Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 07-14-2008, 09:33 AM   #21
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Want2retire View Post
Perhaps you are assuming that government organization is designed in a logical way.
How would you know that? It's not like you've had much of a chance to have a first-hand impression about how it works...
__________________

__________________
"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
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 07-14-2008, 09:46 AM   #22
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,881
Quote:
Originally Posted by ziggy29 View Post
How would you know that? It's not like you've had much of a chance to have a first-hand impression about how it works...
Moi? tee hee
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 07-14-2008, 09:58 AM   #23
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Quote:
Originally Posted by laurencewill View Post
Considering their role in the markets, failure isn't an option.
Quote:
Originally Posted by audreyh1 View Post
Considering that Fannie and Freddie were intially created by the US government in order to foster a liquid mortgage market and enable average Joe to buy a home, it would be ridiculous for the same government to stand by and do nothing while these companies faltered and became impaired to continue to issue mortgage backed notes.
Quote:
Originally Posted by samclem View Post
Sure, the Fed's don't guarantee the stock price, but surely this lowers the perceived risk of their business model.
And, while we're on the subject, why is the FDIC a "corporation"? Doesn't some of this stuff fall into the category of "inherently governmental" tasks?
Hey, that's why they're called "government-sponsored entities".

It's interesting that nothing has actually happened other than extending a credit line and spewing out a few press releases. Yet you'd think that a fleet of cash-filled helicopters has been dispatched to Fannie & Freddie's HQs.

If nothing else, this year has hopefully helped people to be a bit more paranoid about taking on lifestyle debt. And maybe it's helped the regulators to clamp down on all the recent financing innovations-- like forbidding the use of the word "fixed" to refer to adjustable-rate mortgages!

Quote:
Originally Posted by brewer12345 View Post
Wow, you said exactly what I have been thinking about this. FWIW, I think the whole thing is a manufactured problem with no basis in reality.
Oh, and I think this may indicate a bottom, at least for now.
I think the most frustrating aspect of this hysteria has been trying to estimate its effect.

People can figure out that a stock is getting to be a value. But it's awful darn frustrating to buy a bargain and watch it go down another 25%. Patience my ass, I wanna buy something...
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 07-14-2008, 10:00 AM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Anyone stop to consider whether the sky is falling or if its just the ground getting rapidly taller?

Seems to me that its a little too much hysteria over the airing of bad news and the trimming of some 3 legged gazelles from the herd.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Old 07-14-2008, 10:03 AM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by Nords View Post
It's interesting that nothing has actually happened other than extending a credit line and spewing out a few press releases. Yet you'd think that a fleet of cash-filled helicopters has been dispatched to Fannie & Freddie's HQs.
The other funny thing about the wekkend's annnouncement's was the SEC's laughable intention to start looking into market manipulation via rumor mongering. Hey morons: if you want to clamp down on manipulation, reinstate to uptick rule on short selling!
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-14-2008, 10:11 AM   #26
Full time employment: Posting here.
Retire Soon's Avatar
 
Join Date: Nov 2005
Posts: 655
[quote=audreyh1;682846]Considering that Fannie and Freddie were intially created by the US government in order to foster a liquid mortgage market and enable average Joe to buy a home, it would be ridiculous for the same government to stand by and do nothing while these companies faltered and became impaired to continue to issue mortgage backed notes.

Fannie and Freddie were initially created to enable average Joe to reach the All American dream of home ownership. Here lies the problem. Many of the people who obtained home financing over the past few years were far from being average Joe's. How can one justify placing someone in a $600,000 McMansion with a zero down payment on "stated income." Today the federal government is asking the taxpayers to pick up the tab for what initially started as a noble system to enable the average Joe to become a homeowner, but later included people with bad credit, no savings, poor w*rk history, who probably could not have even afford to rent the house they were encouraged to purchase.
__________________
Retire Soon is offline   Reply With Quote
Old 07-14-2008, 10:17 AM   #27
Thinks s/he gets paid by the post
Bikerdude's Avatar
 
Join Date: Jul 2006
Posts: 1,901
Quote:
Originally Posted by audreyh1 View Post
It's been a wild ride, and the panic has seemed ridiculous when the default rates on Fannie and Freddie mortgages are at only 0.8% in one case, and 1.2% in another. Yet the equity markets have become totally panicked on these companies, coming to believe that the Bush government would allow shareholder equity in these companies to be wiped out.
It does seem ridiculous until you realize that their total combined capital is 1.6% of outstanding mortgages. I think the problem is they have had massive growth over the last few years without an increase in capital funding.

