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chimellie
I'm looking at my screen: the UK stocks down 8%, (30% this year) US NY down 500+ below 10,000 (40% this year)and only just opened. Most banks in the West on verge of failure, governments guaranteeing deposits to stop the run on banks, Iceland suspended (oner of the biggest banking systems in Europe would you beleive) And what do I read, seat belts, mountain bikes and where to have a steak!

 

Are we all out of touch with reality or is it just me. IMO this is the most fundamental event since WWII and no one is talking about it.

 

We should be giving each other advise or at least have an opinion unless you don't care that your pension fund has "gone", you need a gang to get rice and if you have any wealth you need guards to preserve it, and that's the UK.

 

I know I'm into this as a "job" even though I pulled out of the markets months ago. But you guys better start thinking about it before it is too late.

 

Ok, it may not be as bad as ALL the markets and commenators are saying, hell, I wish. But just in case they are right, don't you think a minute of two should be devoted to this?

If you own quality stocks, sooner or later they will come back. Luckily for me, I sold all my mutual funds in my 401K 3 months ago, believe it or not I just started buying some stocks today. Some of the stuff I am buying are 60% discount. I can't touch my 401k for another 10 years so if the markets go down the next few years, I still have time to recover the losses and hopefully make some profit. Hang in there John, don't panic yet , you invest for the long haul.

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  • JohninCebu

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Ladies and Gentlemen ,

I'm against the $85,000,000,000.00 bailout AIG.

Instead, I'm in favor of giving $85,000,000, 000 to America in

a 'We Deserve It Dividend' program.

To make the math simple, let's assume there are 200,000,000 bonafide

U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman

and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billon that equals

$425,000.00.

My plan is to give $425,000 to every person 18+ as a

'We Deserve It Dividend'.

Of course, it would NOT be tax-free.

So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.

That sends $25,500,000, 000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.

A husband and wife has $595,000 .00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage - housing crisis solved.

Repay college loans - what a great boost to new grads

Put away money for college - it'll be there

Save in a bank - create money to loan to entrepreneurs.

 

Buy a new car - create jobs

 

Invest in the market - capital drives growth

 

Pay for your parent's medical insurance - health care improves

 

Enable Deadbeat Dads to come clean - or else

 

Remember this is for every adult U S Citizen 18+ including the folks

 

who lost their jobs at Lehman Brothers and every other company

 

that is cutting back. And of course, for those serving in our Armed

Forces.

If we're going to re-distribute wealth let's really do it...instead

of trickling out

a puny $1000.00 ( 'vote buy' ) economic incentive that is being

> proposed by one of our candidates for President.

 

If we're going to do an $85 billion bailout, let's bail out every

adult U S Citizen 18+!

 

As for AIG - liquidate it.

 

Sell off its parts.

 

Let American General go back to being American General.

 

Sell off the real estate.

Let the private sector bargain hunters cut it up and clean it up.

 

Here's my rationale. We deserve it and AIG doesn't.

 

 

Sure it's a crazy idea that can 'never work.'

 

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

 

I trust my fellow adult Americans to know how to use the

$85 Billion

 

'We Deserve It Dividend' more than do the geniuses at AIG or in

Washington DC.

 

And remember, The Family plan only really costs $59.5 Billion

because

$25.5 Billion is returned instantly in taxes to Uncle Sam.

 

Ahhh...I feel so much better getting that off my chest.

 

 

May I suggest that you check your calculation.

 

:mellow:

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Mattfromnz

I am currenly a Real Estate agent (Dont hold that against me) and in New Zealand, like everywhere else in the world, credit has been on tap for all and sundry for years now. 100% mortgages have been easy to get and as a result, everyone has been buying up property left right and centre... Including us! We bought 4 homes in the past two years, three of which we still have, and one we have been trying to sell. Well, when we first put the house on the market for $10,000 more than we bought it for last year (We spent about $15,000 on renovations) we thought we would have no troubles selling it.

 

12 weeks later and after a lot of pushing sh!t up hill, we have decided to keep it and rent it out, as with this world credit crisis going on, we would have to sell for less than what we owe the bank. And that would suck! 100% morgages have now dissappeared and 80% mortgages are now a minimun standard... on a good day. There are way less properties on the market and the ones that are on the market, no buyer can get a mortgage to buy them! Then you've got elections coming up and the media predicting that house prices will fall a further 25%, and no one wants to make a decision.

