patrick.net

Remember, Richmond, profanity is the crutch of the inarticulate motherfucker. I do hope that someone watching that is in a position to make an example of that couple.

To your other question, I think 25 is more likely (at present) than 50, especially after the "rogue trader" story. They could also hold rates steady, but then, they are running scared.

requiem,

Paragraph 1: LOL

Paragraph 2: I got a 20 on .25 but Asia is bleeding out again so I don't know.

It should go without saying but paying off debt at this point makes the most sense to me. I'm always amazed at how many people take on debt for investment and don't understand it is very difficult to try to build wealth by outgrowing the debt. Paying unsecured nondeductible debt is the best safe investment you can make. Paying $100 to an 18% credit card balance is equivalent to investing that $100 and earning over 30% before taxes on the same money.

So in a way, yes it is a time in which savers are not rewarded but high income debtors should find this a very good time to prepare for another buying opportunity in real estate or stocks. Instead of using debt as an extension of credit you can look at it as using debt as a tax free savings account.

Whoever suggested watching the "Closing Escrow" movie, thanks. The mainstream wouldn't find it that great but readers here will find it very amusing.

I just read an article that used the term "Fed Cat Bounce"....

That strikes me as funny....

Savings in "too big to fail" banks and funds. We covered that when the banking system first started to crack. The US government *will not* allow money funds or other cash equivalents to fail at large institutions. This would be perceived as a failure of the banking system in total. Remember that the problem isn't just "savers" as we usually talk about them. It's also every retirement fund, pension fund, government fixed-income fund and most entitlements that are dependent upon these cash vehicles.

Take on currency hedging or speculation at your own risk. Most will lose money trying (but a few will get lucky and come out fabulously).

If you have a relatively high taxable income -- which is most folks in the BA simply due to our local inflation basis -- then I am a big advocate of exploiting tax vehicles to gain returns. Look into tax exempt money markets and munis (at too big to fail institutions). You may be able to offset a lot of your shrinking cash returns with simple tax savings. Especially as taxes are almost guaranteed to rise in the near future.

Most of all, don't worry. The world isn't ending (despite the fact at least a few here are cheerleading the end of times). Remember, you're on the right side of this all. You may not squeeze every last penny out of your position. But you have already saved yourself 90% of what you stood to lose by not buying an overpriced bubble home.

@OO

How could one purchase Australia Treasury ?

Maybe @@ DS. He'll know.

For those who think LTCM proved the "too big to fail" theory, well, I have a new theory for you:

Too Big to Bail

It's like "too big to fail", only bigger. Much bigger. That $2 Trillion in Iraq has almost cracked us - but the housing crash is going to be AT LEAST $8 Trillion, and almost certainly more, once it shakes out.

Too Big to Bail.

I cant eat, drink, burn for fuel or hump gold,,,,,,

No, but I assure you, as long as you're willing to trade gold coins for it, all four will come to you.

60 minutes piece BLOWS LID OFF the bubble

the whole segment is here

http://tinyurl.com/374fh5

its ALL there, the fraud, the cash back at close, the no lending standards, the look the other way fraud everywhere. Even bay area speculators are mentioned. 60 minutes is where the smart sheeple watch.

RE: Goldbugs and doomsday wet dreams

If your dreams come true and you end up holding gold after the apocalypse, and that gold is valuable, then I hope you enjoy using it exactly once for whatever trade you think you're going to do with it.

Remember, the penitentiaries and jails will probably empty out after this rapture occurs. No matter how big of a badass you fancy yourself, you won't be wanting to flash your gold around the Thunderdome crowing about how shrewd you are.

"two men enter,one man leaves" what a great flick. Mel Gibson during his glory(pre insanity) days.

HelloKitty Says:
January 27th, 2008 at 10:16 pm
"60 minutes piece BLOWS LID OFF the bubble"

I love how now the mainstream media is acting like they have unraveled the mystery of the century. OMG! It is so laughable. Just like during the bubble, everyone is now an expert on 'what went wrong.' I need some Pepto.

Bap33 Says:
I cant eat, drink, burn for fuel or hump gold,,,,,, I dont need it.

As an inter-generational store of wealth, it has done pretty well. About 120 years ago, my great-grandfather's father was rewarded in gold by some monarch. He left the gold in a safe-deposit that my dad and uncles inherited. Considering all the cr*p that went down in those hundred years, I can't think of much else the old man could have saved that would have retained value, least of all some paper currency.

As for eating, drinking, burning and humping, the gold-punani exchange rate has always been favorable to the gold holder...

I don't know if gold is a good short- to medium term investment at this point. However, if you plan to leave an inheritance for your grandkids, you should consider gold instead of some crappy fiat currency.

Not advice of any kind.

Regarding FDIC limits, is it true that the $100,000 limit is per depositor per account? i.e. if a couple has a joint account, they are covered to 200,000?

It seems to make sense, but I can't quite imagine a government guarantee to be so logical.

SP :

I was told once by someone well versed in financial matters that I can summarize as following.

