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Old 07-01-2011, 04:46 PM   #21
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Flash forward to today and members of the two parties won't even say hello to each other in the hall. It may seem like there haven't been any changes in the way the two parties work with each other, but party enmity hasn't been this bad since the duel between Hamilton and Burr!
I think you should either sell or turn off your TV and get on with your life. The nice thing about the second option is you don't have to fret about when to buy...
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Old 07-01-2011, 04:50 PM   #22
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The Senators, congressmen and the executive branch folks who are trying to reach a compromise on the debt ceiling (according to their financial disclosure forms) have most of their net worth tied up in the market, just like we do. If you have inside information that they are liquidating everything because THEY don't think the problem will get solved, then let us all know so we can get out too.

Otherwise I will trust my asset allocation and the fact that I don't need any of my investments to maintain my lifestyle.
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Old 07-01-2011, 04:51 PM   #23
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If you are really worried do some hedging.

Options are available... you can write 'em too!
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Old 07-01-2011, 04:57 PM   #24
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Can you point out a time when the Dem and Reps got along famously? It's the same thing over and over.
There have always been significant philosophical differences, sometimes rather pronounced. These days the rancor isn't only over the issues; it's become personal.

Long time members of the Senate from both parties have often remarked how much worse it is now than it was, say, 30-40 years ago. It used to be that you could debate each other all day -- sometimes heatedly -- and at the end of the day, go out for a couple drinks together, drop the shop talk and enjoy each other's company.

These days disagreement on the issues is much more likely to boil over into personal hatred. When it becomes personal, you will do whatever it takes to prevent your "enemies" from claiming any credit or getting a "win." Personal vendettas are preserved over pursuit of the national interest, IMO. Anything that's even remotely a concession to the people you hate becomes a non-starter. (Hence the increasing trend of both sides insisting some things are "off the table" as a precondition to negotiations.)

The 24/7 media have a vested interest, IMO, in turning political debate into Jerry Springer. It's good for ratings. And the politicians are giving us what they think we want, apparently -- we want "our team" to not only win legislatively, but to personally ruin the "other guys."

Having said that, even these days both parties usually wind up figuring out a way to work together when it **really** hits the fan. It just feels like their unwillingness to work together at other times is leading us down that road more often.
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Old 07-01-2011, 05:09 PM   #25
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Democrats and Republicans seemed to get along much better during the 70's and even the 80's. ...
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Long time members of the Senate from both parties have often remarked how much worse it is now than it was, say, 30-40 years ago. ....
I sense a boat-load of revisionist, looking through rose-colored glasses, history here. If I get motivated later, I might try to google up some infamous quotes from the 'genteel' times of 30-40 years ago.

Maybe those long time members of the Senate recall the days when you could have an affair (FDR, JFK) and the press (a bunch of 'good old boys') would not report it. It's so much 'worse' now!


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Old 07-01-2011, 05:18 PM   #26
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I think you should either sell or turn off your TV and get on with your life. The nice thing about the second option is you don't have to fret about when to buy...
Best advice I've heard all week.
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Old 07-01-2011, 05:24 PM   #27
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There are simply too many unpredictable geopolitical and economic events that can cause a market crash; just a quick glance includes these potentially disastrous ones:

1. Debt ceiling annihilates the US credit rating, causing hyperinflation and the world financial system collapses.

2. Middle East flares up even more, eventually resulting in open hostilities, war and ( God Forbid ) nuclear attacks between Iran and Israel.

3. Greece gives the EU the finger and quits, causing Italy, Portugal, Ireland and Spain to consider this easy way out of their financial problems.

4. Obama decides to stay in Iraq & Afghanistan, and for good measure starts meddling in Libya's and Syria's conflicts.

5. More terrorism in the US and the world.


6. Your disaster du jour inserted here.......


So, do I retreat into my cave with my guns, ammo, and MREs or do I continue to live as usual? Do I go to all cash which can be vaporized by hyperinflation, or stay in the market? None of these are palatable or practical, obviously.

As other folks have said, I believe the market has discounted, to varying degrees, the possibilities of these happening.

I am overweight in the energy sector, and the rest of my investments are heavily tilted towards individual corporate bonds ( which I intend to hold to maturity ), and CD ladders.

Anyway, that's my 2 cents ( before hyperinflation ).
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Old 07-01-2011, 05:24 PM   #28
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Given all the rhetoric out of DC, I'd expect lots of people to say there's at least an x% chance of a bad result and decide to sit on the sidelines for a while.

Of course, finding the "sidelines" might be hard. Historically, you would buy US Treasuries, that doesn't seem so wise in this situation.

