I haven't posted any comments lately because my mother died recently and I've had other more pressing issues to deal with. Having said this, life goes on and so does the economic downturn.
We've been on a pretty wild ride in the stock market since last September. With most of the movement on the DOW and S&P being of a downward nature, long term investors have had little news to cheer about recently. That is until the recent bear market rally of the past several days. Is this the bottom? I don't think so. Not a chance - no way.
My common sense tells me that with most consumers feeling like their financial stability is precarious at best, with about 8 million more mortgages set to reset to higher rates in the coming 12-18 months, with demand for goods and services still down 20-50% and with small businesses closing by the thousands every month, we haven't seen the end of this very deep recession.
With every passing day where businesses fail to get back on track, more pain gets created and the domino effect continues - forget the DOW or the S&P!
If you are working for a company that produces goods or sells services that rely on consumer disposable income for its survival, brace yourselves, it's gonna get worse for you. If you have work skills that are still in demand then make the most of it by saving more and reducing your daily expenses to build up a higher economic security buffer in case you do find yourself out of a job at some point. Deep recessions such as the one we are currently battling don't resolve themselves in short order. They drag on for years.
I realize that my predictions for a long lasting economic downturn are mostly negative but then again, so is the shape of the world's economy. The banks and financial institutions still have secrets they're keeping and the financial industry overall will continue to reel from irresponsible bets made over the past 8-10 years. Buckle up because we're not even close to getting out of the woods on this one. Be prepared to spend the next 3 years adjusting your lifestyle to new standards because I believe that it will take 7-10 years for the economy and personal wealth to recover from the trouncing the commercial and investment banks have spent a decade creating.
What do you think?
Friday, March 20, 2009
Wednesday, March 11, 2009
Can things get any worse?
Yesterday we enjoyed a near 5% increase in the value of the DOW. Big deal! Most people long invested in the stock market have lost 30-40 and 50% or more of their investment value.
Anyone that believes this is anything but a bear market rally, and a short lived one at that is kidding him or herself. Look around at any of the main economic indicators:
Home prices continue to drop as do existing home sales
New home construction hits new lows
Unemployment numbers continue to increase
More large companies announce massive job layoffs
Losses at Freddi and Fannie keep mounting - now in the tens of billions of dollars
GM could be forced into bankruptcy as soon as April
And the list goes on and on. Only when employment increases and once home prices have stabilized can we begin to feel somewhat safe again.
The rally in stocks might last a few more months as speculators try their best to regain their losses through shear manipulation but the house of cards will come crashing down again, I am sure of it. When it does, it will send consumers into a near panic as they realize how tough their lives will be for the foreseeable future. Hang on, it's going to be a scary ride.
What do you think?
Thursday, March 5, 2009
The End Of The World As We Know It?
Today the DOW index dropped another near 300 points. With no bottom in sight yet, what is the average American to think about the future?
Well we all know that the "lower the lows", the "higher the highs" right? The problem is that when we finally get to that magical turnaround point, there may not be many of us left standing to take advantage of it.
I've been through many recessions of varying degrees but like many of us, I worked hard all my life to reach a point where I became my own boss. Thirteen years ago, I founded RacingSchools.com. The first couple of years were difficult as starting any new business can be. We experienced some highs and some lows particularly immediately following the 9/11 tragedies. The next few years were great for business and we were all busy making money
In late 2006, my business volume began waining. I wondered if this could be a sign of the beginning of a massive economic adjustment. The decline in sales continued and accelerated towards the end of 2007 and through the first three quarters of 2008. And then, WHAMO, the financial markets collapsed followed by even more dramatic and continued drops in the value of homes nationwide. Consumers were now maxed out and loosing equity and wealth faster than anyone could keep track off.
That meant near disaster for my company and for millions of small business owners during the last holiday season. The beginning of 2009 has seen the catastrophic decline in consumer confidence continue along with the dramatic slide in just about every industry I can think of .