"Simply do not put more than 100K with any bank. Forget about per account, per depositor types of clauses. If you have more than 100K, use more than one bank."

Just be ultra-cautious as this is some f*cking serious amount of money.

If you want to preserve nominal value of your savings a money market fund that invests in short term treasury notes will be quite OK. Leave aside the doom talk on bubble blogs. US Govt will not default on short term treasury bonds. If that occurs, there will be so much sh1t happening that your alternative investments will hardly comfort you.

I have several accounts each with about $101K in them - just enough over to get the higher interest rates for accounts above $100K. Then I go around and "harvest" the interest from them every few months for living expenses. I'm willing to risk that extra $1K but not any more than that.

Banks want your business. Trade around and move money when you get better offers. I "fired" State Farm Bank last summer when Banner Bank offered a 13 month CD at 5.55% apy and moved my money there. Read the newspaper....often banks run "promotional" rates every so often. Right now the best CD deal is at WaMu but I don't trust that bank right now.

Now that I think about it, my dad's house in PA was at 2521 Cowper.

Not bankster advice. :)

Hmm...looks like Warren Buffett got cold feet about a nuke plant.
www.idahostatesman.com/newsupdates/story/277514.html

Not nuclear advice.

If you're relatively young (i.e. less than a year from retirement), just leave your stocks 'as-is' and try not to look at your overall valuation. It will come back. As for new investments, I say anything OTHER than real estate is wise investment. We know that Oil, Gold and the S&P will rise again, and within the next year or so. For the more savvy investor, short sales may prove a nice return. Housing however may be a lost cause for a while. We've got at least another 20% decline to go. What goes up must go down, as the tried-and-true saying goes. Don't buy. Just wait the greedy little FB's out and you'll win in the end.

I meant "more than a year from retirement" as relatively young.

I retired to SE Asia a couple of years ago and have seen the dollar slide over 20% against the local currency. My only US money is an IRA, all in cash savings. Being 10 years away from early social security, I have decided to bet on my banana republic's currency. I took out a sizeable chunk of IRA, paid the 10% premature withdrawl plus taxes, and put it in the local currency (I can always just spend it if I guessed wrong). Next year I will do the same (can't take too much in one year with progressive income tax).

Those of you under 40 years old have no idea how insane this situation is.

SP

Very few goldbugs are talking about preserving multi-generational wealth via gold. I don't recall having read the "leave it for your grandkids" argument anywhere except your comments. Normally, I'm hearing the same arguments that oily guy on CNBC infomercials gives for buying gold.

As for storing value intergenerationally: there are lots of things one can deposit in Swiss (or Austrian, or Luxembourgian) accounts, of which gold is just a component. The massive European "family" wealth funds don't generally sit on piles of gold. They go around the globe investing prodigiously in "uncorrelated" sorts of things -- things that produce real cash flows.

For some reason I see some logic in preserving wealth through generations by gold especially if you do it discretely. You could avoid probate and all kinds of legal concerns. There's something almost romantic about the thought of an older person giving his or her heirs gold throughout their final years.

BTW I am a big supporter of buying gold to preserve wealth in the long term. My recent concerns have been that gold has become a speculutive investment. I believe in buying gold when it is a good value in comparison to what your currency is actually currently worth.

Randy H Says:
Very few goldbugs are talking about preserving multi-generational wealth via gold. I don’t recall having read the “leave it for your grandkids” argument anywhere except your comments. Normally, I’m hearing the same arguments that oily guy on CNBC infomercials gives for buying gold.

Well, any resemblance between me and an oily CNBC infomercial guy is purely coincidental. I am not trying to pump gold as an investment, just saying that if you are trying to bury some stuff for several years, without knowing what is going to happen in that time-frame, and without really having a trusted 'investment manager' that you can rely on - then something like gold seems better than fiat currency or paper assets.

In the one case that I alluded to, the old guy wasn't rich enough to set up a 'family wealth fund'. He just needed a way to store some money that would be relatively immune to political instability, and I suspect he wasn't really investment savvy - all he could do was stick some gold in a vault. Given the investment options that a small time guy like him had access to back in 1889, I don't know what else he could have done to preserve what he had through the various clusterfucks and emigration in the early twentieth century.

Maybe he heard the oily CNBC guy and decided to buy gold... :-)

Malcolm said:
There’s something almost romantic about the thought of an older person giving his or her heirs gold throughout their final years.

Yeah, but reality isn't quite so romantic. An old fart on his deathbed, dropping a doubloon into the hands of a sobbing young kid - sure makes a good movie. But it usually involves a bank vault, bureaucrats and lawyers, who make it less David Lean and more Ingmar Bergman, if you know what I mean.

My grandfather and his siblings spent about 30 years to get the paperwork sorted out (in five different countries!) to prove succession - all but one died before the matter was completely settled. Their kids (my dad's generation) ended up with maybe 8-12 ounces each. Nothing legendary, but better than fiat currency...

I still think it is a cool story.

