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I'm a famous stock, commodities, and currency trader. Mostly because of trading for the Chicago Trader Richard Dennis in the 1980s. I'm generally retired from trading except for my own account. I've been working on poverty and education initiatives mostly.

I’m seeing a big divergence in the risk/reward ratio for stocks and way too much pent up risk on the fundamentals that don’t correlate with stock performance in the U.S. stock market.

The last time I felt this way, I told my father-in-law to get out of his 401K when the S&P was at 1,550. He got talked out of doing anything by his banker who didn’t know fuck-all about stocks. The market dropped within a few weeks to 1,270 and then bounced around and I got my father-in-law and took him down to the bank myself when the market came back to 1,350 and he told his banker to liquidate everything while I was there to explain to his banker that I knew more about trading than he did and that he wanted out so please stop trying to convince him to get into something else. That was in April of ‘08, by March of ‘09, the S&P had halved to 670 so I saved him half his retirement savings.

DISCLOSURE: I have no positions in any markets.

Starting Wednesday this week, I posted the message below the line to my Twitter, StockTwits, Facebook and LinkedIn Connections as well as via email to my closest friends and on my blog at www.curtisfaith.com

I can’t exactly explain why but I feel even worse at the gut level about the markets right now. This is one of those intuitions that advise caution that I wrote about in Trading from Your Gut. They only come every few years and today was the strongest feeling I’ve ever had.

We might even see a test of the post crash lows of 670 again before the market comes back.

In short, be careful and keep your stops tight would be my advice. If you are not at least an expert amateur trader I’d get out and get to safe cash investments. You can always get back in in a few weeks or months if things stabilize and the risk goes down.

Regards,

Curtis

P.S. I didn’t warn my larger groups of friends the last time and I really wish I had. So this time I wanted to make a concerted effort to reach out to my blog readers.

The market may do fine. This is not a prediction of decline. It is a statement that if there is a decline, it could get ugly very quickly. Use great caution over the next few days or weeks!

If a crash does start, you can follow for updates if anything serious develops on Twitter at "inflector" and my blog at: http://www.curtisfaith.com

——————————————&# 8212;——–

Here’s what I’ve been telling my friends today.

If any of you have a lot of money in the stock market. I'd suggest that now is a very good time to go to cash. 100% cash. If I were you I'd sell everything in my 401K etc. Sell mutual funds, etc. Individual stocks etc.

The market is ripe for a correction and it could get ugly again. My intuition tells me that it could get worse than we've seen in recent memory. Even worse than 2008 possibly.

I didn't warn my friends in 2000 even though I was working at an Austin Texas startup with a young brilliant trader name Andy Lam who worked for Steve Cohen at SAC Capital on an internship and who was so good that he still called tech stocks for Steve years later, and we both knew the tech crash was coming and called it within a month.

I didn't warn friends in 2008 but I only told my father-in-law. He was talked out of it by his banker/broker and I had to actually walk down to the bank with him so I could tell his broker that, in fact, I was more expert at trading than he was so would he please get Jim out of everything. That was when the S&P was 1,350, it had been 1,500 when I first warned my dad. It dropped to 660 as you all know.

I don't generally make predictions and this isn't a prediction exactly as the price could certainly go higher. The issue is that the risk/reward for staying in is wrong. The upside is much smaller than the downside and the market has just failed to exceed the highs of April of this year.

Historically that is not a good sign.

I just thought I'd let my friends who are not traders know.

Don't put the money in corporate bonds either. Put it in U.S. guaranteed funds or Treasury Bills preferably.

Europe's finances are too unpredictable, some countries are doing well but others are doing very poorly and you don't want to risk putting mony in Euros now because you don't know how well the Euro will hold up if Eastern Europe and Spain, Ireland, Greece and Portugal fall.

Definitely Avoid Gold!!!!

If you have your money in the big banks, BankAmerica, Goldman, Morgan Stanley, Wells Fargo, Shitytbank, etc.  you might consider moving it out. If things get ugly again there will not be another bailout, the banks will go down and your money will be frozen if it is below the FDIC guarantee level and lost if it is above it. Any banks with exposure to the mortgage mess are at risk. The problems there are far worse than the media wants you to know. I believe that thousands will be jailed for fraud before this is all over, including hundreds of executives. Far worse than the S&L debacle.

