Read on and consider there is a Better way

November 14th, 2008 John Krol Posted in 101 Things going Right, IRA Private Equity investing, TIC Investing, The Book Online, Why a Boomers Bank No Comments »

Off shore Investing

Your 5-minute guide

Its time for you to take control

Its time for you to take control


to saving your retirement

Retirement is just around the corner and you’re not ready?

Let these 18 tips help you get to where you need to be.

By MSN Money staff

Spend less and save more. That’s what the experts advise if you’re getting a late start on retirement savings. Chances are you’ll also have to work longer than you expected.

Don’t despair and don’t panic. Many Americans are in the same boat, but there are still ways to catch up.

First, get an idea of your expected post-retirement expenses. Start with MSN Money’s Retirement Expense Calculator. If you are new to investing or want to brush up on what you already know, there are short online courses in MSN Money’s New Investor Center.

The basics: Social Security

The next step is to look into Social Security. You’ll probably get benefits, but they likely won’t fund a comfortable lifestyle. A third of current retirees rely on Social Security for at least 90% of their income, and the average monthly check is $1,007. (See “Could you survive on Social Security?“)

  • Figure out what your future benefit will be by checking your annual Social Security statement. If you’re in your 50s or younger, anticipate that the amount will be smaller than the estimate. A reduction in future benefits may be one way Congress tries to keep Social Security solvent beyond 2041. (See “Your free financial report card.”)
  • Don’t be tempted to start collecting at age 62. You’ll get a smaller monthly check for life — 20% to 30% less — than if you wait until you’re fully eligible. For most folks, that’s not 65. For anyone born after 1937, retirement age increases by two months per year until it stabilizes at age 66 for people born between 1943 and 1954. After another gradual increase, it’s 67 (at least for now) for folks born in 1960 or later. See the Social Security Administration’s Retirement Planner.
  • You’ll get a larger Social Security check if you don’t start collecting as soon you’re eligible. Benefits increase 6% to 8% each year you delay until age 70.

Just do it — now

Now that you know what the government will likely kick in, turn your attention to trimming expenses and boosting your savings. Start with MSN Money’s Retirement Income Calculator and see “8 money moves you must make at 50.”

  • Take advantage of benefits available to retirees by exploring senior discounts at aarp.org and other Web sites. In addition, seniors can get help paying for food, utilities and other essentials. Use the Eldercare Locator.
  • Maximize your contribution to your employer’s tax-deferred retirement plan. Then make the maximum contribution to an IRA. If you’re self-employed, consider a Keogh plan in addition to an IRA. (See “The vanishing safety net.”)
  • Federal law allows older workers to play catch-up. Those 50 and older can put an extra $1,000 into an IRA (for a total of $6,000 in 2008) and an extra $5,000 into a 401(k) or similar tax-deferred employer plan (for a total of $20,500 in 2008). (See “Saving strategies for the over-50 crowd.”)

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New & Noteworthy Rob Report just for fun

November 5th, 2008 John Krol Posted in News Financial Intelligence, Why a Boomers Bank No Comments »

New & Noteworthy 8-)

November 3, 2008

A Room with a View at Sea

Apreamare’s new 82 Maestro combines the nautical heritage of the 150-year-old shipyard with a modern Italian interior. Unveiled at the Cannes boat show in September, the Italian shipyard maintained a classic-looking, expedition-style exterior while inside it’s designed with a surprising sense of openness achieved with details such as a picture window in the master suite and sleek, off-white furnishings.

Depending on engine choice, the blue-water hull can deliver a top end of 31 knots and cruising range of 400 nautical miles. It’s a yacht that is designed for ocean running but is faster than many other explorer yachts in its class.  In addition to spacious interiors, the designers also maximized the exterior three decks: The bridge has three lounges, sun platform, Jacuzzi, and wet bar, while the teak-laden cockpit area below is a good spot for al fresco dining. The new Maestro series will include 51 and 65 models. (www.apreamare.it)

—Michael Verdon

October 21, 2008

The Custom Line Super-Sized

The sleeker, more contemporary Custom Line 112 NEXT is a significant departure from the Italian shipyard’s previous-generation 112. Launched at the Monaco yacht show in September, the stylish new design, with its banks of curved windows that bathe the interior with natural light, has been super-sized both externally and internally.

The 112 NEXT was codesigned by Studio Zuccon International and Ferretti’s Advanced Yacht Technology division. They employed a super-sizing effect with a spacious 237-square-foot cockpit, an expansive 485-square-foot salon, and a 110-square-foot gourmet galley. At the same time, Zuccon also infused the interior with tremendous warmth, keeping the floor plans as open as possible and blending American walnut paneling and off-white fabrics with contemporary furnishings. The full-beam master suite has a private bathroom, Jacuzzi, and open-view windows.

