Debt Ceiling Nonsense and Value of US Dollar

[Alabamaboy!]

Any American can get a CD in Brazilian reals at www.everbank.com - with which I am not affiliated in any way.

I checked into this company and was ready to buy the CD but they told me that there was a fee to buy and to sell. I think it was 1% or something like that which seemed too high, so I invested instead in some Brazilian ETF's which immediately tanked and are still dropping. I have been following the markets in Colombia, Chile, Brazil a little bit because it seemed to me that they would be great bets even if the US melts down, but it seems that the US "disease" has infected all corners of the globe, so that when the economy goes down here, we take everyone else along with us.

[Researcher]

I checked into this company and was ready to buy the CD but they told me that there was a fee to buy and to sell. I think it was 1% or something like that which seemed too high, so I invested instead in some Brazilian ETF's which immediately tanked and are still dropping. I have been following the markets in Colombia, Chile, Brazil a little bit because it seemed to me that they would be great bets even if the US melts down, but it seems that the US "disease" has infected all corners of the globe, so that when the economy goes down here, we take everyone else along with us.

   When the US sneezes the world gets the flu.The global economy has many countries connected.When it comes to crisis you can run but you can't hide.

       Researcher

[benjio]

The recent debt ceiling nonsense, although it didn't significantly affect the market, cost me about $600 when it was all said and done. And I have a VERY diversified stock portfolio. Stocks are really all about people, how they think and what they want. No market analyst can predict it, no government policy in a pure capitalist system can do much to control it.
 
Believe me folks, in this global economy, there's still a lot of money to be made out there. My money is in Brazil right now and it's in Brazil bigtime. I work for one of the largest drilling and oil tools corporations on Earth. If you all could see the things that come across my desk you'd be throwing your money in the same direction. I'm just a mid-level IT guy, but all operations need technical support, so for me it's just a matter of being able to read between the lines of what I'm looking at. There are a lot of variables that come with oil futures, but drilling for oil is a different story. At this point, it has to be done, regardless of whether the price per barrel goes up or down. Companies/countries will continue to pay handsomely to have it done safely, as economically efficient, and as environmentally friendly as possible.
 
Petrobras Brasileiro is a winning stock if anyone plays the market. I won't go into details here, but my knowledge of their earning potential is far from a secret and just takes a little research. After some recent declines, they'll see huge jumps in share value within the next couple of years and they pay excellent dividends.
 
Weatherford International, the company I use to work for, is also a safe bet. Their stock took a serious blow because they built the casings on BP's Deepwater Horizon Rig. In the last couple of months, Bernard Duroc-Danner, WFT's CEO, has settled with BP to pay them a lump sum to relinquish all financial responsibility for what happened on the rig. Their stock will soon begin to increase again to reveal it's true value. Weatherford may be one of the few stocks I believe in for the long haul. They specialize in technologies that make the most out of wells that are on their last leg of production. As untapped oil reserves become more scarce in the next 25 years, I predict Weatherford will surpass companies like Halliburton (only in the oil field aspects of their business), BakerHughes, and Schlumberger with the innovation of the technology they are developing now.

[Alabamaboy!]

Do you think any stock is going to survive when huge players like USA, Europe, and then China (after it loses its two biggest customers) are heading down the tubes?

I was really hyped on Colombia and Brazil, but I think when you take out 3 superpowers (superconsumers) such as USA and Europe, there will be nowhere to hide.

I would like to know how much of the market cap of companies like Petrobras Brasileiro are owned by Brazilian citizens, and how much is owned by US and European investors who can freak out at any moment and make a run for the bank and put there assets into gold, silver, or cash.

Because I am hoping to semi retire soon, I need to find a way to make about 6-8% safely on my money. Consistently. And was thinking the safest way to do that would be a CDT in Colombia or Brazil, and soon, maybe even the US if the interest rates start spiking due to the credit downgradings.

[benjio]

Do you think any stock is going to survive when huge players like USA, Europe, and then China (after it loses its two biggest customers) are heading down the tubes?

I was really hyped on Colombia and Brazil, but I think when you take out 3 superpowers (superconsumers) such as USA and Europe, there will be nowhere to hide.

I would like to know how much of the market cap of companies like Petrobras Brasileiro are owned by Brazilian citizens, and how much is owned by US and European investors who can freak out at any moment and make a run for the bank and put there assets into gold, silver, or cash.

Because I am hoping to semi retire soon, I need to find a way to make about 6-8% safely on my money. Consistently. And was thinking the safest way to do that would be a CDT in Colombia or Brazil, and soon, maybe even the US if the interest rates start spiking due to the credit downgradings.

