- This topic has 86 replies, 12 voices, and was last updated 15 years, 1 month ago by
Pasadena Broker.
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AuthorPosts
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January 28, 2008 at 1:11 PM #11653
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January 28, 2008 at 1:54 PM #144011
(former)FormerSanDiegan
ParticipantYes, we are screwed.
But that is the case whether or not the Fed cuts rates this week.
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January 28, 2008 at 3:17 PM #144061
kev374
ParticipantThe Fed cut rates during the 90s bust as well. We are screwed not because the Fed will cut rates, it is because the immense excesses of the last 5 years is coming to a sudden stop!
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January 28, 2008 at 3:21 PM #144078
niy38
Participantwhy screwed?
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January 28, 2008 at 3:24 PM #144089
hipmatt
Participantnot if you own gold or gold miners…!!
might as well profit from the irresponsibility of our gov. -
January 28, 2008 at 3:24 PM #144324
hipmatt
Participantnot if you own gold or gold miners…!!
might as well profit from the irresponsibility of our gov. -
January 28, 2008 at 3:24 PM #144327
hipmatt
Participantnot if you own gold or gold miners…!!
might as well profit from the irresponsibility of our gov. -
January 28, 2008 at 3:24 PM #144356
hipmatt
Participantnot if you own gold or gold miners…!!
might as well profit from the irresponsibility of our gov. -
January 28, 2008 at 3:24 PM #144424
hipmatt
Participantnot if you own gold or gold miners…!!
might as well profit from the irresponsibility of our gov. -
January 28, 2008 at 3:21 PM #144316
niy38
Participantwhy screwed?
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January 28, 2008 at 3:21 PM #144317
niy38
Participantwhy screwed?
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January 28, 2008 at 3:21 PM #144346
niy38
Participantwhy screwed?
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January 28, 2008 at 3:21 PM #144414
niy38
Participantwhy screwed?
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January 28, 2008 at 3:17 PM #144299
kev374
ParticipantThe Fed cut rates during the 90s bust as well. We are screwed not because the Fed will cut rates, it is because the immense excesses of the last 5 years is coming to a sudden stop!
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January 28, 2008 at 3:17 PM #144302
kev374
ParticipantThe Fed cut rates during the 90s bust as well. We are screwed not because the Fed will cut rates, it is because the immense excesses of the last 5 years is coming to a sudden stop!
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January 28, 2008 at 3:17 PM #144329
kev374
ParticipantThe Fed cut rates during the 90s bust as well. We are screwed not because the Fed will cut rates, it is because the immense excesses of the last 5 years is coming to a sudden stop!
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January 28, 2008 at 3:17 PM #144399
kev374
ParticipantThe Fed cut rates during the 90s bust as well. We are screwed not because the Fed will cut rates, it is because the immense excesses of the last 5 years is coming to a sudden stop!
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January 28, 2008 at 1:54 PM #144249
(former)FormerSanDiegan
ParticipantYes, we are screwed.
But that is the case whether or not the Fed cuts rates this week.
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January 28, 2008 at 1:54 PM #144252
(former)FormerSanDiegan
ParticipantYes, we are screwed.
But that is the case whether or not the Fed cuts rates this week.
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January 28, 2008 at 1:54 PM #144281
(former)FormerSanDiegan
ParticipantYes, we are screwed.
But that is the case whether or not the Fed cuts rates this week.
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January 28, 2008 at 1:54 PM #144348
(former)FormerSanDiegan
ParticipantYes, we are screwed.
But that is the case whether or not the Fed cuts rates this week.
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January 28, 2008 at 3:54 PM #144116
barnaby33
ParticipantWhat do you mean we? I’m doing ok. Good wine and toys are getting cheaper, at least used ones are. Houses too, though not nearly fast enough to avoid the freight train wreck that is coming.
Josh
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January 28, 2008 at 4:01 PM #144121
(former)FormerSanDiegan
ParticipantThe train has already left the station, regardless of interest rates. Changes to rates now, really start showing up in measures of the economy 6-12 months from now.
While good wine, expensive toys, and overpriced houses are getting cheaper, lots of other essentials get more expensive as the Fed prints money. These items might include food, clothing, energy … everyday stuff.
Meanwhile, prudent savers have seen the interest on their savings drop from over 5% to 3-4% and declining.