Consider good small banks where the service is good like regional banks, community banks or credit unions. If you like your bankers ask them about the company, if they say it is good and well run then you are probably okay. If you are dealing with cogs in a poorly run machine, take your money out and find a good bank. Talk to the people, don't look at figures and facts and data so much.

And I would not wait until tomorrow. It could cost you a lot.

- Curtis

P.S. Feel free to tell your close friends as any friend of yours if a friend of mine.

Originally posted to inflector on Fri Nov 12, 2010 at 09:52 AM PST.

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Comment Preferences

  •  Thanks Curtis I will keep all this in mind (4+ / 0-)

    "When in danger or in doubt, run in circles, scream and shout"

    by not4morewars on Fri Nov 12, 2010 at 09:56:04 AM PST

  •  The investment environment (4+ / 0-)

    has never been stranger. Either you take on huge risk (stocks, commodities) or you get no return (T-bonds, money markets).  

    Both make it impossible to determine if our future is utter deflation or utter inflation. More importantly, both reflect the utter lack of reality in our economy.  And that spells disaster either way, don't you think?

    Denial is complicity.

    by Publius2008 on Fri Nov 12, 2010 at 09:57:04 AM PST

    •  I have been trying to figure out this market (4+ / 0-)
      Recommended by:
      Sylv, chimpy, corvo, melpomene1

      since the 2008 crash.  There is no reason for stocks to have inflated the way they have.  No one can give me a satisfactory answer for why the DOW would be back to 11,000 with as tough as the economy is.  The best explanation I have heard is that foreign markets are doing well.  Any insight as to what they have done?

      "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

      by lakehillsliberal on Fri Nov 12, 2010 at 10:16:53 AM PST

      [ Parent ]

    •  It seems perfectly comprehensible to me. (2+ / 0-)
      Recommended by:
      Iberian, shrike

      There are two ways managing a recession can be botched: You can get deflation, in which case government bonds are a good investment, or inflation, in which case gold (and commodities in general) are a good store of value.

      In short, it seems to me actors are covering all bases. And stocks appear to be high since corporate earnings are high.

      Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

      by Dauphin on Fri Nov 12, 2010 at 10:41:03 AM PST

      [ Parent ]

      •  Corporate earnings are high because they have (2+ / 0-)
        Recommended by:
        corvo, melpomene1

        laid off so many workers but what happens when they run out of that trick to make the bottom line look good or am I misreading that.  The economy here is certainly stagnate and the economy overseas can't be that much better since we are one of the largest importer of goods in the world and our domestic economy sucks.

        "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

        by lakehillsliberal on Fri Nov 12, 2010 at 10:44:21 AM PST

        [ Parent ]

  •  I see. (2+ / 0-)
    Recommended by:
    Timaeus, shrike

    And you're sharing your famous stock tips about gold with us because...?

    •  I like you guys (2+ / 0-)
      Recommended by:
      cdkipp, Elphaba Please

      Rather have progressives with money than banks with money.

      •  Well, thank you. (0+ / 0-)

        I don't have two nickels to rub together, but if I get any, I won't be buying gold.

        I do have a gold watch, and I've been considering selling it. It would disappoint my mother, who gave it to me; then again, I'll still be living under a roof instead of evicted, so...

    •  He says to stay away from commodities. (3+ / 0-)
      Recommended by:
      stratocasterman, petral, Dom9000

      And I would assume he's sharing his opinion because he thinks it might save people from losing a lot of money. Nothing wrong with him sharing his opinion. A lot of people respect and look up to Curtis Faith's knowledge on market issues.

    •  he is 100% correct about gold! (0+ / 0-)

      one thing folks don't consider is that a whole lof of  gold used in jewelry is also through the roof - cutting demand for jewelry because people can't afford it.  demand slows, people who "stock up" have a commodity that is not being "demanded" - and the price falls.

      when gold hit $800 high back in the 70s, it then dropped dramatically in just a few days after peaking.

      if you buy gold now, you are buying at close the top of that peak - with nowhere to go but down.

      think of gold as the "beanie baby" scam. people paid over $200-400 for "collectible" toys that cost perhaps $.50 to manufacture - then, folks woke up and said, "WTF?".  those who paid ended up paying through the nose.

      it always is maxing out profit and gold is maxing out!  it won't continue to climb forever - are you willing to take the risk of losing at least half your investment (or opening your own jewelry making facility)?

      when you get glenn blech pushing gold sales, don't you get a wee bit suspicious?

      and, if you bought gold low - now is a very GOOD time to sell it before everyone else gets the same idea and the buyers dry up.