Custom Line also designed a feeling of openness into the yacht’s flybridge with an enormous sunning area featuring oversize sun beds, barbecue, and Jacuzzi, and the extra-large hardtop gives provides added shade. With its twin 2,775-hp MTU engines, the 112 NEXT cruises at 23 knots and reaches an impressive 26 knots. It is also built to MCA standards for chartering. Custom Line incorporates a high-tech gyro-stabilization system that reduces roll by up to 50 percent, making life on board significantly more comfortable. (www.customline-yacht.com)

—Michael Verdon

October 14, 2008

New Kid on the Block

The first DeBirs 100 Sports Yacht, launched at Cannes in early September, gained instant fanfare for the shipyard based in Alexandria, Egypt. The DeBirs name is actually a highly respected Dutch yard that was reestablished by a group of European yacht designers and American executives from the aviation industry. The plan was to introduce advanced aviation engineering to the yacht-building world, while also taking advantage of Alexandria’s skilled, but relatively inexpensive pool of boatbuilders.

The yacht is an engineering and aesthetic triumph for DeBirs, which has focused on smaller, more traditional-looking motoryachts. The profile has a sleek, Eurostyle look, reminiscent of sportyachts like Azimut S103 or the Riva 90 Duchessa. The Italtecnica/Arrabito-designed hull tops out at 28 knots with twin 2000-hp MTU engines. It’s also about 30 percent lower in price than similar style boats.

The modern interior, designed by Egg and Dart of Munich, also includes a voluminous space defined by light-colored woods, fabrics, and contemporary furnishings. The first 100 have a full-beam master stateroom, with vertical hullside windows that offer tremendous light, along with four other roomy, bright guest cabins. The 100 also has a mini-flybridge that does not compromise the sleek profile but provides extra space for socializing. It’s an impressive launch for a young yard that promises to carry on DeBirs’ good name.

—Michael Verdon

September 23, 2008

High Fashion Meets the High Seas

Haute couture will soon become part of one of the racing world’s most famous luxury yachts:  Bespoke yacht broker Weyves Yachts has sealed a partnership with fashion and perfume designer Thierry Mugler to create a custom interior for the world’s fastest yacht. The 112-foot Gentry Eagle, built by racing legend Tom Gentry, broke the record for fastest transatlantic crossing in 1989, shattering the previous record by Virgin tycoon Richard Branson.

The Gentry Eagle design project is one of several upcoming ventures between Weyves Yachts and Agent de Luxe, a fashion-design agency run by Donald Potard, who spent 25 years as president of Jean Paul Gaultier. Enlisting a fashion designer to redesign a yacht is not a standard decorating move, but Potard believes it is the sign of a new generation. “Fashion designers are more than just clothing designers today,” says Potard, “they influence a lifestyle.”

“Yacht owners are using their vessels as places to entertain, and they want to express their personal style,” Potard said. Mugler’s redesign will stay true to the original owner’s sense of style but will incorporate Mugler’s uniquely glamorous touch. “Crystal, chandeliers, metals―the interior will have a distinctly ‘Mugler-esque’ feel,” Potard said. Mugler drew inspiration from films like Barbarella and the Star Trek series to create the futuristic interior as an homage to Gentry’s favorite films.

The $5 million redesign is expected to be completed by October 2009, and the yacht is estimated to sell for about $10 million. (na@weyvesyachts.com).

—Alexandra Foster


September 9, 2008

Bond Girl of the Sea

The new 163-foot Casino Royale, unveiled in July, pushed the Christensen shipyard to its limits. “The boat’s owners have thirty-plus years of experience building different yachts,” said Joe Foggia, Christensen president. “Their requests pushed us in many new creative directions.”

Casino Royale’s 6,900 square feet of interior space is a masterpiece of interwoven wood and stone, with Sapele mahogany raised-panel joinery and custom marble and granite work defining the salon and dining areas. The master stateroom also has the beautiful woodwork with intricate marble wainscoting. The spiral staircase of the entryway features sexy Bond-girl silhouettes etched into frosted panes of glass, and an intricately carved sculpture of a roulette wheel, made of petrified wood and stone, completes the Bond motif.  The yacht, which has a transatlantic range of 4,500 miles, will be on display at this year’s Fort Lauderdale, Florida, boat show. (www.christensenyachts.com)

—Michael Verdon

August 19, 2008

Little Big Boat

Making its debut in June, the new Hatteras 56 Motor Yacht is a fresh departure for the legendary North Carolina builder of motoryachts and sportsfishermen. Priced under $2 million, its entry-level 56 brings a new echelon of affordability to Hatteras ownership. But the yachts still provide the same Hatteras solid-fiberglass construction and elegant interiors that are built for tough offshore running.