Deep breath. So where do you go from here? If history is any indication, it could take up to a decade for our standard of living to return to 2005 levels. That means that we all need to re evaluate our priorities, tighten our belts and put away as much of our income as possible to weather the storms ahead. In the meantime, don't sweat your credit score. Put your money under your mattress and tell the credit card companies that as soon as you recover your losses, they can look to recover theirs. Put your family FIRST - not your creditors. Why? They're the ones singularly responsible for creating the deplorable conditions we'll have to live under for years to come. That's my story and I'm sticking to it.
What do you think?
Well we all know that the "lower the lows", the "higher the highs" right? The problem is that when we finally get to that magical turnaround point, there may not be many of us left standing to take advantage of it.
I've been through many recessions of varying degrees but like many of us, I worked hard all my life to reach a point where I became my own boss. Thirteen years ago, I founded RacingSchools.com. The first couple of years were difficult as starting any new business can be. We experienced some highs and some lows particularly immediately following the 9/11 tragedies. The next few years were great for business and we were all busy making money
In late 2006, my business volume began waining. I wondered if this could be a sign of the beginning of a massive economic adjustment. The decline in sales continued and accelerated towards the end of 2007 and through the first three quarters of 2008. And then, WHAMO, the financial markets collapsed followed by even more dramatic and continued drops in the value of homes nationwide. Consumers were now maxed out and loosing equity and wealth faster than anyone could keep track off.
That meant near disaster for my company and for millions of small business owners during the last holiday season. The beginning of 2009 has seen the catastrophic decline in consumer confidence continue along with the dramatic slide in just about every industry I can think of .
Deep breath. So where do you go from here? If history is any indication, it could take up to a decade for our standard of living to return to 2005 levels. That means that we all need to re evaluate our priorities, tighten our belts and put away as much of our income as possible to weather the storms ahead. In the meantime, don't sweat your credit score. Put your money under your mattress and tell the credit card companies that as soon as you recover your losses, they can look to recover theirs. Put your family FIRST - not your creditors. Why? They're the ones singularly responsible for creating the deplorable conditions we'll have to live under for years to come. That's my story and I'm sticking to it.
What do you think?
Tuesday, March 3, 2009
JUST SAY NO
The next time your credit card statement rolls in, just say no.
No to paying the bill. Just tell your credit card company that until they repay you the taxpayer, you want to renegotiate your own payment terms with them. Be specific: you want to reduce your monthly payment to say $25 or $50 and you also request that they not report you to the credit agencies as delinquent. If they say no (and I GUARANTEE they will), then I urge you to tell them to take their unsecured debt and write it off because you're not going to be sending them any more money.
After all, you'll never see most of the taxpayer's bailout money again. Don't kid yourself, these companies receiving the bulk of the TARP & TALF money (Citi, BofA, AIG) are BANKRUPT companies that will never bounce back from their bottomless losses. If you as a taxpayer are more concerned with how your family will survive and pay your rent or your mortgage or your electric bills, STOP sending these criminal enterprises your hard earned money.
I call these banks and insurance companies criminal enterprises because although they apparently broke no laws bankrupting the world's economy, they all lied to investors about the enourmous nature of their exposure to risky investments and bad loans. Six months ago, most were telling investors that their fundamentals were sound (kinda like John McCain telling us the fundamentals of our economy were sound, remember that?).
Well unfortunately for these executives, there are laws that govern what executives running publicly held corporations can or cannot say about the state of their businesses. It's simple, they ALL mislead us right up until the total collapse of the financial markets in the last quarter of 2008.
For this, they should all be prosecuted to the fullest extent of the law. Since that means that the SEC would be involved, I wouldn't count on this scenario playing out so:
The only way for you as a taxpayer to recover some of your money that's being dolled out to these criminal enterprises is to STOP paying them. After a few months of collection calls, they'll be willing to negotiate a lesser payoff of your balances. That's when you can make your best offer and potentially save thousands of dollars in principal and interest payments. Just do it.