      MOVE'EM UP! ROLL'EM OUT... MOVE'EM UP RAWHIDE!!! meeeoooow! mrraaarrr!! meeeOOOOOW!

      by edrie on Fri Nov 12, 2010 at 01:22:16 PM PST

      [ Parent ]

  •  Wow, methinks you need/deserve a (1+ / 0-)
    Recommended by:
    jrooth

    show on CNBC to get the word out on this to *everybody*

  •  It isn't hard to figure out (11+ / 0-)

    It is a ponzi scheme.  The big boys know that things are going south so they get together and engineer it so that it looks like the stock market is rising.  For weeks or months the stock market keeps going up - and after a while the regular people take note and start putting their money back in.  Now the market really takes off which is the signal for all the big boys to pull their money out.  All of a sudden the market sags and all the people who bought in late are left wondering where all their money went.

  •  Loaded up on the VXX yesterday (1+ / 0-)
    Recommended by:
    shrike

    I believe that banking institutions are more dangerous to our liberties than standing armies. Thomas Jefferson

    by deepsouthdoug on Fri Nov 12, 2010 at 10:03:52 AM PST

  •  I was talking with a very informed, very astute (4+ / 0-)
    Recommended by:
    Sylv, itskevin, sodalis, lineatus

    ... and involved observer of the markets, interest rates, Fed policy and currency issues last night and he thinks that some very major cards have yet to be played in the world economic crisis.

    Ireland's troubles are, quite literally, the tip of the iceberg. And they could have a cascading effect not only throughout the EU, but around the world.

    Bad debt is bad debt, and at this point, there is not much difference between Ireland's precarious situation and that of any number of U.S. states.

    It's a mess. And it's not settled by any means.

    Even my bot is tired of this shit.

    by Bob Johnson on Fri Nov 12, 2010 at 10:14:36 AM PST

  •  Just curious. (0+ / 0-)

    Things Could Get Very Ugly with Stocks and Banks

    Any particular reason you say this, now?

    •  Yes (1+ / 0-)
      Recommended by:
      petral

      I've thought this for months but I was waiting for the right timing. Notices on a chart of the S&P 500 how the market recently exceeded the post-crash highs of April of 2010. Then it paused and pulled back.

      That's a sign that buying dried up and things could get ugly.

      Further, there have been no significant pullbacks in two months, there is always at least a little pullback. Rockets that go straight up and don't achieve escape velocity come straight down.

  •  Before running too hard with this diary, (4+ / 0-)
    Recommended by:
    shrike, Dauphin, goinsouth, cdkipp

    readers might want to view this page:

    http://www.turtletrader.com/... .

    It seems this poster's company was permanently barred from trading by the CFTC for multiple irregularities.

    It is a calling...to do things about injustice.... It helps to have a goal. I've always tried to have one.--Ted Kennedy, True Compass

    by Timaeus on Fri Nov 12, 2010 at 10:18:38 AM PST

    •  Totally agree. (6+ / 0-)
      Recommended by:
      Timaeus, corvo, shrike, Dauphin, Balto, cdkipp

      Don't take investment advice from an anonymous poster who seems to be short on technical evidence for his opinion but long on ideology.

      •  Well, (1+ / 0-)
        Recommended by:
        Timaeus

        I have a very conservative investment strategy (state-guaranteed bank deposits, and not in a major bank), so anything short of a total disaster or nuclear war should be fine.

        But yes, acting on advice of anonymous posters (myself included) is risky business.

        Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

        by Dauphin on Fri Nov 12, 2010 at 10:42:40 AM PST

        [ Parent ]

    •  Fools (0+ / 0-)

      Trust what comes up on Google without doing some digging first.

      Do you know why Michael Covel who writes there doesn't like me?