The 56’s 18-foot beam gives it as much interior space as yachts in the 65-foot range. The wood-clad interior, including a 130-square-foot full-beam master suite and separate VIP quarters, provides lavish comfort for cruising, while the twin 705hp Cummins diesel engines gives it a range of 300 miles at 18 knots. It reaches a very respectable end of 21 knots. “This yacht allows entrance into the Hatteras family and will appeal to boaters in waters like the Great Lakes or Northern Europe,” says Keri Theophilus, president of the Hatteras Collection. Theophilus says the 56 will remain the baby of the Hatteras fleet: “We won’t build boats smaller than this.” (252.633.3101, www.hatterasyachts.com)

—Michael Verdon

August 5, 2008

Smooth Speed Racer

The 41 Super Leggera, the most recent launch from performance builder Outerlimits, reproduces the superior handling and blistering speed of the company’s latest world championship race boat. The finely tuned surface was built for ocean running and to deliver a smooth ride in harsh seas. “The cornering is phenomenal,” says Mike Fiore, Outerlimits CEO, and holder of multiple world championships. “Racers can cut buoys on a dime, and poker runners can hit 100 mph. We haven’t compromised on handling, though. You can feel the difference when it gets nasty out there.” Outerlimits also provides a three-day training course with world-renowned race champion Trace Martin as part of the purchase price. Luxury is also designed into the 41’s DNA. The helm console is hand-stitched leather and suede, and owners have a choice of hardwoods and fabrics for the interior. Outerlimits creates customized exteriors with signature graphics and colors, so owners can truly express themselves through their super boat.  (401.253.7300, www.outerlimitspowerboats.com)

—Michael Verdon

July 22, 2008

City of Lights

Maraya, the 164-foot custom motoryacht recently launched by CRN, is a breakthrough design for the Italian shipyard. The steel-hulled yacht has a contemporary, sleek profile with innovative designs such as a master balcony that folds outward from the master suite to become a private patio on the sea. Maraya’s expansive interior is literally a city of lights. CRN installed more than 600 points of light, using only fiber-optic and LED technology, to highlight the design of the walnut interior, artwork, decorations, and unique fabrics like cream-colored leather chairs and ebony furniture. The 1,000-square-foot main lounge is a yachting ballroom of epic proportions. It is a single, unbroken space, separated only by a 42-inch plasma TV and dining table that seats 12. The rest of the interior, including the owner’s cabin with its private study and five guest staterooms, is also tastefully decorated and artfully lighted. To make the most of the view, Maraya even has a glass elevator that traverses its three covered decks. (www.crn-yacht.com)

—Michael Verdon

July 8, 2008

Designer Missile

The Pershing 64, launched recently in Milan, is the latest nautical fashion statement from an Italian builder known for introducing bold designs to the performance boating segment. The express yacht, with curvaceous hardtop, reaches 46 knots with its twin 1550-hp MAN engines and Arneson ASD 14L drives. Its more notable assets extend beyond the sleek hull and respectable top speed into the refined interior, where Pershing has given al fresco a new meaning. The long side windows infuse the spacious saloon with natural light, and the panel of rear windows opens electrically, turning interior and exterior into a single open-air lounge.

Pershing partnered with Poltrona Frau, the Italian leather furniture maker, to custom-design much of the interior. All seating and leather details, wall and ceiling panels have been exclusively designed for the 64. The designers took great care to match interior colors such as ivory white, heritage black, and chocolate brown to exude an understated elegance. Other noteworthy interior features: A full-beam master suite, with an oversized window in the hull sides, and two large cabins, each with en suite bathrooms and showers, all using the same color scheme as the topsides (www.pershing-yacht.com).

–—Michael Verdon

June 17, 2008

Riva Moves the Mille Miglia Out to Sea

The Italian boat company Riva pays homage to the Mille Miglia, the legendary classic car race, with a specially designed boat inspired by the vintage automobiles that compete in the race. The Aquariva Mille Miglia (design concept shown), which will be offered at auction a few days prior to the start of the race in Brescia, Italy, in May 2009, is a redesign of the company’s own iconic 33-foot Aquariva boat. The boat accommodates up to eight passengers and is powered by twin 380-mph engines, and it features a driving seat reminiscent of a sports car, red and steel detailing throughout the exterior, and mahogany and maple decks that also mimic a car’s interior. Only one Aquariva Mille Miglia is being produced, but Riva will take orders for up to 10 additional units. (www.riva-yacht.com)

―Alexandra Foster


June 3, 2008

Sensational New Fraser Yacht

The M/Y Sensation, Fraser Yacht’s newly finished 164-foot charter boat, is designed for luxury cruising. It features a vista lounge with two large semi-circular sofas and a grand piano, a spiral staircase leading to the upper deck, a formal dining room, and a main lounge furnished with a plasma-screen television and bar for entertaining. A full staff is available to customize any itinerary with available amenities such as first-rate chefs and certified nannies. The M/Y Sensation, able to accommodate up to ten guests in four staterooms and an owner’s suite (complete with central Jacuzzi bath), will charter starting at $350,000 a week. The yacht is also available to purchase for about $41 million. (www.fraseryachts.com)

