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Old 09-23-2008, 10:24 PM   #1
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Is anybody else on this ride? Someone needs to deploy a storm anchor!
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Old 09-24-2008, 01:01 PM   #2
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Is that a picture of a rogue wave? I don't think the book's been written on this kind of heavy weather sailing.
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Old 09-24-2008, 05:48 PM   #3
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Yeah...no doubt! Strange times are afoot.
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Old 09-27-2008, 07:13 PM   #4
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What is happening is turning everything sour for me. I am not in the market, but my business had just started to accelerate this year. It has dropped to zero.

I owned my home outright, and took 60% to open my business. The 40% left has dropped to around 15%. Thank goodness the boat is paid for. I am going to sit tight for 6 months. I will then make the decision to just go to sea, or hang on a little longer.....OUCHHHHHHH!
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Old 09-27-2008, 08:07 PM   #5
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It is strange though. What is bad for one seems to be good for another. I have cash to buy a house here in Spain but I believe that the bottom is going to drop out of the market here too. It has already started to fall so if I am patient and wait a year or two maybe I will be able to get a nice place at a very reasonable price.

On the other hand, I and my sister share my mother's house and that has dropped a lot in the past year; so much so that we decided not to sell it after our mother passed away but to let it and ride out the bad times. I think we will be hove-to for quite a while.

Aye // Stephen
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Old 09-29-2008, 09:45 PM   #6
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Monday.

Today is the first day we've felt really pessimistic. I've stopped working on a winter trip for us until we can feel a bit more optimistic about money. Damn!
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Old 09-29-2008, 10:30 PM   #7
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What a ride today... Dow down 777.6.!!!!!!!!!

Like Imagine said, Good thing the boat is paid for!
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Old 09-29-2008, 10:45 PM   #8
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Time to go sailing?
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Old 09-29-2008, 11:39 PM   #9
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Quote:
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Time to go sailing?
Maybe so ...it's not a bad option really.
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Old 09-30-2008, 12:41 AM   #10
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Maybe so ...it's not a bad option really.
good option...except the cruising kitty is taking too much "active" management rather than the kind of buy-and-hold that lets one wander off for a while.
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Old 09-30-2008, 07:30 AM   #11
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good option...except the cruising kitty is taking too much "active" management rather than the kind of buy-and-hold that lets one wander off for a while.
I plan on stepping up the progress on "Island Seeker" due to the recent news. I saw this coming but not this soon, maybe a few too many hours spent staring and dreaming rather than accomplishing. Must finish boat! Soon!

Everyone keep an eye on China, if they switch to backing the Euro, we are in for a new chapter in the history of America, OPEC will follow China and the Mexican peso will be worth a fortune compared to the American dollar! Can you say "depression"?

Thanks allot Washington! Wallstreet! The Federal Reserve! Politicians everywhere! Republicans, Democrats! Etc. Etc. Etc. ...

Wait, ...Oh Yea, Finish the boat...Finish the boat. Arrrrrghh!!!!
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Old 09-30-2008, 11:51 AM   #12
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Unfortunately, the US is not the only country to suffer from this financial disaster - the results of years of mismanagement, will no doubt have catastrophic effects on many of the poorest countries whose exports to the US will disappear.
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Old 09-30-2008, 05:28 PM   #13
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On the other hand, if the value of the Euro increases as a result then there is a chance that the poorer countries will experience greater exports to Europe.

Hopefully, the market will soon find a balance, which would be best for everybody. What annoys me greatly with the current situation is that we (ordinary folks everywhere) will be bearing the cost of bailing out the bankrupt corporates whilst the people who are responsible for this will probably end up with 'golden handshakes' or fat pensions. There is no justice out there!

Aye // Stephen
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Old 09-30-2008, 06:43 PM   #14
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Islandseeker,

In the past couple of months I have picked up the pace on boatwork. In 6 months she should be cruise ready, and ready for passages. A friend once told me. Man makes plans, and God laughs!!!!!!!!!!!!!!!!!
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Old 09-30-2008, 09:14 PM   #15
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DOW up 491pts with a little after hours trading. This is like an old wooden roller coaster ride!
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Old 09-30-2008, 10:43 PM   #16
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We were up early, took the boat to her winter storage yard, then hard driving to get back to the house, so we heard no news until after the markets had closed. Peter is shouting at the TV, "This makes no sense!" Gold down, oil up, Dow up, dollar rose against the Euro. What is going on?

Bah! Stuff it all in the mattress!
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Old 10-01-2008, 04:18 AM   #17
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On the other hand, if the value of the Euro increases as a result then there is a chance that the poorer countries will experience greater exports to Europe.

Hopefully, the market will soon find a balance, which would be best for everybody. What annoys me greatly with the current situation is that we (ordinary folks everywhere) will be bearing the cost of bailing out the bankrupt corporates whilst the people who are responsible for this will probably end up with 'golden handshakes' or fat pensions. There is no justice out there!

Aye // Stephen
I have a few "issues" with all the talk going on about how the little guy is innocent in all this. Let me vent a little here.