Bama, excellent point and question. Like I said before. No one knows. To be honest...it's up to us as consumers and citizens to demand the necessary changes from our lawmakers, and change the way we manage money ourselves. As someone mentioned in an earlier post, the bulk of the American public is oblivious to what is really going on. Things haven't gotten so bad in United States that people feel the need to revolt. The powers that be have intelligently found a happy medium of tolerance, where people aren't rioting in the streets, but they are still slowly filling their pockets; widening the gap between the rich and the poor everyday. I, as one man, have limited power and can't do anything about it but educate those willing to listen. I'm making what I can while I can and heading for the border when the $#iT starts falling from the sky.
 
I'm optimistic about the market because I'm still making money off it. People that put their money into 401(k)'s, 403(b)'s, etc. and pay no attention to them; assuming other people's decisions are making them money have always been a mystery to me. I know people that have 5% of their income going into 401(k) accounts and they don't even open the statements they get in the mail. INCREDIBLE!!!
 
I was taught by a very rich man I know to look at stocks as termporary high yield investements. "Trading stocks should be treated like a long game of poker in Vegas...come up as fast and as much as you can, then know when to walk away from the game." While I believe in Brazil now, I fear for their future. They might very well be another Trinidad and Tobago, which had a huge economic burst from the discovery of vast oil reserves a few decades back, but is slowly on the decline as those reserves are pumped dry. For now, there's money to be made for those that decide to capitilize on that market. Petrobras will see significant gains in the next five years, but I'll be selling the stock I have for them within the next three when I think it will max out.

[robert angel]

While many investors tell you not to play the market, but to 'park it and forget about it' until you're ready to retire, that's because people who didn't have a lot of wealth--the folks putting $75--$500 a month into 401 and 403's--it can vary obviously, all too often pulled their money out time and time again, AFTER what they were into plummeted.
 
The savvy, investors move around quite a bit more, from stocks, commodities and yes, even tax free utility and municipal bonds, to 'bottom fishing' the fortune 500, the Dow and the NASDAQ when they hit all time lows. They were the people who were scooping up the likes of GE and Alcoa aluminum when they were at historic lows, to name but a couple.
 
It seems many of what were once seen as cardinal 'rules of investing' for the masses have changed or that the masses should themselves change, although the really big players have long used their own rules and guidelines, buying when others where running in panic.
 
'Bottom fishing' and moving on, once you've reached a predetermined point or see clear warnings up ahead that advise doing so is alive and well.
 
Like the Judge said: "Boy-- Ignorance is NO excuse!"--GUILTY!

[benjio]

The savvy, investors move around quite a bit more, from stocks, commodities and yes, even tax free utility and municipal bonds, to 'bottom fishing' the fortune 500, the Dow and the NASDAQ when they hit all time lows. They were the people who were scooping up the likes of GE and Alcoa aluminum when they were at historic lows, to name but a couple.

Well said Robert. I started playing the stock market about 5 years ago at age 25 as a personal experiment. The first time I made $50 in one day, it became an addiction. I'm constantly moving money. Outside of my IRA and my house I can liquidate any asset I own in 24 hours. Currency exchange is something I've dabbled in from time to time, but it's entirely too risky and unpredictable. I asked Jamie two years ago should I start buying Colombian Pesos to save myself money for future trips when the exchange rate went from roughly 2.400 to 2.000 in a matter of months. He told me it always fluctuates and it wasn't worth taking the chance. While $10,000 USD would have gotten me $20,000,000 COP then, at today's exchange rate I'm only getting a little over 17.5 Million. 2.5 Million Pesos is a lot of money in Colombia. That's spending cash for at least two trips. Oh well, you live and you learn.
 
The reason I think most people don't take an active role in their investment careers is it's just something else to worry about. But personally, I'd much rather sit in front of a computer and press a few buttons to make a $2000 in a few hours as suppose to working a whole week for that. 401(k)'s are fine. They're conservative, long term methods of building nest eggs. For me the return is too minimal though. I like to see the money build in front of my eyes. If everything goes as planned, and I'm lucky enough to see it, I plan on cashing out at 50 and picking up where Dennis Levy left off in Colombia...If I'm not married of course.

