Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Volker, Greenspan and Donner, Too
Old 09-07-2005, 08:18 AM   #81
Thinks s/he gets paid by the post
greg's Avatar
 
Join Date: Jun 2005
Posts: 1,071
Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by wildcat
I hope the markets drop so Greg can rest easy

Can you change your name to GloomandDoom?
No! If I did I wouldn't have anyplace to go.
__________________

__________________
Compounding: Never forget! Never not remember!
greg 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!

Re: Volker, Greenspan and Donner, Too
Old 09-07-2005, 09:43 AM   #82
Full time employment: Posting here.
 
Join Date: Mar 2005
Posts: 557
Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by Apocalypse . . .um . . .SOON
Mike:* This more than anything is my definition of a brittle economy--too much leverage in the system.* The scary part for me personally is that those who aren't heavily leveraged face the same consequences as those who are, a falling stock market.* Thanks for the article.

--Greg
ok Greg, you and Donner are both very concerned about the high debt our nation is carrying, as are Greenspan and Volker. If it implodes, recession likely to follow, thus cash assets should be held.
OTOH, our recent history shows that cash will not hold up to inflation over an extended period and thus one needs assets such as stocks and real estate. Sure, the little guy is going to take the hit if the hedge fund type investments cause financial distress in the markets, but does the little guy do anything other than mantain a balance portfolio (stock, bonds, real estate, cash)?
__________________

__________________
uncledrz is offline   Reply With Quote
Re: Volker, Greenspan and Donner, Too
Old 09-07-2005, 12:14 PM   #83
Full time employment: Posting here.
flipstress's Avatar
 
Join Date: Jun 2004
Posts: 537
Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by Apocalypse . . .um . . .SOON
So my investments are in a house, a five story house, a five story house with structural problems that I think I can judge fairly well as an amateur financial engineer.*
I like your analogy.* Is the structure more like a pyramid, though, in that you put your safest floor on the bottom and that it is the biggest floor, and you keep adding on and building up with less safe investments toward the top but in smaller allocations?* So if the top topples, your strong base will remain?

It could also be still boxy, like a block-like house but with lower ceilings with each succeeding upper floor so that the toppling of the top would not be so heavy to crush your base floors.

Edit to add:* Of course, what one considers "safe", "safer", "safest" (determining what to put in each of the floors or what materials to use for each floor's construction) depends on the type of risk with which one is most concerned.* The problem is how to correctly read the environment, including the "weather", when you are building your "house".* One might have to remodel periodically or "re-arrange/re-locate furniture" as you do or propose to do.
__________________
flipstress is offline   Reply With Quote
Re: Volker, Greenspan and Donner, Too
Old 09-07-2005, 09:40 PM   #84
Recycles dryer sheets
 
Join Date: Dec 2004
Posts: 147
Re: Volker, Greenspan and Donner, Too

No , I am not really Alan Greenspan, or Paul Volker or even Bill Gross.* (see link below)
I guess I just think like them.* * Or maybe they think like me.* Don't suppose they are lurking around this Board to get their inspiration do you?* Hope not.* How come Bill Gross gets the big bucks and all I get is grief by ER Board cognescenti?* Oh well, its more fun here than appearing on CNBC anyway!* *


http://www.pimco.com/LeftNav/Late+Br...ember+2005.htm

Greg--* I think Bill would agree with your house building strategy except that he apparently feels
that a one floor bungalow with four walls and a roof built of cash is the way to go right now.* *Wonder what his asset allocation looks like?* Let's change the title of this thread to Volker, Greenspan, Gross and Donner, Too.* Wonder whose next? :

Donner
__________________
"Remember, if you come this way, don't take no shortcuts and hurry along as fast as you can." (Virginia Reed, Age 12, Donner Party Survivor, 1847)
Donner is offline   Reply With Quote
Re: Volker, Greenspan and Donner, Too
Old 09-07-2005, 09:49 PM   #85
Full time employment: Posting here.
 