In the Netherlands last summer, I saw dozens of these giant and very elegant 3-bladed power windmills, all churning away generating electricity from nothing but wind.

What is the capitalization rate on those things? Do they return better than current CD rates after all is said and done?

Got to get approvals, buy land (maybe offshore), build it, maintain it, but after all that, maybe they're profitable. I bet the problem is that it's way cheaper just to burn coal...

If you put a windmill on the hood of a Prius, could you double the gas mileage? All that wind going to waste.... I mean it uses the tires slowing down when you hit the brakes to charge the battery... why not a coupla 'mills on the thing for same *patent pending*?

HelloKitty Says:
If you put a windmill on the hood of a Prius... All that wind going to waste.

And a windmill in front of each Prius driver, no sense in wasting that wind either. :-)

Randy H,

Agreed. Don't worry, certainly not too much. When you've recently said good-bye to your 20-30% down payment, your house payment ate your lunch and your taxes are based on prices NO ONE is getting... then you've got real problems.

For this poor guy, debating should I... buy gold or...___ is a luxury he simply doesn't have. When it's 56-0 (and your players are being hauled off on stretchers) any spot on the sidelines is just fine.

I am a big fan of wind. In fact, I favor wind an order of magnitude over solar in its current state of development.

Little known fact: the country that produces the most absolute wind power is the US. It's just a very tiny percent of our total generation, because we're so big.

If I remember correctly, those turbines you probably saw in The Netherlands were likely 3rd generation. Those are the massive ones that turn very slowly. They are bird-friendly (the 1st generation mills were known to be literal meat-grinders), but they require higher fixed-costs to entry.

I'll see if I can find any of the capitalization/depreciation data I had when I was doing the green-tech thing. Wind is very attractive. The 3 things that trip up wind (in the US) are:

1. Solar-mania. Almost all subsidies in the US currently go to Solar and clean-coal. In the US no "alternative" generation sources are economical without subsidies, unless you count Hydro as alternative. (Hydro is the cheapest, by an order of magnitude, than everything else).

2. Location + land-use rights. You have to put them where they'll work, and be allowed to put them there. The US, unlike all those European states where you see windmills located in a designed plan, is a land of intense private property ownership. In Germany, the Netherlands, etc. the government can more easily "force" the windmills upon land owners. Here you'll have to pay top-dollar to anyone lucky enough to own a windy range of hills or farm plains. That's why you see most of them here on government-owned open space, or in a few entrepreneurial farmers' fields (and those are the small turbines).

3. The Grid. Most of the energy is lost in transmission, and we don't have a grid capable of supporting decentralized power yet. So a lot of what a single turbine puts out gets lost beyond the immediately local consumers of that energy, which by nature of where they are located, is a couple of farm houses. Big arrays of mills are required to make any real impact on the local grid; best if they're within a few miles of a consuming mid-sized city.

A lot of the energy problems are due to "legacy" designs. An example is the use of 60 Hz power in the US. Aircraft systems decades ago changed to the more efficient 400 Hz standard aboard aircraft, which permits smaller and more efficent transformer designs. (Of course Europe with their 50 Hz systems are even more screwed than we are.) I often wonder what a conversion to higher-frequency power would entail - in a cost/benefit ratio.

empty-houses --- the new BK law allows you to walk away from everything, but you have to actually be poor. You have to make less than the median for your state. Fortunately, lots and lots of people are going to be in just that position. It also requires you to get credit counseling, big whoop, you sit through a class that's the financial version of traffic school. BK's actually cheaper now, because so many people are doing it, and the Feds actually hold seminars in places like out here, on how to file on your own.

As this thing crumbles, we'll see a huge wave of Chapter 7s and an even bigger underlying wave of those who've just walked away from it all and "gone Amish" or Freegan or whatever. Remember as Ran Prieur says, as Empire crumbles, all you have to do is basically stay out of its way.

I am a believer that transformation of the US grid will require half a century or longer to "complete". Such infrastructure is never really replaced, just upgraded. You can still find legacy from 100 years ago left in the telecom systems, for example.

Europe has no excuse. The one time when major, bedrock infrastructures do get replaced is after they've been destroyed. Was 50Hz a reasonable choice in the post war period of rebuilding? If so, then that's the excuse. My guess, though, is that it had more to do with politics than efficiency of design.

DennisN,

It's been awhile for me but the way I recall the 400HZ and even 800HZ inverters made an awful whine you could hear for hours even after you left the flight line. All you could think was, will that flight engineer PLEASE shut down the APU!?

Isn't part of the problem that main transmission lines are aluminum and not copper? I recall reading that some time back. Evidently while copper is a better conductor the sheer weight of it mandate the use of aluminum.

This is not exactly OT for this thread, but can anyone recommend a decent bank or CU in the East Bay (just for general checking & bill-paying)? Definitely want FDIC or FCUA insured, free online banking, and would prefer one with multiple branches. Not too keen on BofA these days, won't go with Wells-Fargo (bad prior experience), and WaMu might be suspect, due to massive exposure to HB.