Comments on: Starting at 8:30 p.m. ET: Larry Doyle’s Dollars and Sense “Central Station”

By: LD

LD — Tue, 17 Feb 2009 00:34:31 +0000

Just wrote a piece on this to be published later today or tomorrow, Legalized Bribery…

By: socalannie

socalannie — Sat, 14 Feb 2009 20:22:49 +0000

Thanks LD!

By: Lizzy

Lizzy — Sat, 14 Feb 2009 15:35:49 +0000

Sorry I missed the discussion last night. There were some very good comments. I saw a rather interesting bit on Bill Moyers last night. His guest was familiar with the IMF. The guest said that things happening in our economy now are similar to what he would expect to see in an emerging market economy. Because of the excessive political contributions of the major banks the government doesn’t have sufficient control of the situation. Could you do a post on this topic? Also now that the pork package is part of our lives could update information on it, especially the health care provisions. Thanks LD.

By: LD

LD — Sat, 14 Feb 2009 11:57:12 +0000

In purchasing an annuity, one takes the credit risk of the entity writing the contract. Typically annuities are written by insurance companies. Thus you need to be very careful about which insurance company you pick.

I am much more familiar with variable annuities.

Based on my understanding, these variable annuities are better investment vehicles for those with a longer term horizon. Returns accrue on a tax deferred basis.

Many variable annuities and annuities have very high expenses associated with them. The products are “more sold” than “bought” if you know what I mean.

I would think that a better area to look would be a high quality bond fund that pays a nice dividend.
With interest rates having backed up in a lot of sectors (corporates, municipals, Ginnie Maes (a govt guaranteed mortgage bond)) that those areas would be better. Additionally a “laddered” approach using govt bonds may also be prudent. “Laddering” means purchasing a string of maturities, such as 1yr, 2yr, 3yr, 5yr.

Hope that helps somewhat.

By: LD

LD — Sat, 14 Feb 2009 11:45:03 +0000

Teak….I think longer term bonds, primarily 10yr maturity to 30yr maturity sold off due to both those reasons. The reality of a massive deficit along with expectation that the U.S. dollar will likely weaken vs stronger currencies such as Swiss franc and japanese yen.

Many people do think that Treasury bonds will continue to sell off. Corporate bonds may hold in for a while but could sell off as they have already had a strong first 6 weeks of the year. Municipals have benefitted recently due to funding provided through this stimulus plan but many states still have huge funding issues.

By: TeakwoodKite

TeakwoodKite — Sat, 14 Feb 2009 05:40:01 +0000

LD, so I get your meaning, Are you saying todays Bond Market sell-off is due to capital flight in earnest or selling before the Fed’s completely crowd out the market and get the last flight out?

Am I correct in thinking that these bonds are headed the way of the stock portfolio?

As an indicator guage goes, one can’t expect to flick the plate glass and expect it read any but empty. here comes 7500.

For the last man standing it appears his little piggy will have none.

By: socalannie

socalannie — Sat, 14 Feb 2009 03:59:39 +0000

LD, what do you think of annuities for elderly people? My Mom is finally taking over hers & her husbands finances (he has dementia); he had lost quite a bit of their savings in stocks & bonds (with Merrill Lynch). Would annuities be a good place for them to invest their savings? Are they safe? Thanks!

By: AnnieCollier

AnnieCollier — Sat, 14 Feb 2009 03:28:27 +0000

I think you were right the first time…

By: LD

LD — Sat, 14 Feb 2009 03:05:00 +0000

i think that will happen…the bond market sold off hard today despite equity market weakness simply due to the tremendous supply that will come to finance the growing deficit…

By: typical.white.person

typical.white.person — Sat, 14 Feb 2009 03:02:39 +0000

I should have said, voting on an 110 page legislation they never read.

By: typical.white.person

typical.white.person — Sat, 14 Feb 2009 03:01:40 +0000

Congress voting on an 1100 page legislation, reminds you of the people who signed the I/O and Alt-A mortgages, eh?

By: Seattle Moss

Seattle Moss — Sat, 14 Feb 2009 02:59:07 +0000

If the dollar weakens only slightly then all my work will pay off with huge gains

By: nymom

nymom — Sat, 14 Feb 2009 02:57:22 +0000

Is there an open thread anywhere? Don’t see it.

So I’d just like to say that I’m very disappointed in Kirsten Gillibrand for voting with the pack on the stimulus law.

By: oowawa

oowawa — Sat, 14 Feb 2009 02:56:21 +0000

Thanks for the enlightening response, LD. I’ll try not to be a pessimist. I’ll just keep humming this tune to cheer myself up:

Freedom’s just another word for nothing-left-to-lose . . .

By: LD

LD — Sat, 14 Feb 2009 02:39:35 +0000

The stimulus bill is being panned as a bill that will make a real difference for our economy in the short term.

I have no reason to think that we would have a MAJOR selloff but that is not to say that we couldn’t. I do think that we will retest the November 20th lows which are down app 4% from todays close. I have felt that for a while. Beyond that I also think we may very well test the lows made in the down back in 2003 which is right around the 7000 level. That would be a bout a 10% pullback from here.

We still have the auto situation, major problems with states, major problems with commercial real estate, unemployment that will increase by app another 2%….hard to be optimistic while I am merely trying to be pragmatic and realistic. I am not a pessimist by nature.

3 day weekends do not necessarily mean major moves on the following Tuesdays unless there is an unknown outcome from a major situation or an unknown development.

Most other threads seem to focus on short term and/or day trading. I try to focus on the bigger picture, and longer term.

Good questions.