Financial markets really hate uncertainty, don't they?

[randomness]

"That stampede you're hearing? It's folks running for the exits."

The biggest problem right now is that no one has any clue who all are holding the bag, or even how big the damn bag is. So while it doesn't hurt that the Fed and the ECB are opening the credit windows and throwing money at the banks, that doesn't make any of the banks less fearful and suspicious of each other.

And fear and suspicion? Bad for markets, just like they're bad for any other relationships.

Comments

[nafe.livejournal.com]

I dunno, but I'm gonna start watching "Mad Money".

[r-ness.livejournal.com]

What, Jim Cramer? He's entertaining, sure.

[r-ness.livejournal.com]

Actually, you know...if you want to see what he thinks on a medium with more bandwidth than "Mad Money", you can always go to http://www.thestreet.com/. Less of him ranting and more data.

My favorite piece on that site was a weekly analysis piece called "The Five Dumbest Things on Wall Street This Week", but I have to say it's gone downhill.

But you may be watching Jim Cramer for the ranting. :)

[nafe.livejournal.com]

I do like ranting! Also, it seems like a decent way to intro myself into paying attention to these things. I'm not really aggresively invested into anything, and there's no reason for that. But I find financial news data boring, so perhaps some ranting will help me stay awake.

[quietann.livejournal.com]

Things are pretty insane right now, yes. I am hoping that the gains that my 403b accounts have made aren't completely erased by this. Somewhat contrary to this, I'm hoping that the developer of yet another half-dozen oversized, overpriced McMansions across the street from us won't be able to sell them. There cannot be a move-up real estate market if no one can access the bottom of the market.

What steams me is that it did not have to happen, and it shouldn't have happened. Throwing easy credit at people without the means to pay it back propped up the economy for a few years, and hey, guess what, our new President will have yet another disaster inherited from the Shrub.

Grrrrr.

[r-ness.livejournal.com]

I am hoping that the gains that my 403b accounts have made aren't completely erased by this.

I wouldn't worry about it; your time horizon has got to be at least a decade or two before retirement, so occasional dips like this you can made up for. If you were planning on retiring next year, that'd be another story.

I will say that easy credit goes all the way back to the tech bust, so I'm not going to pin this on the Shrub.

[quietann.livejournal.com]

yes, I am probably 10 to 20 years from retirement; it all depends on various financial transactions that are not in my hands.

hm... correct about the timeline for easy credit, though I don't think people (your average Joes and Janes) really noticed until after Shrub came into office. Remember all those folks predicting a huge economic crash after 9/11? It would have been far worse if easy credit hadn't stuck around.

[digitalemur.livejournal.com]

Thank you for saying that aloud; I mean, it's not like I was gonna go reallocate and redistribute my 403b accounts, because I have like 30 years to retirement and I know I should NOT touch them except to tweak, but... yeah, still good to hear it said aloud. Even though I find myself saying it aloud to others sometimes.

[quezz.livejournal.com]

I'm glad I didn't buy a house, and I'm glad that I have low-risk investments right now.

I'm gonna wait a couple of years and see what happens.

[dirque.livejournal.com]

Just as a warning. Not all money market funds are safe.

http://www.nytimes.com/2007/08/15/business/15fund.html?_r=1&pagewanted=print&oref=slogin

[tla]

I have to admit I am rubbing my hands with glee. I have a little bit of free money right now, and am looking forward to plowing it back in when this freefall settles down a bit.

[nafe.livejournal.com]

I know right? The key is to know what to look for, and I don't! I feel like a baby vulture looking for my first corpse.

[tla]

I don't know if you've ever been to the Motley Fool's website, but I find that it is full of sensible people. In particular, they have a "stock investing basics" collection of pages here, which is very useful if you don't know how to do a valuation.

My plan is to pick up companies I already believe in, either because I've worked there and know they have good people (this includes GS; I'm delighted at its plunge over the last week, because I believe that they will still find a way to do well over the next couple of years) or because I've been following their stories for a while.

[jojotbird.livejournal.com]

A great time to buy a house, right?

[dirque.livejournal.com]

No, keep waiting. This is the beginnings of a credit crunch. You want to wait perhaps another year or two. Depending on where you are located you want to look at several things:

1. people are defaulting on loans now, but remember that's only the people who picked up ARM loans in2001- 2002, what about all the people in 2003-2004? On average housing prices have only come down 2%.

2. credit markets are only beginning to tighten in the past 6 months with lack of qualified buyers, the market will soon be flooded with properties.

3. demographically, babyboomers were born from 1946 (post ww2) to 1950. The first year they qualify for social security is at age 62 with full benefits starting at 68. So the shift from work housing to retirement housing will begin at 2008 at the earliest with the shift going to full swing post 2014.

[outlawradio.livejournal.com]

Yeah -- the bulk of the ARMs currently outstanding are resetting between this October and next October. So the next year is going to be more of the same.

[orichalcum.livejournal.com]

All too true, but you need to weigh the likely decrease in cost against the likely increase in mortgage interest rates, especially if you expect to be taking on a large mortgage. Timing this market right, like timing any major market, will be very tricky.

Speaking only for myself, the instability would make me not want to buy in the shortrun if my time frame for ownership was short-- say, 3-5 years seemed likely. I would want to buy in the shortrun if I expected to be in place for 7+ years. But other conclusions are certainly reasonable.

--Adam

[outlawradio.livejournal.com]

Right, but it sort of doesn't matter when to buy if credit is not available, which is the big worry now; will money be lent? If it may be available in the future, but at a higher rate, when it is not available at all now, that is the time to buy; one can always refi down the road.