―Alexandra Foster

May 20, 2008

Pied-a-Terre on the Sea

Midnight Express, the Ft. Lauderdale, Florida-based maker of performance-based luxury sports yachts, has taken the idea of a pied-a-terre to sea with its newest boat. The 34-foot Pied-a-Mer is the ideal size for a weekend getaway or overnight trip: It has enough room to sleep two comfortably―plus bunk beds―without compromising outdoor space. The Pied-a-Mer’s greatest luxury, however, is its advanced fuel efficiency. A stepped-hull system allows for a lift in the front of the boat, creating speed with less drag through the water. Perfect for a weekend getaway, the made-to-order twin engine Pied-a-Mer has a top-speed of 60 mph, and prices start at $250,000. (www.midnightboats.com)

―Alexandra Foster

May 6, 2008

La Dolce Vita by Water

Any classic boat aficionado will view the Riva Italian speedboats with the same respect as luxury automotive marques like Ferrari or Maserati: It has the same celebrated Italian heritage and dedication to strong, sexy styling. A prime example of its ability to combine sleekness with performance is the 63 Vertigo, which made its U.S. debut during February’s Miami Yacht & Brokerage show. The Vertigo combines an open cockpit with a hardtop, a unique design that allows for shelter in bad weather and full access to the  queen-size sun pad on the transom on sunny days. Promoting its social layout, the cockpit sofa, running on two tracks, connects to a large table, transforming the cockpit into an outdoor salon. Add the futuristic, centerline helm station, with next-generation electronics and white leather, power helm seat, and the Vertigo will indeed make your head spin.

The bright, contemporary, interior, a mixture of black lacquer, light oak, African wenge, and leather accents, is crafted by Riva’s skilled  woodworkers, many of whom are fourth-generation employees at the Italian firm. There is good space below, but really the place to be on this yacht is the cockpit. Rain or shine, it reaches an impressive top end of 38.5 knots with its twin 1360-hp MAN diesels. It’s priced at about $3,550,000. (www.riva-yacht.com)

―Michael Verdon

April 15, 2008

Benetti Happy to Have More Amnesia

Amnesia III, the latest custom yacht from Benetti’s shipyards in Livorno, Italy, shares the same name as two previous motoryachts the owner built with Benetti, but at 196 feet in length, it is 30 feet longer than Amnesia II. It also features the latest electronics, VIP salon on the bridge, and technical advances in the steel hull and aluminum superstructure. “I know I put the yard under strain with my challenging requests,” says owner Graham de Zille. “But we had to go further, keeping the best of the previous yachts and moving forward with an up-to-date design. We also wanted to improve its layout.”

The five-stateroom interior was designed by Redman Whiteley Dixon, the award-winning British yacht design firm. The light-hued interior is defined by West African anigre wood bulkheads with walnut detailing, and wenge furniture. The owner’s suite has his-and-hers bathrooms, dressing rooms, and a study, and the yacht also has two enormous salons and a massage room. Taking a leaf from the previous Amnesia, the crew quarters and their circulation throughout the yacht are separate from the guests, which should make Amnesia III as popular for chartering as its forefather ship. The yacht accommodates 12 guests and 16 crew, and its twin 1600-hp Caterpillar 3512B diesels give Amnesia a cruise speed of 15 knots and a transoceanic range of 5,000 nautical miles. (011.39.0584.3821, www.benettiyachts.it)

―Michael Verdon

April 1, 2008

King of the Battlewagons

In 1960, Richard Bertram revolutionized powerboating by running the first deep-V hull in the Miami-Nassau race. The 31-foot Moppie, which trounced competitors in horrendous sea conditions, gave the America’s Cup sailor instant street credibility with the offshore racing set, and within a decade, Bertram was considered the premier sportfishing brand. Now owned by Italy’s Ferretti Group, Miami-based Bertram continues to perfect its original deep-V hull (which served as the foundation for modern powerboats), while infusing Italian design into the interior. Its flagship 700 Enclosed, launched in February, is equal parts tournament sportfisherman and trophy home.

Insulated fish boxes, live wells, stand-up rod storage, and freshwater wash downs comprise the fishing ensemble in its 270-square-foot cockpit, while the large salon is defined by African Wenge furniture and cabinetry, a 42-inch LCD HDTV, and a Bose theater system. The enclosed flybridge is equipped with an electronics-filled helm console, spacious U-lounge, wet bar, and DVD-equipped entertainment center. Ferretti’s Anti-Rolling Gyro (ARG) reduces rolling motion by up to 50 percent, giving the 700 a pleasant ride, even while trolling in rough seas. With the upgrade 2200-hp MTU engines, this king of Bertrams has a top end of 35 knots and price tag of $4,410,000. (305.633.8011, www.bertram.com)

―Michael Verdon

March 18, 2008

Italian Elegance, American Ingenuity

The Italian-designed Marquis 70, built in the Wisconsin heartland, has all the elegance of a southern European express yacht with practical features associated with American yachts. Two outer decks, for instance, allow for al fresco dining, and the fully enclosed pilothouse, with its wet bar, leather lounge, and plush helm chair, buttons down in rough weather providing push-button climate control. The Nuvolari & Lenard-designed salon, with its light-colored woods and impeccable stonework, is also a portrait of simple elegance, similar to Italian imports such as Ferretti and Azimut. Poltrona Frau handmade leather furniture, a gourmet galley, and strong natural light define the main deck. The lower deck has three staterooms, with the possibility of a fourth at the stern. The full-beam master suite, with shower, tub, and double sinks, has three vertical windows, offering a window to the sea. With twin Caterpillar C/18 diesels, the Marquis 70 is priced at $3.277 million. (920.822.1575, www.marquisyachts.com)

