PaulBBrown

What Are You Going to do Next Time?

The current crisis will end, of course. But you can be equally certain that we will see another some point in the future. Everything has a lifecycle. So, the next boom time will end in a bust as well. The question is what have you have learned this time around that you can apply next. That is what wisdom--something we are supposed to gain as we age--is all about. 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…

Sign of Normalcy

The papers continue--and rightly so--to be filled with stories about how the crisis on Wall Street is making it difficult for "regular" people. Loans are hard to come by and sales of everything--especially big ticket items like cars--are down as people wonder about their ability to afford them. But,there is a sign things are getting back to normal. No, not because the Senate passed the bill out package last night. But because of the way USA Today reported on it. Instead of making the bailout story its lead item today, USA pushed the story further down on page one, signifying its belief that tonight's vice presidential candidate debate is more important. If the bailout is becoming old--well "older" news--maybe things will get back to normal soon. More…

Maybe the 9% Approval Rating was Too High

On the morning after we all saw our retirement savings take a substantial hit, I only have one question: Is Congress' 9% approval rating too high? If we lined up 11 members of the ThirdAge community today, do you really think that we could find one person who would say they are doing a good job handling the financial crisis? More…

From His Lips to God’s Ears

In case you missed it from yesterday’s Wall Street Journal:. Warren Buffett said “he believes the proposed federal bailout will be approved by Congress and that it will succeed. "The government has a great opportunity," he says. "If they buy things at market prices with the government's cheap funding, they should make a lot of money." More…

When is $700 billion not $700 billion?

A small point, but one you can use to show your friends you have a better handle on the current Wall Street crises than most. The $700 billion (or whatever the final figure turns out to be) that the government is asking for to bailout out financial institutions isn't a loan. It will be used to buy distressed assets that these institutions have. At some point, presumably after the economy stabilizes, the government will sell these assets. I haven't a clue, if they will get dollar for dollar in return (or even turn a profit.) But, they will get something. Which means the bailout will cost less than $700 billion. More…

Perspective Please

I know I am spending far more time than I should following the current economic debate over whether or not to save Wall Street. (But, once a dork, always a dork.) However, if I hear one more person complaint about how much CEOs are paid, I am going to puke. (Lovely image, I know, but true.) Yes, you can argue that Wall Street CEOs are over-paid. And you could argue that rock and movie stars are as well. (Adam Sandler gets $20 million a movie? Really? Have you seen Click?) But when we are talking about spending $700 billion, whether or not someone got several million too many is not the point. If CEOs commit fraud, they should go to jail. And if the FBI is really investigating, good for them. But that is not where the main focus should be right now. More…

A Little Bit of Good News

It didn't get much attention, overwhelmed as it was by all the talk of bailing out Wall Street, but there was a tiny sign yesterday that things may be getting back to normal in the economy. Hewlett-Packard, Microsoft and Nike announced they would be buying back some of their shares. Given all the economic uncertainity, most companies have been conserving cash. The fact that these three firms are willing to spend some of their money, and have concluded that buying their shares is the best place to do it, is a good thing. Companies buy back their stock when they think their shares are cheap, and/or are going to rise sometime soon. Executives at HP, Microsoft and NIke might or might not be right about the future of their stock prices. But it a bullish sign nonetheless. . . More…

That Was the Week That Was

Two points week-one obvious, the other a bit more subtle-about Mr. Toad's Wild Ride on Wall Street last week. The fact that the Dow moved more than 350 points in four of the five trading days last week proves that market timing is a very silly idea. But the less obvious point is this: If you want to sleep well through the market turmoil, make sure that the money you are counting on for the long-term is allocated the way you want. No, I am not suggesting that all your retirement money be in CDs or bonds. You are going to need to have a portion-and perhaps a significant portion-of your money grow during when you are no longer working. More…