Illiterate Poet

I have been buried at work recently. I know people have been trying to get a hold of me but things are a bit nuts right now.

I talked to my writing partner last week and we are submitting a new draft to the Producer. I am still being hopeful.

Michael, working like a dog, out.

I have a bunch of links ready for "link madness" but I figured I would write up a list of links that I visit often. These are sites that I really like and view daily, weekly and some only monthly. Because of our companies policy on blogs, etc I cant view some of these at work, but I usually check them out when I get home.

Dvorak Blog: One of the most prolific Tech gurus in the nation. Some interesting blog posts on technology and "news of the weird".

Mint.com: Although I don't want to look at my 401k and investments, since I use Mint for all my financial tracking, I do see its progress (or lack thereof).

Yahoo Finance: Probably one of the best stock/finance sites around.

Get Rich Slowly: I really like this financial blog. Some great ideas here.

Digg.com: Interesting links updated constantly.

Fark.com: More links updated constantly

Msnbc.com: General news site

News.google.com: general news site

Woot.com: Some pretty amazing deals here.

Lifehacker.com: Interesting articles and links

I also check facebook, MyExtralife and hulu, but only while at the house.

Epicproblem, 12 stones, Dad's blog etc: I usually check out my friends blogs once every other week.

Well, that's all from me.

Michael, out.

Ouch...

Michael, Out.

I am not sure whats going on, but recently everyone in the family has been sick (except yours truly, knock on wood).

Tara has to go back to the doctor to check on some abnormal tests she had. Alyson has scoliosis and feet issues and Lauryn just caught a stomach bug and has been vomiting all day. (Yep, I am on cleanup duty).

Needless to say it hasn't been much fun at our house. Good news is that I am taking off Wed-Fri! Going to be nice to have a few days off. I am hoping I don't get sick though.....

Please send the good thoughts, prayers, etc for the sick family.

Michael, cleaning up Lauryn, out.

I got this from my buddy Mike on Facebook.

http://www.slideshare.net/guesta9d12e/subprime-primer-277484/

(Be warned, some naughty language), but it does explain how this whole mess started.

Michael, out.

http://www.observer.com/2008/politics/be-logical-captain

"We experience moments absolutely free from worry. These brief respites are called panic."

- Cullen Hightower

(Caveat: I am not a financial whiz, nor adviser. I do have a plethora of financial websites, blogs and TV shows that I watch and generally consider myself pretty knowledgeable in the markets. It's always important to do your own research and "due diligence".)

Ok, this whole financial "meltdown" is driving most people including the talking heads and pundits into a tizzy so I figured I might as well throw my hat into the ring and give you my thoughts.

First, there is no doubt in my mind that we are in a recession, and possibly even a deflationary recession, which is probably the most painful kind of recession there is. Second, the US hasn't experienced this kind of financial crisis since 1929. However, the USA has a much better plan to handle the "step down" recession model that most experts think will happen. (think of stairs going down. We will see large drops over time and then flat. Then another downward trend, then flat again. Eventually it will be flat for a while and then trend back up)

Remember that The Baby Boomers and Generation X and Y haven't experienced a deep recession like we will see in the next 24 months. I don't think we'll slide into a depression (Unemployment in the neighborhood of 20-25%) but it is possible, but unlikely.

Predictions:

Over the next 24 months the market will proceed in a step down deflation lowering overall market value. Personally, I believe the DOW will drop to the 7000-8000 mark. I doubt it will go much lower than that.

House prices will continue to fall (median house price) another 20-30%.

As credit tightens up, unemployment will dramatically increase. Current unemployment is around 6.1%. I foresee this to increase to 10-15% (last seen in the 80's recession) over the next 24 months. Getting loans for just about anything will be difficult.

Prices will fall as consumers tighten their belts (consumers provide 2/3 of economic growth in USA). As this happens, companies, unable to raise prices, will trim their company's payrolls increasing unemployment. (Inflation could be a problem, but I really have my doubts that this will happen.)

Gold will rally probably breaking the 1000 ceiling. Oil will continue to drop and stabilize around 60-80 dollars a barrel. Other commodity prices will fall dramatically (Steel, Copper, Grain, Corn, etc).

Companies in Power, Infrastructure, Environmental, Alternative Energy, discount stores, etc will do well over the next 24 months.

Companies in Defense, financial, airlines, travel, luxury goods, "mall stores", etc will not do well over the next 24 months.

Taxes will increase. The writing is on the wall here.

Barak Obama will win the election. (I think we all pretty much see this happening whether you support him or not)

So what am I doing?