[Colgando]

Benjio, you have a high risk tolerance, I like it for your fast money! Brazil is down 19% this year, but Petrobras is a great company, not sure what their YTD return is. I listened to their Investor Relations Representative once in person, they have a good thing going at that firm, def a good company to buy I think in the energy space. Also, people buy Life Goal Funds in their 401ks these days, essentially managed portfolios within the 401K. The trades and re-balancing happen within the fund by the manager, mostly passive investing, ETFs, which is probably the best style of investing for 85% or so of people.


AB: The emerging markets are building out a consumer class, will take time, maybe a generation, but the 21st century belongs to Asia, as the 20th century belonged to the US and as the 19th century belonged to Europe. This is evidenced by 40% of S&P profits being generated outside of the US, much of the profits being generated in Asia. Incredible number, the global economy is becoming less and less dependent on the US with each passing day.

[Ray]

 
Tea Party:   3
 
Commies:    0
 
 
 
 
 

[braziliangirl]

Petrobras Brasileiro is a winning stock if anyone plays the market. I won't go into details here, but my knowledge of their earning potential is far from a secret and just takes a little research.

Benjio,

Have you heard of the EBX group, especially OGX (OGXP3)?

[braziliangirl]

While I believe in Brazil now, I fear for their future. They might very well be another Trinidad and Tobago, which had a huge economic burst from the discovery of vast oil reserves a few decades back, but is slowly on the decline as those reserves are pumped dry.

I feel just like you. But I hope you know the economic growth is not just because of pre-sal. In fact, I'm pretty sure it has just little to do with that.

[euforia51]

When the stock market tanked my 401k lost alot.I kept up with what was going on but I noticed that when Obama made a speech after he was elected the stock market dropped even more.By moving in and out of the market using this info I made alot of my losses back. Just recently it was in the news that used car prices were up because everyone was hanging on to them longer.The 2 year old gas saver I had was worth a few more grand than I owed on it so I traded it in.I now have a brand new car with a lower payment and I owe as much as I did on the one I traded in.That is due to the fact I took advantage of the Cash for Clunkers program on the vehicle I traded in on the 2 year old car.

Buying gadgets is OK if you can actually use them.

Hey there Researcher...

I would venture to say buying gadgets is OK if you can afford them. But you must also remember where they come from. If you're anti-China ... better think twice before you make that next smart phone purchase. It seems we all like to sit around and bitch about China being evil, prosperous, and opportunists. We did the same thing in the late 70s and 80s when the Japanese were kicking our asses with their Hondas and Toyotas. Our "Big 3" was putting out garbage ... and still sucking gas on top of it. The Corvette of that era was a freakin' joke. And lord help you if you rode a motorcycle and wanted to "Buy American." Now this time around, it is China ... like the Hondas and Toyotas we've been gobbling up from the Japanese for 30-some-odd years now, we have to have our gadgets ... China is happy to make them for us ... and we are even happier to buy them and even worse ... mortgage our future by going into some serious debt for this stuff. Makes you wonder if our Congress is somehow controlling our spending habits. By the way, they're on vacation for 3 weeks. And they deserve it  ... after the month-long Chicken-Little game they've been playing. Looks like they gave a portion of the FAA a little time off as well (without pay, of course).
 
The problem with the stock market tanking is ... wait around a while and it will come back. People who lost their asses panic and sell at the wrong times. And the amateurs never had the money to lose in the first place. I had a co-worker or two tell me I need to get into the market; but that's just gambling to me. I'll ride the coaster with my 401K and it'll be alright. But the short and obvious lesson learned is when the market tanks, that is not the time to panic and jump off. Soften the blow by staying diversified. It's not sexy, quick, or glamorous but it will keep you safe and alive when the high-rolling amateurs are jumping off bridges.
 
To this day, I've never owned a new car. The high payments and long loan terms have always scared the crap out of me. So I have always bought used and I do my own work. Domestic, of course. Despite the junk that GM has put out over the years, I have always stuck with them until Ford pulled the trump card with the Explorer. I've owned 3 of them so far. My third is a charm ... running like a top with somewhere in the neighborhood of 165,000 miles with probably another 3-4 years left in her before I'll finally have to cut the cord.

[euforia51]

The reason I think most people don't take an active role in their investment careers is it's just something else to worry about. But personally, I'd much rather sit in front of a computer and press a few buttons to make a $2000 in a few hours as suppose to working a whole week for that. 401(k)'s are fine. They're conservative, long term methods of building nest eggs. For me the return is too minimal though. I like to see the money build in front of my eyes.

