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I note that today Sentinel Management Group in the U.S. has decided that because too many people wish to sell at the moment they are simply going to stop all redemptions!
Now far be it for me to draw parallels to other investment firms and how they might be viewed for doing something similar, but if I don’t then who will?
If for example an unregulated firm selling land were to not honour their contract by allegedly paying people later than agreed, can you imagine how we might all react? Well probably we would talk about in forums and call them crooks etc. So if only these firms could be regulated by the SEC then the complaints, along with the right to legal action would simply evaporate because they would be doing it legally! So the easiest solution if you want to tell your investors they can’t have their money because it doesn’t suit you right now is to get regulated!
The biggest crooks are often the fast talking, slick suited gents found on Wall St; as long as they’re licensed they can get away with it!
The “Masters of the Financial Universe” Bear Stearns thought it would be a good idea to buy loans taken out by people who couldn’t afford them and the repackage them to sell to their investors. They lost 6bn on one which to be fair they bailed out, but investors in the other are not going to be so lucky. Why? Because to do so, would virtually bankrupt BS, if I understand it correctly. So sorry clients, you’re getting the sure-shaft redemption!
Who would have guessed that packaging loans from people with no means of paying them was a bad idea? Certainly if Bear Stearns didn’t know then who could possibly have been bright enough to figure it out?
Yours,
pompous, armchair…Edited on Aug 14, 2007 17:41
Edited on Aug 14, 2007 17:43
It takes two to tango….fast talking crooks need to have a greedy mark or nothing happens. Once this mess is over, and the smoke clears, the stupid and greedy will have fed the smart and wicked…once again. Capitalism at its most basic game.
Did you see what David Walker, comptroller general of the US just said? This comes from the London Financial Times.
________________________________________The US government is on a ‘burning platform’ of unsustainable policies and practices with fiscal deficits, chronic healthcare underfunding, immigration and overseas military commitments threatening a crisis if action is not taken soon…
David Walker issued an unusually downbeat assessment of his country’s future in a report that lays out what he called “chilling long-term simulations”.
These include “dramatic” tax rises, slashed government services and the large-scale dumping by foreign governments of holdings of US debt.
Drawing parallels with the end of the Roman empire, Mr Walker warned there were “striking similarities” between America’s current situation and the factors that brought down Rome, including “declining moral values and political civility at home, an over-confident and over-extended military in foreign lands and fiscal irresponsibility by the central government”.
“Sound familiar?” Mr Walker said. “In my view, it’s time to learn from history and take steps to ensure the American Republic is the first to stand the test of time.”
Mr Walker’s views carry weight because he is a non-partisan figure in charge of the Government Accountability Office, often described as the investigative arm of the US Congress.While most of its studies are commissioned by legislators, about 10 per cent – such as the one containing his latest warnings – are initiated by the comptroller general himself.
In an interview with the Financial Times, Mr Walker said he had mentioned some of the issues before but now wanted to “turn up the volume”. Some of them were too sensitive for others in government to “have their name associated with”.
“I’m trying to sound an alarm and issue a wake-up call,” he said. “As comptroller general I’ve got an ability to look longer-range and take on issues that others may be hesitant, and in many cases may not be in a position, to take on.
“One of the concerns is obviously we are a great country but we face major sustainability challenges that we are not taking seriously enough,” said Mr Walker, who was appointed during the Clinton administration to the post, which carries a 15-year term.
The fiscal imbalance meant the US was “on a path toward an explosion of debt”.
“With the looming retirement of baby boomers, spiralling healthcare costs, plummeting savings rates and increasing reliance on foreign lenders, we face unprecedented fiscal risks,” said Mr Walker, a former senior executive at PwC auditing firm.
Current US policy on education, energy, the environment, immigration and Iraq also was on an “unsustainable path”.
“Our very prosperity is placing greater demands on our physical infrastructure. Billions of dollars will be needed to modernise everything from highways and airports to water and sewage systems. The recent bridge collapse in Minneapolis was a sobering wake-up call.”
Mr Walker said he would offer to brief the would-be presidential candidates next spring.
“They need to make fiscal responsibility and inter-generational equity one of their top priorities. If they do, I think we have a chance to turn this around but if they don’t, I think the risk of a serious crisis rises considerably”.
________________________________________Maybe this is a typical British understatement but this doesn’t sound like good news, eh?
Scott Oliver – Founder
WeLoveCostaRica.comScott….terry cook ….2012 MYAN calander….They have said we will get many signs of the impending doom….each getting more and more serious…I see it every day and more and more posts including yours just scares the daylight out of me….Glad to be here I think we can hold out longer even when the U.S. falls. I´ve always liked eating fresh fruit.
TerryApparently he read a copy of “Empire of Debt” that was sent to him; the themes therein are real and cannot be ignored even if the likes of Larry Kudlow would like to tell us what great shape the U.S economy is in.
BTW, for those who want protection, gold is ready for a breakout. Buy now it could happen in the next few weeks or so. Despite Central bank selling suppressing the price it can’t be held down forever.