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January 28, 2008 at 8:28 PM #144280
barnaby33
ParticipantMeanwhile, prudent savers have seen the interest on their savings drop from over 5% to 3-4% and declining.
Not if they got short. The fundamental lesson that should be developed from this whole crisis, is that the meaning of savings is changing. The rate at which things are considered investments is changing and that is not likely to slow down.
The only reason any investment isn’t a liability is that someone will give you something you want for it. Now sure, from time to time specific investments go out of favor, pets.com anyone? Whats changing now though are perceptions of whole classes of investment, to liability. To me, govt debt, which most people consider prudent savings is the worst “investment” after real estate. The govt has a vested interest in making sure it doesn’t pay those dollars back, in real terms, plus the ability to make it happen.
Prudent savers are those who see whats happening and adjust their outlook accordingly. I’m a prudent saver. I live below my modest means, and invest according to a belief that the fundamental nature of what is an investment is changing, hence the being short.
Josh
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January 29, 2008 at 1:04 AM #144362
bob007
Participanti am a prudent saver too. if inflation hits 10% i lose 10% of my savings unless the interest rates compensate for it
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January 29, 2008 at 1:04 AM #144603
bob007
Participanti am a prudent saver too. if inflation hits 10% i lose 10% of my savings unless the interest rates compensate for it
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January 29, 2008 at 1:04 AM #144607
bob007
Participanti am a prudent saver too. if inflation hits 10% i lose 10% of my savings unless the interest rates compensate for it
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January 29, 2008 at 1:04 AM #144634
bob007
Participanti am a prudent saver too. if inflation hits 10% i lose 10% of my savings unless the interest rates compensate for it
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January 29, 2008 at 1:04 AM #144705
bob007
Participanti am a prudent saver too. if inflation hits 10% i lose 10% of my savings unless the interest rates compensate for it
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January 28, 2008 at 8:28 PM #144520
barnaby33
ParticipantMeanwhile, prudent savers have seen the interest on their savings drop from over 5% to 3-4% and declining.
Not if they got short. The fundamental lesson that should be developed from this whole crisis, is that the meaning of savings is changing. The rate at which things are considered investments is changing and that is not likely to slow down.
The only reason any investment isn’t a liability is that someone will give you something you want for it. Now sure, from time to time specific investments go out of favor, pets.com anyone? Whats changing now though are perceptions of whole classes of investment, to liability. To me, govt debt, which most people consider prudent savings is the worst “investment” after real estate. The govt has a vested interest in making sure it doesn’t pay those dollars back, in real terms, plus the ability to make it happen.
Prudent savers are those who see whats happening and adjust their outlook accordingly. I’m a prudent saver. I live below my modest means, and invest according to a belief that the fundamental nature of what is an investment is changing, hence the being short.
Josh
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January 28, 2008 at 8:28 PM #144523
barnaby33
ParticipantMeanwhile, prudent savers have seen the interest on their savings drop from over 5% to 3-4% and declining.
Not if they got short. The fundamental lesson that should be developed from this whole crisis, is that the meaning of savings is changing. The rate at which things are considered investments is changing and that is not likely to slow down.
The only reason any investment isn’t a liability is that someone will give you something you want for it. Now sure, from time to time specific investments go out of favor, pets.com anyone? Whats changing now though are perceptions of whole classes of investment, to liability. To me, govt debt, which most people consider prudent savings is the worst “investment” after real estate. The govt has a vested interest in making sure it doesn’t pay those dollars back, in real terms, plus the ability to make it happen.
Prudent savers are those who see whats happening and adjust their outlook accordingly. I’m a prudent saver. I live below my modest means, and invest according to a belief that the fundamental nature of what is an investment is changing, hence the being short.
Josh
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January 28, 2008 at 8:28 PM #144548
barnaby33
ParticipantMeanwhile, prudent savers have seen the interest on their savings drop from over 5% to 3-4% and declining.
Not if they got short. The fundamental lesson that should be developed from this whole crisis, is that the meaning of savings is changing. The rate at which things are considered investments is changing and that is not likely to slow down.
The only reason any investment isn’t a liability is that someone will give you something you want for it. Now sure, from time to time specific investments go out of favor, pets.com anyone? Whats changing now though are perceptions of whole classes of investment, to liability. To me, govt debt, which most people consider prudent savings is the worst “investment” after real estate. The govt has a vested interest in making sure it doesn’t pay those dollars back, in real terms, plus the ability to make it happen.
