In DC this week. Typing this whilst looking out my hotel window with a beautiful view of the Washington monument gleaming in the distance. Absolutely spectacular. Talk around here is all about the bailouts of Fannie Mae and Freddie Mac. I can't even begin to sum up how horrible this all is. I still need some time to cool off. The big question on my mind (as well as everyone else I had dinner with this evening) is who's next? The political modus operandi right now seems to be "socialize profits and privatize losses." If you can't comprehend how horrible that is, it might be time for you to quit reading this blog...
In other news, I spoke with a couple of Wall street folks and it seems as though a major bank and major investment bank are on their last breaths. And that's excluding Lehman Brothers. I'll post about anything else I hear whilst in DC this week. Until then!
Showing posts with label Politics. Show all posts
Showing posts with label Politics. Show all posts
Tuesday, September 9, 2008
Monday, September 8, 2008
Rescuing something that never should have happened
What a shame: http://www.marketwatch.com/news/story/us-government-takes-control-fannie/story.aspx?guid={C99D796B-CB3C-47A8-8A56-284A9A4D5C85}
On deck: GM, Ford and Chrysler
In the hole: The New York Times
Nothing quite like blowing a few trillion dollars of someone else's money...
On deck: GM, Ford and Chrysler
In the hole: The New York Times
Nothing quite like blowing a few trillion dollars of someone else's money...
Friday, September 5, 2008
Countdown to November 4th
I just noticed on the countdown on the top of the blog that there's now less than 60 days until the election. Crazy!
What a dive...
For the light of heart, now would not be the time to check the stock market. I'll leave it at that for now and reiterate that you probably shouldn't check in on the market until next year.
As I said previously, I'd like to dissect the differences between the tradition and Roth IRA. With the Roth IRA contributions are made with after-tax assets, all transactions within the IRA have no tax impact, and withdrawals are usually tax-free. With the Traditional IRA contributions are often tax-deductible, contributions are made with pre-tax assets, all transactions and earnings within the IRA have no tax impact, and withdrawals at retirement are taxed as income (except for those portions of the withdrawal corresponding to contributions that were not deducted). There are also various other types of IRA's, but the traditional and Roth are by far the most widely used, so we'll stick to those for now. The maximum contributions to an IRA changes from time to time and varies depending on your age. Obviously the IRA was founded and exists to encourage savings and investment by offering a reduced tax consequence.
Contributions to a Roth IRA are not tax deductible, but at withdrawal, all contributions and earnings can be withdrawn tax-free. With a traditional IRA, contributions are tax deductible, but all withdrawals are subject to being taxed. Currently, since dividends and capital gains tax rates are generally lower than an individual's marginal tax rate, using a traditional IRA for long term investing doesn't make sense in a majority of cases. Furthermore, the Roth IRA has the advantage of certainty. By paying taxes now on contributions, you are assured of having a certain tax liability, whereas it is impossible to tell where tax rates will be in the future. For some persons, this provides an additional peace of mind. Of note, all contributions to an IRA are, for all intents and purposes, locked in until you reach the age of 59 1/2. Consider this carefully if you foresee needing a certain amount of liquidity in the future. Of course, the best piece of advice is to always treat your personal situation as unique. No one strategy is best for everyone. The introduction of the IRA and its related investment mechanisms has been one of the better things Congress has given us. Companies are beginning to offer a Roth 401(k), a blended version of the 401(k) and IRA. Look for more variants of these exceptional investment strategies in the future.
I ended up making a mid-week trip to Phoenix and was tied down for a couple of days. Speaking with several banks and investment houses there, it became all the more clear that banks are in serious entrenching mode to ensure they have very little exposure to insolvency. That being said, it was beautiful in Phoenix and I was far removed from any of the hurricanes or conventions, though I did tune in along with 40 million others to watch Palin deliver her speech. As a former hockey player, it's nice to see the sport get some recognition. Hehehe.
Hope everyone has a great weekend. I'll talk more about bank liquidity and whatever else happens over the weekend. This looks to be a pretty boring one in college football. Until then!
As I said previously, I'd like to dissect the differences between the tradition and Roth IRA. With the Roth IRA contributions are made with after-tax assets, all transactions within the IRA have no tax impact, and withdrawals are usually tax-free. With the Traditional IRA contributions are often tax-deductible, contributions are made with pre-tax assets, all transactions and earnings within the IRA have no tax impact, and withdrawals at retirement are taxed as income (except for those portions of the withdrawal corresponding to contributions that were not deducted). There are also various other types of IRA's, but the traditional and Roth are by far the most widely used, so we'll stick to those for now. The maximum contributions to an IRA changes from time to time and varies depending on your age. Obviously the IRA was founded and exists to encourage savings and investment by offering a reduced tax consequence.