      Could it be because I gave away the rules to the system we traded as Turtles for free?

      Google Original Turtle Rules and you'll come up with a document on Barry Ritholtz site that I wrote. It cost Covel hundreds of thousands.

      He was selling advice and made people believe he was a Turtle when he never was any such thing.

      Don't believe me? Ask Richard Dennis himself what he thinks of me and Covel and whose story is truth and whose is BS.

      Ask Barry Ritholtz what he thinks of me.

    •  On Further Thing on the CFTC (0+ / 0-)

      If you actually bothered to read the links on Covel's site you'd find out that what happened is that an employee embezzled funds and was arrested. The managing director was fined for not adequately supervising him.

      There was no fraud except on the part of the embezzler.

      •  There is additional discussion here: (0+ / 0-)

        http://www.automated-trading-system....

        I don't know the facts here, and I'm not sufficiently interested to spend many hours tracking them down.

        You may be the most honest person in the world.  I don't know.  I'm just pointing readers to the indisputable FACT that there is considerable controversy about at least some of your work.

        What happened here is that I read the first part of this diary and heard all kinds of red warning bells. I then googled your name, since you say you're famous and include your name in the diary. Then I posted one link the the mild suggestion that readers might not want to run too hard with the diary before doing some research.

        Based on Covel's statement, I said:  "It seems this poster's company was permanently barred from trading by the CFTC for multiple irregularities."  That is accurate, is it not?

        It is a calling...to do things about injustice.... It helps to have a goal. I've always tried to have one.--Ted Kennedy, True Compass

        by Timaeus on Fri Nov 12, 2010 at 11:52:48 AM PST

        [ Parent ]

        •  I can't say on the CFTC as I don't know. (1+ / 0-)
          Recommended by:
          Timaeus

          I don't actually know what the CFTC did. I never talked to them, they never talked to me. I wasn't part of any action. I haven't read through all the details of the case only parts of it. I was not part of the company when the CFTC actions took place.

          I don't have anything to gain here. It's not like the DailyKos readers are going to impact the market and I've sold short so I gain somehow. Even big banks can't do that by themselves.

          I'm just trying to warn people to be careful.

          With respect to Covel's book TrendFollowing. It's so so. Some interesting information, lots of flufff but basically okay.

          His book The Complete Turtle Trader is also okay. He rails on my personally and make many factual errors because he didn't interview Richard Dennis, Bill Eckhardt, or Jerry Parker the Turtle trading the biggest money because none of them would talk with him.

          I don't blame you for thinking "watch out" having read Covel's site because he is writing that stuff intentionally to ruin my reputation. I don't really care as anyone I care about already knows he's full of shit. I could send you to a few customers and you'd find out what he's really doing. Many hate him.

        •  Why Covel is Pissed! (0+ / 0-)

          Here's the document that I wrote that got Covel so pissed off. In it, I exposed him as a charlatan. He didn't like this very much as you can imagine.

          https://www.bsp-capital.com/...

          •  I read about half of that with interest, (0+ / 0-)

            although I've never thought much about trading systems.

            I apologize for being a bit quick to judgment, even as I was trying to be careful with my words. You are to be applauded for your restrained response.

            Covel is obviously out for blood. It must be awful to have an Internet enemy like that.

            It is a calling...to do things about injustice.... It helps to have a goal. I've always tried to have one.--Ted Kennedy, True Compass

            by Timaeus on Fri Nov 12, 2010 at 04:10:27 PM PST

            [ Parent ]

    •  I don't know what he has to gain here though (0+ / 0-)

      Timaeus......He is not selling anything..

      Then again....why would he bother to be nice to us.....

  •  Your advice? maybe. (0+ / 0-)

    Your claim that bankers will be jailed by the thousands?  Utterly ridiculous.  They'll have the force of the law and both parties on their side.

  •  It's all a rigged casino (2+ / 0-)
    Recommended by:
    corvo, skywriter

    Treat it as such and you'll be just fine.

  •  I lost my 401k in 2000 (3+ / 0-)
    Recommended by:
    corvo, billmosby, petral

    Wiped out, kept waiting for market to go up. Stupidly I was in tech. The stock market is not for average people. Thanks for the tip about putting money in US savings bonds. I want to help the grandkids save for college and this may be the way to start.

