Bailout

Enough with the bailouts!

Possibly later today--and certainly before Christmas--President Bush will announce that he is bailing out the nation's automakers. Let me see if I have this right. The dogs (American consumers) won't eat the dog food (buy American cars in sufficient numbers) and so we are bailing out the dog food factories. Why? More…

We are shareholders, but....

Here is what I plan to ask my Congressman: Sir, Typically, shareholders have three ways to influence the corporation in which they own stock. 1. They can vote with their feet, if they are unhappy. That is, they can sell their shares. 2. If they hold onto their stock, they can vote at the annual meeting. 3. And if all else fails, they can sue. Now that I own (as a taxpayer) preferred stock in some of the nation's largest financial institutions, do I have any of these options? And if I don't, why not? More…

We Might as Well Share in the Rewards

From today's Wall Street Journal: 'The U.S. government is expected to take stakes in nine of the nation's top financial institutions as part of a new plan to restore confidence to the battered U.S. banking system, a far-reaching effort that puts the government's guarantee behind the basic plumbing of financial markets." You can make the case, as I have, that the government should not be in the bailout business. (It simply isn't the way capitalism is supposed to work.) But, if taxpayers are going to be on the hook for guaranteeing loans to AIG and bailing out the banks, we might as well share in the upside. More…

Sometimes it is Good to be an Ostrich

If you are convinced your retirement money--and your other funds devoted to your long term goals--are allocated correctly, here's a suggestion: Don't look at the value of those accounts until sometime next year. Otherwise, the relentless drops in the market could make you do something you will regret. I don't plan to check the value of my retirement accounts until December 31 of this year. More…

Are you Rethinking your Retirement? (Drop me a line and you be featured here.)

The stock market has fallen more than 33% since last October. Even more depressing, collectively we have lost something like $2 trillion in the value of our retirement accounts. That has gotten me to start rethinking my retirement plans. I am wondering if it is affecting yours. I am not so much curious about people who are thinking about cutting back. Rather, I am wondering if you—like me—are seeing this as a chance to make lemonade out of lemons. The fact that our retirement accounts are plummeting means we are going to have to work longer. But that doesn’t mean we necessarily have do the same sort of work we are doing now. Are you using the current downturn to rethink what you will do for a living in the future, once you reach “retirement” age? More…

Let’s not Blame the People Who Wanted to Buy Homes

If this was 24 years ago, I would have been blamed for causing the meltdown on Wall Street. I was about to turn 29, and couldn’t walk in our tiny two-bedroom condo. Every inch was covered with stuff devoted to the care, feeding and entertaining of our hyper-active two-year-old. My wife and I decided to go house hunting and found the perfect place: A three-bedroom, two and half bath home on a third of acre of land in a terrific school district. That was the good news. The bad news was it cost $138,340, and I was making all of $40,000 a year (my wife didn’t work) and we didn’t qualify for the traditional $110,000 mortgage (at 13%) we needed. More…

You Must Remember This

Over breakfast this morning, my wife handed me the business section, without even taking a glance. "I can't stand looking at the bad news anymore," she said. I understood completely. I, too, am tired of seeing the value of our retirement accounts fall day after day. But here is what I told her. Things are cyclical. We have seen the kind of stock market before. It is awful. And wearing. But eventually it ends. Until it does, if you are happy with the way your funds are allocated, my wife's approach is a good one. Don't read the bad news. Just keep doing what you are doing: Saving for retirement; making sure you have little or no consumer debt, and making sure you have money squirreled away in an emergency fund, invested in something ultra-safe. More…