Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Frightening Story - Just the Beginning - Swaps
Old 04-18-2010, 06:51 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Frightening Story - Just the Beginning - Swaps

I will probably going to 100% cash in the summer. There isn't much upside remaining and bad news e.g. Goldman - Sacks and below is coming out.

Deflation is more of a worry than inflation. Europe should be very cheap in the future. If you read some of the T-Theory it talks about being in a bear market with the bottom coming in the 13-16 time period.

Saint-Etienne Swaps Explode as Financial Weapons Ambush Europe - Bloomberg.com
The worst global financial crisis in 70 years arrived in Saint-Etienne this month, as embedded financial obligations began to blow up.
__________________

__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-18-2010, 08:01 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
Quote:
I will probably going to 100% cash in the summer.
I will be the first one to stand up and say, "I understand some things, but not everything."

It's a personal decision how one handles their money; this I respect. But is it wise to have all the eggs in one basket in troubled times...or any time for that matter?
__________________

__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Old 04-18-2010, 08:55 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 5,280
Quote:
Originally Posted by bbbamI View Post
I will be the first one to stand up and say, "I understand some things, but not everything."
And I am beginning to wonder if I even understand some things. All in cash?!?!
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
RonBoyd is offline   Reply With Quote
Old 04-18-2010, 08:59 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by bbbamI View Post
It's a personal decision how one handles their money; this I respect. But is it wise to have all the eggs in one basket in troubled times...or any time for that matter?
It depends upon what you think what will happen.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 04-19-2010, 03:02 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
Financial Reform is desperately needed.

Investment Banks have no credibility, Hedge Funds collude to raid the market, municipality financial managers were fooled (took the sales pitch from slick Investment Bankers).... net result market and economic instability for everyone in the developed world!

We could be looking at some very serious ongoing instability if something is not done to regulate the activity of the Financial Services Industry.

That municipality situation is particularly hard to swallow in the US... our tax $ go to the investment banks for someone civil servant making a a bad decision (to borrow )

But... It may be unlikely that any meaningful reform will be passed.




__________________
chinaco is offline   Reply With Quote
Old 04-19-2010, 08:35 AM   #6
Recycles dryer sheets
winger's Avatar
 
Join Date: Jan 2007
Posts: 251
I will not time the market, I will not time the market.........
__________________
winger is offline   Reply With Quote
Old 04-19-2010, 08:46 AM   #7
Thinks s/he gets paid by the post
IndependentlyPoor's Avatar
 
Join Date: Jul 2009
Location: Austin
Posts: 1,142
Quote:
Originally Posted by winger View Post
I will not time the market, I will not time the market.........
__________________
Start by admitting
from cradle to tomb
it isn't that long a stay.
IndependentlyPoor is offline   Reply With Quote
Old 04-19-2010, 09:10 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by chinaco View Post
Financial Reform is desperately needed.

Investment Banks have no credibility, Hedge Funds collude to raid the market, municipality financial managers were fooled (took the sales pitch from slick Investment Bankers).... net result market and economic instability for everyone in the developed world!

We could be looking at some very serious ongoing instability if something is not done to regulate the activity of the Financial Services Industry.

That municipality situation is particularly hard to swallow in the US... our tax $ go to the investment banks for someone civil servant making a a bad decision (to borrow )

But... It may be unlikely that any meaningful reform will be passed.
A couple of points:
1. There was a buyer - government - in the news article posted that did not understand the swap. That is not being discussed to change or regulate.
2. The current financial housing problem roots can be traced to government attempting to get out of the depression and encouraging home ownership afterwards. That is not being discussed to change or regulate.
3. The roots of all these situations is too much debt and trying to manage it. That is not being discussed to change or regulate.
4. New regulation is like a general who is preparing to fight the last war - New regulations fail for similar reasons.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 04-19-2010, 09:13 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by winger View Post
I will not time the market, I will not time the market.........
"The market teaches you to lose."
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 04-19-2010, 09:40 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Nov 2007
Posts: 7,530
As to the OP's article - too long, didn't read the last half. But it seems to me these municipalities are saying, after the fact, "we lost money on these craaazy derivatives, therefore they are unfair". Ex ante, these derivatives were good calculated bets for these municipalities which is why they bought them (or these municipalities waste money on employees who are incompetent). Ex post, things didn't work out well, so now they cry fraud. But if ex post, they would have made millions of dollars or euros from these swaps and derivatives, they would be doing nothing but singing praises of the investment banks for helping shepherd them through these difficult economic times.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (5, 11, and 12).
FUEGO is offline   Reply With Quote
Old 04-19-2010, 09:46 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by FUEGO View Post
But if ex post, they would had made millions of dollars or euros from these swaps and derivatives, they would be doing nothing but singing praises of the investment banks for helping shepherd them through these difficult economic times.
This point is not made enough. If Fed low interest rates and mortgages with variable interest rates to the poor worked out; government and bankers would have been praising each other.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 04-19-2010, 10:15 AM   #12
Thinks s/he gets paid by the post
IndependentlyPoor's Avatar
 
Join Date: Jul 2009
Location: Austin
Posts: 1,142
Quote:
Originally Posted by dex View Post
2. The current financial housing problem roots can be traced to government attempting to get out of the depression and encouraging home ownership afterwards. That is not being discussed to change or regulate.
Your reading of history is very different from mine. Consider this view:
- Banking chaos reigned during the last part of the 19th century with frequent bank runs and panics, culminating in the 1929 crash.
- Federal regulation exemplified by the Glass-Steagall Act and the FDIC ushered in a 50-year period of calm.
- A belief that regulation was strangling growth led to deregulation, starting with the S&L deregulation and continuing through to the creation of the Enron loophole, the repeal of Glass Steagall with the Gramm,Leach,Bliley act, and pehaps the worst of a bad lot, the SEC's relaxation of the Net Capital Rule, that allowed Bear Stearns, Lehman Brothers, Merrill Lynch, Goldman Sachs, and Morgan Stanley to operate with unlimited leverage.

