US setbacks see dollar plunge to near 15-year low

[grizmaster]

The housing market propping up America's economic figures is coming to a rapid end. I work in mortgages and I'm laid off as of Friday.


http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/11/29/cndollar29.xml

The dollar tumbled to a near 15-year low against sterling yesterday on fresh signs of economic trouble in the United States.

An 8.3pc crash in US industrial orders and an admission by the Federal Reserve chairman that Washington does not know how bad housing really is set off another day of wild gyrations on the currency markets.

US house prices fell 3.5pc to an average $221,000, the third month of declines. Stocks of unsold homes rose to 7.4 months' supply, the highest since 1993. The US consumer confidence index fell sharply to 102.9.

The "truckers index" of tonnage shipped by US haulage companies was down 1.8pc in October, a leading indicator of contraction. Merrill Lynch called the fall "borderline recessionary".

[Eurobabe]

1. The worst is yet to come

the real shit is going to hit the fan in the Spring. I used to sell new construction in a supposedly bullet-proof market in the Midwest. The firm I worked for is likely to pull out in January. Their market 300K-600K is dead.

Now I live in the Eurozone, and everytime I go back home it's like receiving a 30% rebate. Good for me, bad for you in the US.

[CoffeeCat]

2. Can we talk investments?

I knew I should have invested in some international funds.

We've got to get at least half of our money out of US investments. Not that
we have a lot saved. We don't. However, news like this just reaffirms that
we need to diversify--and prepare for the dollar crumbling further.

Does anyone else have thoughts on this?

Have you invested in international markets more--as a result of BushCo debacles?

I see horrendous stuff on the horizon, that will rival the Depression. Our country
is saddled with so much debt, there is no end in sight to the war and we are making
enemies out of countries that own our butts.

It looks catastrophic.

Any insight is appreciated (If I'm being "Chicken Little", I want to know that too).

[roamer65]

3. When both Paulson and Bernanke are going to Beijing...

together, you KNOW its bad. It sounds like the Chinese are beginning to dump dollars en masse. The dollar is already down to 7.83 yuan with further to fall. Pretty soon everyone will be crowding for the exit.

[grizmaster]

5. the amount of control the Chinese have over the dollar's value

is the scariest part of it all. They have us on a very short, tight leash

[sweetheart]

9. that's a 2 way street

As the dollar slides the billions of chinese reserves are eroding
in value, exacerbating the need for a run on the bank...

... bush and the neocrims are laughing all the way to the bank,
screwing their debtors by inflating the currency and pretending
that it was not deliberate.

[grizmaster]

4. I've had all my 401K funds in several international funds

for the past two years.

And the returns have been decent, but are much better than the domestic funds I could have chosen

[physioex]

6. You have just as much "insight"

As the next person. The answer simply is that we don't know what will happen. But just my opinion that I don't think there will a "great depression" but more of a long term stagnation.

[KharmaTrain]

7. I "Balanced" My Portfolio After the '04 Elections

I also have a lot invested in international currencies...especially the Euro that have worked like a hedge over the goofiness of the U.S. economy over the past couple years. Many investors I know took a massive hit when the market went south for the first half of the year and are just getting back in the black in the run-up of the last three months, but I suspect that will be short-lived. While others took a big hit, mine held steady and actually kept growing.

I wouldn't suggest playing this game on your own...but to go through a trusted broker...who can look at your income, savings and tax situation and suggest ways to better invest.

A sage long ago told me that when someone loses money, there's someone whose making it...the smart ones are the ones who can see this shift and be positioned when it happens.

This fourth quarter is going to be a critical one for a wide array of industries...and if there isn't a killer xmas, we could see some big market dumps and losses on poor earnings reports after the first of the year. Also, the rising price of oil has wiped out a lot of the money that would go into building, investing and saving...combine that with a federal defecit that is beyond comprehension and personal debt that is a very big ticking time bomb and your fears of economic "catastrophe" isn't too far off.

For many, the past 6 years has been a depression...working harder and earning less. Good luck and hopefully you'll find an answer that keeps your investments steady and safe.

Cheers...