  •  Not a fan of copper? (1+ / 0-)
    Recommended by:
    Sylv

    Copper sector is on fire! Bought a Candadian copper stick at a steep discount 1 1/2 weeks ago (TGB). You're advising people to sell their precious metal stocks now?

  •  John Hussman this week: (2+ / 0-)
    Recommended by:
    Sylv, petral

    This is clearly a momentum driven market, and the potential for further momentum relates more to psychology than fundamentals or even observable risks. This feels a great deal like 2000 and 2007 in stocks, and early 2008 in the commodities market, but now as then, short-term overbought conditions did not necessarily resolve immediately into major plunges. We still have a condition that I characterize as "unpleasant skew," where the mode of the expected probability distribution is still slightly positive, while the mean of the probability distribution is negative, the right tail is truncated and the left tail is fat.

    In English, the most probable outcome is a small further gain, but the average outcome is a loss, because there is a modest but clearly elevated probability of a steep decline.

    The upward pressure on 30-year yields here is notable. Historically, the addition of rising yields to an overvalued, overbought, overbullish syndrome has often been associated with steep corrections or new bear markets within a very short period of time (typically a few weeks, following a further price advance averaging about 2%). So the behavior of interest rates across the board is worth watching.

    http://www.hussman.net/...

    Hussman is a very smart, very transparent money manager who runs a group of market-neutral mutual funds. He's worth a read each week.

    •  Translation....get out of the market, it is (1+ / 0-)
      Recommended by:
      corvo

      getting ready for a BIG correction, if I am reading this correctly(I am reading his correlation to 2000 and 2007).

      "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

      by lakehillsliberal on Fri Nov 12, 2010 at 10:32:11 AM PST

      [ Parent ]

      •  I don't think he means it that boldly... (2+ / 0-)
        Recommended by:
        Sylv, lakehillsliberal

        He's careful to say that a correction isn't necessarily imminent, just that the prospect for one is elevated under these market conditions. Note, too, that he's been wary of the market for quite some time.

        In my opinion, John Hussman is kind of like the Nate Silver of the markets: very smart, a numbers geek, and not prone to hyperbole. He considers all the probabilities carefully.

    •  The British and American governments (1+ / 0-)
      Recommended by:
      corvo

      have gone to buying their own bonds.

      The Japanese, Germans, and Chinese aren't happy about what is effectively printing money, but it's either our official 2% interest promise in the face of strong consumer price inflation [~20% in Chinese made stuff]or the computer-age money printing press.

  •  Makes sense, at least some of it. (2+ / 0-)
    Recommended by:
    lakehillsliberal, petral

    The markets are full of uncertainty (worse than risk in the Knightian sense, which you can estimate and therefore take measures against). While everyone's trying to act rationally, there's a distinct undercurrent of fear, and I think we're near 1933, where a completely innocuous piece of information could trigger a panic.

    That said, I think it's safe to buy stocks you plan to buy long-term; for example, I will buy stocks in wind and solar companies, REM mines outside China, and tar sands and other unconventional oil (it'll take a long time for us to get off that stuff) when I have the time and energy to open a trading account. Still, there's no reason to rush things when you can wait and see what happens.

    Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

    by Dauphin on Fri Nov 12, 2010 at 10:32:39 AM PST

  •  This is all well and good, but... (2+ / 0-)
    Recommended by:
    corvo, sodalis

    what do the algorithms of the bank computers say? You know, the ones with the millisecond advantages over everyone else?

    Kissing Republican ass gave Obama a Boehner.

    by The Dead Man on Fri Nov 12, 2010 at 10:35:54 AM PST

  •  Thanks At first I thought this was a BD sales (2+ / 0-)
    Recommended by:
    Gustogirl, petral

    promo that needed to be reported..Then I looked at your background and that you weren't selling anything.....

    I just trimmed things back after reading your post.

    I am back in school and do not want to get bitten........I was just thinking it may be a good time to invest more which is the best indicator for the world it is time to get out.

    I understand you may be wrong but thanks for making me focus.

