Any good long term investments?

The best investment for a child is to get them into a good school with good contacts, this assuming we don't have a bolshevik type meltdown in which case sociopathic children would be the best investment, just don't expect them to look after you in your dotage.
For something more immediate, silver or sterling silver pieces in original condition are becoming increasingly rare due to mental cases melting these down for scrap value.

You never get bank stocks cheaper than now.

If everything goes back to normal, you win huge.
If everything goes worse, you're **** up anyway.

I'm buying bank stocks all over the world, so far a nice profit and they still have low p/e and p/b ratio.

Forgot to say that you have to choose wisely, some are crap and expensive others are heavily underpriced.

I wouldn't buy any UK bank stock. I have Commerzbank AG, Deutsche Bank AG, Monte dei Pascha, BNP, Societe, Credit Agrole, austrian banks and some others in France, Italy, Spain, Greece, Cyprus, Belgium, Asia, JP Morgan, Swiss.... :P

That's a good idea ozy. Any reason why you would not risk uk banks?

Let me get this straight, you've been "investing" in gold since 2002, you are now considering selling to "find another alternative" and in the same breath you're asking for 'any good long term investments" …..for child.

I think at this point I'm willing to just take a wild a$$ guess and say with a lot of confidence that…………you still haven't clued in about what's going on, do you?


P.S. The "buy banks" post is wrong on so many different levels I will not even waste my time commenting.

silver not gold, my bad

@Money Tree

Standard Chartered worth 45 bn €
HSCB 130 bn €
RSBC 20 bn € = Zombie bank
Lloyds 33 bn € = Zombie bank


Not much value in HSCB, good Investment at 4-5 €, now a bit too expensive.
Standard Chartered could be a "decent" Investment.

10 years from now you could probably get more out of these stocks compared to the interest in your bank account. But the main reason is that I think other banks have better risk/profit ratios. But that's just my opinion. Please don't investment your life savings this way.

I for example am aiming for high profits, I don't care if I lose all my money, because most of it isn't mine haha. High credit leverage in combination with nice tax and bankruptcy laws and a decent inheritance in the future made me go this way. ;)


The gold/silver guys again, please be quiet you have no clue. :D

"Please don't investment your life savings this way"



No sh1t !!!! Or, at least if you decide to, learn the meaning of mark-to-model accounting first.

go buy some usesless and **** silver :D

Menelaus is some kind of ****. Some of us don't feel the need to know every inch of the financial system/markets. In fact not many do.

Most  who do don't feel the need to lord it like you.

Can I ask why you bother to post on here? Your input is of no value not once have you posted something constructive or worthwhile.

If you are just after an argument get on the football forum it's much easier there.

Cheers for the reply ozy I'll look into it.

I think he was saying that you already have the asset you need for the financial environment that we are in.

J2 the blokes a total tool.

MONEY TREE 30 Sep 12 10:02 
...............Some of us don't feel the need to know every inch of the financial system/markets. In fact not many do.
............




Trust me mate, those who are on the other side of the trade of those "brilliant" ideas you put up here....DO KNOW. It's their business to know. It's their business to profit at the expense of those who don't know. The sad part in all this is that you seem to be aware that you don't know sh1t, yet you are quite willing to risk your hard earned money at this game, swimming with the sharks and surviving.

And when someone points that out to you, you get hostile. Go figure...


P.S. I haven't the slightest idea why anyone would be compelled to invest in silver in 2002 (!!!!) but I'm sure some incomplete information you processed through your two functional brain cells suggested you should.

Well my two brain cells made a great investment.

They also compelled me to buy commercial property that has also done well.

Go figure smart arse.

WRONG !!!!


You're showing your amateur side again.

When you INVEST, when in other words, you decide to take a risk and put your money at work, YOU SHOULD ALWAYS STRIVE TO MAXIMIZE YOUR RETURNS.

Silver as a return on investment vehicle in 2002 was way down the list. The truly sad part is that I think you don't even have a freaking clue of what I'm talking about.

My investment increased well. That's what it was invested for. Was buying kilo bars for £160 and as you can see its increased.

I would suggest you put your superior knowledge to better use Han on here, to be honest I have no interest in arguing with you over anything as its proven on here you are only here for an argument.

I hope you are better socially than you are on here, I wish you good luck and **** off ;-).

And amazingly I am an amateur. Don't pretend (like you) to be anything else.

I always admit when I'm wrong, and in your case I think I made a huge mistake and I'm prepared to admit it.

You don't have two functional brain cells.

Because if you did, when someone who knows more than you is trying to point you in the right direction, you should consider what they have to say, not throw temper tantrums.





Oh by the way, and I wouldn't do this for many people but you seem like a harmless sort, don't bother wasting your time to "look into" what ozy posted. You'll find nothing, or at least nothing that is transparent. Which is precisely why you shouldn't be "investing" in anything whose balance sheet you don't understand.

fair point, you see its not so difficult to offer an opinion.
I suppose we should be used to your superior persona by now.
Let me put it simply I wish to make a long term investment for my daughter one person put up a suggestion, lots of silly posts then you actually post something of worth.
well done.

I think at this point I'm willing to just take a wild a$$ guess and say with a lot of confidence that…………you still haven't clued in about what's going on, do you?

inform me then melly, im interested.

