Don't Look Too Closely... This Is Very Scary, Another Black Tuesday Looms

Source: Yahoo Finance

What will Tuesday bring for the NYSE? The world indexes are projecting a very bleak outlook for the week ahead. Hang on to your hats.




Read more: http://finance.yahoo.com/intlindices?e=americas

BTW, can you tell me how to take screenshots?

Depress the FN key and PRT SCREEN key simultaneously. Open Paint in accessories and hit CTRL V. :hi:

:hi:

I heard earlier that Dow futures were already down 400 points, and that was much earlier this morning.

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I just now got a NY Times email alert that the markets in Europe "plunged" 7 percent. The GErman DAX is off 7.16% France lost 6.83%.

I think we could probably expect at least as much of a loss and probably more. Maybe as much as 10%.

401 K's are the next to be robbed

Is it that bad that we should all get put cash and gold in a safe? Buy food?

I don't know....asking for advice.

Unless you're over the FDIC insurance limit, leave your money in the bank. If things get so bad that all the banks fail, then we have much bigger problems. Buying gold sounds good but is risky. Not much you can buy with gold today. Where would you keep it.

My advice to people is get out of debt, save some money, become as self-sufficient as possible, hope for the best, expect the worst.

I have about 75 grand in CD's, but have a 2nd (credit line) on my house and owe about 10 grand on cards.

returns anywhere close to the interest you pay on those credit cards. What's the rate on the equity line? If it's more than the 4% or so you get on the CD's it might be wise to pay it off, but keep the line open.

My general feeling is people should pay off as much debt as they can afford.

Are you earning more interest than you pay? If you earn 10% interest and pay 5% interest then debt isn't such a bad thing. The other way around and you're losing money.

$75,000 is a decent amount of money. You should never cash in a CD early (unless it is an emergency) as you get a penalty. Have a home equity line is a nice convenience but remember anything you buy with it is secured by your house. Not so good. $10K credit card debt sounds a bit nasty.

Again, I'd pay that off as best you can afford to from current earnings. Maybe cut back on spending and reallocate that money to reducing your debt. Taking part of your savings to pay down debt might be appropriate but you should leave some cushion there. Only you can judge that equation.

Just read a remark today by a recent immigrant who didn't have a credit card. He explained "Why would I buy something I couldn't afford?". Bravo.

Much better to have ZERO on CC and $65K in CDs..

The interest you pay on the CC MORE than candels out any interest you get on the CDs

for a time when it will, with interest, be worth a third of what it's worth right now?

Edit to add: Any other ideas?

Can you afford to just keep money in the bank paying 4-5% when inflation is over 10? Probably closer to 15?

Just remember that inflation is just another name for how much value the dollar is losing.

The other advice is fine.

It's called EverBank in Florida. FDIC insured. Low conversion fees. Good interest rates, and as the foreign currency you opt for increases against the dollar, the value of the CD goes up even more.

For example, currently: the Icelandic krona is at 11.63% on a 3 month CD; The South Africa rand is at 7.5% on a 6 month CD; the lowest appears to be the Swiss franc at 1.50% on a 12 month CD.

I have not done this, but have been considering it. Min. $10K investment, unfortunately my retirement assets are still tied up in a 401K (which has lost a bunch even since early Dec.)

I'm making no recommendations, and there may be some pitfalls I'm not considering, but it might be worth a check-out:

http://www.everbank.com/001WorldCurrencyCDSingle.aspx?LinkID=Body1

You should be guaranteed a certain % return by the issuer. The greatest factor affecting CD's is inflation and/or the devaluation of the dollar.

shares my same sentiments. It addresses this point as well as can be done here on a message board.

when the economy tanked in the 70s we had all our money in CDs and got incredible interest rates.

There are two main factors that affect bank CD rates available to you. They are:

* The length of time until the CD matures, and
* The current interest rate environment

The longer you'll have your money tied up, the higher your rate will be. Check around, you'll find that bank CD rates go up as the length of time increases. This is because the longer you commit to leaving your money, the more flexibility the bank has with your money. They are willing to pay you a better rate because they can use the money for a wider variety of purposes.

http://banking.about.com/od/cds/a/bankcdrates.htm

the larger economy in driving up rates on CDs overall. for example, back in 2004 i was working in the marketing dept for a large bank and their BEST CD rate was 1.5 percent. now we see 4% rates. in the 70s, at the height of "stagflation" my family was getting double-digit CD rates (taking very short terms so they rollover to higher rates as they changed).

as the Fed has a much greater hand in determining interest rates.

How interest rates are determined
By Bankrate.com
http://aol1.bankrate.com/brm/green/investing/basics1-2a.asp?caret=2

"You need to know how to calculate the interest you'll get by leaving your money on deposit for a certain amount of time, but it's also good to know how financial institutions arrive at the interest rates they advertise.

Interest rates are affected by a number of factors. The Federal Reserve, which is charged with maintaining the stability of the nation's financial system, raises or lowers short-term interest rates in an effort to maintain that stability. The Fed regularly takes these actions in response to economic ups and downs that the country goes through on a fairly routine basis.

