Been getting a lot of emails about what I am doing with my investments during this time. I have stopped putting money into the stock market and started to retain cash. I think times are going to get much worse then they are right now and that will mean there will be opportunities.

As I said many times I never liked putting money into the stock market.  I have played a round here and there and even used to make stock picks in the ShoeMoney newsletter but I am not playing in the market now so I would feel weird recommending a stock to someone even though I am positive cash in my picks from the newsletter I have sold those off.

So ya…  I know…  I am being a whiney pants cause I just lost a shit ton in Wachovia and other stocks but really I have nobody to blame but myself for that.  I do not understand the stock market and have always said I have no business investing in something I do not understand.  I just wish I would have practiced it.

The only stock of ours that makes us well in the market is Berkshire Hathway. Its more then doubled from what we paid for our shares 5 years ago. Still though…. Not feeling that great.

And this Bailout… Maybe I do not get it… The way I look at it is like this:

The government is like 1 big mutual fund (or even hedge fund) that takes your money and invests it for you via taxes. You would like to think of these investments as repairing roads… schools for kids… etc. But many times your money is used to do other things.

This Bailout is one of those things. They want to take a trillion dollars (or 2 trillion depending on who you ask) (btw that 700billion is bullshit its way more) and invest it in these banks that failed? … and thats it? If someone came to me and said hey we are going to take your money and invest it in this failed business I would be like … umm ok wtf is going to change why I should give you my money?

The kicker is I have NO CHOICE I have to invest in these failed businesses or GO TO JAIL (by not paying taxes).

So in reading this 108 page bill there are some changes but not much. They say its the end of CEO’s getting big incentives and all that for taking a company down the toilet…. BUT IF YOU READ THE FINE PRINT you see its only for NEW CEO’s.

I am sure this asshole CEO from Wachovia is going to walk about with 9000x what I lost. Nice score jackass.

Anyway if you haven’t I highly suggest you read the bailout documents and call your congressman and let them know your opinion.

I personally feel this bailout will go down as one of the biggest disasters ever. You can’t give politicians a trillion dollars and a lot of freedom to delegate it. Its going to be kickback city… If the system failed let it fail lets start healing. Lets not prolong the inevitable where politicians see one last chance to grease the American people.

If you look at what caused the Great Depression it was not the big stockmarket crash it was the policies that come from that (the new deal) and many quick fixes that made the Great Depression last so long. I do not want to see us have a bunch of quick fix band aid solutions.

The one thing that always gives me comfort is Americans are willing to do what it takes when its crunch time. We seem to really shine through when the shit hits the fan and great depression or whatever we will overcome it.

It just might be time for pitchforks and lanterns to get all these bums out of Washington.

By Jeremy Schoemaker

Jeremy "ShoeMoney" Schoemaker is the founder & CEO of ShoeMoney Media Group, and to date has sold 6 companies and done over 10 million in affiliate revenue. In 2013 Jeremy released his #1 International Best selling Autobiography titled "Nothing's Changed But My Change" - The ShoeMoney Story. You can read more about Jeremy on his wikipedia page here.

214 thoughts on “StockMarket And The Bailout”
  1. I’m gonna go read through the bailout documents right now and come back with my new found intelligence xD

    1. The documents are probably a load of bullsh*t too. I work in a Large UK bank in London and while the bailout might be a bad idea for the US, the rest of the world is kinda of relying on it to settle the global market a little. The public panic in London is clear to see!

      Good thing for us is that if people need to make a little extra cash then they can always doing it by learning how to make some money online 🙂

      1. I’m also from the UK, a lot of business around my area are going bust due to the credit crunch.

      2. BTW… GOOG was $390 two days ago, then $400+ yesterday and now it’s $390 again. This is a 2-year low.

        So if you can afford to buy 1000 shares, it will make you a six digit profit just in a few months. =)

        1. It was actually at $200 a share the other day right before/after the market closed. It was a ticker error… but I’m sure many were freaking out about it!

      3. “while the bailout might be a bad idea for the US, the rest of the world is kinda of relying on it to settle the global market a little.” – Totally agree with you, but I feel the mayhem is still to really come in to play…

    2. I’m from San Diego and in the last 2 days I have watched friends get loans for new houses (albeit they had great credit and were putting money down – as it should be). I also watched westfield announce it was pulling from it’s $9 BILLION credit line to invest $50 million into our shopping center here downtown.

      1. The next several months will be a kick-ass timing to buy a house. Market is uber-slow and 20%-30% price cuts aren’t unusual!