Stephen, truly, this is a complex economic issue that really can't be simplified down to ordinary folks bearing the cost of bailing out bankrupt corporates and people responsible ending up w/fat pension, etc. As a matter of fact its all the "ordinary folks" who are driving this train right off a cliff. And what is "bearing the cost" when the economy is like the ocean tides--remember the phrase that "a rising tide floats all boats?" well, we're in it together and we should get out of it together, IMHO.

A quickly written ramble of my opinion of "the start" of this crisis--

Here in the USA, we saw huge investment from US investors and those abroad in the 1990's go into the internet boom/bubble. With an expanding economy, we were beyond full employment for many years of the late 90's and early 2000's. Venture capitalists and others used to high-risk were seeing their money double in less than a year. People were spending, spending, spending. Lots of money running around looking for places to "invest" and then came the dot-com bust. Suddenly that money chasing good tech investments had to "go somewhere" and where did it go? Real estate here in the USA and abroad. Further, 9/11 happened and the US economy was very shaky. The administration didn't want to see us go into a recession. So, what did the US do? the Fed lowered interest rates. They were dramatically lowered between 2002 and 2005. Money was "cheap" and banks, credit card companies, etc were looking for people to lend to. People, "ordinary folks" who shouldn't be borrowing so much borrowed lots of money. They cashed out the equity in their houses, they bought cars, SUV's, took vacations, etc, etc, etc. These "ordinary folks" spent a lot of money and kept the economy moving along. Further, many folks with lots of cash bought real estate--including those ordinary folks who couldn't necessarily afford to buy "up" or to buy a second home. But it happened and real estate prices kept going up. Further, municipal governments were able to use the tax revenues to fix roads, build schools, plan capital improvements (based on projected future taxes) and go to Wall Street to borrow money (issue muni-bonds) based on these things.

What was a bit different about all this lending was that it was asset backed (based on the value of the real estate or other asset) and not really credit backed--so numerous "ordinary folks" who shouldn't have gotten these big loans--did get loans. Along with this, we see that credit card companies and mortgage originators ... (ordinary people, some are mortgage brokers who have their own businesses processing mortgages and are paid a fee for doing this "up front" work but who don't work for the bank lending the money...these aren't fat cats, these aren't wealthy bank presidents on Wall Street--these are regular people...little old ladies in tennis shoes who work in customer service at the credit card company, etc) ... "helped" people get those mortgages and cash advances on their credit cards or increased credit limits; new companies began to lend and package loans to be sold "up the chain" to other investors--from retirement funds, hedge funds, investment banks, etc, everyone bought "asset acked securities" thinking they were "normal and safe" and the shareholders of all those companies (shareholders are "ordinary folks" like you and me) were happily benefiting from the investments their companies were making. In particular, retirement funds were trying desperately to keep high return on equity that they'd seen with stock investing in the 1990's and the retirees were demanding high returns, too. All these..."ordinary folk" contributed to the problem of adding pressure for their fund manager to perform--if someone managing a fund wasn't doing as well as others, well, he/she would be losing his/her job. Ordinary folks have a way of putting pressure on everyone along the way--from the customer service rep to the president of the USA.

Then, it seems in the mid 2000's, we were seeing risks of inflation--and here comes the first domino (in my opinion) to fall that brought things down--the Fed began to raise interest rated quite a bit in 2005/2006. Those same rates they'd lowered to keep the economy moving--they raised to slow it down. Stupid move (in my opinion) because suddenly all those adjustable rate mortgages (which go up when rates increase) started going up along with many other things. Interest rates going up makes credit harder for everyone--small businesses who borrow for operating/expansion and large businesses alike. Well, the Fed succeeded in "slowing down" the economy with those increased interest rates and along with the slow down...ordinary people began to default on mortgages and credit card debt. And, other ordinary people who were shareholders in various banks or part of retirement funds and had demanded that their returns/dividends be high--well--suddenly all those asset backed (and mortgage backed) securities that had been providing great return on equity were very risky. I won't even go into the muni-bond investments--that's a whole 'nuther can of worms that we can't blame on the fat-cats.

Wall Street banks, investment banks, yes--they hold lots and lots of these worthless asset backed securities and their shareholders are demanding to know "how much" are they worth--and that expected losses be written off. And, all of the "worthlessness" of the securities comes down to a bunch of ordinary folks who aren't going to honor their commitments to pay the loans that they took out. And, a bunch of ordinary folks who can't keep up the spending because it was on credit cards so businesses are slowing down too. Yes, some of our problems are business defaults driven by interest rates; other aspects of the banking crisis include the massive short selling that has been going on driving vulnerable companies into the ground; we will probably see an investigation in the US into the change in the "up-tick rule" which the SEC got rid of in mid-July 2007 right before the stock markets began to unravel--and that is about the only thing that we can say with certainty that the ordinary folks didn't have much to do with.

Things are indeed a mess. But, please don't think that its solely because of a bunch of wealthy or privileged CEO's. Here in the US, I believe we can look at the self-centered greed of ordinary people as well as CEOs and political leaders--there are plenty of contributors to the crisis across the spectrum.

