Street Speculator

Tough times call for extreme measures. Today the SPECs bring forward a proposal to those suffering financially during these trying economic times. Remember, we are not salesman so there is no financial interest in providing this information.

This is an attempt to assist you in regaining the financial stature once had but now a thing of the past. It is never too late.

1st, GET RID OF THE FOLLOWING:

CABLE TV– Cable TV does nothing but keep people ignorant and overweight. Its sole purpose is to “entertain” the mind and not educate it. Plus, you would probably save between $30 -$90/month if removed. Take that money and put it where it can at least draw interest. If you happen to own these industry companies, sell them. TOO MUCH DEBT and the U.S. Cable industry as a whole is very capital intensive with virtually no international exposure:  Comcast (Symbol: CMCSA) $32 billion in debt; Time Warner Cable (Symbol: TWX) $16 billion in debt; Verizon (Symbol: VZ) $43 billion in debt.

CELL PHONE SERVICE– Yes. Since the day you 1st purchased this gadget and its underlying service, it has become an addictive device. Most people would not know how to survive without their cell phone. But, we all live near access to some type of communication in the event of an emergency. This will be difficult to most to rid themselves of. If you elect not to take our advice and keep your CELL PHONE, then subsequently get rid of your landline service and use the CELL as the main source of communication. Also, “sell” CELL PHONE service stocks as many of these companies are also loaded WITH DEBT: Deutsche Telekom (Symbol: DT) AKA “T-Mobile”, has $58 billion in debt; AT&T (Symbol: T) has $76 billion in debt (Unbelievable).

There may be other so-called house hold luxuries you know is a monthly financial drain. There are many items you can definitely do without, but the mental facility persuades otherwise. Remember, stick with the fundamentals.

As for the Stock Market investing, get back in after this Friday 10.31.08. That way you will have given the market a chance to ingest the FEDS injecting money into the Insurance industry.

Good Luck and Stay Focused.

Did I get a shock about 2 months ago. I attempted to switch my homeowners insurance provider. When calling around for quotes, all came in $40,000 lower in relation to what I owe and what the local government states the property is worth, or better, what I pay personal property taxes on.

Future Homebuyers: You are in the drivers seat (If you can get funding). Before submitting a bid on a potential property, call a few insurance companies and get homeowners insurance quotes. Submit your bid “lower” than what the insurance company values the property at. But, don’t ever bid over their quoted value amount. Also, don’t let the seller know of the quoted price unless the bidding continues past 2/3 proposals. Let the seller know that your price is FIRM.

SELLERS: Patience is a virtue. Insurance companies are becoming illiquid like the major banks. They are repositioning their balance sheets which  means adjusting their “risk level.” Good for the companies, but bad for consumers.

To those property owners with no intention of selling, go out and get a policy quote as well. Tell the insurance companies that you “may” consider switching. Do this just to see what the “true” value of your home is, what they value the property at and not what a salesman told you.

The speech President Bush gave tonight was useless. It served no purpose. Maybe to add some points to his presidential legacy, which as of today probably stands at “0″.

President Bush recited over & over a lot of Wall Street terms and terminology that Main Street Americans probably do not recognize nor understand. Many feel as though this bailout is only for the wealthy bankers in the U.S. There was hardly any mention to help those struggling financially because of unemployment, the rise of health care costs, etc…

This only solidifies Senator Obama’s campaign that much more.

Take a Listen to the speech.

However, it never came to fruition.

During President Bush’s 2nd term, he put together a panel to look at privatizing social security. His premise was to allow the American public to manage their own money for retirement instead of the government.

The negative side of this would be that we would now turn ordinary people (Not to sound elitist) into investors. But, from my understanding, the Social Security Trust Fund, similar to the FDIC, is surviving on credit. Meaning, there is no cash in the system and there will probably be none when many of us retire.

For people like me, there is a high likelihood I would not receive any social security benefits. With the present bailout proposition and the costs of financing the War on Terror, I don’t feel very optimistic. Those born after 1960 should not feel optimistic either.

I would not mind investing for my retirement. The U.S. government does not seem to be good at this art. Also, most government sponsored investment plans will not let you pull your money out until either retirement or termination. This means if I had my 401K or 403B dollars going into a fund whose top holdings included Lehman Brothers, Fannie/Freddie, and maybe AIG, it would be down substantially right now. The only option I would have is to switch funds or attempt to ride out the wave. Both of which are very time consuming and would not protect me from losses.

Hopefully one of the presidential candidates will revisit this proposition. I trust my personal money decisions more than I do D.C. politicos.

The housing crisis is not a distant memory but I will bet that the common man on the street recognizes the industry problems.

The SPECULATORS believe the Student Loan market is next bubble to burst. Student Loans can be securitized as were mortgages, credit card loans, and auto loans.

The premise in the U.S. is that a college education is the tool necessary for financial independence, and there may justifiably be some truth to that.

However, the job market remains challenged. Translation, new graduates will have a difficult time making monthly student loan payments if they are unable to find employment. Translation #2, the student loan portfolios will diminish in value. Translation #3, these securities will be written down in value and the companies holding student loan debt will need to find additional capital. (Same story with Bear Sterns, Citigroup,  and Lehman Brothers, just a different industry).

This leads to our consumer analysis on college affordability. We always stress the need to conserve cash. However, the U.S. savings rate is low and continues on a downward spiral. But, the costs of college continues to increase. This will make college unaffordable for many potential students.

Some schools do have billion dollar endowments (Princeton, Yale, Harvard, Stanford, University of Virginia), but the competition for these dollars will be intense.

College affordability, we imagine, will become a political issue by next summer. It’s probably too late to arrive as an issue now with the presidential election only a few months away.