 

The world is in a shakey state and being reasonably young(29), I have never been through one of these "Recessions" before and as MattfromGA said, it's a bloody good lesson to make you realise that not every day is gonna be better than the last. I must admit, I did think things were always gonna be roses.

I'm just grateful that we are escaping to Cebu in Dec and I wont have to deal with the dilemmas of trying to sell houses that no one can get mortgages for!

 

As sh!tty as the world economics are, the sun will still rise each morning and set at night and one day soon this will all just be a memory.

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JohninCebu
One of the reasons for moving to the province in the Philippines was not to be bothered with things like this.

Since I'm here, I'm mostly interested in local happenings - international problems are far away, and that's good. Because it's always the same: Some people want to get richer than they are already, and everybody has to pay for it.

I'm not reading any newspaper here, not watching news on tv.

If there happens something to my investments now, I might have to go back to Germany and start again from zero, as I did not finish building income and self supply here in the Phils.

However, my money seems to be safe up to now, and if it's not, what could I do?

 

But your wakeup call arrived, and as you seem to have experience, could you please tell me if and how this crisis will or might affect income from:

- Renting appartments

- Container investments

- British life insurances

- The Dollar exchange rate compared to the Euro

 

These are some of my investments. My money on bank accounts, however, should be 100% covered by law.

I have very few experience in the investment market, but I tend to say I was lucky not to invest any money in the stock market ...

I tend to agree with you Speedy, there is little we can do, just be cautious and do what we can. Very few of us this board have been through really bad times - not as individuals but as a society - and I suppose it is a need so we can refocus on what life is about, love, family, the sea breaking on the shore and a bottle of beer with friends.

 

Regarding your 4 questions and assuming you are renting in Germany and a container investment is like a unit trust and assuming an ongoing credit squeeze:-

 

- if we are entering a time of depression/stagflation, unemployment will go up as companies are not able to borrow money on the markets to fund cashflow, wage bills and investment commitments. That suggests rents will go down and therefore property values.

 

- Unit trusts have already plunged and will go down further as people pull their money out. That in turn means funds have to sell the underlying stock holdings which is what we are seeing also - deleveraging by hedge funds, insurance companies and banks as they desperately need cash to recapitalise.

 

- Life insurance I assume is some sort of endowment policy. Returns will reduce dramatically as insurance companies struggle with the same issues as in 2 above.

 

- Dollar versus Euro, god alone knows. The dollar must fall as more liquidity is pumped in increasing overall US debt but equally the Euro is in dire straights as it is seen as leaderless. However, the concensus at the moment is that the dollar has much more of a long term problem and therefore will underperform the euro.

 

This is only my take on things, I'm not giving advise and you must do your own research. All I am saying is that now is the time to make decisions as the full effect of this will show it's face to the man on Main Street in 1 to 2 years down the line. Then it will be too late.

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JohninCebu
Well I guess its the banks own fault that they are collapsing now. None of my business really, I still work for my money and don't try to "let the money work".

And if it really all gets bad I'm sure we could find out where the money has gone and try to get it back...

Well no actually, it is all our fault. The collective "we" have borrowed up to our necks, spent like there was tomorrow and had a good time - as they did in the roaring 20's. The banks have just facilitated it and the bankers have made forunes on the way.

 

If it really gets bad, money will be worthless! I don't think people have the faintest idea what is happening. Money is a piece of paper. If it is worthless try using it to buy a pound of rice. Fiat money is trust that someone will accept your piece of paper. If trust that someone down the line will not accept it, as the banks are saying to each other at the moment (I kid you not) then it is worthless as a means of exchange.

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JohninCebu
Isn't it "US Taxpayers" who are at the bottom of this crisis?

I mean they spent the money the banks wrongfully gave them for raising mortgages on houses that were not really worth that much.

I'm quite surprised you could take a mortgage on a house you already bought, just because its price had supposedly risen. I don't think any European Bank would do such a thing, certainly not a Swiss bank.

So the money should be with the people who produced whatever the US-People bought with there so called "mortgages", which is probably just a load of junk and nothing of lasting value.

Wrong I'm afraid. The UK have lived of remortgaging for years. The housing bubble in the UK is far worse than the US. The same in the rest of Europe but not as great because renting is more prevalent.