  •  Thx for the advice, but I'm not selling my stock. (1+ / 0-)
    Recommended by:
    shrike

    Most of my money is invested in Apple Computers which I think is a relatively safe bet, stock wise, so I won't be pulling out.
    However, it's worth noting that I don't actually use or depend upon the money I have invested - I reinvest all my profits - so if you do need the money you get from your stocks you might want to consider selling them to play it safe, but I wouldn't recommend it. I disagree with the diarist, I don't think a big crash is coming, I think if you do cash out you'll regret it later.
    I DO agree with most of his other advice though. Avoid the big banks. Avoid commodities.

    "On a battlefield, the flies don't care who wins." - William Stafford journal entry, January 31, 1986

    by Dom9000 on Fri Nov 12, 2010 at 10:49:34 AM PST

    •  I Love Apple (0+ / 0-)

      If I had to pick one stock I'd keep that would be the one. Very good company and very good fundamentals.

      But they're still going down in a crash so the best plan would be to pick them up after the bounce if the crash does start, or sell them now and buy them back a bit higher if they exceed their recent highs. That's what I'd do.

      •  Depends on his/her purchase price (0+ / 0-)

        If they have a bunch of capital gains, it would take a big drop in stock price to be able to get back in the stock and break even, or better. if worried about it, and having a large paper gain, buy some puts on the stock, or the qqq's.

        Bi-partisanship is a MEANS, not an ENDS.-Barney Frank Feb 2009

        by sd4david on Fri Nov 12, 2010 at 12:25:35 PM PST

        [ Parent ]

  •  I was in cash 100% until early Sep. (1+ / 0-)
    Recommended by:
    cdkipp

    My broker finally convinced me to get back into other things. So, about half short and intermediate bond mutual funds, about half in various stock mutual funds, all with decade-long track records in the 6 to 8 percent per year gain range.  I looked at all the data I could find on quite a number of things before jumping.

    So I'm not inclined at this point to  not "look at figures and facts and data so much". Just sell it all based on anonymous gut feelings? I think you can see why that probably isn't going to happen.

    Will you come back in, oh, say 6 months and give us an opportunity to ask you some questions?

    Moderation in most things. Except Reactors. IFR forever!

    by billmosby on Fri Nov 12, 2010 at 10:59:03 AM PST

    •  The question you need to ask yourself is... (2+ / 0-)
      Recommended by:
      Dauphin, billmosby

      Why do you think you broker knows more about this than I do?

      My father in-law's broker cost him about $100K when he listened to his advice and stayed in when I warned him to get out the first time.

      Think for yourself. Don't trust any brokers. They either suck, don't know more than you do, or they are liars. There is a reason I retired from trading at 24, I don't like the people in the industry. Investment banks are even worse.

      •  Well, at least I did my own research. (3+ / 0-)
        Recommended by:
        Dauphin, lakehillsliberal, petral

        The broker only motivated me to do what I had been thinking about doing anyway. I had kept everything in cash for about a year waiting for interest rates to go back up. I didn't want to forgo growth and income for a really long time, and I'm not convinced that it's a sure thing that things are going to go to hell in a handbasket from here. At the moment the 21 things I put my money in have risen about 4.1 percent in the aggregate since Sep. 16. Any given day/week/month could tell a different story, of course.

        I hear what you are saying about brokers, though. One thing I began to notice around 1999 was that whenever I saw some guest "expert" on CNBC he or she seemed to be espousing some new theory or concept about the way the financial world worked that I had never heard before. Eventually I came to the conclusion that they were just making shit up all day, every day.

        Wish me luck. Good luck to you, too.

        Moderation in most things. Except Reactors. IFR forever!

        by billmosby on Fri Nov 12, 2010 at 11:27:37 AM PST

        [ Parent ]

      •  Aren't all these people at the end of the day (4+ / 0-)
        Recommended by:
        corvo, crankyinNYC, billmosby, laker

        salesman and like most of the financial services industry, just looking for their next commission?  Maybe that is a bit cynical but nothing that has happened over the last ten years makes me think otherwise.