We got off on the wrong tangent here mate, and I meant what I said that you seem like a harmless fellow despite all the expletives you threw my way, but if you don't get it by now I can't be bothered writing long posts to explain. Let me make this short and sweet:

You were investing in silver at a time when there was no real good reason to tie money up in silver and you are considering selling silver at a time when there's every reason to hang on to it. I would say you are either totally lost or you haven't clued in yet as to what currency debasement by central banks really is.

As for buying banks, you first need to spend some time learning how opaque their accounting is, what off balance sheet entries are and how they work, what counterparty risk really is in a tangled financial web of a mountain of derivatives and if you still like banks, then by all means knock yourself out, buy banks. It's your money, not mine.

Melly

Talk is cheap. List where you have got things wrong on the investment front and then issued a mea culpa and we can judge for sure whether you are an honest misunderstand grouch or just full of pi55 and wind.

Is the use of the Latin "mea culpa" supposed to disguise that you are sniffing my balls again?




Remind me again, what invisible hand has got you by the balls glued to this forum?

"As for buying banks, you first need to spend some time learning how opaque their accounting is, what off balance sheet entries are and how they work, what counterparty risk really is in a tangled financial web of a mountain of derivatives and if you still like banks, then by all means knock yourself out, buy banks. It's your money, not mine."

Of course you need to do that. But you can spent years doing that.

Let me simplify that for you very quickly.

If you're a bit optimistic about the future and want to buy stocks you should buy good and cheap banks right now. Because if you buy other stocks you still have the risk of the banks in your stocks, but without the potential profit. Simple stuff.

If you're pessimistic about the future you shouldn't buy stocks at all, you should go for a nuclear bunker instead.

I think this rates as one of the most amazing examples of circular thinking I ever read.


Here's the problem with this convoluted "simple stuff" thinking:

If you don't know what's on a bank's balance sheet, if you can't see what they are hiding through off balance sheet entries, if you have no disclosure on counterparty risk in derivative help positions, HOW THE FECK DO YOU KNOW THAT THEY ARE CHEAP?

Get a clue before you post this sh1t FFS.


Pretty hard to be "optimistic" about a system who's very foundation is based on infinite growth. Repeat after me slowly so it sinks in.....it is impossible to have infinite growth on a planet with finite resources. It is impossible to keep servicing debt when real growth and debt burden diverge. That is not conjecture, it is a mathematical certainty. Anyone who has bought into the banking cartel mantra that infinite growth is possible is a fool.

The future doesn't have to be a mad max world although I admit our politicians and central bankers are trying their best to get us there. The extraordinary lifestyle we have enjoyed the last few decades has come on the back of a mountain of debt and cheap oil.

The debt can no longer be serviced with organic growth and cheap oil is gone FOREVER. A simpler lifestyle is coming whether we like it or not for all of us. That doesn't however mean living in nuclear bunkers unless the banking cartel decides that exterminating a few billion of us would free up resources for their remaining debt slaves.


"The greatest shortcoming of the human race is our inability to understand the exponential function"

Dr. Albert Bartlett
Professor Emeritus
Department of Physics
University of Colorado

held, not help

Of course you have to crunch some numbers. If you don't know anything about finance, accounting and taxes (tax shield) then it is hard for you to find good banks.

I'm just telling you that if you want to buy stocks you should go ahead and pick some banks. BECAUSE every stock will get dumped if a real financial meltdown occurs.


It has nothing do with it but:

"The greatest shortcoming of the human race is our inability to understand the exponential function"

Obviously you don't understand the exponential function. I didn't know that exponential functions had an end, I always calculated lim -> infinity :(

My whole life was a lie :crazy:]

benny, is that you?

I don't know who benny is.

Who gives a feck if you are or not, there's more posts by aliases now days on here than the real person behind the post, it's become an epidemic with the virus migrating over here from the politics and boxing forums it seems. Let's just say you're just a couple of smiley faces short of matching benny's epic, legendary and unequaled cluelessness.

Next time you pipe up on here however offering "investment advice" try and see if you can back it up with anything else other than "simple stuff" very similar to a silly children's game in a school playground rather than analysis found on a financial forum.

In the meantime, anyone contemplating "buying banks" should spend sometime reading and understanding the following, it could save you a lot of money.




Chris Whalen: The Fallacy of "Too Big To Fail" - Why the Big Banks Will Eventually Break Up.

Interviewed by Jim Puplava

JIM: Joining me as my special guest on the program is Chris Whalen. He’s senior managing director of Tangent Capital.
And Chris, as long as I’ve been reading your work, you've been a critic of the too-big-to-fail fallacy. In your opinion, you think the big guys are going to break up. Why do you believe that to be the case?

CHRIS: Well, the big banks are under an enormous amount of pressure. First off, Fed interest rates; it’s destroying the economics of the business. If you think about your average broker-dealer, repo lending, all of these basic activities that were once normal before the crisis are gone. So the Morgan Stanleys, the Goldmans, they are all sitting there with inventory where they earn nothing on repo; they don’t even bother because the rate is zero. So that’s the first issue.

The second is Basel III. If you look at the new Basel accords that the US is supposed to be adopting, it’s entirely hostile to lending. So I think whether you’re talking about real estate, residential, commercial, we have some really big issues with this regulatory regime. For example, most banks are going to have to get out of the conduit business; that’s going to end up in the non-bank sector. Well, look at where profits came from the big banks over the last seven or eight years. It was mortgage banking; it originates itself. So if I’m even Wells Fargo, which is the last man standing in the US marketplace today, 30 percent market share, I’m eventually going to have to get out of that business; I won’t be able to own a conduit anymore. That’s pretty radical stuff.

