Reading Time: 2 minutes Summary of 2008 Aren’t we glad 2008 is finanlly over? I am sure most people (who are not hiding under rocks) are. On a positive note, most of us survived from the crash (so far). But we do learn a lesson or two on economy and market: live within means, don’t over extend yourself, and
Reading Time: 2 minutes It seems to me the panic selling in the stock market never ends. I can think of the following sources of sellers: 1) Hedge fund. Yesterday Congress has an testimony on Hedge Fund, and five famous Hedge Fund managers were there. Hedge fund industry has grown rapidly in last 10 years. Besides wealthy clients, they
Reading Time: < 1 minute Well, I am not going to short. Two reasons: 1) In order to short a stock, I need to open a margin account, which I dislike. Margin account means I have to borrow from the broker, which increased the risk quite a lot, and increases the “anxiety factor” which is something I dislike. A good
Reading Time: < 1 minute NOT TO DO list first 1) Watch CNBC and other financial news and got confused, and worse got panic. Same goes to checking your brokerage acct or 401k acct every day; 2) Try to be the hero: pick up “cheap” financials, commodities, technology stocks simply because you think they are “cheap” compared to 2 weeks
Reading Time: < 1 minute I am a big fan of CBS 60 minutes. This weekend it explains the Credit Default Swap (CDO) market, and how it backfired and brought down the Bear, Lehman, and AIG. One nice thing about this CBS video (link here), is one does not need formal finance education to understand it. The video lasts 12
Reading Time: 2 minutes Think you are unlucky being US tax payer, paying $700 billion to bail out wall street. Think the poor Washington Mutual (NYSE: WM) shareholder and bond holder, they are left with almost nothing. And yours truely, after been in the US stock market for almost 5 years, is one of the WM shareholders. Looking back,
Reading Time: < 1 minute Ron Paul had an interesting perspective on this topic.
Reading Time: < 1 minute March 16: Bear Stearns, $29 billon Sept. 6: Fannie/Freddie, $200 billion Lehman Brothers: sorry baby no bail AIG: $85 billion Who is the next??? Essentially Fed/Treasury are transfering the downside risks from individual companies to the fed/treasury/greenbacks. Note the money pledged to support Fannie/Freddie/AIG could exceed the original number if the problem worsens. I can
Reading Time: 2 minutes With the Lehman Brothers discussion underway in its 3rd day, and Asian market is anxious waiting for positive outcome. I am thinking otherwise. Regardless Lehman gets sold (as a piece or in several pieces), continue its business with bankrupcy in mind, this Lehman thing is just a tip of iceberger we are going to see.
Reading Time: < 1 minute Fannie/Freddie Short term I think it’s a deal for fed. But long term (it seems nobody is caring about long term these days), why should China continue to buy the Fannie/Freddie debt, for some premium over the US treasuries with substantial mortgage market risk (liquidity). I agree the US treasuries and Fannie/Freddie debt are co-related.
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