COMMON SENSE

AFP – Wednesday, December 9

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PARIS (AFP) – – The Fitch rating agency on Tuesday downgraded Greece’s long-term debt ratings as well as those on four of the country’s largest banks, describing prospects for Greek public finances as negative. Tuesday’s action was a fresh blow to Greece, saddled with high public deficits and debt, as it came a day after another agency, Standard and Poor’s, placed Greek debt under “negative” watch and warned of a downgrading if the government did not rein in its overspending.

The moves by the agencies rattled European markets, with the Athens exchange closing more than 6.0 percent in negative territory.  Markets fell elsewhere in Europe, which analysts partially attributed to nervousness over the Greek situation.  In Brussels the European Union’s Executive Commission urged the Greek government to take “more measures” to reduce its crippling deficit.  “A difficult situation in one euro-area member state is a matter of common concern for the euro area as a whole,” warned outgoing European Union economic and monetary affairs commissioner Joaquin Almunia in a statement.

“It is clear that Greece faces very substantial economic and fiscal challenges… but more measures are required,” he added.  Tuesday’s developments placed the eurozone under new strain because they put Greek debt in a danger zone regarding requirements by the European Central Bank for bonds it will accept as collateral when banks seek short-term funds.

Fitch said that while the four largest banks were likely to perform “adequately” in the fourth quarter this year and in 2010, “there is a high risk that Greece’s weak fiscal position, which mainly caused the sovereign rating downgrade, could accentuate the deterioration of the economy.” “Given the poor historical track record of public finance management, Fitch is not convinced that the substantive pension reform and other measures necessary to contain public spending pressures and broaden the tax base will be sufficiently strong to materially reduce debt.” But the national debt was likely to rise to 130 percent of output before stabilization.

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Technorati Tags: Credit rating agency, European Central Bank, European Union, Fitch, government, Government debt, Greece, Standard & Poor

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Arcording to  Trent of the “Simple Dollar”

Three Questions to ask yourself if you are in your 20’s and want to save for Retirement.

1. If money were no object, what would you do with your time?
2. Are you frugal?
3. Are you interested in having children?

The Simple answer is….

Just worry about the saving for now – don’t sweat the details.

Many people get overly wrought about making sure that their money is in the “perfect” investment. To put it simply, your investment choice is secondary – by a long shot – to simply saving your money as soon as possible and as much as possible. Start saving now. If you don’t know what to invest in, just ask for suggestions from the representative there. Since it’s a tax-deferred retirement account, you can make investment changes later on without any tax issues.

Doctrader says: The most import aspects of long term planing is learning there are market cycles. If you can identify the market cycles, you will be miles ahead in your investment choices!  During bull markets, you should have your money invested in high growth areas of the market through an index fund.  When the bull market begins to wane, you should move your long term investments to a money market position or a  cash position.    If you chose a “stable fund” alternative to cash, you run the risk of losing money due to inflation or hidden land mines within a “stable fund”.

Stable funds usually are guaranteed by an insurance companies.  Insurance companies are subjected to the 7 deadly sins of investing.

These are:

• regulation
• investigation
• litigation
• arbitration
• capitalization
• Taxation
• politicization

These 7 deadly sins of investing will impact your future retirement.   If you are serious about your future, your best option is to “create a product or service” which can launch your career into a small business.  After all, our founding fathers were small businesses.  In  fact, most of new jobs created today and in the future will belong to small businesses.

My suggestion, turn your passion into a profitable small business!

doctrader

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The market media matrix continues to spout their view that everyone should be invested all the time.  The continuation of the “perma bull” lies, is only more evidence that “Joe six pack” doesn’t have a chance in understanding cyclical and secular market behavior.  It should come as no surprise that a company, Vanguard, who manages “other people  money”  through their vast array of failed mutual fund managers, to say “happy days are here again.”  Vanguard’s only concern is “IF you to take your money out of the market”!  Vanguard gets paid to manage your money, why are you not holding them accountable for losing 55% or more of your hard earned 401k assets?  As the article states,  younger workers are still in a state of denial, regarding the severity of this market!  The young workers believe that all is taken care of, simply by the government to declaring “Olly olly oxen free” to all the credit problems that are still present!

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DES MOINES, Iowa – Another major provider of 401(k) accounts says the typical retirement saver now has more money in their account than they did before the stock market began tumbling two years ago. The Vanguard Group Inc. said …

Younger workers with smaller balances caught up the quickest. Nine in 10 participants under age 25 were flat or were ahead of their balance two years ago. About eight in 10 workers in their mid-20s to mid-30s had recovered to 2007 levels.  However, just half of the participants in their 50s and 60s have recovered or gained slightly while half have not.  This was based on Vanguard’s selectively picking  participant balances between September 2007 and September 2009.   I want to know the total return of all their assets from 2000 to present! Given most 401k plans are for long term results, not just a short two year stint.  The overall stock market is up just under 60%, while the markets are still down from their previous highs of 2007 by 25%!   Since “Joe Six Pack” is not versed in the the way Wall Street uses numbers to lie, what will happen to the 60% gain “on paper” to his 401k plan when the market returns to new lows?

Financial News – http://finance.blogrange.com/

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by

STEVENSON JACOBS

NEW YORK — The head of the Federal Deposit Insurance Corp. said Tuesday she’s “very worried” that the nation’s biggest banks aren’t lending enough and warned the economy could take another turn for the worse without increased access to credit.

FDIC Chairman Sheila Bair said the FDIC’s upcoming quarterly report would show that “not many large institutions are doing a very good job of lending.” Instead, she said, some are taking advantage of near-zero interest rates by borrowing dollars cheaply to buy higher-yielding assets like stocks or commodities – a move known as the “carry trade.”

Addressing the rash of bank failures, Bair said the FDIC had enough funds to shut down troubled banks and would tap its line of credit with the Treasury only as a last resort. There have been 120 bank failures this year, …

The Huffington Post

Technorati Tags: bank, Bank failure, business, FDIC, Federal Deposit Insurance Corporation, financial services, Line of credit, Sheila C. Bair

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