  2. There is a ton of money to be made right now by riding the crashes and jumps. People panic and dump everything causing very good companies to lose way to much market value. If you are smart and have the time you can take advantage of these swings and get a great stock for dirt cheap. The one thing though is that you have to have the guts to ride out the market fluctuations…

    1. Youp, If you have the patient, and have followed the stock market for a bit, you could make decent money. The market today are the day traders wet dream.

      1. Now that short trading is legal again, it might be a good idea to short those stocks you think are going to fall some more.

      2. True, even novice investors can now play around in the market more as there’s not much money to be spent on stocks. 😉

    2. idiotic thinking like this is the reason that junk bonds, short selling, and hedge funds have ruined the economy. Way to go asshat.

      1. Any economy based on credit-expansion will eventually collapse. So don’t blame it on Kieran Hawe.

      2. glad we got it all figured out… now if Kieran Hawe could just come up with the $700 billion we need to get out of this mess he/she caused we can all go back to work.

    3. buy low – sell high… I agree though, for those who know what they are doing now is the time to be making big moves.

        1. Yea I agree a lot of people just buy stocks for the heck of it
          and not many know what they are doing

    4. yes, I totally agree with you. Buy now and sell much later, and ride out the current market instability.

  3. Hehe, funny thing that I subscribed to your newsletter based on your stockpicking. I guess it’s a good thing that I haven’t invested yet. I still think the market are going to go down a bit more. But in one year the stockmarket will be higher then what it is today. I think.

    1. The stock market is being down since quite sometime and we can’t expect it to go higher, till the end of the year. May be next year we see something good.

    2. I agree, but I’d say not until atleast 2 years. But hey, who are we to say what’s going to happen? 🙂

    3. Shoe once recommended ValueClick (VCLK) a few months ago… then it went up a decent amount. With the latest crash, it’s down a good deal again.. may be another good time to jump in. Try and find another good quality “affiliate” based company stock.

    4. I thought the newsletter picks were cool, but never actually followed em, just don’t have the time to research them myself.

    5. Yeah, haha, I’m doing a stockmarket game at school and am winning because I am the only one who didn’t buy any shares 🙂

  4. Berkshire Hathaway is always been on the rise, as the finance graph suggests.

    Not investing in the stock market is a good option right now though!

    1. Remember it just depends on what stock that you buy. Everything is going to go up sometime so the key is to find those stocks that are going to go up. Staples are good. Someone even told me about buying stock in cheap beep and such b/c when things get bad people drink. Walmart….Walmart … Walmart

      1. Walmart and Google stocks a sure thing to go back up. Buying those stocks low now is great if you’ve got the money and are willing to wait and be patient.

    2. You never know what will happen tomorrow.. its kinda roller coaster..
      Comes down to deep knowledge and LUCK factor

      1. The stock market always goes up. We’re a capitalist market which means that the people run the economy and we have the freedom to do so. This is something that most of us have forgotten. If i remember correctly the government during the depression focused on created jobs and not bailing out companies. I think that we are resourceful enough to make this happen. The problem here is that too many people became irresponsible with their freedom and put to much weight on the government and the capitalism.

        They were irresponsibile with their freedom in that they freely took an “opportunity” to buy a home or really anything else that they couldn’t afford. The government does not tell you if you are making a bad decision or not.

        People thought that since things were good then capitalism is good and if things are looking up and are up then they could make bad financial decisions. America has always been successful in what we have done. The problem came when people trusted themselves with what they were hearing rather on what they could efford. They took the very rule that parents tell their kids and broke it.

        RULE: If someone told you to jump off a bridge would you?

        Well, just because a credit card company or government tells you that you should buy more than you make in a year or buy a house that you can’t afford when you can’t work . . . . .well… just jumped off a bridge

    3. Why wouldn’t you invest… All the stocks are going down in price. It sucks for people who bought at higher prices but for people looking for long term investments its perfect.

  5. I’ve been watching this very closely over the last couple of weeks, and I agree with you. Let the healing start now rather than use tax payers money.

    1. If the bailout was a good idea – i.e. the gov buying these depressed assets than private money would already be doing it… no need for tax payer money if its a smart move

      1. I think the bailout is not a good idea. The bailout is a result of improper distribution of forces.

        1. The bailout amounts to throwing good money after bad. The base reasons for this happening should be evaluated and adressed first, before any bailout is attempted.

    2. yeah, I also think this bailout is a bad idea, just have to go through a healing process as I believe it will be more effective and inexpensive plus there’s no risk in it as there is in this “bailout” plan the US gov wants to take. I mean really now, why invest in failed businesses? What the hell will change once these failures ahve been resuscitated?