―Michael Verdon

March 4, 2008

Sportfish Deluxe

At first glance, the Vicem 63 Sportfish, launched in February at the Miami Yacht & Brokerage Show, resembles a classic sportfishing battlewagon from North Carolina’s finest custom yards, but the convertible was actually constructed by the Turkish firm Vicem, known for its impeccably built cruisers.

Though Vicem is hardly a household name among die-hard sportfishermen, the $2.6 million boat is handcrafted with the same attention to detail as elite American brands, using a cold-molding build process that fuses mahogany with epoxy to create a lightweight yet virtually bulletproof hull. It is outfitted with the premium of sportfishing accoutrements, including a Pipewelders tuna tower, Pompanette fighting chair, custom teak helm chairs, and underwater lights. Twin 1,550-hp MAN engines give it a top speed of 38 knots. With an interior equipped with a full-beam master stateroom, a 50-inch plasma-screen TV, satellite TV, Bose home theater system, and chef’s galley with Sub-Zero refrigerator and climate-controlled wine cabinet, the 63 is certainly more family friendly than traditional sportfishing boats. The custom leather furniture, Khaya mahogany walls and cabinets with diamond-inlay patterns, and intricate teak flooring are testaments to Vicem’s scrupulous craftsmen.  (954.713.0737, www.vicemusa.com)

―Michael Verdon

November 1, 2007

Cigarette Racing Team Debuts Super Yacht

Pulsing through the water at an impressive length of 55 feet, and with speeds reaching upwards of 60 miles per hour, the Super Yacht is like a powerboat on steroids. In June 2007, after four years of development, Cigarette Racing Team, the world’s leading manufacturer of luxury yachts and powerboats, unveiled its largest yacht ever. The Super Yacht is designed for both speed and luxury, and it comes with amenities unlike any other powerboat Cigarette offers, including a built-in dining area with an electric grill, Wolf convection oven, refrigerator, and icemaker. A master queen-bed cabin and two guest cabins accompany the main salon, and the retractable roof makes the Super Yacht appealing rain or shine. Prices start at $1.7 million for the model with an 800 hp diesel engine and go to $2.2 million for the version equipped with 1100 hp engine. (305.931.4564)
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New Panic in Washington

November 1st, 2008 John Krol Posted in 2008-2038 Investing, News Financial Intelligence, TARP, Why a Boomers Bank No Comments »

WASHINGTON IS PANICKING AGAIN! It’s getting ready to throw hundreds of billions MORE dollars at this crisis within days. In his update below, Mike Larson reveals why these desperate measures can only crush bonds and stocks in the weeks ahead — and why you’re likely to have yet another great opportunity to double your money as weak stocks crater. Read it now. — Martin

GM needs $50 billion more …

Fannie and Freddie could need $100 billion more …

AIG gets $150 billion refinancing …

PLUS Congress has a NEW $100-billion-plus stimulus package on the way!

Q: Where will it all end?

A: In the greatest orgy of government borrowing in recorded history!

INSIDE: The next shoe to drop in this crisis — and how it could hand you gains of 46.1% … 89.9% … 106.7% or more …

WITHOUT options, margin or short-selling …

Exclusively with ETFs that are as easy to buy or sell as Microsoft or IBM …

All for the price of a single gallon of gas: As little as $2.47 per day!

By Mike Larson

Dear Subscriber,

Nearly everywhere you look, another massive corporation is announcing staggering losses and begging Washington for billions to avoid bankruptcy.

CASE STUDY #1 — General Motors: $25 billion wasn’t enough — needs $50 billion more to survive! GM’s sales are down 20% in a year. Its share price is down nearly 90% — from $31.14 a year ago to $3.36 at yesterday’s close.

The last time GM stock was this low, Harry Truman was in the White House, and Elvis Presley was in grammar school. And now, analysts are warning that America’s largest automaker may soon be worth zero.

Investors have every reason to fear for GM’s survival: Last Friday, GM posted a $2.5 billion net loss for July, August and September, bringing its 2008 losses to $21.3 billion.

Worse: Yesterday, the company revealed that despite the $25 billion in Washington aid already on the way, it is now burning through its cash reserves at the staggering rate of $2.3 billion per month.

The company’s top executives now freely admit that without a bailout, GM will likely go broke in the first half of next year.

Alarmed that an estimated 1.4 million GM workers and suppliers could suddenly find themselves out of work, House Speaker Pelosi huddled with car company executives to arrange another, additional bailout of up to $50 billion. And during his visit to the White House yesterday, President-Elect Obama urged President Bush to sign the bill when it passes Congress.

