Wednesday, August 15, 2007

"Brother, can you spare a dime?"

The credit problem seems to be a larger problem than first thought. The stock market sank again yesterday, and as I write this the Korean market is down a record 7% for the day. It looks like we've got a long, rough ride ahead.

We've been down this road before. I was adopted and raised by my maternal grandparents, who lived through the Great Depression. The hard times of the Depression affected all of those who lived through it. Like many who survived the difficult times of the Depression, my grandparents remained frugal throughout their lives and never wasted anything or spent their hard earned money on anything frivolous. I suppose some of that frugal mindset was passed on to me.

Some people play the horses, some drop quarters in the slot machines, and those that don’t understand basic math buy lottery tickets. I drive a 40 year old car and squirrel away every dollar I can. My portfolio has taken quite a hit as of late, as has everyone’s. There’s no need to panic, yet, but one would be wise to keep a watchful eye on the market.

The Chad Mitchell Trio - Brother, Can You Spare a Dime.mp3

Zeke Manners & His Gang - Inflation.mp3

Buck Ryan & Smitty Irvin - Finger And Toes.mp3


Blogger kjk said...

... oh the gamblin' man is rich and the workin' man is poor ... and i ain't go no home in this world anymore ...

August 15, 2007 11:18 PM  
Anonymous john said...

This last June, after much soul searching and dragging my heels, I finally took a big pile of cash out of a nice safe CD and put it into Mutual Funds.
I guess I should'a searched and dragged a bit more!

Oh, well, at least I didn't take out the whole pile of cash, the house is paid for, and my '91 Cutlass wagon is still doing fine.

I was raised by "Children of the Depression" and learned early on that, since I had so few, I had to watch my pennies. My father told me years and years ago to never owe money on anything but a house or car and that "If you can't pay cash, you can't afford it." I've pretty much tried to live by that, although "90 days - same as cash" for a washing machine isn't really cheating. Is it?

I couldn't believe the two commercials I saw yesterday. One was for student loans, telling kids they could borrow up to $40ºº a year and not make payments until they graduated. Oh My God! Unless they went into medical school (or a plumbing apprenticeship) they'd never get a loan like that paid off. The other ad was telling that you could go on vacation, or buy that big screen TV on a home equity loan because "your house owes it to you". Ferchristsake, "owes it to you"!

I'm glad my dad gave me that same damn boring speech over and over and over. It sunk in.


August 16, 2007 9:41 AM  
Blogger Black Dog said...

Hello Ed,
So far away from American politics you would think I was living in a third world country. Market values haven't been the same since the changover to the €uro. The quality of life thing that seemd to work while making so little doesn't work anymore and I've begun to think that to make a living has other connotations. Borders and boundaries in America close out much of the way things function in other countries while the rest of the world just can't get over a prefixed notion that all Americains are rich. We are perhaps, but money has little to do with it.
Funnily enough just noticed that the New York Philharmonic has been invited to North Korea. Maybe they picked up the 7% from their southern confreres.
Growing up in Cleveland was like living in the outskirts of Poland with grandparents and parents wanting us to be real Americains, speak english and make a success of it. The world market leaves me speechless like a mythological figure running on his own energy.
You're just being conscientious which says a great deal. I can spare the dime. And I ask myself what happend to the guy in NYC who set up shop outside the Wash and Dry with a poster stating free advice for a quarter ? That's marketing.

all the best and keep the blog turning in spite of market values.

all thoughts fly... k.

August 16, 2007 11:18 AM  
Anonymous Dan said...

Before anyone panics, I have to relate my advisor's advice, and I think it true. The market needed an adjustment. Think longterm. Everything is cyclical. The very wealthy who control economies were edgy anyway, and the gobs of free mortgage money that U.S. banks gave to everyone was a stupid move in the first place. Now, we all pay, but only in the short term. Relax. You have no control over this poop anyway!

August 16, 2007 6:13 PM  
Blogger Ed said...

Actually guys, I started to feel uneasy about the market's multi-year climb back around February. I started to sell off the more speculative holdings and buy defensive stocks. I didn't foresee the mortgage meltdown, but felt a correction was overdue.

Dan, your adviser is right, it is the business cycle. John, something had to trigger the correction. You are spot on, the big money lenders, and their greedy tactics, got them into this mess.

Less than a dozen years ago, I was homeless. I lived in a tent in a county park (in Kennewick, Washington) with my wife and three young children. We made the best of it. We came away from the experience knowing we could survive happily if we pulled together as a family. I also vowed that I would do all in my power to avoid such circumstances again.

I am sitting on some cash and doing a little selective bargain hunting.

August 16, 2007 7:28 PM  
Blogger kjk said...

Not trying to get (too) political here, but greedy bankers are not the only ones losing out ... some people were just looking to settle down ...

... is he gettin' your home? is he gettin' your home? ...

Ed, does that make you Kennewick Man? Sorry, couldn't resist .... :)

All the stocks I was sitting on are still going up, dang it!

August 16, 2007 7:48 PM  
Blogger Ed said...

Ken, you are right about the unfortunate folks caught in the middle of all of this mess. I have heard estimates of upward of 7 million folks affected by the mortgage mess.

Thanks for sharing another great selection of tunes. You always come through with appropriate selections.

At times I have felt like Kennewick Man. He was found not far down the Columbia River from our tent home. There was a two week limit on stays at the park. Every two weeks we moved across the Columbia to a park in Pasco.

All of your stocks are up?! Care to share your holdings and strategy?

August 16, 2007 9:00 PM  
Blogger kjk said...

no! most of my stocks are down, but the one's i was hoping to pick up at a bargain are still going up ... luck of the dice (or uneducated mind) i guess ... :)

August 16, 2007 9:15 PM  
Anonymous Anonymous said...

For John, about the college loan commercial, did you catch that their interest rate is "better than a credit card's"? So, what would that be, 17%? Those kids are doomed.

August 16, 2007 9:23 PM  
Anonymous john said...

I'm thinking there's another word to use, besides "doomed".

August 18, 2007 8:33 PM  

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