Contributions to a Roth IRA are not tax deductible, but at withdrawal, all contributions and earnings can be withdrawn tax-free. With a traditional IRA, contributions are tax deductible, but all withdrawals are subject to being taxed. Currently, since dividends and capital gains tax rates are generally lower than an individual's marginal tax rate, using a traditional IRA for long term investing doesn't make sense in a majority of cases. Furthermore, the Roth IRA has the advantage of certainty. By paying taxes now on contributions, you are assured of having a certain tax liability, whereas it is impossible to tell where tax rates will be in the future. For some persons, this provides an additional peace of mind. Of note, all contributions to an IRA are, for all intents and purposes, locked in until you reach the age of 59 1/2. Consider this carefully if you foresee needing a certain amount of liquidity in the future. Of course, the best piece of advice is to always treat your personal situation as unique. No one strategy is best for everyone. The introduction of the IRA and its related investment mechanisms has been one of the better things Congress has given us. Companies are beginning to offer a Roth 401(k), a blended version of the 401(k) and IRA. Look for more variants of these exceptional investment strategies in the future.
I ended up making a mid-week trip to Phoenix and was tied down for a couple of days. Speaking with several banks and investment houses there, it became all the more clear that banks are in serious entrenching mode to ensure they have very little exposure to insolvency. That being said, it was beautiful in Phoenix and I was far removed from any of the hurricanes or conventions, though I did tune in along with 40 million others to watch Palin deliver her speech. As a former hockey player, it's nice to see the sport get some recognition. Hehehe.
Hope everyone has a great weekend. I'll talk more about bank liquidity and whatever else happens over the weekend. This looks to be a pretty boring one in college football. Until then!
Tuesday, September 2, 2008
Alaska is a big state
Well, I hope everyone had a fabulous holiday weekend. Sandwiched in between the two party conventions was a 3 day weekend and a hurricane aimed at New Orleans. All's well that ends well though and the markets are certainly responding. Oil plunged below $110 as Gustav caused minimal damage to Gulf oil rigs. For all the beating the oil companies take, it is simply amazing to consider the oil rigs floating in the Gulf. Hurricanes Katrina, Rita, Gustav et al., have plowed through the Gulf in recent years and the damage to offshore rigs has been trite. Simply amazing.
The plunge in oil prices, a recent strengthening of the dollar, 3.3% growth in Q2, the impending end to this election cycle and what I think is the bottom of the housing market have me thinking the second half of 2009 and 2010 are going to be stellar for the market, if and only if the next president's administration doesn't do too much to get in the way. The worst thing for the housing market right now would be for the government to interfere with the housing market by bailing out failed entities. This would only cause the housing markets doldrums to continue.
As I review my own savings and investments, this year has been turbulent but fun (at least for me). For those of you who's portfolio's have taken a beating, take heart, the market is poised well for a recovery; this again has the caveat that the next administration's policies don't send everything off track.
I had a few people ask me about IRA's over the weekend, so I think I'll dedicate my next post to talking about their differences and how best to play them in an overall tax strategy. Until then!
The plunge in oil prices, a recent strengthening of the dollar, 3.3% growth in Q2, the impending end to this election cycle and what I think is the bottom of the housing market have me thinking the second half of 2009 and 2010 are going to be stellar for the market, if and only if the next president's administration doesn't do too much to get in the way. The worst thing for the housing market right now would be for the government to interfere with the housing market by bailing out failed entities. This would only cause the housing markets doldrums to continue.
As I review my own savings and investments, this year has been turbulent but fun (at least for me). For those of you who's portfolio's have taken a beating, take heart, the market is poised well for a recovery; this again has the caveat that the next administration's policies don't send everything off track.
I had a few people ask me about IRA's over the weekend, so I think I'll dedicate my next post to talking about their differences and how best to play them in an overall tax strategy. Until then!
Thursday, August 28, 2008
What a horrible economy...
Well, despite the best efforts of the mainstream media and pessimists everywhere, the economy blistered ahead at a 3.3% growth rate in GDP. Thank goodness the best of worst intentions aren't directly impacting the economy. For those of you unconvinced things are really that good, consider that in the 2nd quarter, the United States added the equivalent of Sweden, the 18th largest economy, and on an annual pace is adding an Italy to the economy every year. Italy is the seventh largest economy in the world. It's amazing. But don't expect to hear anything about this in the media. Instead the focus will be on rising unemployment (which is still below the historical low point for economic cycles) and how hard it is to make ends meet with record gas prices. While the latter may be very true, it remains as important to stop and note how very impressive a 3.3% growth rate is.
The number on the FDIC's bank watch list has risen to 117. Historically, 13% of banks on the watch list fail. For those of you with bank stocks, I would continue to keep a keen eye on the news for any information about your holdings. Bank stocks are certainly attractive right now, trading at very low multiples. Even banks with relatively low exposure have been pummeled along with the rest of the industry. That being the case, I still wouldn't advise the faint of heart to consider investing in individual bank equities. Unless you're willing to take a big gamble, a safer option would be an ETF or mutual fund that invests in the financial industry. Right now, the industry is in a rut and trading cheap, but it will eventually rebound.