So I think the basic assumptions in large bank business models are all being questioned. And so if you don’t react to that as an analyst or, you know, I’m a banker. I’m out trying to raise money for small banks, non-bank lenders, you know, we've started a hedge fund and focus on the financial sector. In each one of those cases, we're not even looking at the big banks because I don’t see them as bankable.

JIM: Yeah. Because your new fund which is going to be invested is more in favor of banks that focus on the old-fashioned lending, avoid the risky businesses like the derivative trading, which so much dominates the big banks.

CHRIS: Oh absolutely. Think about JP Morgan. Here you have a bank that’s a dominant lender, so they actually know when your company is going to go bankrupt. They may even be arranging DIP financing. They’re also trading credit default swaps on the other side. I mean isn’t this is an anti-trust problem? Isn’t this a conflict of interest? Of course it is. And yet nobody ever thinks of it this way because the large banks are seen as sacrosanct, all the payment flows go through them every day — mortgage payments, tax payments, everything else — and the Fed says, Oh, mio my, we can’t break them up. Yes we can.

If I was appointed trustee at Bank of America to restructure the litigation liabilities that are killing that bank, I would have no problem selling five, six institutions in IPOs and raising a lot of money and then we would have five more banks about the size of US Bancorp. I think that would be very good for the economy. So you can break these things up, but in an economic way that’s not going to scare the public; you have to communicate effectively obviously. But I think the economics of these big banks, it no longer works.

I’ll give you another example. Look at Citi. They sold Smith Barney. Morgan Stanley is supposed to be consolidating that whole business on their balance sheet. I think they’re going to have to sell it. The economics are just not there in retail brokerage. And there’s a whole list of other — so look at Wells Fargo with the old Wachovia brokerage business that they bought from Prudential. It doesn't work. They’re driving brokers out in droves. So I think over the next couple of years, these banks are going to have to change their business model to suit the realities. That’s what it comes down to.

JIM: Now, you've often been critics, not only of the banking system, but maybe sometimes of policies by the Fed, and there are some individuals at the Fed who don’t appreciate sometimes your comments, even though at one time, Chris, I believe you worked at the Fed.

CHRIS: I was at the Fed in New York. I was a management trainee and I worked in bank supervision and then the bond department. And you know, however they feel, they feel. But I think the Fed has mishandled bank supervision consistently. I think we should take it away from them and just have them focus on monetary policy, market surveillance; I think they could handle that.

I don’t really have much problem with their monetary policies. They’re doing what they had to do after a period of insanity; right? But when you look at the way that they allow large bank mergers and all of the other policies that the Fed follows, which essentially enforces the monopoly by the top banks and disadvantages community banks, why are we doing that? It makes no sense.

So you've got to remember; these are academic economists who have never met a large bank they don’t love and they’re also really concerned about maintaining the access of the Treasury to the debt markets. So that means you’ve got to try and protect primary dealers, right? But we didn’t do that during the crisis because we lost five primary dealers. They slammed Merrill Lynch and Bank of America; horrible transactions.

JIM: Two issues which I think are related which you've written about recently, which is Greek credit default swaps and also MF Global. And I want to talk about derivatives because the idea — or the proponents for derivatives are saying this is a wonderful way that individuals or institutions can diversify risk. But as you point out recently, in a derivative transaction, there’s going to be one winner, there’s going to be one loser. So at the derivative table, when a contract is negotiated, it usually is the smarter firm with the deeper talent pool who exploits the lesser players who end up losing.

CHRIS: That’s correct. I mean Marty Mayer said to me many years ago, credit default swaps are all about moving the risk to the dumbest guy in the room. And it is a zero-sum game; there is no additive value creation in derivatives. I think, going back to the point about conflicts, though, I would like to see all of these derivative products that can actually be put on an exchange moved out of the bank, so that the bank again becomes a lender and an agent for customers, but they don’t have that principal conflict that you see so much with this whole reporting about JP Morgan and this fellow doing the energy trades out of London.

What’s interesting is that all of his colleagues in New York have already been fired because of the Volcker rule. [6:57] So the principal trading activity here in New York is basically done because the lawyers told JP you have to get rid of all these people.

But again, going back to the conflicts, imagine if you own a company and you’re in distress and you come to JP Morgan and you say, Hey, I need DIP financing. We're going to file bankruptcy.

Doesn't that make you feel a little uncomfortable that the same institution can be shorting you in a credit default swap market while they’re arranging a loan for you for bankruptcy restructuring?

I have a big problem with that and I don’t think we fully understand how many conflicts and asymmetries there are in this marketplace. And to me, the very simple solution, Jim, is to push all these contracts onto an exchange. Get it away from the bank, get the collateral away from the bank, too, by the way, because that’s where these guys make a lot of their money in these bilateral relationships. And then I think we can start to restore transparency, equity and fairness to a market that does have some reason to exist.

You know, credit default swaps are basically ways to short a bond that you can’t borrow. If you think about a public company, right, in most cases you can’t borrow a corporate bond or even a bond issued by a bank because it’s sitting in somebody’s portfolio; they don’t want to lend it. So a CDS gives you a way to create a short position on a given credit. That’s fine, but when you have contracts that have no cash basis, I don’t think we should allow those. They are entirely speculative.