  6. Thanks for posting this. I rely on people smarter about $ than me to help me understand this. If you’re saying it’s bad, and Ron Paul is saying it’s bad, and most of the Republican congressmen are saying it’s bad…

    …I’m thinking this bailout is bad. :-/

    Doesn’t make me feel much better about the state of the economy though.

    1. I agree, If people who know about money say its bad than its probably bad. Now we have to see how it turns out

    2. I find it weird that republicans think its bad but democrats do not. I’ve always pictured the democrats as the more responsible ones.

      1. If i can simplify the two party general stances for you here I will.
        Republicans (by virtue) are the typical, “pull yourself up by your
        own bootstraps, we won’t give you anything” type of party. They believe that government should keep their hands out of business and leave that to the business people, just as long as they pay taxes. If you fall on your face in business, well then, you probably learned something, but it was your fall to make and learn from and no one else’s.

        Democrats (by virtue) are the typical “Let the government help, we
        can make this easier, we can do this for you, but this is what you’ll
        have to give to everyone else for it..” type of party. They believe that
        everyone should help everyone else no matter how hard, or not hard,
        you might have worked for your money, and the other guy did not.
        I’m not trying to start a political debate, but I don’t think this bail out
        is right either. The last line in this post is so very poetic.
        Pitchforks indeed.

        The government should not be the ones telling us what is going to
        happen, the politicians are going to make so much money from this
        we’ll be sick about it for decades. If these businesses hadn’t been
        dealing in some sort of underhanded ways, and had been more
        transparent in their dealings…maybe this wouldn’t have happened.

        But they did, and now this is happening, and for the people that have
        money, the opportunities are everywhere. For the people that don’t
        we just still won’t. But our kids shouldn’t have to pay for something they didn’t do, and neither should I.

        1. The bailout demonstrates that to the American masses a simple rule their country abides by:

          Socialism is for the wealthy, raw, untainted capitalism is for the masses.

          US citizens have only experienced a very narrow point of socialism — such as social security, emergency services, trash collection, and schools — they have yet to experience the bigger positive aspects of hybrid socialism/capitalism delivered to them in the same manner that we, in majority of Europe, enjoy.

          The bailout only handed them a vividly negative aspect of socialism and alienated them from the concept of appreciating a mixed economy that could bring back the US and what it originally stood for.

    3. Agreed! Much smarter people than myself are against it. Only in the mainstream media do you see people REALLY sounding thankful for it – and I have no trust left for mainstream media 🙂
      The problem is that now the politicians are just saying “the public doesn’t realize how dire the situation is, so we’d better vote yes and look out for their best interests in spite of themselves!” Not cool.

    4. I think it’s sad that you need someone else to point out that a bureaucrat’s hand in your pocket STEALING FROM YOU.

  7. I am all for the pitchforks and lanterns. Enough is enough. They just want to float the market another few years so they don’t have to preside over a major downturn – but a major downturn is coming no matter what. Our economy is propped up on debt, and much of it is bad debt at that. It’s money that never existed. It’s a ponzi scheme.

    It’s like in Dumb & Dumber when Lloyd and Harry take the $1 million in the briefcase and spend it – replacing it with I.O.U.s. Imagine someone took the IOU’s down to the bank and used them as collateral to secure a loan, then invested that money in a business.

    A debt is not money – it’s nothing but a promise that can easily be broken through default or bankrupcy. We need to get that through our heads.

    1. That’s true, the problem is that the alternative to the major downturn is a total breakdown of economy worldwide and the great depression is a joke compared to what we’d see without any intervention.

      1. The intervention is only putting a small bandaid on a gapping would. The derivative market is what caused this – Buffet called them Financial Weapons of Mass Destruction – it’s a 1200 Trillion Dollar Market in a 600 Trillion Dollar world economy – the two do not fit together – we’re 600 Trillion short.

        The $700 Billion infusion will not stop this – the only thing we can hope for is that it will buy us time to unwind and abolish derivatives; the likely hood of this happening is slim to none – too many Banks would be out of business. Obama and Mccain receive the majority of their campaign dollars from the very banks that are carrying the most derivatives. JP Morgan has in excess of $9 Trillion on their books or 1.5x our GDP!!

        This is no reason to pull your money out of the market – if it crumbles then you’re dollars, yen, pounds, euros will be worthless anyhow – keeping your money in the market in soilid companies that sell products globally will ward off inflation that is sure to grow rapidly in the coming years, if we do avoid or continue to prolong the crash.

  8. Shoemoney for president! You got my vote.

    Also, when are we going to see you on World Series of Poker?

