Our financial system is crumbling this week.

[clement]

A blogger at the Economist dug this up:

In a hearing today before the House Oversight Committee, the credit rating agencies are being portrayed as profit-hungry institutions that would give any deal their blessing for the right price.

Case in point: this instant message exchange between two unidentified Standard & Poor's officials about a mortgage-backed security deal on 4/5/2007:

Official #1: Btw (by the way) that deal is ridiculous.

Official #2: I know right...model def (definitely) does not capture half the risk.

Official #1: We should not be rating it.

Official #2: We rate every deal. It could be structured by cows and we would rate it.

EAT MOR CHIKIN.

That's seriously creepy. Sounds like something out of a movie.

Yeah. A movie like "The Smartest Guys in the Room"

[ghostrunner]

A blogger at the Economist dug this up:

In a hearing today before the House Oversight Committee, the credit rating agencies are being portrayed as profit-hungry institutions that would give any deal their blessing for the right price.

Case in point: this instant message exchange between two unidentified Standard & Poor's officials about a mortgage-backed security deal on 4/5/2007:

Official #1: Btw (by the way) that deal is ridiculous.

Official #2: I know right...model def (definitely) does not capture half the risk.

Official #1: We should not be rating it.

Official #2: We rate every deal. It could be structured by cows and we would rate it.

EAT MOR CHIKIN.

That's seriously creepy. Sounds like something out of a movie.

Yeah. A movie like "The Smartest Guys in the Room"

I desperately want to film this with two people talking.

#1 has a conscience and tries to talk sense
#2 agrees, but has bought into the system.
#1 tries to push back, hoping to be agreed with
#2 drops his smile, and lays down the hammer of reality.

[Freed Roger]

Warren Buffet says the US is for sale at a 35% discount and to buy. Some younger guys I know are all excited about this, and want to pour whatever they have and then some into stocks now.

I guess this mentality of dumping money in the market is the scary thing. Companies are going to go under. Thus, you end up with nothing for that investment. We still have to pick the companies that are solid and ones that will be around when the dust settles. The survivor companies will probably be stronger than ever.

I'm still confused about how to safely join in this long-term investment gold rush, without getting stuck with fools gold companies. My 401K investment choices are limited mainly to a laundry list of mutual funds. Sure, I'll put some in the SP index fund, but what about the rest - am I fairly safe to assume these blue chip fund managers don't have a bunch of Ford or GM stuck in the portfolio. Sure those companies can be bought cheap, but if they go bust, the ROI is negative.

I guess, I'm asking for advice and giving some as I drink some beers . Especially to the younger guys/gals. yeah on the stock market if you can afford to. But your best and most assured return on your money is paying off debts. Pay down of a mortgage your ROI will be 4% or higher depending on tax breaks. Paydown Student loans. car loans 7 - 10% savings last time I checked. Payoff of credit card debts, a ROI of 12% to 25%. etc etc.

Chances are, by paying down debts -you'll save more than you could ever earn in the stock market.

anyhow - here's a pretty good program about the effects of the economy on retail. Its in layman's term.

http://www.onpointradio.org/shows/2008/ ... he-crisis/

[Michael]

These are some tough times. The world feels crazy.

[ghostrunner]

lewis kinski on the economy

[/youtube]

Klaus Kinski on the economy:

[TimeForGuinness]

Warren Buffet says the US is for sale at a 35% discount and to buy. Some younger guys I know are all excited about this, and want to pour whatever they have and then some into stocks now.

I guess this mentality of dumping money in the market is the scary thing. Companies are going to go under. Thus, you end up with nothing for that investment. We still have to pick the companies that are solid and ones that will be around when the dust settles. The survivor companies will probably be stronger than ever.

I'm still confused about how to safely join in this long-term investment gold rush, without getting stuck with fools gold companies. My 401K investment choices are limited mainly to a laundry list of mutual funds. Sure, I'll put some in the SP index fund, but what about the rest - am I fairly safe to assume these blue chip fund managers don't have a bunch of Ford or GM stuck in the portfolio. Sure those companies can be bought cheap, but if they go bust, the ROI is negative.

I guess, I'm asking for advice and giving some as I drink some beers . Especially to the younger guys/gals. yeah on the stock market if you can afford to. But your best and most assured return on your money is paying off debts. Pay down of a mortgage your ROI will be 4% or higher depending on tax breaks. Paydown Student loans. car loans 7 - 10% savings last time I checked. Payoff of credit card debts, a ROI of 12% to 25%. etc etc.

