September 19, 2007

HousingPANIC Stupid Question of the Day


Regarding the "cash is king" mantra, as written about in Manias, Panics and Crashes:

The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king.

Is "cash is king" still relevant today (especially non-US$ cash)? Or, because of an incompetent, negligent and corrupted Fed, is it truly gonna be "different this time",

40 comments:

Anonymous said...

.
.
.
.
cash will always be king
it truly hurts me to say this , and it really ,really .pisses me off
it will not be the
united states of Americas dollar

enough said..how long will we just watch and just let happen ?
when is enough a enough

we are the
united states of America

where are the patriots
what was our constitution for if we will not enforce it
its supposed to be we the people
well people

F'ed said...

Does anyone have any comments they can share about using Everbank? Thinking of using them to get out of US dollars. Thanks!

keith said...

Schiff on CNN just now - long day for him

Back to the voice in the wildnerness after a day like today

The sheeple have no idea

Gold, oil, foreign stocks and get the f*ck out of US$

keith said...

Schiff just now on CNN:

"The economy of the United States is a house of cards and it's about to collapse"

Anyone want to argue that point?

Anonymous said...

A couple weeks ago Cramer said something surprisingly insightful -- that the US economy is primarly about extending credit, and the real estate is the most important part of that credit.

House of cards sums it up.

Euro is king! Way to go Ben!

Anonymous said...

This is suitable for what happened today..

http://www.youtube.com/watch?v=ZaN6Rx8X6_I&watch_response

Anonymous said...

I'm probably 80% ex-US. I still believe in equities for the long haul, but it's gotta be ex-US equities until the dollar bottoms out.

I say 2 USD to 1 Euro...but well see.

Anonymous said...

US about to collapse? No way. Big deal the short interest rate has been cut, has anything really changed? We still have a huge trade imbalance, the only way that corrects is that the dollar drops enough to cause us to stop buying so much foreign crap and make foreigners buy our stuff. And that is not under the control of the Fed, the dollar has been and still is in the hands of foreign holders of our long debt. Anyone who thinks things are gonna be better in Euros should look at the high unemployment numbers over their, their own trade deficits, and numerous housing bubbles in places like the UK and Spain. Now if you really wanted to change things here, the US should change tax policy to encourage, rather than punish, saving. This again is not in the hands of the Fed - it's in the hands of congress and the president. Think about it when you vote for GWB's replacement next year.

Anonymous said...

Keith,

Right now I am so demoralized by the lack of responsibility in this country I am ready to say screw it and live better and easier somewhere else. My career will let me make a living anywhere in the world.

I like to think Ben just had no real choice because the crash is going to be so huge he couldn't sit still and do nothing. I feel for the A hole I really do. I mean do nothing and the ship goes down and your an idiot. Maybe he just felt he should do something just to say look we tried. If it ends up starting another bubble though, I hope I go to hell for a ring side seat to the burning of Bernacke.

In the end I don't really think this will do a bit of good. We lowered rates to nothing for almost 3 years and the Ameriscam stock market adjusted for inflation is still below the 2001 peak. Holding virtually any major currency in your mattress would have been a better idea. How are those Enron shares doing anyone?

The Japanese went to 0% and handed out Yen in every noodle shop and look where they are 15 years after their bubbles.

Maybe it is time for the Dollar carry trade. Yeah thats it need to read about the Yen carry trade.

Sequoia

Batman said...

Cash IS kind. But it has to be cash with stable value. I'd say Gold but all you anti-goldbugs would rant, but barring that, Euros aren't bad.

What's the prognosis of the yuan?

Anonymous said...

so we are just supposed to give in and TRASH THE usd
SCREAM PEOPLE SCREAM !!!!
we have been hijacked





we the people



have greater words ever been spoke





we the people

smitty said...

"Anyone want to argue that point?"

no, people are predicting that this is the "sucker rally" and things will implode in the spring. I liked reading stirling newberry. he wrote great stuff over at tpmcafe.com last year and now posts over at agonist.org.

I'll be moving my 401k over to bonds by the end of this quarter; stirling predicts a few more quarters of bubble and then boom and I agree because I don't think the spring home sales will take off.

i think it's better that the boomers understand now that it could be difficult to sell their homes down the road... rather than get a rude awakening when it's way too late....