CASE STUDY #2 — American International Group (AIG): $150 billion refinancing announced yesterday!

First, the Fed gave AIG an $85 billion line of credit in a failed attempt to save America’s largest insurer.

When that failed to work, the Fed added $38 billion more through its borrowing facility.

And when the company continued racing towards failure, the Fed agreed to buy more billions of AIG’s toxic commercial paper.

Now — just yesterday — after announcing it still lost a whopping $25 billion in July, August and September, the government revealed that it refinanced AIG’s earlier loans with better terms and gave them still MORE money, for a new, total rescue package of $150 billion!

That’s just ONE single company, and already it has gotten as much money as the entire U.S. population got from the economic stimulus package of 2008.

CASE STUDY #3 — Fannie Mae: Losing money so fast, it could need as much as another $100 billion or shut down completely!

Despite the $100 billion already spent to bail out Fannie, the company has revealed that it lost a staggering $29 billion in the third quarter — an announcement that means America’s largest mortgage lender will probably need untold billions more to avoid a total shut-down.

Ten Billion Here … A Hundred Billion There …
Before You Know It, You’re Talking REAL Money!

Anyone who thinks that these three companies are alone — and there won’t be hundreds more lined up behind them to demand their share of the greatest bail-out bonanza in history — is dreaming.

Just yesterday, we heard more calls in Congress for a second huge stimulus package in an attempt to get shell-shocked consumers to begin spending again.

And anyone who believes the government can magically create all of this wealth out of thin air is greatly mistaken. They will have to BORROW the money. Indeed, last week — even BEFORE this latest news hit the wires — the U.S. Treasury announced that it will borrow a total of $550 billion — more than the entire deficit for ALL of fiscal 2008 — just in the last quarter.

But even that record-smashing amount is only the tip of the iceberg: Goldman Sachs analysts announced that, to finance an $850 billion federal deficit … to buy $500 billion in bad assets … and to roll over $561 billion in maturing Treasury securities, Washington will have to borrow TWO TRILLION DOLLARS!

Paying the piper for U.S. Gov’t Bailouts:
$2.7 TRILLION
in loans and commitments — and more to come!
TARP $700 billion
Bear Stearns $29 billion
Detroit Big Three $25 billion
AIG $150 billion
Fannie and Freddie $200 billion
Mortgage-backed secs. $144 billion
FHA Rescue bill $300 billion
JPM for Lehman $87 billion
Fed’s TAF program $200 billion
Commercial paper $50 billion
Fed currency swaps $740 billion
Total: $2.7 trillion

Worse: That $2 trillion will almost surely STILL not be enough: Just to cover the bailout loans, investments and commitments the government has announced SO FAR, the total bill comes to a whopping $2.7 trillion. (See table at right).

As the U.S. economy continues to crater … as federal tax revenues continue to plunge … and as Washington continues to run amuck with new bailouts … Washington could easily add another $1 trillion or even more to this borrowing spree!

A NEW Orgy of U.S. Government
Borrowing Is Directly Ahead!

This reality — the fact that the greatest tidal wave of Treasury bonds in history is about to slam into the markets — means two things:

1. Plunging bond prices: Like any other investment, when the supply of bonds rises, bond prices fall. Given the mind-boggling size of this borrowing binge, we’re now staring down the barrel of one of the most devastating bond market crashes ever.

2. Huge profit potential for contrarian investors like us: Investments that soar when bond prices plunge are about to give you the opportunity to multiply your money throughout the rest of 2008 … throughout 2009 … and beyond!

In fact, this great government borrowing binge gives us not just one, but TWO opportunities to go for windfall crisis profits in the weeks and months ahead …

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Gold price

November 1st, 2008 John Krol Posted in News Financial Intelligence, Why a Boomers Bank, Your Cash Flow Now No Comments »

Gold price                   

does not make it a safe haven

With the calamitous downfall of some of the world’s most prominent financial institutions, and the knock-on effect it has had on equities, bonds and currencies, investors are feeling exposed. As a physical asset, gold is no one’s liability. There is no risk that a coupon or a redemption payment will not be made, as for a bond, or that a company will go out of business, as for an equity, or that savings will be lost through a bank that is going out of business. And unlike a currency, the value of gold is not undermined by a country’s inflation. But even when prospects are generally more optimistic, smart investors know it is wise to retain an allocation to gold as insurance; like an insurance policy, gold’s value as an asset becomes most obvious when it is most needed.

Of course, a number of investors have made strong returns from gold’s stellar price performance over recent years and some are wondering why gold is not hitting more record prices in today’s current turmoil. However, it is too simplistic to look at just gold’s safe haven appeal for answers as to the gold price’s performance.

In relative terms, the gold price has outperformed most other commodities. But at the moment everything is being driven by the need for cash. There has been evidence of profit-taking by investors and selling by leveraged institutions that have needed cash to meet margin calls on other assets — these institutions have owned gold as a safety net and have been forced to draw on that safety net. The fall in other commodities has also affected gold, reflecting its inclusion in major commodity indices.