What do you think?
No to paying the bill. Just tell your credit card company that until they repay you the taxpayer, you want to renegotiate your own payment terms with them. Be specific: you want to reduce your monthly payment to say $25 or $50 and you also request that they not report you to the credit agencies as delinquent. If they say no (and I GUARANTEE they will), then I urge you to tell them to take their unsecured debt and write it off because you're not going to be sending them any more money.
After all, you'll never see most of the taxpayer's bailout money again. Don't kid yourself, these companies receiving the bulk of the TARP & TALF money (Citi, BofA, AIG) are BANKRUPT companies that will never bounce back from their bottomless losses. If you as a taxpayer are more concerned with how your family will survive and pay your rent or your mortgage or your electric bills, STOP sending these criminal enterprises your hard earned money.
I call these banks and insurance companies criminal enterprises because although they apparently broke no laws bankrupting the world's economy, they all lied to investors about the enourmous nature of their exposure to risky investments and bad loans. Six months ago, most were telling investors that their fundamentals were sound (kinda like John McCain telling us the fundamentals of our economy were sound, remember that?).
Well unfortunately for these executives, there are laws that govern what executives running publicly held corporations can or cannot say about the state of their businesses. It's simple, they ALL mislead us right up until the total collapse of the financial markets in the last quarter of 2008.
For this, they should all be prosecuted to the fullest extent of the law. Since that means that the SEC would be involved, I wouldn't count on this scenario playing out so:
The only way for you as a taxpayer to recover some of your money that's being dolled out to these criminal enterprises is to STOP paying them. After a few months of collection calls, they'll be willing to negotiate a lesser payoff of your balances. That's when you can make your best offer and potentially save thousands of dollars in principal and interest payments. Just do it.
What do you think?
Thursday, February 26, 2009
Citigroup's still cheating all of us
A few weeks ago I was "RATE JACKED" by this most irresponsible and arrogant of banks. I received a notice informing me that my credit card rate would skyrocket to almost 17% from under 10%. As a former banker I understand very well the games the banks play so I called them and after speaking with a couple of representatives, I managed to get my interest rate lowered back down to 6%. That's right, 6% FIXED for another 6 months.
But that's not what I wanted to talk to you about today.
Just as Citi is about to absorb BILLIONS more tax dollars into the enormous financial black hole that this enterprise has come to be, another complication has emerged. One of Citigroup's most profitable holdings is in Mexico. Grupo Financiero Banamex. Some Citigroup executives are worried that an increased U.S. stake might subject the bank to pressure to relinquish some or all of its ownership of Grupo Financiero Banamex, the No. 2 bank in Mexico by assets, the Wall Street Journal said today. Really?
This is yet another outrage. Now there's talk that Citi and the Fed could consider "negotiating" with Mexico through diplomatic channels to have them "waive" this requirement in their laws. That's incredible. As the economy has worsened and my business revenue has declined dramatically, I have been forced to put some of my most treasured personal assets up for sale to pay my bills. But Citi is not being asked to do the same.
So while more of my tax dollars are being poured into this virtually bankrupt enterprise, I'm being forced to sell assets while Citi just keeps sucking up Fed money with no pressure to do the same. How is that possible??? Is it actually better to strong arm the Mexican government than to force Citi to unload some of its valuable assets? Apparently so.
I am just about ready to tell Citi to take my $24,000 credit card balance and stick it where the sun don't shine and I'll gladly take the hit on my credit score. It's gotten to that point.
With the economy in such bad shape I need to start looking out for myself and saving $24,000 is the first step in ensuring that I put my family and my financial well being in a position to survive the very crisis that Citi is responsible in great part for causing. I hope other courageous consumers that also have credit card balances with Citi will decide to do the same and send these bastards a clear message. What do you think?
