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View Diary: Greenhouse Debt: war, oil, credit, and the rising tide of inflation (8 comments)

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  •  Gloom and doom, and what to invest in. (1+ / 0-)
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    mbass

    We are not alone -- plenty of fringe investment newsletters and economic blogs are in the same position of enduring ridicule for as long as the "perma-bulls" can keep the party going. But even the  mainstream investment people are starting to say the housing emperor has no clothes, and in recent months virtually all of the fundamentals have trended towards the doom scenario. More and more web pundits can see it, and occasional pockets of the MSM have said something, too.

    For a ringside seat on the housing crash, you really want The Mortgage Lender Implode-O-Meter.

    It's been argued that much of the stock market's rise is due to record merger and acquisition activity, which is the classic warning sign of raiders sucking cash out of previously-healthy corporations until they are dry husks. Of course, they will never admit that until it's too late:

    But is the expected surge in M&A cause for worry on Wall Street?

    Not this time around, said Stone.

    Unlike the heydays of 1999 and 2000 when technology companies were king and irrational exuberance of the stock market resulted in poorly thought out deals, he said the market is viewing M&A in a more pragmatic fashion.

    "Back then, they were playing with monopoly money and now they are playing with real dollars," he said. "Hedge funds do it for financial reasons and corporations are realizing that they need to acquire other businesses for growth."

    ....

    One reason is that banks that lend money to fund cash acquisitions are more like to closely examine the proposed benefits of the deal before doling out any cash -- making the chance of a successful merger even higher.

    Yeah, right. The same banks that rushed to sell mortgages to anyone who could fog a mirror? We've heard it all before.

    What I invest in: "high yield" income funds with a large defensive cash position (indicating the fund manager can see what's coming), metals/mining funds, hard currency funds, foreign stocks in mature countries (not emerging markets), and value funds (to enjoy what's left of the party while staying closer to fundamentals).

    Also good choices: energy and other commodity-related stocks. Some people predict a water-utility crisis brewing too.

    "Follow the Money" ... where does the Fed get all that money anyway?

    by toddpw on Sat Apr 21, 2007 at 06:36:16 PM PDT

    [ Parent ]

    •  Yep. I'm a gloom and doomer... (0+ / 0-)

      toddpw, thanks for your reply.  Sorry for the delay in mine.

      I am a very 'static' investor, once the decision has been  made I usually stick with it.  What this really means is I just ignore things after I plink down my quarters.  The closest to decision making I come to is what to do with a credit union IRA that is coming mature.  Usually I stay with it.

      My concern is it all evaporating like it can do in precarious times, and the credit union is the only place I trust to be on my side.  Not even that, so much, anymore.

      I agree with most of your suggestions based on my limited understanding, but am inclined to stay away from such things simply because I have no experience, even at the most fundamental levels.  Now doesn't stike me as a time to be an apprentice mogul.

      I appreciate your links and will check them out asap.  Water as a commodity has become an issue much sooner than I ever dreamed, and I've been concerned for decades.  Big money is buying up all the resources as we speak.

      Maybe toilet paper is not such a bad investment...

      Thanks,

      danz

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