There are a range of different influences that can affect the gold price and push it in different directions. Two key influences over the last year are gold’s relationship with the US dollar and its safe haven appeal.

The dollar effect

Often these two factors have pushed the gold price in the same direction for instance, markets have responded to bad news from the financial sector by pushing down the US dollar. In such cases, the gold price has benefited from both its safe haven appeal and the lower dollar. However, this isn’t always the case. If the bad news has emanated from Europe, the dollar has sometimes risen in response. Sometimes the safe haven effect will dominate, and at other times the dollar effect will dominate. Over the last few weeks, it has been the dollar effect that has dominated.

It is important not to draw conclusions from short term price movements. It is too early to say that the worst is over for the global economy and financial sector, and too soon to say that the dollar’s decline is over.

Aside from the demand drivers, one must also remember the importance of the supply side when looking at the outlook for gold. There has been a gradual reduction of mine output in recent years, with only a small number of major gold finds by the mining industry, which is constraining supply.

The real value of gold is not that it provides a quick, speculative fix, but its capacity to provide a sure and steady means of protecting wealth. Those who allocated a proportion of their portfolio prior to the current financial crisis will be the ones truly benefiting in today’s market.

— The writer is President, World Gold Council

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Terrorism Index

October 19th, 2008 John Krol Posted in Global Energy 2032, News Financial Intelligence, Why a Boomers Bank No Comments »

The Terrorism Index 2008
Page 1 of 10
September/October 2008
Signs of progress in Iraq have left America’s top foreign-policy experts experiencing a rare sensation: optimism. But, according to the fourth Terrorism Index, the U.S. national security establishment is in sharp disagreement with the presidential candidates—and alarmed that its so-called allies may soon harbor its worst enemies.

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For the first time since the terrorist attacks of Sept. 11, 2001, issues of national security no longer dominate political discourse. Rising energy costs, the subprime mortgage implosion, and other domestic imperatives now monopolize the national conversation. In a recent poll conducted by the Pew Research Center for the People & the Press, Americans ranked terrorism as the country’s 10th-most important priority—behind healthcare, education, and the federal budget deficit. But even as attentions shift, the wars in Iraq and Afghanistan have become the longest U.S. military engagements in a century, with the exception of Vietnam. Around the world, terrorists have continued to strike with deadly effect—from Athens and Paris to Beirut and Baghdad. The upcoming presidential election presents the United States with a choice about how it will seek to combat this threat, even as, somewhere, terrorists might be plotting their next attack. Wherever the war on terror may exist in the public’s consciousness, there is no doubt that it rages on.

Opening ChartBut is it making the United States safer? To find out, each year Foreign Policy and the Center for American Progress survey the very people who have run America’s national security apparatus during the past half century. Surveying more than 100 top U.S. foreign-policy experts—Republicans and Democrats alike—the Foreign Policy/ Center for American Progress Terrorism Index is the only comprehensive, nonpartisan effort to poll the highest echelons of the country’s national security establishment for its assessment of how the United States is fighting the war on terror. First released in July 2006, then again in February and September 2007, the index attempts to draw definitive conclusions about the war’s priorities, policies, and progress. Its participants include people who have served as national security advisor, director of the Central Intelligence Agency, senior White House aides, top Pentagon commanders, seasoned intelligence professionals, and distinguished academics.

Although most of these experts still see a world with considerable dangers, this year’s index revealed a new trend: signs of progress. For the first time since the index was launched in 2006, the experts have become more optimistic. A year ago, 91 percent of the experts said they believed the world was growing more dangerous for Americans and the United States. This year that figure fell to 70 percent, a 21-point drop in 12 months. Similarly, when asked in 2007 if they agreed or disagreed with the statement, “The United States is winning the war on terror,” just 6 percent of the experts agreed. Today, 21 percent of the experts say the United States is making headway in fighting terrorism. Overall, the percentage of experts who see the threat of global terrorist networks as increasing dropped from 83 percent last year to 55 percent today. Such assessments, broadly speaking, represent the most positive scores in the two-year history of the index.

Some of this optimism might stem from what the experts see as good news in Iraq. Sixty percent of the experts, for instance, say that the so-called surge in Iraq has had a positive impact on the war effort. That figure represents a massive reversal from a year ago, when 53 percent of the experts said the surge was failing. The experts also see progress in U.S. policy elsewhere, including the Korean Peninsula. Forty-six percent of the experts believe that U.S. policy toward North Korea is positively advancing America’s national security goals, a 35-point increase from two years ago and a 12-point increase in the past 12 months. More than half the experts say that U.S. policy toward China is having a positive impact, up 25 points from 2006.