Bottom line, the "problem" can be attributed to many people in different roles in our society--lots of them plain old "ordinary folks." I just hope that the ordinary folks in the US begin to act like intelligent people by paying their bills and encouraging their elected officials in Washington to take action to mitigate effects of this economic crisis.
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Old 10-01-2008, 06:48 PM   #18
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Islandseeker,

In the past couple of months I have picked up the pace on boatwork. In 6 months she should be cruise ready, and ready for passages. A friend once told me. Man makes plans, and God laughs!!!!!!!!!!!!!!!!!
I'm looking at another year. That's if no emergencies come up. I can't wait till I can say 6 months left with confidence. I know somebody must be laughing at me, I bought a wood boat! lol! Good luck on the future progress 'imagine2frolic'.
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For the truth is that I already know as much about my fate as I need to know. The day will come when I will die. So the only matter of consequence before me is what I will do with my alloted time. I can remain on shore, paralyzed with fear, or I can raise my sails and dip and soar in the breeze.

- RICHARD BODE
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Old 10-02-2008, 12:32 AM   #19
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What is happening is turning everything sour for me. I am not in the market, but my business had just started to accelerate this year. It has dropped to zero.

I owned my home outright, and took 60% to open my business. The 40% left has dropped to around 15%. Thank goodness the boat is paid for. I am going to sit tight for 6 months. I will then make the decision to just go to sea, or hang on a little longer.....OUCHHHHHHH!
Imagine2frolic, we, like you, drew heavily on a home equity line of credit to start our business (2001) and were thankful for the hugely inflated prices of real estate which made it possible for us to start the business with a low interest rate loan like that.

We did get cold feet (the real estate market was "too hot" for our taste and risk evaluation) and sold the house in July 2006 at a good profit. We downsized the business so we could take the time to work on our cruising boat full time and take some time "off" to do some sailing. Things always take longer and cost more than you think, but for us, things are coming along ok.

I hope that your business continues to thrive and your boat is ready to go to sea so you have choices to do what you wish. Best of luck in all.
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Old 10-02-2008, 07:46 PM   #20
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Some perspective on the market...

30 Years

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Last 10 Years

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From October 1, 2007 to October 1, 2008, the market has declined over $4.7 Trillion in value.

I found this article very interesting from Yahoo Finance:

From ClusterStock, Oct. 1, 2008:

Now that the government has been terrified into rubber-stamping the bailout, what happens now?

In our opinion, here's the most likely scenario:

Hank Paulson & Co. survey the banking industry and decide who will stay and who will go. JP Morgan (JPM), Citi ©, Wells Fargo (WFC), and Bank of America (BAC) will stay. Goldman (GS) will probably stay. Morgan Stanley (MS) might stay. Everyone else in trouble could go. The government doesn't need to save all banks. It just needs to save some.

Within a month or two, Paulson buys $250 billion of worthless assets. He pays more than market value, but not an egregious amount more (because the public will be watching these early rounds). Over the next six months, he buys $700 billion of assets...and then he--or his successor--asks Congress for more money.

Confidence improves modestly, but banks continue to hoard capital and credit markets stay tight. Loans stay expensive and hard to get. This keeps pressure on the economy.

The credit crunch filters through to consumers: Credit cards, home equity loans, mortgages, car loans, etc., get more expensive, putting more pressure on consumers and forcing them to cut back further.

The economic news continues to get worse: American consumers continue to pull back, housing continues to fall (as of July, the year over year declines were still accelerating), companies begin to cut back, which leads to layoffs--which puts more pressure on consumers.

The global economy continues to weaken: Europe, Asia, and, eventually, emerging markets. This is already happen, and everyone else is later in the cycle than we are.

The stock market continues to fall, as corporate earnings come under increasing pressure and hope for an early 2009 recovery fades. Analysts are still expecting huge growth in S&P 500 earnings for next year. These estimates will get cut by at least a third.

The government enacts further measures to try to stop the fall in asset prices (stocks, houses)--including an expansion of the bailout plan--but these don't work. Governments always try to do this. They never succeed. All they do is delay the inevitable.

A new round of white-collar prosecutions send a new posse of corporate villains to jail. Some will be guilty. Some won't. All will be hated.

The government announces a new New Deal, finally investing in the country's infrastructure, in the hopes that this will stimulate the economy (which it will). Investments include broadband, green tech, wireless, physical infrastructure, et al.

Eventually, asset prices will bottom: Housing down 40% in real terms, the stock market down at least 50%. With luck, this will happen by early 2010, so the recovery can begin.

Warren Buffett loads the boat with stocks, but by that time, most people are too depressed (and poor) to follow him.

Unlike Japan, we finally force our banks to write down assets as far as they need to be written down...and then recapitalize them. This is what we should have done in the current bailout, but we'll get it right next time (we hope).

We gradually begin a long-term economic recovery, one in which consumers save a greater percentage of income, thrift and saving again become admirable qualities, we gradually begins to wean itself off international oil, and the bacchanalian decades of the 1990s and 2000s become an embarrassing memory.

The stock market finally begins a new, long-term bull market, in which stocks once again return 10%+ per year. Unfortunately, most Americans will be so sickened by the stock losses they've sustained since 2000 that they'll miss many years of it.
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