Doomsday

From a Yahoo! News story: "WASHINGTON – Congressional Republicans on Sunday predicted a doomsday scenario of crushing debt and eventual federal bankruptcy if President Barack Obama's massive spending blueprint wins passage."

It sounds a little scary. So what happens if the USA goes bankrupt? Any idea? Will China take over? What I would like to know is how many top flight American people already own property in Europe (just in case).

Privacy

From a news story on the net: I had not heard about this wild idea: "PORTLAND, Ore. – Oregon is among a growing number of states exploring ways to tax drivers based on the number of miles they drive instead of how much gas they use, even going so far as to install GPS monitoring devices in 300 vehicles. The idea first emerged nearly 10 years ago as Oregon lawmakers worried that fuel-efficient cars such as gas-electric hybrids could pose a threat to road upkeep, which is paid for largely with gasoline taxes." Raising gas taxes is just too simple a way out of this dilemma. Everyone knows that cars cause most of the world's pollution. The real reason behind this lame idea must be to reduce the number of cars. Maybe soon, we'll hear someone say that people over a certain age shouldn't drive at all. The words "monitoring devices" scares the unholy sweat out of me.

Whom do you blame?

From a popular investment newsletter: “Underlying the credit crisis gripping the U.S. and world economies is a crisis of confidence. Blame has been laid at the feet of the U.S. Federal Reserve, and an investment bankers’ brew of toxic financial products. Ultimately, however, it was the supposedly trustworthy rating agencies that got everyone to drink the poisoned Kool-Aid. The sheer fraud and greed of rating agency analysts and executives is staggering. That no one has gone to jail, and none of the agencies have been shut down is a travesty of justice on an infinitely larger scale than Bernie Madoff’s Ponzi scheme. Until depositors, bankers and investors regain confidence in the quality of ratings we rely upon to measure financial stability and creditworthiness, the tremors that underlie the credit crisis will drag on indefinitely.” I have to say I agree with this quote 100%. Let us pray that the Food and Drug Administration is not currupt on the same scale. Just imagine. I don't know who that is on the left but I know she is not an investment analyst. But, if she were, it would make absolutely no difference to anyone.

Listen up

I have been advising my eight readers to buy stocks - 100,000 shares to start - as long as they are safe, conservative companies they're buying into. I also said the market has gone as low as it's going to go - 8500 - give or take. Today, the market went up by almost 900 points - 10%. Now, we continue to hear dire predictions about the housing sector. The housing sector will hit bottom in about three months. Some say it won't hit bottom for another year or more. I say no, no, no - three months max. Why does the media enjoy scaring people? Because FEAR sells. The lady at left proves the economy is about to right itself. Hemlines are a better indicator of the state of the economy than any ECONOMIST. Remember that.

Money and Markets

Money and Markets has produced a free one-hour video which you (one of my eight readers) might be interested in, especially if you're looking forward to some day receiving payments from your 401K pension.

Here is what the banking experts behind Money and Markets say:
"We NAME NAMES — 198 of the big banks we believe are most likely to fail, the 197 strongest banks in America, and the most solid brokers as well ...
We give you the simple, step-by-step instructions for finding out how safe your bank is even if it's not one of the 395 named in the X-List report ...
And we give you the four crucial guidelines to follow when choosing a bank to trust with your money." There is, of course, tons of other useful financial information in the video. Buy stocks and plenty of them, but make sure you're investing conservatively. Do not worry about the stock market. It can only go up.

Simple Finance 101

Herewith, a few words of advice for dealing with the recession and personal financial losses. I copied it from I don't remember where. Buy lots of cheap stocks too, if you have the money. Stocks can only go up, in the long term. My simple formula for financial security? Always, always live below your means and save the difference.

Deal with Debt: If you have debt, pay it down. Better still, eliminate it completely. Going forward, pay cash for everything you buy. That may keep you from making some purchases; if so, that's good.
Downsize Your Life - Before it Downsizes You: Differentiate between things that you want, and things that you actually need. By streamlining your life, you'll rediscover that some "things" (time with your family) are more important than other things (a plasma TV).
Stay in, Don't Cash Out: If you're a decade or more away from retirement, everything we know about market probabilities and recorded history suggests the better option is staying in the market, as opposed to cashing out. But don't go crazy, either. We also know that balanced funds, hard assets and a solid emphasis on income offer the best shot at higher returns over time.
Be Real: If you're already retired, and your "nest egg" has been eviscerated, conduct a realistic appraisal of your financing needs. If you realize you can't risk losing part - or all - of the money that you still have invested in the markets, talk to your financial advisor immediately. It may be better to pull out of the markets and move on to safer choices.

Finance for adults

Fannie Mae and Freddie Mac - remember those names. Their collective name is now mud since a rumor began to spread earlier today about Federal regulators taking them over. That move will cost common shareholders and you and me dearly. Maybe not me. Maybe my kids. If the rumors are true, the Federal budget will have to support billions of dollars in bad loans which have up to now been backed by the two giant semi-public entities. This is what happens when one is careless with someone else's money. What are the choices? There aren't any. A collapse of either or both of these giant underwriters would cause panic and start an unstoppable cascade of shareholders bailing out - like a run on a bank. Credit would get super tight. If money is not kept moving, the entire economy will grind to a halt. Perhaps we're hanging by a thread but don't yet know it. I wonder if the Chinese were wanting to cash in their chips? Or the rich Arabian sheiks? The Federal action, otherwise, appears premature. Good luck to us all.