JIM: Yeah, because it used to be, Chris, let’s say I own a bunch of GM bonds or let’s say in the case of Greek bonds and I’m a little unsure about the credit quality so I’m going to go out and buy a credit default swap. Now, if I go to collect, just like owning car insurance and I get in an accident, I turn in the damaged car or in this case the bond that’s in default. But you have a lot of people who are buying this stuff who don’t even own the bonds, so they don’t have to turn in a bond to collect on the CDSs. [8:53]

CHRIS: That’s right. Well, it’s because we allow cash settlements. If the buyer of protection was forced to deliver the underlying — whatever it was, it could be a loan, could be a bond, could be accounts receivable — whatever it is, you could create a spec on an exchange that would allow for that. It’s just the way you can deliver different Treasury bonds against a bond future based on the yield; right? Then you would have some discipline because all of those people have an insurable interest.

But because Wall Street has perverted the legislative process in Washington, we’ve pretended these insurance contracts are not insurance. They should be regulated by the state of New York and the other states that have major insurance operations. But the banks wanted to keep this derivative market for themselves because the basic operations of these banks are so unprofitable. Credit default swaps are the most profitable activity inside most big banks, followed by things like structured notes, which are essentially derivatives.

Those types of activities have very high risk, but they also help profitability inside big banks that really aren’t that profitable. If you look at the retail operation of JP Morgan, it’s probably a loss. If you look at cash securities in the age of deregulation, right, probably a dead loss in most firms. They don’t make money on it. So we've skewed the business model of these organizations with government intervention, regulatory efforts to try and address the problems caused by government intervention.

So today, the little community bank or non-bank lender is really the only business model out there that makes sense, whereas the big banks I think are just going to fly apart because the economics are not there any more. You don’t have to do anything, by the way, Jim, we could just watch.

JIM: I want to talk about another conflict of interest and we saw this with the Greek default or the restructuring of Greek debt. You have this organization ISDA which is dominated by the big banks. It’s the supposed standards setting body for the marketplace and yet they ruled that, well, that really wasn’t a default so the banks didn’t have to pay up. Isn’t that another conflict of interest?

CHRIS: Again, because the banks have taken the old model from the foreign exchange markets and the interest rate markets and they’ve migrated what used to be a swap — in other words, I would pay you a fixed rate, you would pay me a floating rate — and there’s nothing wrong with that contract. It’s fairly transparent; it’s pretty well standardized. But we then migrated that legal template to credit default swaps and so ISDA is now in a position where not only do they have to set standards for this over-the-counter, non-exchange market in interest rates and currencies, but they almost have to become an arbiter of default. And people feel somewhat uncomfortable about this because each case is essentially subject to special judgment on the part of this private entity that is the rule maker — the de facto rule maker — to this OTC market in credit default swaps.

I think that’s what makes people a little antsy. If you had a mutual exchange where all the clearing members are transparent, where you have a credit committee and you have published rules for each contract, then there’s no issue. The default is defined, everybody understands what default is. That’s it. So I think the subjectivity and the lack of transparency in the ISDA process is a big problem for people. And remember, who controls ISDA? The big banks. JP Morgan.

JIM: Let’s move on to MF Global because if there is a lesson here, it seems the lawyers and the lobbyists for the large banks have **** the game in favor —

CHRIS: Oh, very much.

JIM: — of the OTC market and large dealers. So what happened here? What’s going to happen to that $1.6 billion? Will the customers ever get that money? And if I’m a fiduciary and I’m holding customer accounts, I’ve got to be leery in terms of who I’m clearing with.

CHRIS: Well, the 2005 bankruptcy reform legislation, which is one of the most hideous laws ever passed by the Congress, strengthened the safe harbor in bankruptcy for secured lenders. Why did they do this? To protect the OTC derivatives market.

Unfortunately, one of the side effects has been that if you’re a customer of a broker-dealer and the broker-dealer fails, in almost every case you’re not going to see a receiver appointed, you’re simply going to have a bankruptcy trustee. Now, why is that important? Well, in Madoff and MF Global, what you’ve seen in each case is that the very long standing view of the court and in the law that says that the trustee is tainted by the estate and can only act on behalf of the estate; it essentially prevents the trustee from going after third parties on behalf of the victims. So in this case the estate is MF Global, the failed broker-dealer, but the trustee can’t act for the customers. The customers have to organize themselves, hire counsel and go into the bankruptcy litigation. Even then, their chances of recovering funds, in this case by clawing them back from JP Morgan and the other secured parties is small because of the changes in the bankruptcy law.

Unfortunately, in the US, since the 30s we’ve seen a decline in the use of receivership. You saw a receiver in the case of the Stanford Group. In that case there was no bankruptcy. The creditors just went to a federal district judge and said, there’s fraud, there’s disarray, et cetera. We need a receiver.

The receiver works for the court and the only standard a receiver is following is equity. It’s very different from a trustee.

So I think what MF Global and Madoff illustrate is how the large banks have perverted our legal system and have made it difficult for bankruptcy judges to even do the right thing. You know, essentially what we've done is endorse fraud and we’ve said well, if management of a broker-dealer steals customer funds and uses it to pay a margin call by a lender, then the victims of the fraud can’t get their money back. That’s essentially what you have with MF Global. So we need to repeal the 2005 bankruptcy reform in total and I think also tell the courts that it’s okay to appoint a receiver where you have fraud.

And I think, you know, financial people and investors — anybody who works in these markets — has to know that as soon as you take a loss, you file a claim in the bankruptcy and then you go to the judge immediately and you ask for a receiver. You can’t wait six months. You have to understand what your rights are. And even if you go to the federal district judge who supervises the bankruptcy court, that’s okay. Put the issue before the court. Argue the merits and I think you can win.