Out at the peak said...

I've been using Everbank since 2005. It's a cool bank, and their online tools to open/change foreign currency and CD accounts is really easy. The USD equivalent value lags a day I believe.

GreedKills said...

good question

james said...

F'ed teica...



Im thinking the same thing, hoping we see some answers that might be helpful.

Anonymous said...

I just signed up for an Everbank account today!

They send out a daily email.

Today they mentioned that one possible scenario is the devaluing of the US$.

My question is if/when that happens does the mortgage get devalued as well as everything in your bank account?

Was it in Argentina where the currency was devalued, but only in the peoples bank accounts, and not their mortgages?

SPECTRE of Deflation said...

It's never different. Instead of paper currency we have digi-dollars this time. The dollar is still shit either way. They made their choice yesterday, and now I can make my choices.

Anonymous said...

The you tube stupid America video. Although home made, I do believe and agree with the content 100%.

Anonymous said...

Only fools and losing newbie currency traders look at dollar euro. Euro irrelevant. US is part of Asia. Europe is not. If you haven't figured out that yen and dollar are the key, you'll finish in second place.

eurogringo said...

Hay guys,

so i just sold my last US stocks and i am wondering what to buy. i live in europe and have all my savings in euro. euro-stocks? japan-stocks? Gold, although that is denominated in us dollars?

Budvar said...

"My question is if/when that happens does the mortgage get devalued as well as everything in your bank account?

Was it in Argentina where the currency was devalued, but only in the peoples bank accounts, and not their mortgages?"



If you have $100 in the bank, and they devalue the $US, you still have $100 in the bank, it just wont buy as much stuff when you come to spend it.
If you mean "Revalue" ie they give you 1 new dollar in exchange for 10 old dollars, then yes, if you had a mortgage of $100k in old dollars, you would only have a mortgage of $10k in new dollars.

Anonymous said...

next stop.... $8 loaf of bread.

Mammoth said...

Anon 6:04 AM said:
“We still have a huge trade imbalance, the only way that corrects is that the dollar drops enough to cause us to stop buying so much foreign crap and make foreigners buy our stuff.”
-------------
What stuff will foreigeners buy? In case you haven’t noticed, the US manufacturing industry has been gutted.

If Manufacturing does return to the US, we will be in for a rough start. Why?

Since so many of the support people have been laid off and fled the industry, every day there are fewer and fewer people left who know how to properly set up an efficient production line, as well as design & make the tooling necessary to manufacture a product.

Opening a manufacturing facility and starting from scratch here will be prohibitively expensive – we’ll be like China in the mid-1990’s, figuring it out as we go along, making all kinds of expensive mistakes.

At least they had foreign Engineers come there to help them. What will we do – import Chinese Engineers to help us get up & running again?

I have worked ten years as a Manufacturing Engineer, and if I get laid off I will leave the industry too, taking all my knowledge and experience with me. Let somebody else figure out how to make the sh1t!

Maybe I will plant a bigger garden and sell vegetables & fruit at the local farmer’s market. What with the price of food going up these days, this actually may become a viable way to make a living.

-Mammoth

Happy Homedebtor said...

Such pessimists! If the value of the dollar fluxes too much, companies will simply setup shop here and bring back more manufacturing jobs to the US helping the blue-collar folks, and by association bumping up local economies and housing/etc.

You guys really don't get it do you? Our economy is so complicated it's rediculous. Any single factor can have an effect, but realistically it would take a catastrophe of global-proportions to stop it/kill it. And if that were to happen, it would happen on a global-scale: the US might get the worst, but everything everywhere will be hosed almost as bad, or worse in some cases/places.

So, you may want to stop hoping for the sky to fall, because only the ultra-rich, who are from old-money and not noveau riche (sp?) will be ok. And betting on the sky falling is a fool's bet.

I notice Keith didn't post my comment on another one pointing out that he was quoting a tool who didn't understand the fact that the fed funds rate and primary mortgage rates are not linked in any way, shape, or form - as evidenced by the last 5-6 years. :) Gotta love it when the guy talking about media coverups and spin begins to coverup the truth to not look stupid. :D

Sheeple said...

Cash is always king, just try to live without it. What they are forgeting is that you can't make sheep blankets without wool. In other words America needs to make somthing the world wants.