Regular interest rate adjustments
Short-term rates are raised in what are called expansions -- good times -- to keep the economy from building too fast and risking inflation. Inflation is when too much money chases too few goods and services, sending prices upward. Raising interest rates slows down the economy because it makes it more expensive for you and for businesses to borrow money, which means you'll have less to spend.

The Fed will lower short-term rates when the economy is contracting -- slowing down. Lowering rates makes it less expensive to borrow money. Now you and businesses can afford to buy more products and services. That speeds up the economy and keeps it from sinking into a recession. A recession happens when consumers hold on to their money or don't have much and don't buy the products and services that keep companies afloat and employees employed."
http://aol1.bankrate.com/brm/green/investing/basics1-2a.asp?caret=2

Real interest rates (nominal interest rate minus the rate of inflation) should be nominally 3% or so for 5-10 year borrowing, and higher or lower depending on whether the economy is being stimulated or not.

However, when inflation goes up, the nominal interest rate also goes up. So if the government has to "print money" to get out of this crises, we will get double digit inflation and double digit interest rates.

From stock funds to Bond funds. I hope that is a safe place to be.

...in October. Everyone says you "can't time the market" but I think the occasional move is okay. I'm going to get back in maybe at some point this year.

"The Smartest Investment Book You'll Ever Read" by Daniel Solin.

His 'system' is along these lines:

1. Determine your desired asset allocation between three categories (US stock index, US bond index, International stock index).
2. Invest accordingly in three no load index funds (Vanguard, Fidelity, etc).
3. Rebalance every 6-12 months.

The author claims that according to researches, in long run, you will beat 95% of the investors (after considering fees, tax implications, etc).

It is an easy reading even for non hard core investors (like myself), his claims seems to be well substantiated and he provides step by step instructions.

(Disclosure: I have no financial or other interest in the book whatsoever. I am just a 'user' of the book and attended one of the book presentations by the Author).

Kam

That looks like good advice.

but I let a finanical planner talk me out of doing the same with my Roth Ira and my brokerage account. I feel like a fool for listening to him. I retired 3 weeks ago. Bad timing, for sure.

1. This system is for long term investments only. If you need to cache the majority of the portfolio next year, this is probably not the system for you.

2. If you do use this system, it is very important to stick with it. For example, if you decided on 40% allocation for US bond index and 40% for US stock index, and if in current market situation bonds are up and stock are low, when you rebalanced your portfiolio, you need to sell the excess bond index (beyond 40%) and buy stock index (to reach 40%). This way you sell high and buy low. If for example you panic and sell stock to buy bonds, you sell low and buy high (bad).

3. Re balancing too often is also not good. You have excessive profits now and will need to pay more taxes (unless if it is in a tax deferred account).

The book explains it very well and will resonant well with typical DU readers that don't appreciate excessive corporate greed (high commission fees with 'hyper managed' accounts).

(BTW, I am not an expert, just a personal investor).

Kam

If you are close to retirement age, you can't afford this unless you are really well off.

If you are close to retirement age, you can't afford this unless you are really well off.

Something wicked this way comes.

I've been watching the foreign markets plunge since late last evening. This is just awful.

exactly the *cabal wanted, to have this country on her knees. Or am I losing it?

you're not losing it.

can profit immensely in large market swings. The "free market" is a rigged game.

I did a lot of research when I finally got up enough nerve to put some money into mutual funds (that's looking like an "oops" right now....), and I noticed that the best stuff I found (as in they *never* seemed to lose money and made way more than most in good times) always had a minimum of a million or so...

I've seen rebounds in the Dow after foreign markets tanking. I think the PPT still has a trick or two up it's sleeve. The markets are bullshit anyway, part of a charade. Everyone I know(former middle class) has been suffering for YEARS from outsourcing and ridiculous food and fuel prices.

Knock yourself out.

Short term there will probably be a snap back, maybe before the end of the day tomorrow. I have been doing this a long time, and global crashes usually result in up days for US markets.

Long term, get rid of stocks, buy gold and canned goods, a gun and some ammo, and you might be okay.

Long term: get rid of stocks??

You've got one dire, pessimistic view of the US and world markets going on there. When the S&P 500 hits zero I guess I'll buy an infinite amount of the economy for $0.

What's the yield on guns and ammo these days? (And gold for that matter... lol)

go figure?

tomorrow is going to be a fucking bloodbath. The Europeans think Bush waited WAY TOO LONG to do anything about the economy and the sub-prime crisis. Heard it all over the news today.

Make losses public and profits private. That's the core Law of modern capitalism.
Which in itself guarantees the election of a democrat to the white house.

...this is really going to piss off the repug base. They HATE watching their stocks turn to shit, and as long as the "make money", they are happy as clams at high tide.

I have my life savings in a large 401K, and I'm watching it sink another grand or two daily. I'm in it for the long haul, so I can ride it out. But it makes me hate the monkey even more, and I didn't think that was possible.

A 7percent drop is my prediction.

All of these industries will thrive in the next 3-10 years. Everything else—i.e., everything that depends on the health of the U.S. "consumer economy"—is likely to tank. You can only go on being a net consumer (as opposed to a net producer) as long as your credit holds up. Bush has run up the national debt like no one else in history: he's also ignored our colossal trade imbalance AND allowed the dollar to collapse. That little troika of economic disasters is a serious time bomb, and it may just have gone off.

!