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Inauguration Day! January 20, 2009

Posted by shaferfinancial in Finance.
Tags: , , , ,

For a year now the national psyche has been down in the dumps.

Today, a new regime takes over the reigns of government.  With it the spirit of the American people will rise. What we are seeing is truly historical, but more importantly is the reaction of the American people.  The expectations are uncommonly high, making it a certainty that we will be disappointed at some time in the next 4 years.  We will start seeing some breaks of daylight in the current economic storm during 2009.  Hopefully, folks will put themselves in position to make the needed changes to take care of their financial lives.  Thanks for reading my blog over the last year.  If you haven’t seen it yet, please check out my new website!

Yours in hope,

David Shafer



1. Sean Carr - January 20, 2009

I believe the daylight in 09 may be that we finally begin to have some transparency to the depth of the underlying financial issues. The news of the UK banking problems today is disturbing, but knowing what’s out there will at least allow markets to establish some footing even if it is from a lower base. It will be very interesting to see what their response is.

We have some numbers floating out there that are difficult to understand; BOA with 38 Trillion in OBS derivatives, JPM with 90T, Citigroup with 38T, etc. How many of those are bad apples? Paulson doesn’t seem to want to tell that secret but it will have to be understood in order to stage a recovery. It’s no wonder banks want to recapitalize and refuse to trust thy neighbor. It’s my hope that the number isn’t so bad that I begin to start liking Hank for keeping it from me for so long. I may be labeled a perma bear but I don’t want to concede to the guy at the office who’s been recommending investing in guns and gold. If I miss buying in at the absolute bottom I wont be too upset.

Anyway I’d like to be more optimistic but I believe that while 09 may come close to a bottom, the most profitable investments will continue to be short positions and currency trades. I’m aware those are difficult areas for many investors enter. I don’t have any good advice on tackling that one.

While I’ve been looking at RE I’m still uncomfortable with the risk, especially as a leveraged investment. I’ve drastically reduced the leverage in my short positions because I have no insight into what’s driving the extreme volatility. I remain with a sizable short position, just not a leveraged one.

I have great hope for President Obama and believe he will confront these issues in a more straight forward and transparent manor. Unfortunately this mess of dept de-leveraging cannot be made to go away, it has to be cleaned up and there will be no meaningful recovery until that has been achieved (based on my narrow understanding of macro economics of course!).

Cheers! Hope you have a great 09.

2. shaferfinancial - January 21, 2009

Thanks Sean for your comment. Uncertainty is a big issue with traders now. You are right, no one can buy with any confidence when there is a failure of transparency. Many stocks that are transparent, have been brought down to prices that represent a good value for folks with courage and analytical abilities. One thing we know is that no matter what the market, bear or bull, there are people with a plan making money. The key is to have a set of rules which you abide by. Doesn’t matter if you are a trend follower (trader) or a buy-and-holder, you can make money in this market over the long run. Hope you have a plan, sounds like you do.

For me, I see credit loosening up, and the recession in its last months. Real Estate pricing that is low enough that the average income can buy in. And of course Obama giving us hope that change is in the air. 1.3-1.5 million people on the mall in Washington tells us something about the power of change!

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