Benjio ... I just started reading your posts in here. I'm one of those who doesn't need or want another worry to bother with so I play the 401K conservative and laugh at the arrogance of the sh&t-talking fools who are up one day and down the drain the next with their favorite stocks after only reading a pretty, 4 color brochure. Now don't get  me wrong, making serious money has been on my agenda for a while now. And it seems like not only do you have some knowledge about the company you're working for but you're also involved; which I think is important. And what better a product than oil drilling technologies? It's been said before that the real money in past Gold rushes wasn't so much in the lucky strikes ... but in the pockets of the men who sold the shovels. I may hit you up on PM some time for some stock advice ... if you don't mind.

[utopiacowboy]

Tea Party:   3
 
Commies:    0
 
 
 

If only that was true but sadly it's not.

[Researcher]

Hey there Researcher...

I would venture to say buying gadgets is OK if you can afford them. But you must also remember where they come from. If you're anti-China ... better think twice before you make that next smart phone purchase. It seems we all like to sit around and bitch about China being evil, prosperous, and opportunists. We did the same thing in the late 70s and 80s when the Japanese were kicking our asses with their Hondas and Toyotas. Our "Big 3" was putting out garbage ... and still sucking gas on top of it. The Corvette of that era was a freakin' joke. And lord help you if you rode a motorcycle and wanted to "Buy American." Now this time around, it is China ... like the Hondas and Toyotas we've been gobbling up from the Japanese for 30-some-odd years now, we have to have our gadgets ... China is happy to make them for us ... and we are even happier to buy them and even worse ... mortgage our future by going into some serious debt for this stuff. Makes you wonder if our Congress is somehow controlling our spending habits. By the way, they're on vacation for 3 weeks. And they deserve it  ... after the month-long Chicken-Little game they've been playing. Looks like they gave a portion of the FAA a little time off as well (without pay, of course).
 
The problem with the stock market tanking is ... wait around a while and it will come back. People who lost their asses panic and sell at the wrong times. And the amateurs never had the money to lose in the first place. I had a co-worker or two tell me I need to get into the market; but that's just gambling to me. I'll ride the coaster with my 401K and it'll be alright. But the short and obvious lesson learned is when the market tanks, that is not the time to panic and jump off. Soften the blow by staying diversified. It's not sexy, quick, or glamorous but it will keep you safe and alive when the high-rolling amateurs are jumping off bridges.
 
To this day, I've never owned a new car. The high payments and long loan terms have always scared the crap out of me. So I have always bought used and I do my own work. Domestic, of course. Despite the junk that GM has put out over the years, I have always stuck with them until Ford pulled the trump card with the Explorer. I've owned 3 of them so far. My third is a charm ... running like a top with somewhere in the neighborhood of 165,000 miles with probably another 3-4 years left in her before I'll finally have to cut the cord.

   Hey Euforia, I don't usually move my 401k in and out like that but I saw an opportunity in times that weren't the norm so I went for it.I thought about doing it before the debt talks but decided I didn't want to make it a habit.

   Before I began working for an auto maufacturer I always bought used as well.That is the best way to do it.But with my employee discount it makes sense to buy new now.

   I think staying with gadgets that are not the latest and greatest is still the best way to go.I have always built my own computers and stayed away from the latest operating system put out by Windows.I have a Smart phone but it is a model behind the latest out there, and I saved alot on it.I'm finding alot of uses for it also which makes me feel better about getting it.


       Researcher

[benjio]

Benjio,

Have you heard of the EBX group, especially OGX (OGXP3)?

Yes, most definitely! I will write a very long post about that outfit when I have a little more time.
 

I feel just like you. But I hope you know the economic growth is not just because of pre-sal. In fact, I'm pretty sure it has just little to do with that

Braziliangirl you are 100% correct.
 

Benjio ... I just started reading your posts in here. I'm one of those who doesn't need or want another worry to bother with so I play the 401K conservative and laugh at the arrogance of the sh&t-talking fools who are up one day and down the drain the next with their favorite stocks after only reading a pretty, 4 color brochure. Now don't get  me wrong, making serious money has been on my agenda for a while now. And it seems like not only do you have some knowledge about the company you're working for but you're also involved; which I think is important. And what better a product than oil drilling technologies? It's been said before that the real money in past Gold rushes wasn't so much in the lucky strikes ... but in the pockets of the men who sold the shovels. I may hit you up on PM some time for some stock advice ... if you don't mind.

Euforia, feel free to hit me up at any time. I only trade what I know, so I don't even touch industries outside of drilling, communications technology, and computers, but always willing to swap opinions and tips.

[Ray]

If only that was true but sadly it's not.

