Sentient Money

Here is a listing of some great posts from the past week:

Financial 911 by Millionaire Mommy Next Door - Good solid personal finance advice, that applies in good and bad economic times.
The Death of Index Investing by Early Retirement Extreme- Love this article.  He does a good job of simplifying the case against index investing, [...]

The world is not ending.  Actually, if you have some cash it might be time to start looking for some good bargains.  I put roughly 30% of my cash to work today.   Why am I so calm…it (market) always comes back.  If it doesn’t it won’t matter if my assets are all in cash, as [...]

 
With everything that is going on let’s take a look at the most overlooked, but what may be the most important aspect of our economic model.  What is it?  The Fed?  Wall Street?  Inflation?  Nah…it’s psychology.
Right now you are thinking, “This guy has lost it.  Companies are going bankrupt left and right, thousands of jobs [...]

The Fed, European Central Bank and four other central banks cut their interest rates by 50 bps (.5%).  This brings the bechmark Fed rate to 1.5%.
Is this what the market has been waiting for?  Psychologically it could help, but this cut won’t really have an impact on the economy for a few months.  It should be [...]

This market and economy are painful, but there is some good news out there.  Consumers (we are just numbers to them) are paying off debt faster than they are accumulating it….YES!
 
It was the first month since January 1998 that consumers had paid off more debt than they took on.
Borrowing to buy an automobile declined sharply. [...]

We could be nearing a bottom:

Cramer wants everyone to sell their stocks
Everyone is talking about the financial crisis. It was the first topic my cab driver wanted to talk about the other day, and friends, who never pay much attention to the market, asked me if it was time to sell.
The VIX (volatility of stock [...]

 Wrong!  Don’t pay any attention to the CPI numbers quoted on the local, national or business news.  It is all garbage.  Why?  They screw with the formula every few years so a 4-5% now is actually around 8% or so.  Take a look at the chart below, curtsy of Shadow Government Statistics:
 
 The real CPI is [...]

There is one thing we cannot allow to happen after this bailout.  We cannot allow the perpetrators to escape unscathed.  This was brought on by two distinct groups.
Money Men
We must ensure that any solution has strong wording to ensure the money men do not run off with their new found capital.  The government/taxpayer needs to [...]

Consumer sales are starting to tank.  Just look at the auto companies (all the numbers are drops in sales):
 
Standard
·         Ford Motors 34%
·         Honda reported a 24%
·         Toyota U.S. 32.3%
·         Chrysler U.S. 33%
·         Volvo 51.8%
·         General Motors 15.6% (expected 26%)
·         Nissan Sales 37%
·         Volkswagen sales 9.4%
·         Hyundai Motor’s U.S. 25%
·         Kia U.S. sales [...]

In his new article “Drill, Baby, Drill” Stein spouts nonsense with just enough facts to make everyone think he is on to something with off-shore drilling.  He suggests that more off-shore drilling will be a major factor in gaining our energy independence.  He couldn’t be more wrong.
We, the United States, only have 1.5%-2% of proven [...]