JIM: What was amazing to me, Chris, is in the ’91 S&L crisis, there were a lot of white-collar crimes; a lot of individuals went to jail over that scandal. We recently talked to William Black and he said as a result of the 2007-2008 crisis, nobody has gone to jail. In the case of MF Global, there have been no allegations — or at least nobody is being held under criminal charges. Has that surprised you that $1.6 billion disappears and everybody pleads ignorance in terms of where it went?

CHRIS: Well, no. This is Barack Obama. Look, Barack Obama is bought and sold by the big banks. He could have bought a variety of claims against people who use deception in a securities transaction. It’s illegal; it’s a violation of most state laws and it’s a violation of the uniform securities act. But nobody has bought the claim. He’s waited long enough now that the statute of limitations has run on most of these claims. So this is really Barack Obama. I mean if Mitt Romney has his act together, he should crucify Obama over letting the bankers get away.

See, what judges don’t understand, especially at the federal and appellate level is that the fraud in the US today is just as bad as it was in the 20s. And when Louis Brandeis came down with his great decision in 1925 in Benedict v. Ratner, he basically slammed the door shut for Wall Street. We couldn't do structured securities deals for 25 years until they had the revision to the Uniform Commercial Code in the late 50s after World War II.

Unfortunately, the fraud today is at least as bad if not worse and because the politicians are, as I say, bought and sold by the big banks; that’s where they raise all their money. You know, Obama was just up here in New York raising money from the banks. He’s let them go. And I think it’s only when the public gets angry enough to start voting these people out of office and you start maybe seeing some attorneys general at the state level — like Eric Schneiderman, who may want to run for higher office — do the right thing and bring fraud claims maybe under New York state law (well, It would be better under New York law, in fact, it would be easier to prove), then you may start to see some justice. But you know, Barack Obama dropped the ball. It’s very simple.

JIM: A final question. You've been a critic of the Volcker rule, even though Paul Volcker was a friend of your father’s and family. You don’t think it does what it’s supposed to do. [18:13]

CHRIS: No, the Volcker rule is bizarre, Jim. I mean think about it. What happened in the subprime crisis? We had bad securities, we had bad loan underwriting that went into those securities, right? Did prop trading cause any failures? No. And the Volcker rule is primarily focused on shutting down own-account trading by banks.

But what are the side effects is that you know, in my market for example, big banks own the securities issued by little banks. The chief investment officer at JP Morgan is one of the biggest investors in small bank securities. He’s not allowed to trade around his position anymore; they’ve had to fire all those people. You've probably been reading about the whale trade in London. That guy works for the same group, he’s probably going to be let go because of the Volcker rule. So what’s happened is you've had a decline of maybe a third of the securities, of the liquidity for small banks and regional banks because of the Volcker rule.

Is this what Chairman Volcker intended? I doubt it, but I don’t think anybody thought it through.

You know, you've got to always remember in a democracy we always do the wrong thing, and so, you know, we had a problem with securities fraud, we had a problem with lending and bad underwriting, so we come back with consumer protection, right, foreclosure abuse, neither one of which are significant compared to the fraud, and we have the Volcker rule, which is almost a Calvinist punishment for big banks: You can’t trade your own account.

But what did that have to do with the crisis? Nothing. But this is what we do in a democracy; we always do the wrong thing first. And my hope is that after the election, we’re going to come back and look at this again, hopefully revise some of these laws which were pushed by the Democrats by and large.

And you know what, they’re crushing real estate lending, they’re crushing other aspects of credit creation in this economy. And when we don’t have any job growth this year and the year after, maybe we’ll think about this again. We’ll come back and we’ll fix it because the current Dodd-Frank act and Basel III and all the rest of it is going to kill us. You’re going to see home prices going down more next year and there maybe people who get angry.

Unfortunately, that’s the way our system is set up. We have to wait until the pain level gets so intense that you start to see change in Washington. We're still not there yet believe it or not, after five years of this.

JIM: Chris, I mean the very issues you and I have been discussing here, for the average investor out there who probably doesn't understand the implications of what’s going on here the way that you have explained them, is it going to take somebody a little bit more sophisticated — an attorney general who wants to make a name for himself — who goes after this and starts cleaning this up.

CHRIS: Well, I think so. You know, unfortunately, we've got the third string on the field today. If you look at the people that have guided the country through the Great Depression and you know, Jesse Jones and some of those great figures who literally restructured the US economy, we don’t have people of that caliber on the case right now. Look at Tim Geithner; he has no banking skills whatsoever. He has got two festering situations, Allied Financial probably the most significant. You could see a bankruptcy for Allied before the election. So what do you think that’s going to do?

The other fascinating thing is the credit union industry. The administration, the Fed are all hiding the problems in the credit union sector; they don’t want anybody to know about it. They’ve been actually stuffing the paper in the Fed in New York. So you know, these things are going to fester and they are going to blow up.

And the ability of the third string to hide these problems, you know, remember AIG, nobody thought that was going to blow up. So I suspect we're going to see another systemic event soon. And the definition of a systemic crisis is something that surprises the market. So to the extent the market thinks we’re done with all the bad stuff in the banks and the financial markets, when we surprise them and tell them, no, we're not done, and we have to restructure a couple of good-sized bank holding companies, then I think people are going to start to question why we have the current leadership. And you know, to your question, maybe we need different leadership.