First, is to limit spending and build cash reserves. You need to calculate your bills over a 6-12 month span and have that cash sitting in a money market account (FDIC insured). I just moved my money market accounts to ING Direct.

If you have cash to invest and have "fully funded" cash reserves, I would follow my DRIPS plan and invest in KO, MO, GE. Buffet is doing the same, so I must be on to something here.

If the company you work for is not in the fields that I mentioned above that I think will do well, polish up that resume. Start networking with sites like Linkedin. Interestingly enough the best time to go back to school full time is during a recession as well. The key to finding a new job is network NOT Dice, Monster, etc. Now is the time to be noticed in the company you work for. Good employees are very expensive for companies to replace, make sure you are one of them.

Trim spending and get a budget.

Continue to FULLY fund your 401k program. Even with the losses with company match, you are still doing well. With the tax incentives and "buying low" mentality, it's still a good choice. You could move your money around if you want, but I am sticking to my long term plan and not messing much with my fund choices.

Get out of debt. In a perfect world, you wouldn't have any debt, but with most of us, we have a house, cars, etc we have to pay for. Ideally, 1 house note and 1 car note should be your only debt obligations. Get rid of credit card debt.

Remember that this is just a period in time. Don't panic and sell everything (as Jim Cramer suggested). Stay calm and remember that you're in this for the long haul.

The days of making 20% returns in a year are over. As you see with my predictions of a curve, it steps down and flattens before going back up.

Well, that's all I can think of at the moment. Again, getting your cash reserves up and getting out of debt are most important. I think most of these stocks are really battered down. I am even thinking of taking a small amount of cash and buying FRE, FNM while it is so low and holding it for a few years.

Michael, looking at his mint.com summary, out.

Tara's birthday is coming up and I have no idea what to get her. She is notoriously hard to buy for. I on the other hand am very easy. Most people who know me will get me gift cards to Barnes and Noble (Voracious reader) or pilot supplies (My parents bought me an E6B and Tara bought be a subscription to Plane and Pilot last year). I don't know why it seems women are so hard to figure out. If anyone has any ideas, please email me.

I will be heading to Boston next week. It's been a while since I have had to travel and the break has been nice. The project is going well also. We are at the point where most of the "heavy lifting" is done and now we are in maintenance and operations mode.

Tara is already starting to plan holiday schedules. It looks like she wants to go to Atlanta a week before Thanksgiving to see her Dad, then come home to BTR and spend Thanksgiving Day with her Mom. We are heading to Tampa for Christmas with my parents this year also. Going to be a busy holiday season!

I received new office furniture yesterday also. It isn't very "feng shui" but it works. For some reason this office is VERY cold. My thermostat says it is 73 degree's but I would argue it is in the upper 60's which is pretty cold for me. I probably will need to start bringing a jacket just to sit in my office. I still need to put up the "me wall" with all the certifications, degree, etc. as well.

We have been getting involved with "small groups" at our church. We meet weekly at someone's house (this week it is our house) and since we are all couples, the conversations can get very interesting. So far it's been lots of fun.

I realize this is a pretty boring post, but not much has been going on. The attention on the political campaign (I still don't know who I will vote for), and the financial crisis seems to be taking most of the attention. All I can say is that I am not looking at my 401k/investments, I am continuing to buy investments, and ignoring most of the political speak.

That's all from me.

Michael, out.

"If stupidity got us into this mess, then why can't it get us out?"

Will Rogers

This whole bailout mess really makes me mad. Personally, any bailout makes me mad. I pay my mortgage, pay all my bills, have no debt, and we are going to "reward" everyone who made bad decisions? The idea that we are going to pay 700 BILLION for worthless garbage seems a bit crazy to me. I am no economist, but I have been reading many of them and from what I can tell, they think this is madness too.

Someone sent me this website. See if you can balance the budget. I was able to get to 2042 before the budget was busted. (I cut as much junk as I could). I still increased school, science and technology investments (Except NASA! I worked with NASA, trust me.. There are many cuts we could make there and most government agencies).

Things are going well in spite of the madness in the economy. Tara is doing well at school teaching, girls are doing well as well. It's frightening how fast they are growing up. Of course Keyser is doing well too!

I will have to head back to Boston soon. I need to get up there for meetings. To be honest, it has been nice not having to travel as much. I probably will need to go to China one more time, but I am hoping it will be a short trip.

That's all from me.

Michael, out.

PS: I almost forgot, I never thought I would see the day. My Dad who gets frustrated with most technology (and wont install Instant Messenger) signed up for Facebook! Go Dad!