  9. Mr. shoe,

    The stocks are at a all time low and i think you should capitalize on this situation. An year later, most stock prices would be up by 50% or more.

    Now is the time to invest in the stock market.

    1. What if it keeps on going down for another 6 months and takes 2 years to reach the current levels ?

      1. yea thats why you shouldn’t invest now for short term gains
        we never know when its going to go back up

  10. My suggestion: Fire Congress! They work for us. We’re electing every member of the House and 1/3 of the Senate this November. Well, maybe it’s just time to vote for the non-incumbent.

    And, if you think this bailout is bad, just wait for the pension funding bailout. That will amount to tree or four times this cost.

    1. I agree Chuck. I know the the pension issue has been the big airlines turn over the pension to the government to get it off their books as a liability. But the government is only paying out pension money 25 percent of what a pensioner was supposed to be receiving from the company. Nice. Big business dump on the little people because the government lets them, now if the gov people are only paid 25percent of their pension or pay check it might be a different story.

  11. you gotta keep the money flowing. I like the mark to market rule change. Look for 500-700 bank failures over the next year and accelerated consolidation of those that survive. I am buying BAC. It will double in the next 2 years

    1. Very true, my man. The banks are a mothafookin bargain. I’m surprised to hear a man who has overcome numerous failures in his life (Shoe that is) talk about losing money. It’s all part of the game baby.

    1. Alot of people think they are still going to go longer, I don’t have enough knowledge to say though.

    2. If you have money that you can put to work, it might not be a bad idea to pick a few stocks up. Not advising anyone… but I have been buying on all of these mega drops.

  12. I read the intiial “Rescue Plan” (Nice Political spin huh) when ti first came out. Essentially, if you are a CEO or are in danger of a house foreclosure – Times are Good for You!! CEO’s keep what they are promised due to contractual obligation… mortgage notes are renegotiated to principal ONLY and low interest rates for those in danger.

    The latest BS of loading it with pork projects is just one more reason we need to vacate Washington, badly! Most of them are crooked and controlled by the big lobbies.

    We are people without representation – our elected officials have no interest in our needs, only those that pad their campaigns.

    As we make out way to DC to clean house, we need the stop on K street and burn down the buildings of the lobbyists first!!


  13. Jeremy,
    Not that it helps you, but for a change the fat cats at Wachovia got spanked too.
    STEEL ROBERT KING, Officer 1,000,000 shares Direct Purchase at $15.32 – $17.02 per share on July 22,2008 and on Sept 15, 2008 GOODWIN WILLIAM H JR Director 1,000,000 Shares Indirect Purchase at $11 per share.
    There were several others at Wachovia buying, I think their inside info on the bailout screwed them. LOL

    David G.

  14. I think a lot of those banks and companies knew what they were doing when they bought/merged and sucked up a ton of bad debt; knowing full well the government would end up bailing them out, while they jump out the window with their golden parachutes. Hard to believe you could get the big (and powerful) without being able to see down the road a little farther than the rest of us.

    I’m not a big stock market investor either, aside from systematic investments and let them grow over time (stock market has never lost money over the course of a human life.. so investing and letting it sit is still a great way to go.. assuming you invest in the right stuff, and that you don’t need to pull it on when the market is in a slump).

    There is a very interesting movie that was put out awhile ago, called Zeitgeist Move, that raises some very interesting points. The first 5-7 minutes are fluff and can be skipped, but the rest of the movie is pretty compelling. It’s shot in documentary format, and covers everything from religion, to the true power behind governments, the stock market crash, world wars, 9/11 and more.

    I’m not a conspiracy person myself, but it’s an entertaining look at things if nothing else. Some things in the movie certain seem plausible, and if true could explain some of what we find ourselves in now. Other things are a little harder to swallow, but check it out. You can watch the full movie online, click on the second movie link on the page (where it says watch full movie).

  15. Yo SHOEMONEY! This is the first time I’ve posted a comment on your blog but have been a subscriber for awhile now. I just wanted to give you a big shout out and say thanks for keeping it real and speaking what’s on your mind – That’s a small group, everyone scared on how their readers will react, just like the politicians are only concerned with they’re reelection… bottom line is this deals going through whether we like it or not. I could care less about putting in my 3,000 or whatever the number is to “help Americans” what I dislike is the fact that of knowing how many times the majority of Americans have been screwed of by the government in the past and how it looks like we’re about to be screwed over again.

    For starters, why can’t we get the idiot out of the white house, some people want him to be impeached I saw we he needs to be tried and given the death penalty – Ya I said it, others are thinking it but most people don’t talk about it – Bush needs to be tried in a Court of Law that fucking B!@#%!

