[zzz]

HLS I don’t know why you bother to state a litany of facts that are rather obvious like you can lose money and there is no guarantee in the market. I am not debating this, I fully agree with you.

The question is whether or not you bother to TIME your 401k. There is NO guarantee his bond funds arent going to eat shit if the market continues at the levels we’re at. Fixed income is not a lot safer if more companies fail or if a lot more companies get downgraded. No one is talkin guarantee but since you and I don’t have a crystal ball, as DaCounselor pointed out, the market does go UP and DOWN. Trying to time the UP And DOWN has been proven not to work very well for MOST of us over a LONG time horizon. If you are <10 years from retirement, you shoulda been out of equities to begin with.

[zzz]

HLS I don’t know why you bother to state a litany of facts that are rather obvious like you can lose money and there is no guarantee in the market. I am not debating this, I fully agree with you.

The question is whether or not you bother to TIME your 401k. There is NO guarantee his bond funds arent going to eat shit if the market continues at the levels we’re at. Fixed income is not a lot safer if more companies fail or if a lot more companies get downgraded. No one is talkin guarantee but since you and I don’t have a crystal ball, as DaCounselor pointed out, the market does go UP and DOWN. Trying to time the UP And DOWN has been proven not to work very well for MOST of us over a LONG time horizon. If you are <10 years from retirement, you shoulda been out of equities to begin with.

[zzz]

HLS I am definitely NOT drinking the Kool-Aid. I speak ONLY about his 401k. If you choose to invest in a 401k, HISTORY and a chart of the DJI(not me, not joe schmoe) shows that over TIME dollar cost averaging works. Since none of us have a crystal ball, I can only look at history and how the market has traded. There is no financial model that can predict apocalyptic events that wipe out an entire economy.

[zzz]

HLS I am definitely NOT drinking the Kool-Aid. I speak ONLY about his 401k. If you choose to invest in a 401k, HISTORY and a chart of the DJI(not me, not joe schmoe) shows that over TIME dollar cost averaging works. Since none of us have a crystal ball, I can only look at history and how the market has traded. There is no financial model that can predict apocalyptic events that wipe out an entire economy.

[zzz]

HLS I am definitely NOT drinking the Kool-Aid. I speak ONLY about his 401k. If you choose to invest in a 401k, HISTORY and a chart of the DJI(not me, not joe schmoe) shows that over TIME dollar cost averaging works. Since none of us have a crystal ball, I can only look at history and how the market has traded. There is no financial model that can predict apocalyptic events that wipe out an entire economy.

[zzz]

HLS I am definitely NOT drinking the Kool-Aid. I speak ONLY about his 401k. If you choose to invest in a 401k, HISTORY and a chart of the DJI(not me, not joe schmoe) shows that over TIME dollar cost averaging works. Since none of us have a crystal ball, I can only look at history and how the market has traded. There is no financial model that can predict apocalyptic events that wipe out an entire economy.

[zzz]

HLS I am definitely NOT drinking the Kool-Aid. I speak ONLY about his 401k. If you choose to invest in a 401k, HISTORY and a chart of the DJI(not me, not joe schmoe) shows that over TIME dollar cost averaging works. Since none of us have a crystal ball, I can only look at history and how the market has traded. There is no financial model that can predict apocalyptic events that wipe out an entire economy.

[zzz]

Many experts believe you should not actively manage your 401k if you are very far from retirement. You are trying to time the market. Your friend is right, you will lose $$ in what you currently hold, but you are dollar cost averaging.

If you really think about it, you want the market to stay cheap, depressed, whatever you want to call it without it becoming apocalyptic, for all the years leading up to say your 50s and then rally like hell leading up to your retirement. Buy low, sell high.

[zzz]

Many experts believe you should not actively manage your 401k if you are very far from retirement. You are trying to time the market. Your friend is right, you will lose $$ in what you currently hold, but you are dollar cost averaging.

If you really think about it, you want the market to stay cheap, depressed, whatever you want to call it without it becoming apocalyptic, for all the years leading up to say your 50s and then rally like hell leading up to your retirement. Buy low, sell high.

[zzz]

Many experts believe you should not actively manage your 401k if you are very far from retirement. You are trying to time the market. Your friend is right, you will lose $$ in what you currently hold, but you are dollar cost averaging.

If you really think about it, you want the market to stay cheap, depressed, whatever you want to call it without it becoming apocalyptic, for all the years leading up to say your 50s and then rally like hell leading up to your retirement. Buy low, sell high.

[zzz]

Many experts believe you should not actively manage your 401k if you are very far from retirement. You are trying to time the market. Your friend is right, you will lose $$ in what you currently hold, but you are dollar cost averaging.

If you really think about it, you want the market to stay cheap, depressed, whatever you want to call it without it becoming apocalyptic, for all the years leading up to say your 50s and then rally like hell leading up to your retirement. Buy low, sell high.