Prudent savers are those who see whats happening and adjust their outlook accordingly. I’m a prudent saver. I live below my modest means, and invest according to a belief that the fundamental nature of what is an investment is changing, hence the being short.
Josh
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January 28, 2008 at 8:28 PM #144621
barnaby33
ParticipantMeanwhile, prudent savers have seen the interest on their savings drop from over 5% to 3-4% and declining.
Not if they got short. The fundamental lesson that should be developed from this whole crisis, is that the meaning of savings is changing. The rate at which things are considered investments is changing and that is not likely to slow down.
The only reason any investment isn’t a liability is that someone will give you something you want for it. Now sure, from time to time specific investments go out of favor, pets.com anyone? Whats changing now though are perceptions of whole classes of investment, to liability. To me, govt debt, which most people consider prudent savings is the worst “investment” after real estate. The govt has a vested interest in making sure it doesn’t pay those dollars back, in real terms, plus the ability to make it happen.
Prudent savers are those who see whats happening and adjust their outlook accordingly. I’m a prudent saver. I live below my modest means, and invest according to a belief that the fundamental nature of what is an investment is changing, hence the being short.
Josh
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January 28, 2008 at 4:01 PM #144360
(former)FormerSanDiegan
ParticipantThe train has already left the station, regardless of interest rates. Changes to rates now, really start showing up in measures of the economy 6-12 months from now.
While good wine, expensive toys, and overpriced houses are getting cheaper, lots of other essentials get more expensive as the Fed prints money. These items might include food, clothing, energy … everyday stuff.
Meanwhile, prudent savers have seen the interest on their savings drop from over 5% to 3-4% and declining.
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January 28, 2008 at 4:01 PM #144364
(former)FormerSanDiegan
ParticipantThe train has already left the station, regardless of interest rates. Changes to rates now, really start showing up in measures of the economy 6-12 months from now.
While good wine, expensive toys, and overpriced houses are getting cheaper, lots of other essentials get more expensive as the Fed prints money. These items might include food, clothing, energy … everyday stuff.
Meanwhile, prudent savers have seen the interest on their savings drop from over 5% to 3-4% and declining.
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January 28, 2008 at 4:01 PM #144391
(former)FormerSanDiegan
ParticipantThe train has already left the station, regardless of interest rates. Changes to rates now, really start showing up in measures of the economy 6-12 months from now.
While good wine, expensive toys, and overpriced houses are getting cheaper, lots of other essentials get more expensive as the Fed prints money. These items might include food, clothing, energy … everyday stuff.
Meanwhile, prudent savers have seen the interest on their savings drop from over 5% to 3-4% and declining.
-
January 28, 2008 at 4:01 PM #144460
(former)FormerSanDiegan
ParticipantThe train has already left the station, regardless of interest rates. Changes to rates now, really start showing up in measures of the economy 6-12 months from now.
While good wine, expensive toys, and overpriced houses are getting cheaper, lots of other essentials get more expensive as the Fed prints money. These items might include food, clothing, energy … everyday stuff.
Meanwhile, prudent savers have seen the interest on their savings drop from over 5% to 3-4% and declining.
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January 28, 2008 at 3:54 PM #144355
barnaby33
ParticipantWhat do you mean we? I’m doing ok. Good wine and toys are getting cheaper, at least used ones are. Houses too, though not nearly fast enough to avoid the freight train wreck that is coming.
Josh
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January 28, 2008 at 3:54 PM #144359
barnaby33
ParticipantWhat do you mean we? I’m doing ok. Good wine and toys are getting cheaper, at least used ones are. Houses too, though not nearly fast enough to avoid the freight train wreck that is coming.
Josh
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January 28, 2008 at 3:54 PM #144386
barnaby33
ParticipantWhat do you mean we? I’m doing ok. Good wine and toys are getting cheaper, at least used ones are. Houses too, though not nearly fast enough to avoid the freight train wreck that is coming.
Josh
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January 28, 2008 at 3:54 PM #144456
barnaby33
ParticipantWhat do you mean we? I’m doing ok. Good wine and toys are getting cheaper, at least used ones are. Houses too, though not nearly fast enough to avoid the freight train wreck that is coming.
Josh
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January 29, 2008 at 9:58 AM #144467
Pasadena Broker
Participant“What do you mean we? I’m doing ok.”
Of course, what else really matters?