Hey cowboy,
 
With the whacky leftists calling the Tea Party "terrorists", "suicide bombers", and other similar nonsense, I have to give them a point right there for making the commies show what utter idiots they are.   
 
At least Obama's stupid socialist tax hikes were put off for another round of battle on another day.
 
Ray
 
 

[utopiacowboy]

Hey cowboy,
 
With the whacky leftists calling the Tea Party "terrorists", "suicide bombers", and other similar nonsense, I have to give them a point right there for making the commies show what utter idiots they are.   
 
At least Obama's stupid socialist tax hikes were put off for another round of battle on another day.
 
Ray

To listen to some of these lunatics you would think the Tea Party was responsible for the whole recession. Which indicates the level of clear-headed thought that the American public is capable of - NOT! They always whine about their children and grandchildren - exactly the people the Tea Party is trying to protect by screaming about the insupportable increases in spending. Future generations are the ones who are going to curse the current generation for bankrupting the country.

[Researcher]

     The Tea Party is pretty much a result of the recession! That and Obama's socialist agenda.

      Researcher

[Alabamaboy!]

If the Tea Party could purge itself from any evangelical nuts and pro-war fanatics I think they could break off as a 3rd party and win election after election in landslide manner at this time.

[bcc_1_2]

If the Tea Party could purge itself from any evangelical nuts and pro-war fanatics I think they could break off as a 3rd party and win election after election in landslide manner at this time.

I just wanted to confirm that travel to Latin America across the board is in fact getting more expensive. Brazil, Costa Rica, Argentina, etc... be prepared to pony up the cash because it is going to cost you. Putting your money in foreign currency is the way to go. I don't do CDs at my bank anymore.

The quote above by alabamaboy seems accurate to me. And the tea party did start out that way (grassroots)... but in addition to the flaws mentioned by alabamaboy the tea party has to deal with special interests as a lot of articles and commentary out there notes the tea party is bankrolled by billionaires and special interests.

On top of that you look at what many are now calling the face of the tea party... Michele Bachmann... and she's just not that intelligent. Unless Bob Barr's brain is transplanted into her head I just don't see the tea party as a competitive third party in the presidential elections. Democratic strategists want nothing more than Bachmann to win Iowa.

I suppose my point is that decades ago the republican party used to be the party of business. With our current budget crisis we have an expenses (spending) and a revenue problem. Just by looking at Ronald Reagan's record for example (and many republicans in the 80s) in this type of situation he would have cut expenses and raised revenues. It's like looking at a retail business or any business really. In the past you were generating profits... now you are generating losses and have to make changes to get your business on the right track. A quick fix (and probably necessary) is to fire an employee and or cut hours. But ultimately if you aren't making enough sales firing an employee can't make up for the fact that your revenues are declining. So you may have to look at the products you have in the store (amoung many other things) and also make a marketing change to raise revenues.

This reminds me of a recent quote from Warren Buffet saying his tax rate is lower than his secretary's rate (http://www.forbes.com/forbes/2007/1126/042b.html). GE for example... didn't pay income taxes at all. When Forbes was running for President he suggested a flat tax of around 17 or 18%. Democrats where against it because they believe someone that makes 50 million dollars should pay a higher rate than someone that makes 50,000.

However if we went to Steve Forbes rates our country's revenues would be significantly higher with everyone paying the same rate. Another little known fact is that under Steve Forbes flat tax plan a family of four wouldn't pay any taxes if they made $43,000 or less per year.

Basically what I'm saying is yes this whole debt ceiling argument and the fact that our credit worthiness has been downgraded is a huge and unneeded embarrassment to our country.

One thing the tea party is supposed to be all about is upholding our constitution.

14th Amendment (section 4)
"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned"

The bottomline is raising the debt ceiling is not fun but it is and should be a non-partisan issue. Now Michele Bachmann was against raising the debt ceiling under any circumstances... so yea the tea party needs someone smart.

I'm just not sure those bankrolling the tea party would be for the Steve Forbes flat tax... because there wouldn't be any tax loopholes and they'd all have to pay 17% just like you and me.

[Ray]

 
　

…the tea party is bankrolled by billionaires and special interests.

　
Let me guess. George Soros and SEIU? LOL!
　

... Michele Bachmann... and she's just not that intelligent.

　
Probably ten times as intelligent as that moron in the White House.
　

Now Michele Bachmann was against raising the debt ceiling under any circumstances...

　
Yes, and so was Senator Barack Obama.
 
 
This sounds just like another case of Michele Bachmann Derangement Syndrome.
　
　

　
Ray