Monday, February 9, 2009

Financial Meltdown: The Villains Are On Your TV

As I sit here calmly . . . well, that is trying to be calm, I am choosing my words carefully.

Okay, here goes . . .


Whew! Now, with that out of my system, I point you toward a story that illustrates where a big chunk of the "housing crisis" eminated. It wasn't just financiers, or developers, or people in Congress who now say they have the answers, but were asleep at the switch when these problems bubbled up more than five years ago.

No, the problem -- is on your TV.

The idiotic "flip my house" shows, combined with the "get it for nothing" shows, competing with the "oh baby my house is worth a fortune" shows . . . THEY are a huge part of the culture today that doesn't understand why banks have tightened credit standards, or that their place doesn't appraise where they think it should. Viewers of these shows weren't investors -- they were gamblers. ARE gamblers. And they lost. Investors buy and hold and trade for long term wealth growth and to shelter taxes. Gamblers are looking for a fix for their cash habit. Something to put some extra bucks in their pockets, but didn't care about tax implications. Or that the false values that were being affixed to these properties would ultimately crumble because there was no foundation beneath them (like the construction metaphor?).

Read it. Understand it. Pass it on. Like I said early on, this is not news to me nor to regular CASH ON CASH readers. Old news. But for many, listen to hear any jaws dropping as folks who played this roulette wheel realize what they were a part of and how they drove the problem to become worse.

Now . . the writer takes a tongue-in-cheek viewpoint on this. He actually is being kind of silly with his story. But the guts of it are right on. These television shows encouraged people to drink the no-money-down koolaid, and many got hosed. How is that for blunt?

Okay, I'm off my soapbox now. . . .

Tuesday, February 3, 2009

Financial Humor

Okay, its a rough market out there. But here is a little financial humor to give you a chuckle, if even for just a moment.


Definitions: The New Financial Jargon....

Bull Market -- A random market movement causing an investor to mistake himself for a financial genius.

Bear Market -- A six to 18 month period when the kids get no allowance, the wife gets no jewelry and the husband gets no "loving."

Value Investing -- The art of buying low and selling lower.

P/E Ratio -- The percentage of investors wetting theias the market keeps crashing.

Broker -- What my broker has made me.

Standard & Poor -- Your life in a nutshell.

Stock Analyst -- Idiot who just downgraded your stock.

Stock Split -- When your ex-wife and her lawyer split your assets equally between themselves.

Market Correction -- The day after you buy stocks.

Institutional Investor -- Past year investor who is now locked up in a nuthouse.

Profit -- An archaic word no longer in use.


Rolling your eyes, or chuckling at this point?

Either way, I would respectfully disagree with the last point. Profits are out there. You need to know how to find them. And understand -- and respect -- the difference between greed . . . and smart, planned growth.