Why they let this go for so long and let panic start to settle in is anyone's guess. Maybe it has something to do with an election year?
__________________
“I guess I should warn you, if I turn out to be particularly clear, you've probably misunderstood what I've said” Alan Greenspan
Bikerdude is offline   Reply With Quote
Old 07-14-2008, 11:55 AM   #28
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,465
Quote:
Originally Posted by brewer12345 View Post
Wow, you said exactly what I have been thinking about this. FWIW, I think the whole thing is a manufactured problem with no basis in reality.

Oh, and I think this may indicate a bottom, at least for now.
It's good to know that my layman's superficial grasp of what is going on is not completely off base!

It might have been a good bottom, except that banks are failing! Here we go for another round of bank panics.

Audrey
__________________
audreyh1 is online now   Reply With Quote
Old 07-14-2008, 12:02 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by audreyh1 View Post
It might have been a good bottom, except that banks are failing! Here we go for another round of bank panics.

Audrey

The frustrating thing about this round of nonsense is that the market is making little distoinction between banks. So the shakiest are going down right along with some of the safest and best-run banks in the US.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-14-2008, 12:07 PM   #30
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: 42,103
While I understand the general public might be spooked by bank failures, this is hardly something new to those of us who were around for the S&L crisis in the late 80's. Note this article in May which said the handwriting was clearly on the wall - the FDIC luring retirees experienced in bank closures out of retirement:

Bank failures to surge as credit crunch slows economy - MarketWatch

(Let me be the first: "Yeah, but this time is different.")
__________________
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 07-14-2008, 12:10 PM   #31
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,543
[quote=Retire Soon;682979]
Quote:
Originally Posted by audreyh1 View Post
Considering that Fannie and Freddie were intially created by the US government in order to foster a liquid mortgage market and enable average Joe to buy a home, it would be ridiculous for the same government to stand by and do nothing while these companies faltered and became impaired to continue to issue mortgage backed notes.

Fannie and Freddie were initially created to enable average Joe to reach the All American dream of home ownership. Here lies the problem. Many of the people who obtained home financing over the past few years were far from being average Joe's. How can one justify placing someone in a $600,000 McMansion with a zero down payment on "stated income." Today the federal government is asking the taxpayers to pick up the tab for what initially started as a noble system to enable the average Joe to become a homeowner, but later included people with bad credit, no savings, poor w*rk history, who probably could not have even afford to rent the house they were encouraged to purchase.
most of the NINJA loans didn't have anything to do with Fannie or Freddie. Once in a while i visit the mortgage broker board at creditboards. when this first started last year the resident subprime mortgage brokers said that in the last few years FHA and GSE loans were a small part of their business. Now it's going to be the opposite.

Even through the nonsense of the last few years fannie still had pretty good underwriting standards. the loony loans were mostly originated, packaged and sold by the investment banks
__________________
al_bundy is offline   Reply With Quote
Old 07-14-2008, 12:13 PM   #32
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,543
Quote:
Originally Posted by brewer12345 View Post
Wow, you said exactly what I have been thinking about this. FWIW, I think the whole thing is a manufactured problem with no basis in reality.