The lack of a drop suggests that the large investors believe that the rhetoric is just red meat for the respective bases, and when the crunch comes there will be a deal. In this case "believe" might be the result of face-to-face assurances from the politicians that the rest of us don't get to hear.

I'm staying where I am. I figure I probably know less than the big players, so I'm not going to try to bet against them.
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Old 07-01-2011, 06:32 PM   #29
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I think everyone's being a little hard on the OP. I could very well see a big drop in a day or two due mainly to the circumstances he's espousing.

However, that still doesn't mean I'd try to time it here.

The two best comments (or the two that made me go "hmmm.. I'll have to think about that more") were these, IMO:

Quote:
Originally Posted by chinaco
If you are really worried do some hedging.

Options are available... you can write 'em too!

Quote:
Originally Posted by Animorph

That's a key. How much do you think it'll go down? And then, how much are you willing to bet? And last, how close can you hit the peak (which was a while past most likely) and trough? A 10% drop and a bet of 10% of your portfolio and you can make 1.1% extra if everything works out OK. Is that worth it?
Hmm..
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Old 07-01-2011, 06:56 PM   #30
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Yeah a crash seems immanent but if a solution is found we may get a rally. Or the deadlock continues and the markets tank but then Obama pulls a Bush and asserts executive privilege based on the (not at all far fetched) proposition that the debt ceiling is unconstitutional and after the dust settles the market rallies, or tanks again, or...
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Old 07-01-2011, 07:09 PM   #31
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The good news is that in the event our esteemed Congresscritters do what many of us expect, that the interest rate on what remains of our Treasuries will be much higher...
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Old 07-01-2011, 07:28 PM   #32
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I sometimes wonder about getting out now also. For now, I am not sure what to do. I certainly am not investing any new dollars for now.

The problem is that the potential debt ceiling crash is just one of a fair amount of other failures that could cause a crash/collapse.
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Old 07-01-2011, 07:51 PM   #33
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Rebalance, rebalance, rebalance. That's all you need to do.

BTW, why didn't you start this thread last week before the market was up 6+% this week? What has changed? If you had bailed last week, you would've missed a very nice uptick. Of course, equities could go down 6% next week. So what? Markets are supposed to fluctuate.
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Old 07-01-2011, 07:53 PM   #34
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... but party enmity hasn't been this bad since the duel between Hamilton and Burr!
I think you're a little paranoid, but let me introduce you to true paranoia. Big money wants to drive little guys out out of a rising market. If they can scare you off with tales of political fights, so that you are induced to sell low, that's good for them, bad for you.
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Old 07-01-2011, 07:57 PM   #35
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The big question for me is WWDD? (What would Dex do?)

The other big question for me is why the heck did the market go up 5% this week? There was no significant news, good or bad. To get a 5% rise I'd expect to hear that unemployment was down to 7%, or China had quit manipulating the value of the Renmimbi, or dogs and cats were seen living together...

Until I get answers I'm not doing anything.
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Old 07-01-2011, 08:44 PM   #36
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The good news is that in the event our esteemed Congresscritters do what many of us expect, that the interest rate on what remains of our Treasuries will be much higher...
With Greek 10 year bonds now at about 16% APR, I'm ready to jump in with both feet. That's way more than the annual increase needed to meet my SWR, and the rate is guaranteed. Hey, they are government bonds, what could go wrong?
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Old 07-01-2011, 08:46 PM   #37
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No significant news? Are you kidding me? Did you see what the Greek parliament did? It could've gone the other way.

Also the ISM report today was big.

But the 6% rise was after a 4% drop 2 weeks ago, so net +2% on the Greek news. Not such a big move after all.
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Old 07-01-2011, 09:11 PM   #38
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Is this e-r.org or Yahoo! Finance?
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Old 07-01-2011, 09:31 PM   #39
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I sense a boat-load of revisionist, looking through rose-colored glasses, history here. If I get motivated later, I might try to google up some infamous quotes from the 'genteel' times of 30-40 years ago.
Well, you obviously know better than the folks who lived it and experienced it.

And really, I would suggest there are far better uses of one's time than going out of one's way to "win" a trivial argument on a message board that really doesn't amount to anything but idle banter. Is it really that important to you? Wow.
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Old 07-01-2011, 09:59 PM   #40
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Well, you obviously know better than the folks who lived it and experienced it.

And really, I would suggest there are far better uses of one's time than going out of one's way to "win" a trivial argument on a message board that really doesn't amount to anything but idle banter. Is it really that important to you? Wow.
Well, you made the claim - I'm just telling you how it sounds to me. And w/o data, nether claim means anything, really.

To be honest, it made me curious. Are things worse today? There is a lot of 'good old days' talk on a variety of topics. So I was thinking about seeing if I could find anything to back up either view. Not sure why my curiosity deserves a 'wow', but whatever.

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