JIM: All right. Well, listen, Chris, I know you have a busy schedule. I want to thank you for joining us on the Financial Sense Newshour. And for our listeners, I highly recommend you read Chris’s book called Inflated: How Money And Debt Built the American Dream.

We've been speaking with Chris Whalen senior managing director at Tangent Capital.

Chris, thanks for joining us on the program.

CHRIS: Thanks a lot, Jim

I can back it up if I want to. But any word written for you is a waste of time anyway. That's why I keep it simple. Do you want me to write 100 pages?

Unfortunately for me I use my own mind and can't copy&paste text walls.

100 pages??? Really???

Try writing a single paragraph which actually INCLUDES some analysis not motherhood cliche  statements like "BECAUSE every stock will get dumped if a real financial meltdown occurs" Wow, really? You think that in case of a collapse the equities markets will suffer? I need to remember that, it's very original.

Ask the RBS shareholders if they think a real financial meltdown took place, or better yet those of Lehman's or the banks on this list (http://en.wikipedia.org/wiki/List_of_bank_failures_in_the_United_States_(20... and see what they tell you.

Keeping it simple is another way of saying I can't look any deeper than the surface.

Ok melly thanks for the reply the thing I find strange is the comment " no real reason to be investing in silver"

In 2002 I felt that it was an area that was easy to invest in and one that would increase in value.

This would seem correct now.

I dont feel the need to be searching for the best thing day in day out just an investment that will make a few quids.

How do you invest your money?

I think the General Motors and other investors are very angry at some banks because they wrecked the economy and made them go bankrupt.

Where do we go from here? The list you posted is the past. Does it get better or worse?

If I buy stocks from a car company I face the external risks of the banks. If it's get worse with the financial system I'm more or less screwed with every stock I buy.

If the situation gets better I don't profit that much, because my profits depend on the car sales and not on the well-being of the financial system.

You have to make up your mind about the situation right now and then ask yourself what it could the situation be in 10 years?
I can find many arguments for both base scenarios.

That's the stuff you have think about first. Then it is about finding value investments. Use fundamental analysis.

What is a company with 2bn profit and 25bn equity worth?
What will the company be worth if the profit rises to 4bn?

That's the basic stuff, the other is [b]boring information collection and calculating scenarios and buffers.


If I can get money for 1% and lend it for 5% than that is a nice profit. Looking at the long-term history you'll see that banks flourish after a crisis happened.
For example the 1 trillion tender of the ecb for 3 years at 1% is nothing but pure profit for banks. It will generate about 100bn € in gross profits in the next 3 years.

@ MONEY TREE

You are still missing the point mate. Trust me I know what the price of silver is today so I'm not trying to take anything away from your victory parade. What I'm still saying however is that there were no compelling reasons to buy silver in 2002 (as they are today) and on a return on investment basis, silver was near bottom of the list in 2002.

You could have bought silver at the start of 2002 for about $4.50/oz. You could still buy silver at that price 18 months later. So far you haven't gained a penny and you are not outrunning inflation. In the spring of 2004, that's about 25 months later, you could have bought it at $5.50 (so less than 20pc higher than the 2002 price). Fast forward to the fall of 2008 and you could buy silver for $9.00/oz essentially doubling your investment after almost FIVE YEARS, ON AN ASSET that yields NO INTEREST and PAYS NO DIVIDEND. I've seen punts on penny stocks that double their value overnight.

So I'm still puzzled by what compelled you to invest in silver in 2002 and achieve minimal gains for years as opposed to putting your money at work during that period in higher yielding assets. I'm all ears though, so if there's a good reason beyond "I like silver and that's that", then let's hear it.





@ OZ

I have no idea what school you attended to learn about using "fundamentals" in financial analysis but you are fully entitled to a refund.

because I purchased it as a long term investment and was prepared to hold tight for as long as required.

now its not really going anywhere I thought maybe a time to sell and move on.

It would seem from your replies that you think that wrong, so where do you see silver going?

I suppose its all down to your motivation, I am happy as long as I have a return at some point.

So basically, the answer is "I like silver and that's that".

Because although you keep repeating yourself, you still haven't provided a single morsel of information as to WHY silver was singled out by you, an INDUSTRIAL metal with some numismatic value, as a particularly good long term investment in 2002. I can tell you some good and compelling reasons why one should buy silver today NONE of which however existed in 2002.

But to each his own mate, if we all saw the markets the same way, they would be no one the other side of our trades.

As to where silver goes from here, my answer is simple. INVEST IN ANYTHING CENTRAL BANKERS CAN'T DEBASE.

I wanted to have metals as felt undervalued.

I also bought gold but I sold that off to fund a deposit.

I don't need to analyse like you as I presume it's your job too do that day to day.

I had a decent return from that and that's what I did it for.

Now with this thread I was just seeing what people felt were good long term investments to do for a child.

I wanted to have metals as felt undervalued.

WHY did you feel metals were undervalued? Obviously the market didn't agree because they stayed "undervalued" for another year and a half. Rhetorical, don't bother answering, I think I already know what you'd say.

I also bought gold but I sold that off to fund a deposit.

I feel for you because by the end of the day gold may be the last man standing at the end of this debacle.

I don't need to analyse like you as I presume it's your job too do that day to day.

It's analyze, not analyse but I get your point. If you are putting your hard earned money at risk, especially for a better future for your children, you better learn how to analyze and analyze in depth (as well as apply some critical thinking). And no, I have a degree in economics but I work in M&A, not in a bank, investment house or a hedge fund, so I don't analyze all day. It's only your perception that I do.