The experts are not, however, without concern. On issues ranging from the war in Afghanistan to Iran to U.S. energy policy, they find worrisome trends. Perhaps nowhere is this truer than with regard to the war in Afghanistan. Eighty percent of the experts say that the United States has focused too much on the war in Iraq and not enough on the war in Afghanistan. A majority, 66 percent, continues to say that the war in Afghanistan is having a positive impact on U.S. national security, but that figure is down 27 points from two years ago. The U.S. government’s efforts to stabilize and rebuild Afghanistan have been judged to be below average. Eighty-two percent of the experts say that the threat posed by competition for scarce resources is growing, an increase of 13 percentage points from last year. More than 8 in 10 experts say that the current U.S. policy toward Iran is having a negative impact on national security. And, though a large bipartisan majority agrees that creating peace between Israelis and Palestinians is important to addressing the threat of Islamist terrorism, they grade U.S. efforts at working toward that goal to be just 3.3 on a 10-point scale.

The belief that some threats are increasing while others are ebbing may help explain why, over the long term, the experts’ views about the threats we face remain consistent. As in the previous indexes, a large majority of experts—71 percent—continues to say that a terrorist attack on the scale of 9/11 is likely or certain within the next decade. As has also historically been the case, an even larger majority—85 percent—continues to expect a smaller-scale attack akin to those that occurred in Madrid and London within the next 10 years. It’s a reminder that, though the public’s priorities may shift, the war on terror continues.
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Powell endorses Obama

October 19th, 2008 John Krol Posted in News Financial Intelligence, Why a Boomers Bank No Comments »

Powell endorses Obama for president

Republican ex-secretary of state calls

Democrat ‘transformational figure’

Video

WASHINGTON - Former Secretary of State Colin Powell endorsed Sen. Barack Obama, D-Ill., for president on Sunday, criticizing his own Republican Party for what he called its narrow focus on irrelevant personal attacks over a serious approach to challenges he called unprecedented.

Powell, who for many years was considered the most likely candidate to become the first African-American president, said in an interview on NBC’s “Meet the Press” that he was not supporting Obama because of his race. He said he had watched both Obama and his Republican opponent, Sen. John McCain of Arizona, for many months and thought “either one of them would be a good president.”

But he said McCain’s choices in the last few weeks — especially his selection of Gov. Sarah Palin of Alaska as his vice presidential running mate — had raised questions in his mind about McCain’s judgment.

“I don’t believe [Palin] is ready to be president of the United States,” Powell said flatly. By contrast, Obama’s running mate, Sen. Joe Biden of Delaware, “is ready to be president on day one.”

Powell also said he was “troubled” by Republican personal attacks on Obama, especially false intimations that Obama was Muslim and Republicans’ recent focus on Obama’s alleged connections to William Ayers, the founder of the radical ’60 Weather Underground.

Stressing that Obama was a lifelong Christian, Powell denounced Republican tactics that he said were insulting not only to to Obama but also to Muslims.

“The really right answer is what if he is?” Powell said, praising the contributions of millions of Muslim citizens to American society.

“I look at these kind of approaches to the campaign, and they trouble me,” Powell said. “Over the last seven weeks, the approach of the Republican Party has become narrower and narrower.”

Bolstering Obama’s international credentials
Powell, a retired Army general who was chairman of the Joint Chiefs of Staff under the first President Bush before becoming secretary of state in the current administration, is one of the most highly decorated military officers of modern times and an admired figure in both parties. The Obama campaign is likely to cite the endorsement as an answer to critics and undecided voters who have questioned the foreign policy credential of Obama, a first-term senator whose national experience amounts to four years in the Senate.

Powell said a major part of his decision to turn his back on his own party was his conclusion that Obama was the better option to repair frayed U.S. relations with allies overseas.

“This is the time for outreach,” Powell said, saying the next president would have to “reach out and show the world there is a new administration that is willing to reach out.”

In particular, he said, he welcomed Obama’s president to “talk to people we haven’t talked to,” a reference to Obama’s controversial pledge to hold talks with Iranian President Mahmoud Ahmadinejad.

“I think that [Obama] has a definite way of doing business that will serve us well,” Powell said.

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Won’t campaign for Obama
As recently as a month ago, Powell said that electing an African-American president would be “electrifying” for the world but that he remained undecided. The unsteadiness of the Republican campaign in recent weeks, especially on the economic crisis, went a long way toward pushing him off the fence, he said.

“It isn’t easy for me to disappoint Senator McCain as I have this morning,” said Powell, who emphasized that he would not campaign for Obama because of his admiration for McCain’s long record of service in the military and in Congress.

But as he examined both campaigns in the last few weeks, he said, he became “concerned” that “in the case of Mr. McCain, he was a little unsure how to deal with the economic problems.”

“Every day, there was a different approach,” he said, adding that he also “would have difficulty with two more conservative appointments to the Supreme Court.”

McCain would be a good president, Powell said, but Obama is “a transformational figure” who would be an “exceptional” leader.

“I truly believe that at this point in Amserica’s history we need a president who will not just continue … basically the policies we have followed in recent years,” he said. “We need a president with transformational qualities.”

For that reason, he said, “I will be voting for Barack Obama.”

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