Join Date: Aug 2004
Posts: 909
Send a message via ICQ to Marshac Send a message via AIM to Marshac Send a message via Yahoo to Marshac
Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by moghopper
Never trust an amateur economist.
An amateur is only an amateur until they get paid
__________________
Marshac is offline   Reply With Quote
Re: Volker, Greenspan and Donner, Too
Old 09-07-2005, 11:32 PM   #86
Thinks s/he gets paid by the post
greg's Avatar
 
Join Date: Jun 2005
Posts: 1,071
Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by Donner

Greg-- I think Bill would agree with your house building strategy except that he apparently feels
that a one floor bungalow with four walls and a roof built of cash is the way to go right now. Wonder what his asset allocation looks like? Let's change the title of this thread to Volker, Greenspan, Gross and Donner, Too. Wonder whose next? :

Donner
Thanks for the Bill Gross article. You caught it before me. My five story house analogy is useful only to me. I was just hoping that others might take a look at their portfolios and slice them up into the natural risk and behavior components. Ten parts are too many--you get goofy looking at moving parts; two or three doesn't give you a good feel for the dynamics of your portfolio. See each part separately and identify the possible behaviors--especially if they get volitile. I think everyone needs to look at each segment of their portfolio and sort of see the behaviors so that they can easily identify problems--and pre-measure their own emotions and tactics if bad things happen to one or all parts. It's just a slightly different take on the same old risk management stuff. Many people have already made their decisions, and that's good. But I'm always worried about those who go along complacently and then panic near the bottom and sell. It happens during every single up-down cycle. A majority piles out near a bottom. I wish I didn't have to time. But I always remember that if you lose 50% of the pile, you have to make 100% to get it back to 'go.' I see ten years--optimistically--to make that happen if all goes very well.. It's worth it to me not to reach too hard in the first place. If I had $100K right now and had to put it in the market I'd probably split it up in Hussman Funds. The man seems to know his stuff.

--Greg
__________________
Compounding: Never forget! Never not remember!
greg is offline   Reply With Quote
Re: Volker, Greenspan and Donner, Too
Old 09-08-2005, 08:33 PM   #87
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
Re: Volker, Greenspan and Donner, Too

Quote:
Oh well, its more fun here than appearing on CNBC anyway!
Unless I'm being interviewed by Becky Quick...
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Re: Volker, Greenspan and Donner, Too
Old 09-08-2005, 10:50 PM   #88
Thinks s/he gets paid by the post
Helen's Avatar
 
Join Date: Oct 2004
Location: Portland
Posts: 1,349
Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by Apocalypse . . .um . . .SOON
Mike:* This more than anything is my definition of a brittle economy--too much leverage in the system.* The scary part for me personally is that those who aren't heavily leveraged face the same consequences as those who are, a falling stock market.* Thanks for the article.

--Greg
I have to agree that there is too much leverage. That's why it feels like too much money chasing too few investments. But, I think it will be worse for those who are heavily leveraged.

I rode out the tech bubble until last November when I moved most of my investments into short term securities. Only time will tell, but I really believe the bubble moved from high tech to the housing market and perhaps beyond. I think Greenie should have let the tech bubble burst and recover on it's own. It seems like he merely moved a fairly small problem to a bigger one. After he retires it will pop big time, it's like a zit coming to a head. I have to wonder if his looming retirement caused him to strategize differently.

The government and private citizens are living like there is no tomorrow. There is very little elasticity left. If the economy continues to do well then there is no problem, but that is not reality. People, and the Government are leveraged to the hilt and interest rates are rising. The yield curve is damn close to flat and will probably invert with the continued rise in the short term interest rates; and they will rise because inflation is a real threat. When a recession hits and workers start losing their jobs the lack of elasticity is going to have a spiral effect, due to the lack of personal savings and new fangled (careless lending practices) mortgages. What will the ratios of deficit to GDP look like if the GDP drops, what will it look like if interest rates continue to rise ? How can government spending (a huge factor in GDP) continue to rise ?

On a national level we have a high trade deficit, a high budget deficit, a pension bail out program that is in trouble, and social security and medicare programs which are in trouble. This can only mean higher taxes and fewer payouts. We also have our auto and airline industry in deep doo-doo. Plus we have a ton of money in risky hedge funds which apparently no one can make sense of (think Orange County).

