Tuesday, June 2, 2009

Tuesday Station Break

Out of time this evening as I had to meet with the construction crew regarding some new stairs for the back of the house. Pretty tame day overall and now we wait for Bernanke to speak tomorrow. Leave tonight's best stories in the comments section so I can get a head start on reading catch up later.

Have a good night.


Lisa said...

The only story I have for you is...I'm getting married! :)

Anonymous said...

the IRA Bank Monitor may view the Q1 2009 profiles for all US banks. We'll be talking more about zombie banks later this week in an interview with Professor Ed Kane of Boston College. As we discussed with Dr. Kane and also with our friend Josh Rosner last week, without the bailouts of Bear, AIG and the work-around of many other CDS counterparties, the capital of JPMorganChase (NYSE:JPM) would have evaporated several times over as CDS contracts were triggered. But given that the big news today is the bankruptcy of General Motors (NYSE:GM), we thought it would be useful to take a look at GMAC and its FDIC-insured bank unit, GMAC Bank, now known as "Ally."

Most of the readers of The IRA are aware that GMAC, the financing arm of GM, is insolvent. At the behest of President Barrack Obama and the Democratic leadership in the Congress, the US Treasury and the Federal Reserve Board have taken extraordinary and, we believe, illegal actions to keep GMAC afloat.

The reason is simple: without GMAC, GM cannot finance car sales and has little chance of emerging from bankruptcy. And without GM and its parts suppliers, the Democrats will begin to lose millions of voters in heartland rust belt states where the legacy automakers are located as workers migrate south looking for jobs. For the Democrats, slowing the liquidation of the UAW beyond the 2012 general election is "job one."
Ya think?

Lisa congratulation, may you have a long successful marriage.


getyourselfconnected said...

Lisa, congratulations! I thought Brad Pitt was married already though?

watchtower said...

Congratulations Lisa and best wishes!

Stagflationary Mark said...

Oh my!

Lisa is responsible for the housing market crash!

We finally have a scapegoat.

Can't you picture it?

What if Lisa owns a house?
What if her husband to be also owns a house?

The combinatation will have one too many houses!

The market looks ahead. It saw this coming. It all makes sense now!

Just kidding. Congrats. :)

Lisa said...

Thanks everybody! By the way Mark, we are renters! LOL
GYSC: I turned Brad down, that's why he married Angelina. :) I heard a story tonight about a person who broke down on a highway. They called their insurance co. for a tow (covered expense), but couldn't get one from the usual line-up of GM or Chrysler service/dealers. One of those consequences of the bankruptcy/dealer closings I hadn't even thought of. The insurance co. said that a couple of the dealers had closed their service dept. and were just selling inventory. Many more details to this story, but it's time for bed.

GawainsGhost said...

Congratulations, Lisa. I wish you bliss and happiness.

Here is today's must read.


Picture a sine curve. Prices go up, prices go down. This is analogous to the typical bubble economy.

When prices are going up, people are making money. So everyone wants to get into the game. Thus it becomes a frenzy. Buy now and you too can become rich! Buy! Buy! Buy!

Actually, this is the worst time to buy, because there are a lot of buyers and all the sellers are holding out for higher prices. This is the time to sell.

Conversely, after the bubble bursts, when prices are going down, people are losing money. So everyone wants to get out of the game. Thus it becomes a frenzy. Sell now before you go broke! Sell! Sell! Sell!

Actually, this is the worst time to sell, because there are a lot of sellers and all the buyers are holding out for lower prices. This is the time to buy.

That is the exact situation we find ourselves in with housing. It's a great time to buy, but a terrible time to sell.

Do not confuse this with the old mantra of buy low, sell high. That's not what this is about. It's about knowing when to buy and when to sell. That would be when there are a lot of sellers and when there are a lot of buyers.

Real estate remains, as it always has, a solid investment, provided that you buy a house to live in it and get the right financing (20% down on a 15-year fixed-rate mortgage). The same is true in the case of a rental property. But you have to have the money and know what you're doing to play in this game.