Parchayi.com – Personal Finance Simplified

The goverment rejected the automaker restructuring plan, asked for GM CEO to resign and better terms with unions. This is exactly what should have been done with banks. Get rid of their lousy management, reduce the ridiculous pay that financial folks get and not just dump money at them.

I’m glad the administration is talking a tough stand this time. Hopefully no more of your and my money and our children’s money gets thrown at problems that shouldn’t be solved. If there is a need, somebody will come forward and fill the need. We don’t require government intervention in everything everywhere unless it is a good plan that we know will work.

Inspite of today’s downturn, it looks like 2009 has the potential to be a positive year for stocks. Fingers crossed.

The Dow is now below 7000, below even 6900. AIG posted the biggest loss ever posted of nearly 62 billion dollars. HSBC is closing it’s consumer loan business in the US as it posted a 70% drop in profit and is laying off thousands. The feds pumped 30 billion more into AIG making their investment a total of 180 billion.

I got my home assessment last month. I am now officially underwater. If house prices continue falling, trouble might get worse. Inspite of having perfect credit and the ability to pay my mortgage bill, I cannot refinance into a lower interest rates because of being underwater. I’m hoping Obama does something to let us people who are not missing payments also refinance.

During the great depression the Dow fell almost 90% from it’s high. Times are different now and I didn’t think the dow could fall over 50%, but it has. So is this a bottom? Only time will tell. Personally I’m assuming that the market can fall even more and I’m not getting into anything now. Chances are that it will rise tomorrow as it generally does after bleak days. But beyond that, who can tell?

So even though I might miss out on some gains if today is the bottom, I’ll wait until the market steadily rises for a few weeks before getting into anything.

Another thing to note is that gold is back near all time highs. So if you are thinking of moving from stocks to gold, this is probably the worst time ever.