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January 29, 2008 at 2:57 PM #144731
Anonymous
GuestUnfortunately, I think the term prudent saver now means someone who is willing to take some risk to beat inflation. While that kind of goes against being prudent, getting 4% while the dollar drops 10% is a guaranteed loss.
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January 29, 2008 at 2:57 PM #144971
Anonymous
GuestUnfortunately, I think the term prudent saver now means someone who is willing to take some risk to beat inflation. While that kind of goes against being prudent, getting 4% while the dollar drops 10% is a guaranteed loss.
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January 29, 2008 at 2:57 PM #144972
Anonymous
GuestUnfortunately, I think the term prudent saver now means someone who is willing to take some risk to beat inflation. While that kind of goes against being prudent, getting 4% while the dollar drops 10% is a guaranteed loss.
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January 29, 2008 at 2:57 PM #144997
Anonymous
GuestUnfortunately, I think the term prudent saver now means someone who is willing to take some risk to beat inflation. While that kind of goes against being prudent, getting 4% while the dollar drops 10% is a guaranteed loss.
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January 29, 2008 at 2:57 PM #144999
Anonymous
GuestUnfortunately, I think the term prudent saver now means someone who is willing to take some risk to beat inflation. While that kind of goes against being prudent, getting 4% while the dollar drops 10% is a guaranteed loss.
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January 29, 2008 at 2:57 PM #145070
Anonymous
GuestUnfortunately, I think the term prudent saver now means someone who is willing to take some risk to beat inflation. While that kind of goes against being prudent, getting 4% while the dollar drops 10% is a guaranteed loss.
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January 29, 2008 at 4:21 PM #144816
barnaby33
ParticipantOf course, what else really matters?
Not sure if that was an attack or not, if so its pretty weak. As someone who was an admitted enabler of the fiasco we are now living through you hardly get to point the finger.
Just because I was too morally weak too lever up to the hilt last go-round, doesn’t mean I didn’t learn my lesson.
Josh
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January 29, 2008 at 4:21 PM #145056
barnaby33
ParticipantOf course, what else really matters?
Not sure if that was an attack or not, if so its pretty weak. As someone who was an admitted enabler of the fiasco we are now living through you hardly get to point the finger.
Just because I was too morally weak too lever up to the hilt last go-round, doesn’t mean I didn’t learn my lesson.
Josh
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January 29, 2008 at 4:21 PM #145082
barnaby33
ParticipantOf course, what else really matters?
Not sure if that was an attack or not, if so its pretty weak. As someone who was an admitted enabler of the fiasco we are now living through you hardly get to point the finger.
Just because I was too morally weak too lever up to the hilt last go-round, doesn’t mean I didn’t learn my lesson.
Josh
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January 29, 2008 at 4:21 PM #145085
barnaby33
ParticipantOf course, what else really matters?
Not sure if that was an attack or not, if so its pretty weak. As someone who was an admitted enabler of the fiasco we are now living through you hardly get to point the finger.
Just because I was too morally weak too lever up to the hilt last go-round, doesn’t mean I didn’t learn my lesson.
Josh
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January 29, 2008 at 4:21 PM #145156
barnaby33
ParticipantOf course, what else really matters?
Not sure if that was an attack or not, if so its pretty weak. As someone who was an admitted enabler of the fiasco we are now living through you hardly get to point the finger.
Just because I was too morally weak too lever up to the hilt last go-round, doesn’t mean I didn’t learn my lesson.
Josh
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January 29, 2008 at 9:58 AM #144708
Pasadena Broker
Participant“What do you mean we? I’m doing ok.”
Of course, what else really matters?
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January 29, 2008 at 9:58 AM #144712
Pasadena Broker
Participant“What do you mean we? I’m doing ok.”
Of course, what else really matters?
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January 29, 2008 at 9:58 AM #144738
Pasadena Broker
Participant“What do you mean we? I’m doing ok.”
Of course, what else really matters?
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January 29, 2008 at 9:58 AM #144808
Pasadena Broker
Participant“What do you mean we? I’m doing ok.”
Of course, what else really matters?
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January 29, 2008 at 6:26 PM #144916
kewp
ParticipantDid anyone else see this?
http://globaleconomicanalysis.blogspot.com/2008/01/bank-reserves-go-negative.html
I would think the banks having no cash might be a bit of a problem?
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January 29, 2008 at 6:39 PM #144931
Pasadena Broker
ParticipantWhy is a banks problem, my problem, when ‘I’m doing ok’?