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JohninCebu
It is not a mortgage problem and certainly not a credit problem created by the small mortgage holder on the street. They always have to pay the highest interest rate and if they cannot pay anymore, the banks will rather raise the interest rate charged to them and not giving them a break.

 

Logically, the system has to collapse as it is against all financial sense to charge the highest interest rates to the ones who can afford it the least and the lowest interest rates to the ones who can afford to pay more.

 

This illogical system has been up and running and praised for many years an nobody ever questioned it.

 

The way they tackle it now will delay the collapse for another year and they will try to let the printing presses as fast as they can.

 

European Banks, Swiss Banks (Switzerland is in Europe too I believe), US Banks, Canadian Banks, UK etc. all of the big boys are playing the same game.

 

Just wait and see until the first Swiss Bank is in the media.

 

.

They are, all of them. UBS is only surving with state aid and has declared the biggest losses of all banks so far.

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John,

 

First, this isn't to pick at you, or to brag, or otherwise.

 

But, maybe you should look at putting, if only a little amount, into Legacy. I have not had one issue with them since doing so - not one. I am still making the same percentage today, that I was two years ago.

 

Yes, it could end tomorrow, for me. Before anyone makes that same statement. But, it hasn't so far. Of course, I am also sure that, it is only a matter of time before this really hits us here too, to some degree, if it keeps going as it has.

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12 weeks later and after a lot of pushing sh!t up hill, we have decided to keep it and rent it out,

 

 

I will tell you a secret. Ahem, not so big of a secret actually.

 

I can't tell you how often I heard that "renting out" FAIRYTALE.

 

Good luck.

 

.

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Mattfromnz
I will tell you a secret. Ahem, not so big of a secret actually.

 

I can't tell you how often I heard that "renting out" FAIRYTALE.

 

Good luck.

 

.

Hmmm, I may be missing the point... You mean the fairytale about people who become "accidental" landlords due to not being able to sell? I know it happens quite often, but Im still trying to figure out the "Secret"?

Edited by mattNZ
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JohninCebu
John,

 

First, this isn't to pick at you, or to brag, or otherwise.

 

But, maybe you should look at putting, if only a little amount, into Legacy. I have not had one issue with them since doing so - not one. I am still making the same percentage today, that I was two years ago.

 

Yes, it could end tomorrow, for me. Before anyone makes that same statement. But, it hasn't so far. Of course, I am also sure that, it is only a matter of time before this really hits us here too, to some degree, if it keeps going as it has.

Paul, my only problem is the time frame. I don't like to lock up funds in times like these when things are moving daily. In 3 years, the term for the rural banks (which have had negative press) we could have inflation of 20%+ - it's already 12%. So a negative return is possible. When markets settle, could be a year or two, I'll probably do 50%pa for a few years and still have control.

 

Not saying anything negative about Legacy, it's all a matter of timing.

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JohninCebu
Hmmm, I may be missing the point... You mean the fairytale about people who become "accidental" landlords due to not being able to sell? I know it happens quite often, but Im still trying to figure out the "Secret"?

Matt, keep it on the market though. May be best to take a 10% hit now on the mortgage rather than 30% in a few years. I assume you pay tax on rental income.

 

Will you keep all 4 when you move over here?

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Hmmm, I may be missing the point... You mean the fairytale about people who become "accidental" landlords due to not being able to sell? I know it happens quite often, but Im still trying to figure out the "Secret"?

 

Everybody who can't sell their house are renting it out.

 

What do you think the result will be?

 

.

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Mattfromnz
Matt, keep it on the market though. May be best to take a 10% hit now on the mortgage rather than 30% in a few years. I assume you pay tax on rental income.

 

Will you keep all 4 when you move over here?

Hey John, Of the 4 homes, we sold one prior to moving into the home we are in now. We now only have three. NZ'ers pay tax on rental income, but all the properties are negatively geared, so we have to top them up each week. We get to claim this against our personal income tax and get a rebate each year.

 

We really wanted to sell our own home before we left for Cebu, but as I said, we had no luck. This would have given us more money to play with while we are there, but now we will just have to live on a bit of a budget. Will still have enough to buy you a beer though!

 

I understand that it may be wise to just get rid of our house, but we cant as the bank will bankrupt us if we cant sell the home for more than what we owe. Then we may not be able to continue with our trip. So we decided to keep it as a rental, long term (7-10 years). We will keep the other two rentals as there is a lot more equity in them.

 

As they say in NZ, "She'll be right mate!"

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