Barclays Gold ETF is not bad and can be bought through Interfin directly…can I say that? I think I just did…
Just to play the devils advocate here; why does Kudlow have it wrong and Walker have it right? As an almost 44 year old American I remember at least a few calls for our impending end, killers bees, S & L collapse, Japan buying us up, now its China, Russia Bankrupt, NYC Bankrupt! Over population etc…I recall reading in I think it was called “Die Broke” by a couple of Economists that said the real estate boom was finished in 1990 and housing would be stale for the next 20 years? So many speculations so little time? Be sensible other than that I guess all this speculation is fun to chat about, anyway time will tell? This article seems pretty objective http://www.npr.org/templates/story/story.php?storyId=9096735 Buy gold? http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a6gf2SsU.4qE Maybe but what qualifies you to make such a statement? You would have to be a fool to invest money based on a tip from a guy on a forum about Costa Rica! And perhaps a bigger fool to offer such advice(not trying to be mean, but what the heck do you know? Then some poor fool puts all his cash in gold and things don’t pan out.) Bob Brinker who has been spot on since 1986 advises buying on dips below 1450 (s&p) maybe? But at least he qualifies his suggestions in a news letter. I remember on this board I had 20 people(Trevor Chilton the loudest) telling me that wellington were probably crooks and the project would not get past the front gate. Guess what I now am closed, the project is finished and I must say looks stunning and Chilton’s project is one smallish building and a web page that tells you how great and trust worthy he is 2 years later? Just thought I would throw my 2 cents in, anyone with some real insider knowledge of what the markets are doing please email me privately, I want to retire yesterday!
Edited on Aug 15, 2007 05:07
Edited on Aug 15, 2007 05:38
Just going with the odds; I liked gold at $275 some years back and I like it right now in the high $600’s. Probably when I dont like it, lets say at around $4-5,000 or higher, a lot of people will be loving it.
I dont recall Kudlow warning investors about this recent bout of turmoil and he won’t ever make a negative call on the market; his perma-bull mind set doesn’t allow for critical market analysis.
Of course, I am not qualified to make such recommendations on gold, but I dont have to be; if you want that you have to go to the licensed experts at Bear Stearns.
One more thing, if Scott will allow it. There’s a company in the U.S that offers a product called zero downside gold for those who are sceptical. The company is http://www.everbank.com . The product gives you most of the upside and no downside (principal protected). The funds are secured agaisnt the physical metal.
I like the rates on the checking accounts although to get the 6.01% you need $100k+ You can also go with inflation protected TIPS.
This posted in wrong place and reposted here by Scott
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Posted Aug 15,2007 9:51 AM crchuck
I too have read that book as well as “Financial Reckoning Day” and the facts can’t be ignored, whether these prophesies come to life, is anyone’s guess. The schizophrenic market is a result of an intentional devaluation of the USD for several reasons, mainly to reduce the MASSIVE debt to China. This is as much for POLITICAL reasons as economic! Also, great efforts are underway to get Americans to be scared into stop acquiring so much credit debt and to get them to start SAVING more! Seemingly a futile concept considering the very govt attempting to bring this about is one of the worst carriers of debt of any nation, the globe over! Carrying large amts of debt is built into the very fabric of Americans. Furthermore, the scare tactics are designed to change the way Americans think about retirement and to get them to forego 20-30yr retirements and work for at least 3-5yrs more, each! But you have to be very careful not to spook people too much with all these efforts because then you lose confidence to invest in your market and then real problems set in that could take forever to get out of. You just might cause what you are feigning! So much for efficient market theory…jajaja. Are the markets being manipulated? Whatever the case, what a schizophrenic mess!
Now to the main reason of my comment: GOLD. When staunch index investing proponents start recommending more GOLD and China investments, as appeared today on the Index Universe site just as one example, it is probably good cause to sit up and take notice. Lots of “crash” talk lately is being put out by those who normally do not engage in these scare tactics. Hmmm. When Burton Malkiel, famed Princeton Professor of Economics and author of the classic book “A Random Walk Down Wall Street” starts recommending investing in China to protect your portfolios, well…you get the picture. He has even written a new book on China investing (gosh forbid, due to be released in Dec! WOW A staunch indexer I am and am not easily scared by the usual tactics but when I see articles from staunch indexers, economists, respected investors, money mgrs and writers coming in clumps, I can’t help but take note. They are writing these with the potential of an impending “crash in mind. There have always been these warnings but usually from predictable sources, many of these are not your usual sources. Some are recommending putting ALL of your assets in GOLD and China! That is a little scary
And today Merrill Lynch analysts downgraded Countrywide Financial shares to “sell” from “buy” citing liquidity concerns and “fear that the acceleration of margin calls and forced asset sales in the capital markets could lead to more problems.”
Boy! Don’t you wish you had a great investment advisor at Merrill Lynch eh?
Countrywide Financial was trading at around $45 in January and when the crap started flying a few weeks ago, Merrill analysts who still had a “buy” rating on the stock said nothing but now that there is a full blown panic in the sector and AFTER the stock has been slashed in half – now they come out and downgrade it to a “Sell.’
Brilliant eh?
Scott Oliver – Founder
WeLoveCostaRica.comMerrill is the worst!!! I had a bunch of co-workers who all used a broker from Merrill, I think she had a $250k minimum? Long story short of course they made money as the Internet “bubble” expanded…But as it showed signs of running out of steam she just had people buying more, “Oh worldcom…can’t get lower than that”. Combined they lost a few hundred grand.
Edited on Aug 15, 2007 16:18
Scott…I know you will not take my small account or any account for that matter from the U.S citizen cuz of the problems with dealing with the good ol Government but what say you about moving my money to gold…really would like the insite of a person with your knowledge and experience…
Thanks
Terry Cook now in QueposI have a client who this week bought another US$350K of gold (we prefer buying the actual gold rather than a fund) which is physically held in their account in Zurich.
Scott Oliver – Founder
WeLoveCostaRica.comOne can’t help now but wonder how much of what is going on is part of the intentional game and how much is not. On one hand you have this type downgrade on a major player and then on the other you have all these top money mgrs re-iterating their bullishness on stocks! Right now, I believe GEO-POLITICAL events present the biggest threat to our investments, a factor that the investor has very little control over, if any, especially at a time when the markets appear to be being manipulated for political reasons. Wait! Can markets be manipulated? jajajajaja
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