The democrat convention rolled along this week. Up to today, it had been more about the Clinton's than Obama, but that changes tonight when he speaks from the Parthenon, er Invesco Field. There has been relatively little talk about fiscal policy thus far; maybe tonight's speech will provide some insight on how an Obama administration would affect your portfolio. Of note, the Annenberg papers at the University of Illinois at Chicago were released for public viewing. In them, it showed Obama was President of the organization and pushed to reform Chicago's public school into socialist activism "re-education" camps. All the while, Bill Ayer's remained intimately involved as a senior advisor to the organization. The same Bill Ayer's who's an unrepentent terrorist. Just thought I'd drop that in...
I'm headed to the coast for the holiday weekend. There I'll be enjoying margaritas and sitting on a beach all the while attached to the internet thanks to my handy satellite internet card. Ahh, the wonders of technology. The following weekend I'm headed to the Dallas Trader's Convention. Should be a good time.
Hope everyone has a FANTASTIC Labor Day weekend. Watch out for Gustav; he arrives next week! Until then...
The number on the FDIC's bank watch list has risen to 117. Historically, 13% of banks on the watch list fail. For those of you with bank stocks, I would continue to keep a keen eye on the news for any information about your holdings. Bank stocks are certainly attractive right now, trading at very low multiples. Even banks with relatively low exposure have been pummeled along with the rest of the industry. That being the case, I still wouldn't advise the faint of heart to consider investing in individual bank equities. Unless you're willing to take a big gamble, a safer option would be an ETF or mutual fund that invests in the financial industry. Right now, the industry is in a rut and trading cheap, but it will eventually rebound.
The democrat convention rolled along this week. Up to today, it had been more about the Clinton's than Obama, but that changes tonight when he speaks from the Parthenon, er Invesco Field. There has been relatively little talk about fiscal policy thus far; maybe tonight's speech will provide some insight on how an Obama administration would affect your portfolio. Of note, the Annenberg papers at the University of Illinois at Chicago were released for public viewing. In them, it showed Obama was President of the organization and pushed to reform Chicago's public school into socialist activism "re-education" camps. All the while, Bill Ayer's remained intimately involved as a senior advisor to the organization. The same Bill Ayer's who's an unrepentent terrorist. Just thought I'd drop that in...
I'm headed to the coast for the holiday weekend. There I'll be enjoying margaritas and sitting on a beach all the while attached to the internet thanks to my handy satellite internet card. Ahh, the wonders of technology. The following weekend I'm headed to the Dallas Trader's Convention. Should be a good time.
Hope everyone has a FANTASTIC Labor Day weekend. Watch out for Gustav; he arrives next week! Until then...
Tuesday, August 26, 2008
Gustav!
Well, the democract party convention is in full swing and last night saw the typical typicals come out and speak. I was actually surprised. There were no "victims", no real people with "stories of hardship". Maybe they're saving it for later in the convention, but I expect to see at least: one person, probably a single parent with nine kids, talk about how hard it is to get by in today's economy and how the economic policies of the last eight years have left he/she unable to afford to leave any tooth fairy money on her kids pillow; another will talk about how high oil prices have forced them to sell their home and how they don't understand how "ordinary Americans" are supposed to get by on $3 pesos an hour while Exxon takes home $11B in profits. Stay tuned, they'll show up.
I was about to sit down and type up how McCain and Obama would affect your investments, then I found someone already has, so we'll start there: http://www.marketwatch.com/news/story/how-obama-mccain-affect-your/story.aspx?guid={93C57CD0-8A08-4632-AAD1-EFEAFEF80563}
Hurrican Gustav is bearing down on Haiti and meteorologists are giddy with glee at the possibility that a Category 5 hurricane will follow its most likely path and arrive full steam in New Orleans sometime early next week. Of note, if you day-trade and play the market you might want to consider shorting airline stocks and going long with some non-Gulf refining companies. If the refiners in the Gulf have to shut down, other refiners will stand to reap the rewards.
I should get back to work. More on the conventions and why drinking wine and cheese doesn't always taste good awaits the next post. Until then!
I was about to sit down and type up how McCain and Obama would affect your investments, then I found someone already has, so we'll start there: http://www.marketwatch.com/news/story/how-obama-mccain-affect-your/story.aspx?guid={93C57CD0-8A08-4632-AAD1-EFEAFEF80563}
Hurrican Gustav is bearing down on Haiti and meteorologists are giddy with glee at the possibility that a Category 5 hurricane will follow its most likely path and arrive full steam in New Orleans sometime early next week. Of note, if you day-trade and play the market you might want to consider shorting airline stocks and going long with some non-Gulf refining companies. If the refiners in the Gulf have to shut down, other refiners will stand to reap the rewards.
I should get back to work. More on the conventions and why drinking wine and cheese doesn't always taste good awaits the next post. Until then!
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