Respectfully, after discussing this with senior people from Geneva, Boston, London, and New York, affiliated with major brokerage and bond funds around the globe, your father is in the minority. I for one, will put my money where my mattress is, i.e. treasuries, double A or better rated Municipal and Revenue Bonds (even though unlike Federal Bonds states must rely on credit with accompanying risk to integrity), and CD's, FDIC insured until 12/09. Unless one is prepared to sit on a house or stock for years, now is not the time to spend money. Clearly, if you have enough to buy a business in trouble or a real estate fire sale (large commercial properties who cannot get financing), it is really a gamble to leave home. I don't pretend to know what is going to happen (except when Carter and a Democratic Congress delivered to us Treasury Bonds at 12% interest)given that Paulson, Bernacke, Obama and McCain, don't have a clue. What I do know is if you owe as much as we do to foriegn countries, there is a real risk of a debt being called and our economy being destroyed, as well as the threat of a serious encroachment on our freedoms. I tell my sons that "freedom is defined by those who control it". We have no savings necessary for investment and most people are in debt (which needs to be paid first before they are ok), with rising unemployment slowing production, and money being printed as fast the presses can run. This sounds like deflation, but paradoxically we may also be facing a U curved recession characterized by stagflation. Ferrari prices will continue to drop, with a odd sale here or there based on someone with money wanting a particular car at a particular moment. Otherwise, we still live in a world of supply and demand and the supply has outstripped demand. The value of something is simply what someone will pay for it. Why pay more than you have too, given that most sellers are under pressure to sell or would not be selling. Again, I always wear out the eraser on my pencils before the lead. Best
15/94 Amazing Jim, What a wellspring of knowledge, experience and wisdom to have around. The Great Depression, WW2, the cold war, atomic bombs, man on the moon, the civil rights battles, 9/11, on and on. Not sure what I could say/offer to a man like that. Interesting thought-He may be one of only a few (the only?) individuals to have experienced the 2 greatest economic upheavals of our history.
Well stated..........prices in every sector will drop and prices must drop. People must start realizing the importance of cash. Even if markets have reached a bottom and will start turning from this point, people must be wiser and will be wiser in their spending. People have learnt a lesson and not an easy one. Over spending will come to a halt and most of the luxury items will return to normal prices and demand will be much less.
Oh yeah, the dancer.........I remember her . Big T, you are very right.......I was much happier when cash was scarce.
Tarek, thanks. A bit off the usual topic of our Silverstone/Cuio and other preferences, but given your relative isolation from the "states", let me share with you another piece of good news. I believe there is an 80% chance that Obama will be President, unless "Plumber Joe" catches on and people get it that Obama will "redistribute wealth" (take from someone trying to earn a living and giving it to someone who needs a job but won't be able to get it because by taking from the first guy, he is not hiring anymore). With Obama we have the Nancy Pelosi (Congress) and Harry Reed (Senate) to help spend money. It is likely the Democrats will control Congress, and this spells disaster. Why? Unfortunately, and maybe necessarily, when Goverment became owners of our Banks (something usually forced in third world countries) the "barriers" between Government and private enterprise fell. The Goverment now sits at the table of private corporations. Add to this the desire of the Democrats to permit expanded unionizaation, including "public" voting, so no one has a private vote any longer, and you create more democrats, not to mention price pressures on business. If this scenario comes to pass, the United States will move quickly toward socialism. akin to some European Countries. This is not unprecedented, given Franklin Roosevelts "New Deal" (work program) to "help" get us out of the Depression, and to a lesser extent under Lyndon Johnson's "Great Society". Also Jimmy Carter with a Democratic Congress managed to get our interest rates up to 12% accompanied by hyperinflation. Obama is raring to go to "spread the wealth". Death taxes belong to the Goverment. Capital Gains increases which actually result in less revenue to the Government (check history record) will be increased, all but nationalizing health care, providing 40% of the 95% (who do not pay taxes "tax credits" (welfare). I am not sure McCain could do much better as a President, but it would be better to have one part in the White House and one in Congress either way. Pack a lunch, cause this is going to be one wild ride (to use a (Ferrari Forum) metaphor. Hope you are well. Best
so, based on the fact thati and others have recently been afforded 31 flavors of financing and lease terms to purchase cars, how can you say it doesn't exist unless at 50% LTV?
Thanks for the info ............I believe Obama will win. Everbody outside the US wants Obama to win. He will benefit greatly from this crisis and he will redistribute the wealth. Markets will start going up after his election. Obama and his team have to save the US and the world .
This is not the last few years....this is nothing like the last few years. The question is not whether you take a loss or not. The question is do you take a loss now, or a bigger loss later?
I looked for the link to the article, but it's not online any longer. The link is for Bloomberg "TVTODAY" and does not go back to earlier this week...or at least I couldn't find it....
You know. I can take a 20-point drop in my Exxon. I can deal with the fact that everything I own is now worth less than it did yesterday. But what scares the living fock out of me is what Barack/Nancy/Harry are going to do. I don't know about Barack. However, everytime I see Nancy or Harry on TV, I can't escape the feeling that they are insane. I don't mean figuratively. I mean literately. Check it out. The next time you watch one of these demented weasels, check out their eyes. Holy guacamoley! Scary times, my friend. Truly scary times. Dale
The financial system is crumbling around us, we're fighting a pointless war on borrowed money from China, we have a national debt that has more than doubled in the last 8 years, the dollar is in jeopardy, and Saudi Arabia has us in an energy-based chokehold. Yeah, what if Nancy Pelosi is actually a psychopath. There's something to worry about... At the risk of straying on topic, the problem is that housing has fallen, and it has to fall a lot more to reach rational levels. Not only are the real estate cash machine and Wall Street gravy train that powered the modern Ferrari market gone, but they may not be coming back for a decade (or more - who knows).
the smaller banks and credit unions that didn't get into the subprime lending game still are lending at pretty much the same level as before in terms of approvals for loans (car, home, etc.) as they don't need any bailout $. a question for SDChris or the other brokers....what is typical floorplan financing rates right now out of curiosity?
First, sorry about the repetition of the question of the man's age in my prior post. I meant to erase it and sent it instead. Second, while I agree with most of this assessment, I need to point out that US Treasury securities (Bills, Notes and Bonds) are not callable. What is generally considered the risk of foreign ownership is that one of these foreign governments will try to "dump" our debt, by selling it at any price on the open market. With such a large supply, and a dwindling number of buyers, the theory is that the price of the debt will fall dramatically, which will raise interest rates and which will cause the refinancing of such debt to be at Jimmy Carter rates or worse. I NEVER SAY NEVER, but think of this. If China decides to dump, say, $100 Billion of our debt, the price will fall. But this hurts China too, because the value of their remaining holdings--which is a multiple of 9 or more on the $100 B they just dumped--will be significantly impacted. So, in dumping our debt, it depletes their own holdings' value, and they use Treasuries for certain reserve requirements in both public and private transactions. It doesn't make sense for them to dump. The wild card is if, say, Iran gets its hands on $100 Billion of our debt and dumps it--they commit economic suicide, but may bring us down with them. Read, "The Black Swan." If you start to learn the principles therein, you can conjure up some bad S**t. Back to Ferrari Prices . . . Waaaay Down still to go. Read my posts from a year ago. THIS WAS NOT A SURPRISE--and it is much harder to say it will happen BEFORE it happens, than to say "I told you so" afterwards. I take no joy in the current downturn (it may very well elect Obama). But, I MUST continue to function in this economy and the best way to do this is to see current reality and to speak out loudly about the obvious next few steps. They are obvious to anyone who is paying attention. I am hopeful--but I am not blind.