Little or no regulation: chaos, bank runs, and financial panics
Strong regulation: 50 years of orderly prosperity
Deregulation: chaos, bank runs, and financial panics
__________________
Start by admitting
from cradle to tomb
it isn't that long a stay.
IndependentlyPoor is offline   Reply With Quote
Old 04-19-2010, 10:31 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by IndependentlyPoor View Post
Your reading of history is very different from mine.
Not really; read my post - no where did I propose no regulation. On the contrary. I have a degree in accounting and finance so auditing, accounting policies and procedures are in my bones.

Quote:
Originally Posted by dex View Post
2. The current financial housing problem roots can be traced to government attempting to get out of the depression and encouraging home ownership afterwards. That is not being discussed to change or regulate.
The focus/point that you quoted is that government has a hand in the housing bubble and that is not being addressed.
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 04-19-2010, 10:52 AM   #14
Thinks s/he gets paid by the post
IndependentlyPoor's Avatar
 
Join Date: Jul 2009
Location: Austin
Posts: 1,142
Quote:
Originally Posted by dex View Post
The focus/point that you quoted is that government has a hand in the housing bubble and that is not being addressed.
True, and maybe I over-reacted to your post.
The government has certainly been encouraging home ownership, and that surely contributed to the housing bubble. However, I don't think that it was anywhere close to being the most important factor. The reason is that many of those government programs have been around since the 30s, and everything rocked along just fine until the deregulation meme swept the country.

I also should have said that I think that some adjustment/loosening of some regulations may have been in order. It is just that we went about it in a particularly stupid way. "Everybody" knew that FDIC and FSLIC were only possible when coupled with strong regulation. Otherwise moral hazard was extreme. Well, poof! We got rid of federal regulation and continued to insure the deposits.

Sorry about the ranting tone of these posts. IndependentlyPoor is just in a grouchy mood today.
__________________
Start by admitting
from cradle to tomb
it isn't that long a stay.
IndependentlyPoor is offline   Reply With Quote
Old 04-19-2010, 11:02 AM   #15
Thinks s/he gets paid by the post
IndependentlyPoor's Avatar
 
Join Date: Jul 2009
Location: Austin
Posts: 1,142
Quote:
Originally Posted by dex View Post
I have a degree in accounting and finance so auditing, accounting policies and procedures are in my bones.
Interesting. The only other person I know who is 100% cash is a semi-retired securities lawyer. Am I seeing the beginnings of a pattern here? The folks who know the most about the business are getting out?
__________________
Start by admitting
from cradle to tomb
it isn't that long a stay.
IndependentlyPoor is offline   Reply With Quote
Old 04-19-2010, 11:04 AM   #16
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
It's starting to feel like summer 2007 around here again....
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 04-19-2010, 11:09 AM   #17
Thinks s/he gets paid by the post
IndependentlyPoor's Avatar
 
Join Date: Jul 2009
Location: Austin
Posts: 1,142
I wasn't around in 2007. Did the ER posting show concern about the market peaking?
__________________
Start by admitting
from cradle to tomb
it isn't that long a stay.
IndependentlyPoor is offline   Reply With Quote
Old 04-19-2010, 11:24 AM   #18
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,477
Quote:
Originally Posted by dex View Post
I will probably going to 100% cash in the summer. There isn't much upside remaining and bad news e.g. Goldman - Sacks and below is coming out.

Deflation is more of a worry than inflation. Europe should be very cheap in the future. If you read some of the T-Theory it talks about being in a bear market with the bottom coming in the 13-16 time period.

Saint-Etienne Swaps Explode as Financial Weapons Ambush Europe - Bloomberg.com
The worst global financial crisis in 70 years arrived in Saint-Etienne this month, as embedded financial obligations began to blow up.
Not challenging your choice to go to all cash - but curious why not now if the upside is limited.
__________________
MichaelB is online now   Reply With Quote
Old 04-19-2010, 11:35 AM   #19
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,123
Quote:
Originally Posted by IndependentlyPoor View Post
I wasn't around in 2007. Did the ER posting show concern about the market peaking?
See for yourself. There were threads that indicate (in retrospect) warning signs and that many of us were contemplating whistling as we walked past the graveyard...

20% stock market plunge
REITs finally taking a dive??
CHASE Banks Giving Away Money
Sleeping Well in this crazy market?
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 04-19-2010, 11:53 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by MichaelB View Post
Not challenging your choice to go to all cash - but curious why not now if the upside is limited.
Read about the Aug 28th peak - I'll average out before then. Right now I have 45% in cash - excluding home.
Terry Laundry's T Theory‚„Ę Observations: Terry Laundry's Weekly T Theory‚„Ę Observations for April 18 2010

Among other reasons
__________________

__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Frightening Video RonBoyd Other topics 6 01-06-2010 12:16 PM
Credit Default Swaps boont FIRE and Money 15 09-21-2008 07:49 PM
Frightening - Federal Agencies Are Saying Their Rules Pre-Empt Injury Lawsuits chinaco Other topics 4 03-31-2008 04:27 AM
PIMCO swaps out BUM FIRE and Money 7 12-31-2005 11:38 PM

 

 
All times are GMT -6. The time now is 11:05 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.