But that's not what I wanted to talk to you about today.
Just as Citi is about to absorb BILLIONS more tax dollars into the enormous financial black hole that this enterprise has come to be, another complication has emerged. One of Citigroup's most profitable holdings is in Mexico. Grupo Financiero Banamex. Some Citigroup executives are worried that an increased U.S. stake might subject the bank to pressure to relinquish some or all of its ownership of Grupo Financiero Banamex, the No. 2 bank in Mexico by assets, the Wall Street Journal said today. Really?
This is yet another outrage. Now there's talk that Citi and the Fed could consider "negotiating" with Mexico through diplomatic channels to have them "waive" this requirement in their laws. That's incredible. As the economy has worsened and my business revenue has declined dramatically, I have been forced to put some of my most treasured personal assets up for sale to pay my bills. But Citi is not being asked to do the same.
So while more of my tax dollars are being poured into this virtually bankrupt enterprise, I'm being forced to sell assets while Citi just keeps sucking up Fed money with no pressure to do the same. How is that possible??? Is it actually better to strong arm the Mexican government than to force Citi to unload some of its valuable assets? Apparently so.
I am just about ready to tell Citi to take my $24,000 credit card balance and stick it where the sun don't shine and I'll gladly take the hit on my credit score. It's gotten to that point.
With the economy in such bad shape I need to start looking out for myself and saving $24,000 is the first step in ensuring that I put my family and my financial well being in a position to survive the very crisis that Citi is responsible in great part for causing. I hope other courageous consumers that also have credit card balances with Citi will decide to do the same and send these bastards a clear message. What do you think?
Tuesday, February 24, 2009
AIG - Need I say more?
Today, Congressman Elijah Cummings said on CNBC that in a meeting with the CEO of AIG in mid January he was told that AIG planned on beginning to repay the money they had borrowed very soon. Yesterday, the Street began suggesting that AIG would report the world's largest ever quarterly loss, 60 BILLION dollars. How in hell will AIG repay taxpayers when their losses continue to mount at this rate??????? They can't. That's the simple answer.
It seems to me that taxpayers still don't know how AIG has used the funds it has already received and that a lot more money will have to be pumped into that irresponsible company to save it from complete collapse. Are we as taxpayers ready to sink more of our limited resources into AIG?
With CEO's of publicly held corporations misrepresenting the soundness of their businesses' financial health on a daily basis, shouldn't the SEC start looking into these officer's misleading statements? Where is the SEC anyway?? And where is Tim Geithner while these financial institutions continue to implode while they hide the true miserable state of their balance sheets and regularly mislead investors???
I suggest that AIG be forced into bankruptcy and the sooner the better. Why? Simply because a bankruptcy filling will force these deadbeat companies to reveal the true nature of their sad state of affairs. Without a bankruptcy filling, taxpayers and our government representatives are having the wool pulled over their eyes and nothing in the short term will change that.
CEOs of these "banks gone bad" have ZERO vested interest in telling us the truth. Let bankruptcy, the truth serum of failing business, be the medicine that sheds light on the current and real state of these enterprises and let the chips fall where they may. What do you think???
It seems to me that taxpayers still don't know how AIG has used the funds it has already received and that a lot more money will have to be pumped into that irresponsible company to save it from complete collapse. Are we as taxpayers ready to sink more of our limited resources into AIG?
With CEO's of publicly held corporations misrepresenting the soundness of their businesses' financial health on a daily basis, shouldn't the SEC start looking into these officer's misleading statements? Where is the SEC anyway?? And where is Tim Geithner while these financial institutions continue to implode while they hide the true miserable state of their balance sheets and regularly mislead investors???
I suggest that AIG be forced into bankruptcy and the sooner the better. Why? Simply because a bankruptcy filling will force these deadbeat companies to reveal the true nature of their sad state of affairs. Without a bankruptcy filling, taxpayers and our government representatives are having the wool pulled over their eyes and nothing in the short term will change that.