What is this ‘we’ business you guys keep prattling about, I am an island unto myself.
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January 30, 2008 at 10:59 AM #145219
JWM in SD
ParticipantJWM in SD
“Why is a banks problem, my problem, when ‘I’m doing ok’?
What is this ‘we’ business you guys keep prattling about, I am an island unto myself.”
So I guess you keep all of your money in your mattress right?
So PB, do you work for one of those fourteen organizations that the FBI will be looking into shortly? Who knows, you might have an orange jumpsuit in your future…..
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January 30, 2008 at 6:35 PM #145563
Pasadena Broker
ParticipantBank of Sealy doesn’t provide enough of a return but is sounding pretty attractive with what I see coming down the pike.
Nope, not associated with any of the 14, and my personal hope is they bust all the thieving, lying bastards that are destroying communities and families.
Orange doesn’t bring out the color in my eyes
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January 30, 2008 at 6:35 PM #145807
Pasadena Broker
ParticipantBank of Sealy doesn’t provide enough of a return but is sounding pretty attractive with what I see coming down the pike.
Nope, not associated with any of the 14, and my personal hope is they bust all the thieving, lying bastards that are destroying communities and families.
Orange doesn’t bring out the color in my eyes
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January 30, 2008 at 6:35 PM #145834
Pasadena Broker
ParticipantBank of Sealy doesn’t provide enough of a return but is sounding pretty attractive with what I see coming down the pike.
Nope, not associated with any of the 14, and my personal hope is they bust all the thieving, lying bastards that are destroying communities and families.
Orange doesn’t bring out the color in my eyes
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January 30, 2008 at 6:35 PM #145844
Pasadena Broker
ParticipantBank of Sealy doesn’t provide enough of a return but is sounding pretty attractive with what I see coming down the pike.
Nope, not associated with any of the 14, and my personal hope is they bust all the thieving, lying bastards that are destroying communities and families.
Orange doesn’t bring out the color in my eyes
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January 30, 2008 at 6:35 PM #145905
Pasadena Broker
ParticipantBank of Sealy doesn’t provide enough of a return but is sounding pretty attractive with what I see coming down the pike.
Nope, not associated with any of the 14, and my personal hope is they bust all the thieving, lying bastards that are destroying communities and families.
Orange doesn’t bring out the color in my eyes
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January 30, 2008 at 10:59 AM #145459
JWM in SD
ParticipantJWM in SD
“Why is a banks problem, my problem, when ‘I’m doing ok’?
What is this ‘we’ business you guys keep prattling about, I am an island unto myself.”
So I guess you keep all of your money in your mattress right?
So PB, do you work for one of those fourteen organizations that the FBI will be looking into shortly? Who knows, you might have an orange jumpsuit in your future…..
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January 30, 2008 at 10:59 AM #145487
JWM in SD
ParticipantJWM in SD
“Why is a banks problem, my problem, when ‘I’m doing ok’?
What is this ‘we’ business you guys keep prattling about, I am an island unto myself.”
So I guess you keep all of your money in your mattress right?
So PB, do you work for one of those fourteen organizations that the FBI will be looking into shortly? Who knows, you might have an orange jumpsuit in your future…..
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January 30, 2008 at 10:59 AM #145500
JWM in SD
ParticipantJWM in SD
“Why is a banks problem, my problem, when ‘I’m doing ok’?
What is this ‘we’ business you guys keep prattling about, I am an island unto myself.”
So I guess you keep all of your money in your mattress right?
So PB, do you work for one of those fourteen organizations that the FBI will be looking into shortly? Who knows, you might have an orange jumpsuit in your future…..
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January 30, 2008 at 10:59 AM #145561
JWM in SD
ParticipantJWM in SD
“Why is a banks problem, my problem, when ‘I’m doing ok’?
What is this ‘we’ business you guys keep prattling about, I am an island unto myself.”
So I guess you keep all of your money in your mattress right?
So PB, do you work for one of those fourteen organizations that the FBI will be looking into shortly? Who knows, you might have an orange jumpsuit in your future…..
-
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January 29, 2008 at 6:39 PM #145169
Pasadena Broker
ParticipantWhy is a banks problem, my problem, when ‘I’m doing ok’?
What is this ‘we’ business you guys keep prattling about, I am an island unto myself.