Anonymous said...

GET GOLD

Anonymous said...

I disagree. I work fo onre of the big 4 accounting firms. Just got a hefty bonus check. We must turn away business sometimes due to lack of qualified people.

The clients I deal with (no reics)are companies mainly held in private firms. They all seem to be going great guns...pharmaceuticals, banks, manufacturing.

Like us, there main problem is finding qualified people. Not real worried about downturn, all their plans are long range and they have cash to spare....

Anonymous said...

Cash is still king in equities markets declines. It's just the FED refuses to let a natural economic cycle/decline to occur for political reasons. So it keeps reinflating the economy.

The more they keep this economy unnaturally 'jacked' on cheap cash, the more currency gets flushed down the crapper.

Expecting a large market decline? Go all cash in a basket of non U.S. cash currencies.

Expecting the cycle of constant reinflation continue for a long time? Go into vital commodites like Oil and Gas.

Anonymous said...

Start hoarding cash folks. The dollar is down but not out. Cash is definately king at this cheap price. The market for long bonds will determine interest rates and now and in the foreseeable future risk is too high or not easily priced so rates have to go up to compensate. Hold cash! Put cash in your mattress! Put cash in your car! Get Cash!!!!

Anonymous said...

Anonymous said...
.
.
.
.
cash will always be king
it truly hurts me to say this , and it really ,really .pisses me off
it will not be the
united states of Americas dollar

enough said..how long will we just watch and just let happen ?
when is enough a enough

we are the
united states of America

where are the patriots
what was our constitution for if we will not enforce it
its supposed to be we the people
well people

September 19, 2007 5:26 AM

----------------------

The Constitution says that only silver and gold are money.

Anonymous said...

eurogringo said...
Hay guys,

so i just sold my last US stocks and i am wondering what to buy. i live in europe and have all my savings in euro. euro-stocks? japan-stocks? Gold, although that is denominated in us dollars?

September 19, 2007 1:31 PM

--------------------

Gold is denominated in units of mass (e.g., grams) not in dollars or any other fiat currency.

Anonymous said...

Most of my money is in Euros, Brazilian Real, Swiss Franc, foreign stocks, gold, and real estate overseas.

Switched to FIFO a while back because the inflation stats, like everything else, is rigged.

long termer said...

Investing in Euros today is like investing in a Miami condo in Sept. 05
I has only 1 way to go from here = DOWN

Wonky said...

I'm living in Tokyo with cash in yen.

the other trader said...

"Cash is King"?

Tell the Germans that during the dark Weimer days...

The great sucking sound you hear is not jobs leaving like Ross said, it is the drying up of liquidity, which will precipitate a massive unwinding of the lopsided, unfair, and fraudulent(sp) bank reserve system.
And once this starts in earnest, there will be no stopping it.
Cash WILL be king;
for a while, (6-12 months?) then, it will turn to a "wonderful heat source"! (remainder of eternity?).
Ha, Ha.

Anonymous said...

Gold, gold, gold. GLD, pool accounts, or direct ownership. There's a reason it's doubled in the last four years despite central bank sales...

Anonymous said...

ummmmmmmmmm WRONG ! the real smart and presumably rich ones have already unloaded their " assets " onto poor unsuspecting schmoes .....duh.... remember what the ceo from countrywide did LOL! it's in cash duh .... too late ....

you guys just don't get it do you ?/ you did it to yourself ... like i said b4 who forced you to buy a home you couldn't afford anyway... and the brokers were simply providing a service to people that were going to buy the " american dream " no matter what !! and of course at exorbidant rates ... surprise surprise ....

Anonymous said...

.


Last time I bought gold it wasn't by the gram!


.

vegas crash watcher said...

Gold and Euro are in a blow off top. A weak dollar is killing Europe more than the US. The Chinese yuan is linked to the dollar, so it doesn't matter to the Chinese; it makes Chinese goods cheaper to Europeans.
The US dollar will come back strong; its not backed by gold but by something better: military force.

turdly said...

I just want the old days of making 10% on my damn cd!

Can you imagine how disheartening it is to have 2 mill in the bank and I can't retire? What the hell am I supposed to do if cd rates drop again.
I've got two mill in the bank and I'll make 40k in interest, and be taxed on that! That's a trailer in Oklahomo!!!!