CEOs of these "banks gone bad" have ZERO vested interest in telling us the truth. Let bankruptcy, the truth serum of failing business, be the medicine that sheds light on the current and real state of these enterprises and let the chips fall where they may. What do you think???
Friday, February 20, 2009
Biggest fraud perps stay out of jail
Are you amazed that the perpetrators of Americas largest financial frauds remain free and out of jail? Me too.
Get caught stealing a few hundred dollars worth of goods from a retailer and assuming you get caught, you got straight to jail. Not these guys. Madoff and Stanford and many others yet to be identified are still enjoying the comforts of their multi million dollar homes and the privileges that go with it.
In the Madoff case, it was disclosed today that Maddoff didn't register a single purchase of securities for his long list of client investors in over 13 years. He was able to do this despite having certified accountants review his books annually. Where were the regulators that were warned many times over the past 10 years!!!!!!!!!! that Madoff's business was a fraud?????
How was Madoff able to administer this fraud by himself? He wasn't. Yet despite the obvious involvement of dozens if not hundreds of co conspirators, not a single one has been identified publicly so far. WHERE ARE THE REGULATORS even today???? Where's the FBI???? Where was the NY state attorney general????
What a bunch of incompetent civil servants. Shouldn't they be charged as negligent co-conspirators??? Shouldn't the auditors be charged with a crime???? Don't hold your breath. Even Arthur Anderson's guilty verdict was eventually overturned. That's the firm that audited Enron's books for years before that company imploded.
Our entire regulatory system is in shambles and has never really worked as it should have to start with. Oh, I forgot, the SEC did nail Martha Stewart for selling a couple of hundred thousands of dollars worth of stocks on an insider tip and lying to the regulators. I say bring back Spitzer and I'll pay for him to sleep with prostitutes. At least he was doing something about the corruption on Wall Street.
Our government is no longer on our side and hasn't been for years. Obama may have the best of intentions but the Congress still maintains their right to cozy up to big business at the expense of the taxpayers.
We need to start waking up and publicly objecting to what's going on. Wake up America, your future is being wiped out by your representatives in Washington. What do you think?
Get caught stealing a few hundred dollars worth of goods from a retailer and assuming you get caught, you got straight to jail. Not these guys. Madoff and Stanford and many others yet to be identified are still enjoying the comforts of their multi million dollar homes and the privileges that go with it.
In the Madoff case, it was disclosed today that Maddoff didn't register a single purchase of securities for his long list of client investors in over 13 years. He was able to do this despite having certified accountants review his books annually. Where were the regulators that were warned many times over the past 10 years!!!!!!!!!! that Madoff's business was a fraud?????
How was Madoff able to administer this fraud by himself? He wasn't. Yet despite the obvious involvement of dozens if not hundreds of co conspirators, not a single one has been identified publicly so far. WHERE ARE THE REGULATORS even today???? Where's the FBI???? Where was the NY state attorney general????
What a bunch of incompetent civil servants. Shouldn't they be charged as negligent co-conspirators??? Shouldn't the auditors be charged with a crime???? Don't hold your breath. Even Arthur Anderson's guilty verdict was eventually overturned. That's the firm that audited Enron's books for years before that company imploded.
Our entire regulatory system is in shambles and has never really worked as it should have to start with. Oh, I forgot, the SEC did nail Martha Stewart for selling a couple of hundred thousands of dollars worth of stocks on an insider tip and lying to the regulators. I say bring back Spitzer and I'll pay for him to sleep with prostitutes. At least he was doing something about the corruption on Wall Street.
Our government is no longer on our side and hasn't been for years. Obama may have the best of intentions but the Congress still maintains their right to cozy up to big business at the expense of the taxpayers.
We need to start waking up and publicly objecting to what's going on. Wake up America, your future is being wiped out by your representatives in Washington. What do you think?
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