I had a decent return from that and that's what I did it for.

You could have had better returns elsewhere, that's the point you're still fail or refuse to understand.

Now with this thread I was just seeing what people felt were good long term investments to do for a child.

You have what you need in your hands now, hang on to it. If your financial condition is such that you can afford to also buy gold, physical not the paper kind, do it. Protect your wealth against central banker lunacy and theft. Do it for your child..........but I'd wait until the next price dip to buy. We've gone from $1,550 to $1,780 almost in a straight line so we're due for a correction.

you're = you

I could of had better returns that's for sure. The vehicle I picked to invest in long term has provided an increase in the funds that's all I was looking for. How many people pick the top investment every single time? Anyone who says they do is only fooling themselves as with some many unpredictable events it would be impossible to get it right 100% of the time.
I sold the gold to fund part of a commercial property, selling it meant I could buy with no mortgage. This property was cheap but he rent is high so it will be paying for its self in 7.5 years now for me that's very good.

Plus the other thing hat puzzles me is the year and a half comment, IMO that's a short amount of time for an investment I'm not looking for volatile investments that fluctuate I'm looking for steady growth.

I take your point on the silver and will hold fire selling it

One question to anyone is though do you not think that the price should of kept increasing? The economy is no better but the price has stagnated.

I don't know mate, just when I think there's some hope for you you go and post this.

Do you have any idea what has happened the last few months with a commitment from the FED for UNLIMITED printing to buy MBSs and the ECB for UNLIMITED printing to buy sovereign bonds? Do you understand what that means? Do you understand the extend that central banks including the FED, ECB, BoE, BoJ, SNB and China have conjured money out of thin air and will continue to do so? Do you have any idea of the amounts we are talking about?

Do you understand that the economy and the markets have disconnected? Do you understand that price discovery has been killed by central bank intervention? Do you understand that the price of precious metals is TOTALLY CONTROLLED by the FED through proxies? Do you understand that for PM prices to reflect the money printing that has taken place and will continue to take place (yes, for the last friggin time, THERE'S NO PLAN B) central banks must first lose control?

I don't think you do, because if you did, you wouldn't be asking silly questions about the price of silver stagnating and where it's going.

Do you understand what nominal GDP targeting is? Well you better look into it and understand it because that's what's coming next.

No I prefer to remain positive and not be dragged down by the doom and gloom!!!!

Fingers crossed and all that!!

:-( :-) :-)

And the reason I say stagnated is that if everyone was buying it to hold in case your scenario occurs then the price would increase or am I wrong ther iyo

I don't think I'm getting through to you

What "doom & gloom" mate? Since when is stating reality considered "doom & gloom"? This has nothing to do with being an optimist or a pessimist, it has everything to do with understanding mathematics and geology.

The system will fail because it was designed to ultimately fail from the outset. All ponzi schemes eventually come to an end and this is what today's "money created through debt" system really is, a ponzi scheme. Try and internalize that if you can.

Today's money system needs infinite and exponential growth to pay the coupon, otherwise it collapses. It's simple mathematics. That's what the power of compounded interest does. Organic growth now is nonexistent ANYWHERE when you use the proper GDP deflator, not the fictional rate of inflation that lying governments concoct to hide central bank theft. And cheap oil that enabled this massive growth through debt is gone forever. You can't cheat geology.

The only reason the system hasn't collapsed yet is because the money cartel has taken unprecedented and often unlawful actions to intervene to protect their members. Central banks have gone on a money printing orgy to stop the collapse and your government started borrowing on your behalf whether you like it or not to keep the system alive on life support while a miracle comes along. No miracle is forthcoming.

This can delay the collapse but it can't stop it. Because contrary to most people think, central banks don't have unlimited power. Eventually credibility in "policy decisions" erodes away and faith in fiat money is lost and the whole stack of cards comes tumbling down. It played out this way many many times in the past and this time won't be any different.

You appear to have invested in silver without evidently knowing why, you claim you are taking a long term view because of child yet you seem to be blissfully unaware where these events are taking us and you're still trying to make sense why the price has "stagnated" when there is reams of evidence that the FED is in complete control of the PMs markets. I think you need to invest a little more time understanding this stuff.

Buy PMs, particularly gold WITHOUT leverage and WITHOUT money that you may need for other uses in the foreseeable future and then.......LET BERNANKE DO THE REST FOR YOU. I assure you he will, there's no Plan B. They have no other tool than the printer and he will hyperinflate the trillions of unpayable US massive debt away but printing the currency into oblivion. But not before the greatest theft and wealth transfer to his friends first takes place. This is the phase we are in the middle of today.

If the real thieves in society, your government, doesn't come after your gold through various schemes "for national security reasons", I assure you your daughter will be thanking you some day for having enough smarts to protect part of your wealth NOW before central bankers transfer it to their friends.

I've said more than enough on his thread, you're on your own now. Good luck.






"People cannot stand too much reality"
Carl Jung

That's an interesting view, so in your opinion anything bar pm's will be near worthless. Have you sold your house and car yet?

Indulge me once more and tell me how you are protecting yourself against this impending doom.

Btw I'm interested and not taking the pee, I had you down as a. Argumentalist but you proved me wrong.

Apologies.

No need to apologize mate, I've been called a lot worse on this forum.

