Bailout Links for 10 Oct 2008

Berlusconi Says Leaders May Close World’s Markets | The Italian Prime Minister would like to suspend the markets for a short time in order to “rewrite the rules of international finance.” Well, the problem I see is that you have debt. And not only people but governments living excessively outside their means. Fiat currencies not backed by gold and you basically have a bunch of paper that people say has a certain value. When that paper gets traded at 20 times its value, it’s only a matter of time until that becomes untenable. And it is going to correct. If they keep the markets from sinking further in number, they do it in actuality through inflation. Just look at Zimbabwe, Argentina, etc. to see where this could end up for us.

AIG Draws Fire for Executives’ $440,000 Post-Bailout Retreat at Posh California Resort | Shock. Amazement. Bewilderment. The government bails you out because you screwed up and what do you do? Fix it? NO. You go on a fscking resort and pay for $6 diet cokes on the company (now taxpayer) dime. These people should have their personal assets taken from them to pay back the 85 billion (or part of it) and get a pittance of a salary to fix it. Or they can just quit. Or they can go to jail. I like door number three myself. “Executive Douchebag? meet Bubba. He likes men.”

Jim Cramer: Get Out of the Market | Jim Cramer recommends that people get the heck out of the market if you plan on using that money in the next five years. We heard something similar from our USAA advisers about 6 months ago when this all started to rumble with the sub-prime debacle. But this is going mainstream. Will this affect a sell-off of large proportions?

Settlement Day Approaches For Derivatives | Derivatives are really the 800 lb. Gorilla in the corner that everyone’s been ignoring. If these things go, get ready for fun.

Is This A Replay of 1929? | No. And that’s a relief. Newsweek’s Robert J. Samuelson talks about the differences and similarities between now and the Great Depression. Also see The End of Prosperity, Time’s look at similar concerns.

Worst Case Scenario Is Approaching Rapidly | The European Union is in chaos as certain countries jump out of step to secure their own domestic banking accounts.

  1. hemdeep says:

    if you have over 5 years you can ride it out.I just completed level 3 of the CFA pgarrom and no where does it say that investors should liquidate equities to have funds ready to cover their expenses over the next 5 years. That is either OLD finance 101 or it is a rule-of-thumb type financial planning. A modern financial plan for someone with near term cash needs would include a higher cash allocation in portfolio but it might also take into account dividends from equity portions, some laddered debt instruments, and even expected inflation.

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