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January 29, 2008 at 6:39 PM #145197
Pasadena Broker
ParticipantWhy is a banks problem, my problem, when ‘I’m doing ok’?
What is this ‘we’ business you guys keep prattling about, I am an island unto myself.
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January 29, 2008 at 6:39 PM #145200
Pasadena Broker
ParticipantWhy is a banks problem, my problem, when ‘I’m doing ok’?
What is this ‘we’ business you guys keep prattling about, I am an island unto myself.
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January 29, 2008 at 6:39 PM #145271
Pasadena Broker
ParticipantWhy is a banks problem, my problem, when ‘I’m doing ok’?
What is this ‘we’ business you guys keep prattling about, I am an island unto myself.
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January 29, 2008 at 6:26 PM #145153
kewp
ParticipantDid anyone else see this?
http://globaleconomicanalysis.blogspot.com/2008/01/bank-reserves-go-negative.html
I would think the banks having no cash might be a bit of a problem?
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January 29, 2008 at 6:26 PM #145182
kewp
ParticipantDid anyone else see this?
http://globaleconomicanalysis.blogspot.com/2008/01/bank-reserves-go-negative.html
I would think the banks having no cash might be a bit of a problem?
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January 29, 2008 at 6:26 PM #145185
kewp
ParticipantDid anyone else see this?
http://globaleconomicanalysis.blogspot.com/2008/01/bank-reserves-go-negative.html
I would think the banks having no cash might be a bit of a problem?
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January 29, 2008 at 6:26 PM #145255
kewp
ParticipantDid anyone else see this?
http://globaleconomicanalysis.blogspot.com/2008/01/bank-reserves-go-negative.html
I would think the banks having no cash might be a bit of a problem?
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January 30, 2008 at 10:49 AM #145205
Geedup
ParticipantMy favorite quote from Warren Buffet (perfectly applies to what happened to our housing market)
“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”
Berkshire Hathaway 2000 Chairman’s Letter
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January 30, 2008 at 5:25 PM #145512
rocket science
ParticipantBr. Buffet had another good one in 2002 as well.
Following are edited excerpts from the Berkshire Hathaway annual report for 2002.
The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.
This was quoted as recently as Jan 2008 with respect to credit default swaps in a LA times article on the economy.
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January 30, 2008 at 5:25 PM #145755
rocket science
ParticipantBr. Buffet had another good one in 2002 as well.
Following are edited excerpts from the Berkshire Hathaway annual report for 2002.
The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.
This was quoted as recently as Jan 2008 with respect to credit default swaps in a LA times article on the economy.
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January 30, 2008 at 5:25 PM #145783
rocket science
ParticipantBr. Buffet had another good one in 2002 as well.
Following are edited excerpts from the Berkshire Hathaway annual report for 2002.
The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.
This was quoted as recently as Jan 2008 with respect to credit default swaps in a LA times article on the economy.
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January 30, 2008 at 5:25 PM #145794
rocket science
ParticipantBr. Buffet had another good one in 2002 as well.
Following are edited excerpts from the Berkshire Hathaway annual report for 2002.
The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.
This was quoted as recently as Jan 2008 with respect to credit default swaps in a LA times article on the economy.
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January 30, 2008 at 5:25 PM #145855
rocket science
ParticipantBr. Buffet had another good one in 2002 as well.
Following are edited excerpts from the Berkshire Hathaway annual report for 2002.
The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.
This was quoted as recently as Jan 2008 with respect to credit default swaps in a LA times article on the economy.
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January 30, 2008 at 10:49 AM #145444
Geedup
ParticipantMy favorite quote from Warren Buffet (perfectly applies to what happened to our housing market)
“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”
Berkshire Hathaway 2000 Chairman’s Letter
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January 30, 2008 at 10:49 AM #145472
Geedup
ParticipantMy favorite quote from Warren Buffet (perfectly applies to what happened to our housing market)
“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”
Berkshire Hathaway 2000 Chairman’s Letter
-
January 30, 2008 at 10:49 AM #145474
Geedup
ParticipantMy favorite quote from Warren Buffet (perfectly applies to what happened to our housing market)
“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”
Berkshire Hathaway 2000 Chairman’s Letter
-
January 30, 2008 at 10:49 AM #145546
Geedup
ParticipantMy favorite quote from Warren Buffet (perfectly applies to what happened to our housing market)
“The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities — that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future — will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.”
Berkshire Hathaway 2000 Chairman’s Letter
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