Chances are, by paying down debts -you'll save more than you could ever earn in the stock market.

anyhow - here's a pretty good program about the effects of the economy on retail. Its in layman's term.

http://www.onpointradio.org/shows/2008/ ... he-crisis/

Buffet can take on more risk than you or I can. I'm waiting for the dust to settle, I still think there will be movement down in the short term and sideways after that. I think you will have plenty of time to invest...don't think you have to do it today. Spend some time, do some research, and pick solid companies.

[KyCardinalFan]

Things I've wondered and this seems the best place, as any, to ask.

What exactly does a point on the stock market represent? (How do the dollars spent on stocks convert into "points".)

Also, what is the significance of the volume trading? The other day when the DJ was "only" down like 150-200 points, the TV analyst said something like, it was light trading, so not too significant a loss. Which got me wondering how much volume is "heavy volume" (as they say), how much is "light volume" and why does it matter?

Thanks, I'll hang up now and listen.

[TheoSqua]

Warren Buffet says the US is for sale at a 35% discount and to buy. Some younger guys I know are all excited about this, and want to pour whatever they have and then some into stocks now.

I guess this mentality of dumping money in the market is the scary thing. Companies are going to go under. Thus, you end up with nothing for that investment. We still have to pick the companies that are solid and ones that will be around when the dust settles. The survivor companies will probably be stronger than ever.

I'm still confused about how to safely join in this long-term investment gold rush, without getting stuck with fools gold companies. My 401K investment choices are limited mainly to a laundry list of mutual funds. Sure, I'll put some in the SP index fund, but what about the rest - am I fairly safe to assume these blue chip fund managers don't have a bunch of Ford or GM stuck in the portfolio. Sure those companies can be bought cheap, but if they go bust, the ROI is negative.

I guess, I'm asking for advice and giving some as I drink some beers . Especially to the younger guys/gals. yeah on the stock market if you can afford to. But your best and most assured return on your money is paying off debts. Pay down of a mortgage your ROI will be 4% or higher depending on tax breaks. Paydown Student loans. car loans 7 - 10% savings last time I checked. Payoff of credit card debts, a ROI of 12% to 25%. etc etc.

Chances are, by paying down debts -you'll save more than you could ever earn in the stock market.

anyhow - here's a pretty good program about the effects of the economy on retail. Its in layman's term.

http://www.onpointradio.org/shows/2008/ ... he-crisis/

Buffet can take on more risk than you or I can. I'm waiting for the dust to settle, I still think there will be movement down in the short term and sideways after that. I think you will have plenty of time to invest...don't think you have to do it today. Spend some time, do some research, and pick solid companies.

Aye, If I had 100 billion to waste, i'd totally be buying. Since i only have about 100 dollars to waste, no thanks.

[Arthur Dent]

Things I've wondered and this seems the best place, as any, to ask.

What exactly does a point on the stock market represent? (How do the dollars spent on stocks convert into "points".)

Also, what is the significance of the volume trading? The other day when the DJ was "only" down like 150-200 points, the TV analyst said something like, it was light trading, so not too significant a loss. Which got me wondering how much volume is "heavy volume" (as they say), how much is "light volume" and why does it matter?

Thanks, I'll hang up now and listen.

The "points" on the stock market generally refer to various stock indexes the most famous being the Dow Jones Industrial Average. Basically, these attempt to capture the market as a whole (or some specific portion) by combining the prices of many stocks. The simplest index would just add prices. For example if stock A sells for $45 and stock B sells for $55, my A-B index would stand at $100. The real formulas for these indexes are more complicated and cannot be interpreted in strict dollar terms, so they use the imaginary unit points. If some index is up 15 points from 100, that means that roughly speaking, the stocks in the index are 15% more expensive.

Trading volume is just the number of purchases and sales in a given day. Light trading doesn't make a 150-200 point loss any more or less significant. It just tells you that there wasn't a lot of action that day.

[AWvsCBsteeeerike3]

Try to get the deals WB got. You'll get laughed out of the room. Basically, he bought stock, but he also got the option to buy a boatload more of it at any point in 5 years I think for the same price he bought it at now (which is obviously very discounted).....ahhhhh the power of capital.