[grizmaster]

8. another thing to keep in mind

It only matters what you bought the investment for and what you sold it for. All those phantom values in between mean nothing.

And if everybody tells you that it's the hot time for a particular investment, you most assuredly are already too late. Patience, diversity, and sensibility go a lot further than hot tips.

[KharmaTrain]

10. Excellent Advice

I knew a lot of "paper millionaires"...especially during the dot com boom who either got suckered into phantom IPOs or day traded...all went away and then some when the market crashed. The smart ones never really counted that money or cashed out (like Mark Cuban) on top...but, this requires having a lot of knowledge or a very good financial advisor.

I constantly get "investor newsletters" that come primarily from right wing wheeler-dealer. I get a kick out of how wrong they are in their assesment of politics and an even worse track record when you look at what they recommend. These days I laugh when I read them as they're at a loss to explain how their golden boy has failed them and how transparent this "good economy" is. Anyone who put their money with those goons or with any "get rich quick" investment plan without doing due dillgence is asking to be taken.

Also, if you can afford, always "go long", sticking in sold investments like blue chip stocks or diversified Money Market funds where there's a low risk. You may earn only 4 or 5% on those funds, but it's almost always on the positive side. I'm grateful to my mother who was a very conservative investor and taught me the "ropes"...now I'm hoping to do the same for my children.

[grizmaster]

13. I like sticking with a good percentage large cap traditional stocks

with a healthy smaller blend of small and mid caps, but I do swing the percentage based on what I see coming in the economy. I've been following the Chinese buying up our debt and have raised the percentage investment in overseas funds significantly for the past 3 years. I may have been early, but as I say by the time everybody is telling you it's time, it's past time.

[KharmaTrain]

14. I'm Hearing Inflation Will Return Next Year

A really telling bit of info I heard recently is the "housing notch". The most and least expensive homes are still selling briskly but anyone in the middle...say with a home valued from 75k-400k (depending on the area) are having troubles selling...including many who are stuck in goofy ARMs and other financial games to get lower interest rates than now are rising and forcing many into the financial abyss.

We could see ourselves back in the 70's scenario...where the debts of Vietnam, rising oil prices and stagnant economy fueled the double digit inflation that Carter ended up paying for. While I'd hate to see this happen as I remember how hard those times were, on the other hand, that's when my mother was able to find 15 and 20 year bonds that paid out 10% or more...most of them in tax free munis.

I'm with you on the large caps...i'm a "low risk" type myself.

Cheers...

:hi:

[grizmaster]

15. if some of that inflation shows up in my paycheck

that'll suit me just fine



buy low sell high

peace...

[enid602]

11. Chene-ster

=Since 11/04 I've been 45% in non-Dollar bond mutual funds and non-Dollar equity mutual funds, with my total portfolio 55% bond mutual funds, 45% equity mutual funds and 10% CD. All my money is in IRA's, so I can't physically buy foreign investments or take money out of the country without penalty and taxes. I learned (I think through the freedom of info act or some such), that Cheney, Alito and Roberts also have substantial investments in the same funds that I hold. It is interesting to note that Cheney, as architect of the policies which have done so much to harm our nation (and currency), has chosen to 'diversify' his portfolio as well. Maybe he knows something we don't.

[KharmaTrain]

12. Many of the Big Funds are Structured That Way

I'm involved with one portfolio that is based on 10 different funds...currency, bonds, municipals, treasury bills, stocks and so on that are designed to go with the "hot hand" in the market and is constantly being adjusted. No surprise Crashcart and his cabal are tied into similar type of a portfolio, but they're beyond the reach of most investors as these funds require a minimum investent of 100G or more to deal into.

Sadly many people are locked into 401s that they have little knowldege and even lesser control over. They were sold on these plans as their retirement nest egg only to see them fall flat in recent years. And whose the goons who plundred these funds? The same asshats who are proposing privatizing SSI.

What pisses me is how Chenny has all those Haliburton options that are in a "blind trust" (yeah, right) that he and the other profiteers made off the blood of our young men and women. My hopes are they are sued as part of their war crimes investigation/trial.