On a micro level we have a negative or low (at best) personal savings rate and an aging workforce. Many of these problems are on a global scale.

So, I guess I can change my name to doom and gloom but I see trouble ahead. To me, the real question is how to handle it.

I'm ducking for cover in short term securities and I-bonds. Like I've said before, if I can make a few percent above inflation I can bail out of the workforce in 7.5 years.

I watched the high tech bubble explode and kicked myself in the ass for not paying attention to reality. I'm now thinking that I might get a second chance and if I'm right the high tech bubble was cheap tution.

May we live in interesting times (as long as I'm learning I'm OK with that),

-helen
__________________
Helen is offline   Reply With Quote
Re: Volker, Greenspan and Donner, Too
Old 09-08-2005, 10:54 PM   #89
Recycles dryer sheets
 
Join Date: May 2005
Posts: 287
Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by Helen
I think Greenie should have let the tech bubble burst and recover on it's own.
That is easy to say, but he had to adjust to what he was given...

Loosened policy due to the Asian crisis, then because of Y2K fears... Then tightened afterward, combined with the equity bubble let to recession, combined with Terror attacks led to a loosening, now back to tightening.

I think it has been whipsawing pretty good through no fault of Greenspan, Clinton, Bush.

Could things have been handled differently? Can't they always when you're looking backward??
__________________
moghopper is offline   Reply With Quote
Re: Volker, Greenspan and Donner, Too
Old 09-08-2005, 11:50 PM   #90
Thinks s/he gets paid by the post
Helen's Avatar
 
Join Date: Oct 2004
Location: Portland
Posts: 1,349
Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by moghopper
That is easy to say, but he had to adjust to what he was given...
Could things have been handled differently?* Can't they always when you're looking backward??
Well, I don't know how much looking backwards I am doing. Most of my post is projecting - we are still holding steady at the moment.

Greenspan said it's never an easy ride after interest rates have been historically low. He knew that before he lowered the rates.

Katrina snuck up on us within a matter of days. The aging population, increased deficits and low personal savings rates/high consumer debt did not.

We created the problem of little elasticity via a lack of planning for the future. We've painted ourselves into a corner. Now we are just waiting for a catalyst.

-helen




__________________
Helen is offline   Reply With Quote
Re: Volker, Greenspan and Donner, Too
Old 09-09-2005, 12:19 AM   #91
Thinks s/he gets paid by the post
Helen's Avatar
 
Join Date: Oct 2004
Location: Portland
Posts: 1,349
Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by moghopper
That is easy to say, but he had to adjust to what he was given...

Loosened policy due to the Asian crisis, then because of Y2K fears...* Then tightened afterward, combined with the equity bubble let to recession, combined with Terror attacks led to a loosening, now back to tightening.
Warning, I do not have a Ph.D in Economics ...

The asian crisis impact on the US economy was well over before interest rates dropped. The Y2K fears did call for a moderate loosening. The equity bubble was a result of the loosening.

The terroist attack was tragic emotionally, but economically was just a blip on the screen, much like three mile island.

The major problems we have now were a long time in the making. I agree with what I think you are saying, it is a bi-partisan problem. It seems to be an escalating mind set problem within the American culture, government and citizens alike. The mindset seems to be, as long as things are good today, let's not worry or prepare for the future.

-helen

__________________
Helen is offline   Reply With Quote
Re: Volker, Greenspan and Donner, Too
Old 09-09-2005, 07:00 AM   #92
Recycles dryer sheets
 
Join Date: May 2005
Posts: 287
Re: Volker, Greenspan and Donner, Too

Quote:
Originally Posted by Helen
Well, I don't know how much looking backwards I am doing.
I was speaking only in regard to Fiscal policy moves in the last 10 years. Obviously I should have spelled that out.
__________________

__________________
moghopper 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
U.S. Government Rigging The Equity Markets? Donner FIRE and Money 57 09-15-2005 04:01 PM
Comes Sir Alan Greenspan Donner FIRE and Money 20 03-03-2005 09:44 AM

 

 
All times are GMT -6. The time now is 02:43 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.