get the five mill back. Here is Lehman doing the EXACT same thing to the Maher brothers for 200 Million: http://online.wsj.com/article/SB1202954399...=googlenews_wsj Link to comment Share on other sites More sharing options...
DrStool Posted February 16, 2008 Author Report Share Posted February 16, 2008 Due to budgetary constraints, the Economic Indicators service http://www.economicindicators.gov will be discontinued effective March 1, 2008. 645483[/snapback] The timing on that isn't suspicious. Un-frickin believable. Link to comment Share on other sites More sharing options...
DrStool Posted February 16, 2008 Author Report Share Posted February 16, 2008 If you would like to register for the board, because of the spam problem the quickest way to get approved is to shoot me an email an let me know the user name you have registered with. That will help me in identifying and validating your registration. For best results use an email address from a known isp. If your isp is in Russia or Eastern Europe, it's a real problem. We'll send you a confirming email with a few questions. Don't even bother using any email address from gmail, or yahoo.uk. Sorry about that. contact me at drstool at capitalstool.com using the standard email address format with the @ and no spaces. Link to comment Share on other sites More sharing options...
elh Posted February 16, 2008 Report Share Posted February 16, 2008 How much do you plan to hold under the mattress? Link to comment Share on other sites More sharing options...
stevieo Posted February 16, 2008 Report Share Posted February 16, 2008 For the last year or so I have pointedly told anyone in my family who cared to ask that the only place they should have their money is in a Treasury only MMF, preferably at Vanguard, or in FDIC insured CDs, for now. These are unsophisticated people. I now think we have gone beyond even that! We are now entering the cash in the mattress stage.? I am terrified and appalled at the rate at which US Givermint finances are collapsing. 645496[/snapback] I want this option in my brokerage account. The money under the matress (MUM) fund. Link to comment Share on other sites More sharing options...
GregFokker Posted February 16, 2008 Report Share Posted February 16, 2008 I don't know how this happened, but it seems that shorty has started a blog for his own self!!!! http://wallstreetexaminer.com/blogs/mantle 645497[/snapback] Sell the house sell the car sell the kids sell the dog sell the goldfishy sell sell sell! Link to comment Share on other sites More sharing options...
GregFokker Posted February 16, 2008 Report Share Posted February 16, 2008 A weekend observation: Lady Fokker rescued a couple of issues of "Town and Country" magazine from the recycling bin at our apartment, and I perused it this AM with my breakfast. What is it about rich fokkers that makes them have such gawd-awful gaudy taste? From these horrrendous diamond-encrusted Rolexes to weird useless-looking purses to museum-cum-houses to weird food-less dishes with the sauce poured everywhere but on the little bit of food in the center... I think it's an indication of a mASSive top in this current inflationary binge that the richie-riches have completely jumped the shark and lost any vestige of taste or proportion. When the prevailing style has become Celine-Dion-Vegas-Extravaganze, I think it's time to sell. Link to comment Share on other sites More sharing options...
DrStool Posted February 16, 2008 Author Report Share Posted February 16, 2008 Hey! Watch it, you Anglophone Kweebecker you! Insulting Celine! How DARE you!!!! :lol: Link to comment Share on other sites More sharing options...
prancing_cow Posted February 16, 2008 Report Share Posted February 16, 2008 For the last year or so I have pointedly told anyone in my family who cared to ask that the only place they should have their money is in a Treasury only MMF, preferably at Vanguard, or in FDIC insured CDs, for now. These are unsophisticated people. I now think we have gone beyond even that! We are now entering the cash in the mattress stage. I am terrified and appalled at the rate at which US Givermint finances are collapsing. 645496[/snapback] what about T Bills from Treasury Direct? Link to comment Share on other sites More sharing options...
Jimi Posted February 16, 2008 Report Share Posted February 16, 2008 I appreciate - I'm sure we all appreciate - you sharing your friend's story, Chi-townBear. It is an incredible story - almost unbelievable. It's difficult to fathom where this is all headed..... Link to comment Share on other sites More sharing options...
DrStool Posted February 16, 2008 Author Report Share Posted February 16, 2008 what about T Bills from Treasury Direct? 645507[/snapback] OK, so I was exaggeratin' just a bit. But as far as holding T-bills at the Treasury or in Vanguard, whatever suits your fancy. I don't think the USG is quite on the verge of default yet, but they are going to have to find ways to increase revenues and cut outlays real fast. We can't have both guns and butter. The choice we face is which one we'd rather have. Link to comment Share on other sites More sharing options...
prancing_cow Posted February 16, 2008 Report Share Posted February 16, 2008 I appreciate - I'm sure we all appreciate - you sharing your friend's story, Chi-townBear. It is an incredible story - almost unbelievable. It's difficult to fathom where this is all headed..... 645508[/snapback] actually I think it is believable. my two friends from work, who have been indoctrinated by my bear view of the stock market, RE market and economy in general, do what they have been "trained" to do for years anyway. They catch falling knives - because Crapvision expert says market overreacted - other has been looking to buy a second house - look how much the seller lowered the price. or the latest - I hear gold is going to be a good investment because Fed has been pumping. old habits die hard Link to comment Share on other sites More sharing options...
An Ant Posted February 16, 2008 Report Share Posted February 16, 2008 OK, so I was exaggeratin' just a bit. But as far as holding T-bills at the Treasury or in Vanguard, whatever suits your fancy. I don't think the USG is quite on the verge of default yet, but they are going to have to find ways to increase revenues and cut outlays real fast. We can't have both guns and butter. The choice we face is which one we'd rather have. 645509[/snapback] Doc, is checking account better than MM Savings instead of mattress ? Thanks Link to comment Share on other sites More sharing options...
DrStool Posted February 16, 2008 Author Report Share Posted February 16, 2008 Doc, is checking account better than MM Savings instead of mattress ? Thanks 645511[/snapback] I don't see any serious problem as long as your balances are less than the FDIC coverage. When banks start blowing up is when I want to accumulate actual paper cash in quantity. But there's no difference between a checking account or CD in terms of safety. I still think that the Vanguard Treasury Money Market Fund is where I want to have the bulk of my assets. Those guys are cheap tightwads, conservative as hell. They never bought into the SIV crap even in their non Treasury MMFs. Link to comment Share on other sites More sharing options...
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