Oh, and I think this may indicate a bottom, at least for now.
if the US Government has to pump a few hundred billion $$$ to support the GSE's debts, isn't it the same thing as pumping money into the system via the Fed? you are still pumping money into the system which can lead to higher inflation. and if you have to borrow than the deficit/GDP equation changes and it can affect T-Bill prices
__________________
al_bundy is offline   Reply With Quote
Old 07-14-2008, 12:42 PM   #33
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,448
Quote:
Originally Posted by brewer12345 View Post
The frustrating thing about this round of nonsense is that the market is making little distoinction between banks. So the shakiest are going down right along with some of the safest and best-run banks in the US.
That's a buying opportunity.
__________________
MichaelB is online now   Reply With Quote
Old 07-14-2008, 12:45 PM   #34
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,448
Quote:
Originally Posted by brewer12345 View Post
The other funny thing about the wekkend's annnouncement's was the SEC's laughable intention to start looking into market manipulation via rumor mongering. Hey morons: if you want to clamp down on manipulation, reinstate to uptick rule on short selling!
I think the SEC is right. Only CEOs should be allowed to use false or misleading information to manipulate support stock prices.
__________________
MichaelB is online now   Reply With Quote
Old 07-14-2008, 12:50 PM   #35
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by MichaelB View Post
That's a buying opportunity.

Based on recent experience, it just means you will be setting yourself up fore another ass-kicking within a week.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-14-2008, 02:30 PM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
Quote:
Originally Posted by brewer12345 View Post
Based on recent experience, it just means you will be setting yourself up fore another ass-kicking within a week.
When I look at many stocks that have nothing to do with banking, and are conservatively financed, I can't understand these low prices. The "Doomsday Thesis" IMO makes no sense. I don't know if it might be real or not, but how can interst rates be as weirdly low as they are, and earnings yields of valid blue chip stocks stay as high as they are? There has to be an adjustment although I suppose it could be a real spike in interst rates, which would make stocks less relative bargains.

I think this is a stock panic, and nothing more, and represents a rare opportunity for a discerning buyer. More and nore it feels like late summer 1974, good stocks falling day after day. Then it ended, and Ka-Boom! off to the races.

Be sure you have a seat on this rocket before she lights off. Hey, I might even get to visit my gal Amanda en Suiza when this one plays out.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 07-14-2008, 02:46 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Quote:
Originally Posted by haha View Post
I think this is a stock panic, and nothing more, and represents a rare opportunity for a discerning buyer. More and nore it feels like late summer 1974, good stocks falling day after day. Then it ended, and Ka-Boom! off to the races.
Ha
Was there a catalyst in 1974, or did the selling finally just dry up?

I am having a hard time thinking of a catalyst these days, since the market only reacts to bad news.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 07-14-2008, 03:22 PM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
Quote:
Originally Posted by brewer12345 View Post
Was there a catalyst in 1974, or did the selling finally just dry up?

I am having a hard time thinking of a catalyst these days, since the market only reacts to bad news.
As I remember, it just dried up. Interst rates were relatively high, inflation was relatively high, and no one in the government was blinking. I would would pick up a Seattle Times on my way into work in the afternoon-at that time it was an afternoon paper and so it had the closing stocks. Day after day lower, then finally, a rally. Then back down again into October, and then off to the races. Although it remained rocky for a few years, good high ROI companies never looked back from the fall '74 lows.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 07-14-2008, 07:10 PM   #39
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Quote:
Originally Posted by brewer12345 View Post
Was there a catalyst in 1974, or did the selling finally just dry up?
I am having a hard time thinking of a catalyst these days, since the market only reacts to bad news.
The selling dried up in 1974-5.

In late 1979 Business Week published the notorious "Death of Stocks" article.

The Dow Jones bottomed in 1982.

So we could look forward to at least eight years of fantastic dividend reinvestments!

(I can't believe that I can't find an image of that Business Week cover on the Internet. You would think someone would have tracked it down by now, maybe even donated a copy to the Smithsonian...)
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Old 07-14-2008, 07:29 PM   #40
Full time employment: Posting here.
DRiP Guy's Avatar
 
Join Date: Nov 2006
Posts: 546
__________________

__________________
DRiP Guy 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
The sky really is falling... REWahoo Other topics 53 02-21-2008 02:16 PM
Is the sky falling? Dow is way down any hope Sunny101 FIRE and Money 45 11-14-2007 08:53 PM
The sky is McCulleying, the . . . . greg FIRE and Money 11 09-02-2005 10:04 AM
The sky is falling, the sky is falling greg FIRE and Money 110 08-24-2005 02:17 AM
Re: The sky is falling wabmester Other topics 28 04-21-2004 08:21 AM

 

 
All times are GMT -6. The time now is 04:50 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.