[zzz]

Many experts believe you should not actively manage your 401k if you are very far from retirement. You are trying to time the market. Your friend is right, you will lose $$ in what you currently hold, but you are dollar cost averaging.

If you really think about it, you want the market to stay cheap, depressed, whatever you want to call it without it becoming apocalyptic, for all the years leading up to say your 50s and then rally like hell leading up to your retirement. Buy low, sell high.

[zzz]

Roubini wrote a piece today that we’ve become the USSRA (United Socialist State Republic of America). Its rather long and talks about the implications of the AIG “takeover”. Here’s a few paragraphs:

If we start bailing out those creditors of AIG (holders of bond insurance policies) we may as well nationalize also all of the other private monoline insurers. And we treat differently different bond insurers (we make whole those who bought bond insurance from a too big to fail AIG and we let go bust those who bought the same protections for a non-systemically important bond insurer) we exacerbate moral hazard as in the future no one will buy bond insurance protection from truly private and smaller bond insurers and everyone will buy it from large too-big-to-fail institutions such as AIG where such bond insurance comes now with the additional protection of an implicit government guarantee of insurance. So the US government may become – on top of the biggest insurer in the world with its takeover of AIG – also the biggest re-insurer in the world.

And how will the government decision to protect fully the small insured claimants of AIG (those who hold life and casualty insurance) affect the competition in the insurance business? If the government makes such policy holders senior to the government large and too big to fail private insurer have a massive competitive advantage relative to smaller insurance companies where the claims of the policy holders are at greater risk if the insurance company goes bust?

And, as in the case of banks involved in mortgages, where were the insurance regulators that were asleep at the wheel while AIG was using the policy holders premia not to invest into safe long term bonds but rather to insure toxic MBS and CDOs and other junk? Why were they asleep at the wheel while AIG was conducting the scam of the century getting involved into a business – bond insurance – that was toxic and caused its demise? Why was AIG allowed to become too-big-to-fail but letting it get into a business – bond insurance – where it should have not been in the first place and that caused its current bankruptcy?

So there are tons of questions that remain to be answered and the pathetic Fed statement of the Fed on the takeover of AIG does not answer creating much greater uncertainty and confusion. AIG should have been allowed to go into bankruptcy court and any government financial help to avoid systemic risk should have occurred in the form of a formal debtor-in-possession (DIP) financing. Bankruptcy court have laws and a judicial history of how claims of an insolvent firm are treated and they provide clarity to the pecking order of such claims while avoiding – via a stay – some creditors running and be made whole while others are inflicted – because of such a run – even greater losses. So instead of doing the right thing – pushing AIG into bankruptcy court and providing government DIP financing – the Fed and Treasury have formally nationalized AIG and they have created a legal mess where there will be endless confusion and lack of transparency of the government claims relative to junior and senior creditors of AIG, short term creditors and long term creditors, insurance policy holders of a traditional sort and of a non-traditional sort (life and casualty holders versus bond insurance holders).

So soon enough the transformation the USA into the USSRA (United Socialist State Republic of America) will be complete: we have defeated the USSRR to create a communist economy in the most advanced free market economy in the world. And calling it socialism (even socialism for the rich, the well connected and Wall Street) is giving a bad name even to a failed experiment like socialism; this is more akin to the creation of a corporatist state (like the Italian fascism or the Germany Third Reich) where private sector interest are protected (gains privatized and losses socialized) where the government is taken over by corrupt and reckless private interests.

[zzz]

Roubini wrote a piece today that we’ve become the USSRA (United Socialist State Republic of America). Its rather long and talks about the implications of the AIG “takeover”. Here’s a few paragraphs:

If we start bailing out those creditors of AIG (holders of bond insurance policies) we may as well nationalize also all of the other private monoline insurers. And we treat differently different bond insurers (we make whole those who bought bond insurance from a too big to fail AIG and we let go bust those who bought the same protections for a non-systemically important bond insurer) we exacerbate moral hazard as in the future no one will buy bond insurance protection from truly private and smaller bond insurers and everyone will buy it from large too-big-to-fail institutions such as AIG where such bond insurance comes now with the additional protection of an implicit government guarantee of insurance. So the US government may become – on top of the biggest insurer in the world with its takeover of AIG – also the biggest re-insurer in the world.

And how will the government decision to protect fully the small insured claimants of AIG (those who hold life and casualty insurance) affect the competition in the insurance business? If the government makes such policy holders senior to the government large and too big to fail private insurer have a massive competitive advantage relative to smaller insurance companies where the claims of the policy holders are at greater risk if the insurance company goes bust?

