Comments on: A Fresh and Honest Perspective

By: lizzy

lizzy — Fri, 20 Feb 2009 03:09:07 +0000

Great post LD. The videos were sobering but it was good to hear some one who knows say what we have been suspecting. It is helpful to see the situation from a perspective outside our own box. I loved his description that the banks had bandaged themselves up and gone home because their game was too risky.

By: meileen

meileen — Fri, 20 Feb 2009 01:24:18 +0000

Loved it! Thanks.

By: LD

LD — Fri, 20 Feb 2009 00:26:22 +0000

Please never hesitate to ask and I will do my best to offer appropriate advice.

By: karen

karen — Fri, 20 Feb 2009 00:25:27 +0000

I’d rather hear a hard truth than be blindsided.

By: TeakWoodKite

TeakWoodKite — Fri, 20 Feb 2009 00:08:51 +0000

I will watch the clips when I get home this eve…

Most informative post LD, and Bart asks the billion dollar question, doesn’t he/she?

By: Peggy Sue

Peggy Sue — Fri, 20 Feb 2009 00:08:03 +0000

No, I entirely understand, Larry. In fact, I knew I was walking the plank even asking.

Major angst on a lot of home fronts wondering where the devil this is going. I’m still contributing to my 401k and right now so is my company [although a number of companies are pulling out of the "match funds"].

But then, I am concerned at the drop in the Dow to 7500. Someone told me that that was the number to watch, and if it held we were in serious, serious trouble.

I’d really like to find a crystal ball. :0)

By: LD

LD — Thu, 19 Feb 2009 23:47:51 +0000

Peggy Sue….

I do think it would be somewhat irresponsible of me to make blanket recommendations as allpeople’s situations are different.

I view a 401K in the context of one’s overall financial posiiton. Variables that need to be addressed are age, liquidity needs, other assets and liabilities. Overall exposures to the markets.

We are ery close to objectives that I was highlighting at the beginning of the year. We have actually penetrated the lows seen on Novemebr 20th for the DJIA while we are still about 3-4% in terms of the S&P 500.

I am not optimistic that we will see a near term bounce simply because from my vantage point there is still a lot of deleveraging (selling of assets purchased with borrowed money)yet to go.

If you are concerned about the markets, I would think that any investor may want to see if the market holds down 3-4% from here which equates to lows last seen in late 2002 and early 2003.

I hope this helps and I hope you appreciate my caution in even thinking about making blanket recommendations. That would not be appropriate.

Good luck.

By: Sassy

Sassy — Thu, 19 Feb 2009 22:56:56 +0000

Thanks for keeping us informed LD.
The one statement that occurs regularly is your point that the global situation is worse than it appears.
Even my limited financial reading confirms this, and I have seen the reference to a time-span of three years at a minimum.

By: Peggy Sue

Peggy Sue — Thu, 19 Feb 2009 22:49:17 +0000

Larry, for those of us tied into our 401ks, what can we do? Are there certain investment choices we should avoid [they're usually limited in the corporate menu]. I mean, we’ve already limited our company stock exposure [Enron was a huge wakeup call]. But should we burrow down in fixed income funds and just wait it out?

By: LD

LD — Thu, 19 Feb 2009 22:28:51 +0000

Bart….great question about what to do in regard to protecting vs hyperinflation.

What to do…in my opinion, real estate, commodities (hard assets) and senior secured floating rate loans…because the Federal Reserve will be forced to raise rates to head off the inflation. You don’t need to make these moves yet but I think you should be thinking along these lines.

By: I'm a Linda too

I'm a Linda too — Thu, 19 Feb 2009 22:13:57 +0000

Excellent.

By: bart

bart — Thu, 19 Feb 2009 22:12:52 +0000

The videos are fascinating. Apparently Keating thinks this financial mess heralds the end of American pre-eminence in the world, although he didn’t quite say it that way.

And he predicts serious inflation. So, how does one prepare for hyperinflation? I could make jokes about wheelbarrows, but, seriously, how to cope?

By: Wisewoman

Wisewoman — Thu, 19 Feb 2009 21:51:03 +0000

Thanks LD. I always like to read your posts.

By: fiscalliberal

fiscalliberal — Thu, 19 Feb 2009 21:18:53 +0000

LD – Meridith Whitney is striking out on her own and she was on CNBC with a pretty extensive interview. I would expect it will be on the CNBC site for viewing.

I wonder if she agree’s with any of Keatings musings regarding the new Bretton Woods? Also, China, Russia and the oil countries are not going to subjegate themselves to a US run IMF etc. She has a theory that the big US banks have to much market share and we need to shore up the smaller banks to let them take more of the market share. She would sell Citi stock and hopes JP Morgan can survive.

I realy wonder if Obama has a sense of the potential of China and how they can be a real advasory if we choose it to be.

By: beebop

beebop — Thu, 19 Feb 2009 21:13:16 +0000

The Cuba example brought it totally in perspective.

Amen!