Archive for May, 2009

Show me the money…

For those that are interested, I believe this market is trash and will be heading much lower. But where is my money now? Well since I don’t think any place in the stock market is safe, I have it pretty much all in “cash”. By cash I mean in short term CDs and Money Market funds. I also have a small amount of money in T.Rowe Price’s International Bond fund as a “hedge” against a falling dollar. Here are some keep thoughts on why.

  1. Interest rates are crazy low right now and WILL rise. I want to be in short term instruments (CDs in the 3-9 month range) so that I can take advantage of higher rates when they come.
  2. Money in the bank is now NCUA or FDIC “insured” up to $250k, this has been extended to 2013. Note: Even though the FDIC is insolvent, you will get your money back – there is no guarentee what that money will be worth though.
  3. Even though the market is up some 35% from its “bottom” I don’t think that is the bottom. We will certainly retest the lows and I expect we will break through them. I just don’t see how the economy can continue to get worse while stocks continue to climb higher.
  4. Gold / Silver / Oil are all scary to me… these are trading on fear of a complete dollar collapse and little else. If Big Ben does the RIGHT thing and accepts that deflation must happen and losses must be taken, then metals and commadoties will probably snap back faster than you can blink… and you do not want to be holding gold or oil if that happens.

Of course this is just my opinion, I could be wrong.

NOTICE: This is not investment advise and I am not an investment advisor. This information is provided “AS IS”. All investments contain risk.

Its sad and its true…

I must say that SNL and The Daily Show) do a great job on these skits. If you have been following the so called “Stress Test” you will find this pretty sad and amusing.

This is sad because it is true. In fact, the truth is even worse. Not only have banks been able to “negotiate” the results of the test.

The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation’s biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.

In addition, according to bank and government officials, the Fed used a different measurement of bank-capital levels than analysts and investors had been expecting, resulting in much smaller capital deficits.

The test itself (even in the more “adverse” scenarios) is not as stressful as thing already are ALREADY.