And, as in the case of banks involved in mortgages, where were the insurance regulators that were asleep at the wheel while AIG was using the policy holders premia not to invest into safe long term bonds but rather to insure toxic MBS and CDOs and other junk? Why were they asleep at the wheel while AIG was conducting the scam of the century getting involved into a business – bond insurance – that was toxic and caused its demise? Why was AIG allowed to become too-big-to-fail but letting it get into a business – bond insurance – where it should have not been in the first place and that caused its current bankruptcy?

So there are tons of questions that remain to be answered and the pathetic Fed statement of the Fed on the takeover of AIG does not answer creating much greater uncertainty and confusion. AIG should have been allowed to go into bankruptcy court and any government financial help to avoid systemic risk should have occurred in the form of a formal debtor-in-possession (DIP) financing. Bankruptcy court have laws and a judicial history of how claims of an insolvent firm are treated and they provide clarity to the pecking order of such claims while avoiding – via a stay – some creditors running and be made whole while others are inflicted – because of such a run – even greater losses. So instead of doing the right thing – pushing AIG into bankruptcy court and providing government DIP financing – the Fed and Treasury have formally nationalized AIG and they have created a legal mess where there will be endless confusion and lack of transparency of the government claims relative to junior and senior creditors of AIG, short term creditors and long term creditors, insurance policy holders of a traditional sort and of a non-traditional sort (life and casualty holders versus bond insurance holders).

So soon enough the transformation the USA into the USSRA (United Socialist State Republic of America) will be complete: we have defeated the USSRR to create a communist economy in the most advanced free market economy in the world. And calling it socialism (even socialism for the rich, the well connected and Wall Street) is giving a bad name even to a failed experiment like socialism; this is more akin to the creation of a corporatist state (like the Italian fascism or the Germany Third Reich) where private sector interest are protected (gains privatized and losses socialized) where the government is taken over by corrupt and reckless private interests.

[zzz]

Roubini wrote a piece today that we’ve become the USSRA (United Socialist State Republic of America). Its rather long and talks about the implications of the AIG “takeover”. Here’s a few paragraphs:

If we start bailing out those creditors of AIG (holders of bond insurance policies) we may as well nationalize also all of the other private monoline insurers. And we treat differently different bond insurers (we make whole those who bought bond insurance from a too big to fail AIG and we let go bust those who bought the same protections for a non-systemically important bond insurer) we exacerbate moral hazard as in the future no one will buy bond insurance protection from truly private and smaller bond insurers and everyone will buy it from large too-big-to-fail institutions such as AIG where such bond insurance comes now with the additional protection of an implicit government guarantee of insurance. So the US government may become – on top of the biggest insurer in the world with its takeover of AIG – also the biggest re-insurer in the world.

And how will the government decision to protect fully the small insured claimants of AIG (those who hold life and casualty insurance) affect the competition in the insurance business? If the government makes such policy holders senior to the government large and too big to fail private insurer have a massive competitive advantage relative to smaller insurance companies where the claims of the policy holders are at greater risk if the insurance company goes bust?

And, as in the case of banks involved in mortgages, where were the insurance regulators that were asleep at the wheel while AIG was using the policy holders premia not to invest into safe long term bonds but rather to insure toxic MBS and CDOs and other junk? Why were they asleep at the wheel while AIG was conducting the scam of the century getting involved into a business – bond insurance – that was toxic and caused its demise? Why was AIG allowed to become too-big-to-fail but letting it get into a business – bond insurance – where it should have not been in the first place and that caused its current bankruptcy?

So there are tons of questions that remain to be answered and the pathetic Fed statement of the Fed on the takeover of AIG does not answer creating much greater uncertainty and confusion. AIG should have been allowed to go into bankruptcy court and any government financial help to avoid systemic risk should have occurred in the form of a formal debtor-in-possession (DIP) financing. Bankruptcy court have laws and a judicial history of how claims of an insolvent firm are treated and they provide clarity to the pecking order of such claims while avoiding – via a stay – some creditors running and be made whole while others are inflicted – because of such a run – even greater losses. So instead of doing the right thing – pushing AIG into bankruptcy court and providing government DIP financing – the Fed and Treasury have formally nationalized AIG and they have created a legal mess where there will be endless confusion and lack of transparency of the government claims relative to junior and senior creditors of AIG, short term creditors and long term creditors, insurance policy holders of a traditional sort and of a non-traditional sort (life and casualty holders versus bond insurance holders).

So soon enough the transformation the USA into the USSRA (United Socialist State Republic of America) will be complete: we have defeated the USSRR to create a communist economy in the most advanced free market economy in the world. And calling it socialism (even socialism for the rich, the well connected and Wall Street) is giving a bad name even to a failed experiment like socialism; this is more akin to the creation of a corporatist state (like the Italian fascism or the Germany Third Reich) where private sector interest are protected (gains privatized and losses socialized) where the government is taken over by corrupt and reckless private interests.

[Author]

Posts