It's in my nature to challenge conventional wisdom, probe and try and understand things below the surface. Something that has served me well in business and life in general but sometimes also gets me branded as "argumentative". I also don't suffer fools lightly (consider it a character flaw of mine) and unfortunately taking issue with some of the massive drivel I've seen posted on here over the years disguised as "financial advice",  can also be construed as being "argumentative". Last but not least, because of some prior work experience (a half a lifetime ago) in basically what amounts to the UK's "Ministry of Propaganda", I've learned never to accept events and stories promoted by government and a complicit media at face value. There's always an hidden agenda. Openly challenging those stories and positions on here also has managed to earn me the "disagreeable" label.

I am who I am. No one is forced to read my posts and there's a great feature on here called "ignore poster". So those who don't like my style or what I have to say have only themselves to blame.

I have been posting for a long time now on this forum so there's no secret how I feel about PMs. I was touting gold $1,200 ago and getting flak for it. I have been increasing the percentage of my wealth in gold bullion over the last five years to about 50pc now. This may surprise you but I'm also invested in equities (large cap with no debt load and paying nice dividends, also food producers/processors and the medical sector). Inflation expectations will drive the market higher and in the event of a complete collapse there will always be hard assets left behind in the case of large cap and the need for medicine and food will intensify not go away). Although I like PMs I definitely do not like miners for a lot of reasons but that would be a completely separate post if anyone wanted to know.

I don't consider the two properties I own an investment and they are both mortgage free. My property is London has gone up in value from it's pre crisis price as I'm fortunate enough to own in the high end of the market which has mostly been immune to the downturn - not all real estate markets behave the same way. My property in France which I bought more recently was purchased for the same price it was bought for in 2004 and will probably be worth the same (although my wife has sunk a fair bit of change renovating the place) years from now. Rural France never has never had a real estate bubble and likely never will so the prices have more or less remained flat. Besides, I don't plan to sell, I have two daughters that these properties will be passed onto. As for my cars, although all three (two here for my wife and I and one in France) are brands with high resale value, I consider them nothing more than a depreciating asset and are purely for our enjoyment.

Nice chatting you but it's time to go on discussing other things, like for example the reasons why the Spanish bank stress tests were a sham.

Quality 50% is a high amount so you must have huge confidence. I messed up somewhat as I have a mortgage on my house but he commercial properties are mortgage free in hindsight I should of had it he other way.

I suppose the fact you are prepared to challenge opinions is why you get the abuse, but you have changed my mind and also opened my eyes a little. I will try and resist any cash savings and continue with pm's.

I like your food producers comment as that was one thing I had thought about. No matter what state the economy is in people still need to eat. They also need medication failing that a huge load of alcohol to forget their troubles.

Don't forget dark chocolate and tampons

Melly

Still deflecting I see. I thought you would man up and give me at least one occasion where you have called it wrong on financials and then admitted your mistake. It seems I called that wrong. How was I to know how truly gutless and spineless you are?

By the way not only is it poor form to pull someone over their punctuation but to do so and then get it so spectacularly wrong is even worse. I know your every post causes most of this forum to have an attack of the zzzzzzzzzzzzzzz's but do you really have to populate so many of your words with a z when you should be using an s?

It still remains the English language so analyse is perfectly acceptable. Don't be so rude to people you errant fool. I can't be bothered to point out where else you have done it but unlike yourself it is all there.

Sorry mate, not good enough.

You're not getting a free pass just to amuse myself anymore.

Answer the question.

What invisible hand has got you by the balls and keeps you glued to this forum?

You can sing and dance for me all you want but you still need to answer the question.

What invisible hand has got you by the balls and keeps you glued to this forum?

Answer the question or........I will answer it for you and you might not like what I have to say.



(HINT: chronic psychosis, addiction, serotonin, single, sociopath, alone, addiction, wheelchair, windmills, sickness, sociopath, 13900, addiction, aliases, sick, depression, anger, SSRIs, chronic psychosis, addiction)

Answer the question

At least you didn't write queztion. You keep learning and I'll keep teaching son.

No, I'm afraid not, not even close to being good enough.

Ever since you showed your face on here months ago now and despite your addiction to incessantly posting on these forums as evidenced by close to 14,000 put up by you in a very short time:

You never contribute to any financial discussions , you just don't know enough.

You never opine on anything financial, your vast ignorance would be on display.

You never debate anything financial, most of the stuff posted on here is way over your head.

You never start a thread related to finance, your knowledge is anecdotal and everyone can see that you all fluff and no substance.

And neither do the other two aliases you use on here.

Yet, you're glued here 24/7



You look for your daily serotonin fix, that you do, but that's about it.



Soooo, answer the question.

What's the invisible hand that's got you by the balls and keeps you glued to this forum?


Answer the question or I'll answer it for you and I'm sure you're not going to like what I have to say.

HINT: chronic psychosis, addiction, obsession

Do you know what zugswang is in chess?

Well, you better find out, because that's the position I put you in now.

Answer the question or put your tail between your legs and.....resign.

It must have been killing you waiting behind the curtain until I posted. You don't even bother hiding the obsession any more.

I bet you wish you had stayed on the boxing forum, eh?

You are the one desperately trying to get a finger nail inserted into my ball sack so you can cling on. Have some dignity man.

And have some dignity. Stop starting so many love letter threads. I get it but sadly for you you aren't getting it from me. Find somebody else to have your mid life crisis over.

More strawmen, more confused diatribe, more tilting at windmills, more......well, how shall I say.......more of the same.

I know. But enough about you......

Now stay there and be a good boy.