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"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Wednesday, December 31, 2008

End of the Year Gold Chart and Video Mosh Pit!

Is your 2008 going out with a bang, or slouching toward the exits? Here's a chart for those who like a golden end to the year ...This compares gold (green line) to silver (blue line), the S&P 500 (black line), oil (red line) and the TLT bond fund (pink line). Obviously, bonds got the better of 2008. But what will happen in 2009? That's the real question.

Here, in my latest web-cast, I try to answer some of those questions in my latest broadcast for MaM-TV.

Those are my answers. What are your answers? There are plenty of answers around, but the trick is asking the right questions.

Here are some other things to think about.

First of all, the
Fed is going to buy $500 million in mortgage-backed securities by the middle of 2009. Will that finally unstick the frozen mortgage markets?

Money is tight.
California is going to start paying bills with IOUs. But there's one group that is still getting a raise: Congress. Members of Congress are giving themselves a $4,700-a-year pay raise starting Thursday.

the New York Times details how Washington Mutual built an empire on shaky loans. At least one of the loan supervisors did his job fueled on crack cocaine. I believe it. We bought a house with a WaMu loan about 7 years ago. They did such a bang-up job -- they assessed the WRONG HOUSE. They delivered a report in which our house backed up to a street and had no pool -- our house actually has a pool and backs up to a preserve.

How could they miss so badly? Maybe the clue is that the company that built the housing development we live in changed the street names in the middle of the project. On Google Earth, the streets still have the old labels. So, my guess would be the folks at WaMu looked at "our street" and "our house" on Google Earth, made a back-of-the-envelope guestimate, and voila -- job poorly done.

The Financial Times reports that
money is flowing out of hedge funds at a record rate. The FT reports that "Investors pulled a net $32bn from hedge funds last month, making 2008 the first year in their recorded history that the funds have had significant outflows and ending the industry’s 18 years of asset growth.

Meanwhile, I've been getting death threats. We all have -- the latest round of dire warnings about how the earth will end. Some say a long-dormant s
uper-volcano in Yellowstone National Park will do us in. Competing with that is a giant dust cloud in space that could wipe out life on Earth. The icecaps are melting fast, and a sudden melt could cause a huge and sudden rise in sea levels. And then there's the old standby, a giant asteroid hitting Earth (now with Pink Floyd soundtrack!)

My answer to all that ...

Have a happy New Year, try not to worry too much, and I'll speak to you in 2009.
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