        "When fascism comes to America, it'll be wrapped in a flag and carrying a cross." Sinclair Lewis

        by lakehillsliberal on Fri Nov 12, 2010 at 11:28:45 AM PST

        [ Parent ]

      •  Brokers are the worst people in the world. (1+ / 0-)
        Recommended by:
        corvo

        They get paid whether they are correct or not. One fleeced my mother of a lot of money by spinning complete fiction. They are often encouraged to sell crap if the wire house has a banking unit doing business with that company. So you get told Company X is great, simply because they have a lot of Company X on hand having taken Company X public.

      •  I think it was Truman (0+ / 0-)

        who said he wished for a one-handed economist.

        On one hand things might..., on the other hand...

  •  I remember when (1+ / 0-)
    Recommended by:
    petral

    Paul Krugman started posting blogs about the complicated financial fraud instruments (CDOs) that the banks were using and he was warning people to get smart about that.  It freaked me out.  He was right about that, and the rumblings of fraud in the foreclosure market are eerily similar.  I am already planning to move my money to a new bank.  Bank of America (where I have my accounts) is fingered as doing some serious hanky panky with mortgages and could be one of the prime targets for collapse.  I'm outta there.

  •  So how do I liquidate w/o penalties (0+ / 0-)

    How do you liquidate a 401k without paying the penalties? Where can I put it so it grows safely without losing money (like how savings accounts used to work)?

    My partner (56) has a 401k is through his work. Mass Mutual "The Journey" plan. He can't afford either to lose the balance he has now or penalties.

    From end 4Q 2006 to end 3Q 2010 just the investment income (not including employee  or employer deposits) equaled NEGATIVE $10,050!

    So if someone could tell me how to do this and where to put it, it would be much appreciated.

    "The reason to stick the Army in there...was to get the Iraqis to solve their own fish" -Chris Matthews

    by Sark Svemes on Fri Nov 12, 2010 at 12:17:25 PM PST

    •  I THINK (1+ / 0-)
      Recommended by:
      SingleVoter

      you can sell whatever you want, you just can't remove the money from the 401k account. So likely money would be put in a money market account short term.

      Bi-partisanship is a MEANS, not an ENDS.-Barney Frank Feb 2009

      by sd4david on Fri Nov 12, 2010 at 12:35:02 PM PST

      [ Parent ]

      •  Thanks and question (0+ / 0-)

        Thanks for your response.

        Money market account like in those  checking accounts that pay interest?

        Do I call up Mass Mutual and tell them to put it all in cash? Won't fees eat that away?

        Does it stay in the $Mkt account for a while and then I can move it out?

        "The reason to stick the Army in there...was to get the Iraqis to solve their own fish" -Chris Matthews

        by Sark Svemes on Fri Nov 12, 2010 at 12:42:12 PM PST

        [ Parent ]

        •  Yes, reg money market account (0+ / 0-)

          You need to check with whoever has your account on how to do it, and if there are any fees. I'm sure there are fees on selling stocks, hopefully not 4 buying money market account.

          Bi-partisanship is a MEANS, not an ENDS.-Barney Frank Feb 2009

          by sd4david on Fri Nov 12, 2010 at 01:05:56 PM PST

          [ Parent ]

    •  You can probably buy US government bonds (0+ / 0-)

      if worried about safety.

      I'm not all fearful, but I think that the market is just about fully valued.

      There are no bargains on the US exchanges to be had, which is often a bad sign.

      I am thinking about higher-yield Euro bonds [not sure if they are callable - if callable some risk, modest gain].

      I've read that Australian interest rates are fairly high, but Australian property prices are also high, meaning some risk.

      I've read some FTSE stocks have a P/E of around 10 in Britain, but the British economy and pound might take a beating, so that limits FTSE stock picking.

      I generally eat well today. The markets and economy have become vicious. The __ I produce is of my own making. It's better that I live well than some financial shyster.

  •  I can see a correction (2+ / 0-)
    Recommended by:
    corvo, petral

    but I think the fatcats can thrive in a sea of poor Americans just like they did in the 19th century.

    Corrections usually knock the wind out of over-valued stocks and pricing becomes current reality based.

  •  It should be borne in mind that (1+ / 0-)
    Recommended by:
    corvo

    Germany could go to a new mark and let the Euro float.

    That way the PIGS could solve their debt based problems using electronic printing presses.

    One might prefer to convert one's Euros into German Euros which might be convertible into new marks.

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