  16. […] This Bailout is one of those things. They want to take a trillion dollars (or 2 trillion depending on who you ask) (btw that 700billion is bullshit its way more) and invest it in these banks that failed ? … and thats it? …[Continue Reading] […]

  17. Hard times are the best time for new opportunities. I don’t see that market crash/bail out as a negative thing, it’s an opportunity to shine as you say Shoe!

  18. I’ve invested in gold, silver, and put some in foreign commodities. Also looking at a bit of real estate locally.

    1. I’ve never considered Gold/Silver as an investment. People call it “investment” all over, but, technically, it is a misconception. Gold/Silver are just great indicators of the currency inflation and the state of economy. It’s more like a safe haven that preserves the current monetary value, making it immune to volatile markets.

      After all, a piece of metal can not appreciate by itself. It doesn’t increase in size, right? 😉

  19. I agree wholeheartedly, nobody really likes this bailout plan, the big argument though is if it is necessary or not. I believe that we will suffer either which way. I almost want to say that it is worth taking the fall and not saving them, just on prinicple – should private companies really be saved from their mistakes? It seems like borderline socialism and it’s a dangerous precedent

  20. I have a sick feeling in my stomach if the bailout passes. I can’t believe, first of all, that any company who fails should get bailed out by the government. Second, they’re giving the money to the same damn people who f’d us over in the first place. The ultra rich are screwing the middle class to save their own asses.

    As far as the stock market – I believe there are going to be some unbelievable deals here soon, but I don’t understand the market enough to confidently play in it. Personally, I think the best investment is in myself and the internet anyways.

  21. That 3 page Treasury proposal, which the House declined to pass at 181 pages is now in excess of 400 pages, and is chocked full of pork, pork used to buy votes. I can support the government removing “mark to market” and increasing FDIC caps, those two moves will help but take some time to work.

    I could even support the House Republicans idea of creating an insurance fund for these struggling bonds, with the premiums coming from the banks not from federal coffers. But alas, that proposal is being totally disregarded in an effort to do “something” “anything” to look caring for the upcoming election.

    When politicians race to do “something” or “anything” they make foolish decisions. When they subvert the process of checks and balances, like the Senate passing a spending bill first instead of waiting for the House, it gets even worse.

  22. Okay so now we had a war. An unbelievable bail out. There is no way in hell that taxes can be lowered for anyone. Taxes are going to have to be increased. So, who’s going to get the shaft.

    Best regards, Matt Thompson |
    Original Orthodox Hubby @ Home Dad

  23. I’m curious if these economic changes are having an effect on your choice for President?

  24. Amen, shoe. This bill will be a disaster. The best way to “fix,” if you must, a problem like this is hit the underlying reasons for the problems – home loans that can’t be paid and fear among big depositors (those with over 100K in banks). Work to restructure home loans like they did in the Depression, and temporarily increase the FDIC insurance limit, perhaps to an unlimited amount. Problem will be solved.

    Ultimately, bad debt is bad debt. Have the government own it won’t change the fact it won’t get paid back.

  25. I didn’t know much about this bailout thing.So I didn’t know whether it would be good or bad.But after reading this post I got some idea about it.Total world economy depends on US.Even some of my clients stopped giving me works for this depression! I hope economists should find out a way so that this type of thing never happens again.

    1. I doubt he got where he is today by not understanding finance, or atleast picking it up along the way.

      1. Dude man thank you for the tip. I should get learning finance and then I could get money like ShoeMoney.

  26. Nice score jackass. I would like to say too but I keep don’t understand this is communist method or socialist whatever… This is my plan I would vote if I was in charge…
    Why are we ,bailing out someone that screwed up, why not give the money to the american people. if we were to give 174,000.00 to each American Citizian 18 and older that would solve the ecomony from crashing, and I dont’ think the american people would mind being taxed on that.. I would stimiulate the ecomony,homes would be paid for, young would beable to attend colleges that they could not otherwise. itw a win win if you ask me. sure beats giving the ones that screwed up our money to do it again..

    1. Can’t give everyone 174K because that would lead to hyperinflation. It would also lead to you getting a FAIL in economics.

  27. The new bill was actually 451 pages according to the articles I read.

    I would invest in gold, silver, platinum…when inflation is pretty much guaranteed, metals will maintain their worth.

    1. If only we’d all known this in around ’98 or ’99 🙂 Still not a bad idea, but the dollar sure buys a lot less gold than it did 10 years ago!

  28. The world economics is on crisis right now. Don’t know if it’s the right time to enter or to out from the stock markets

  29. I agree that we shouldn’t be bailing these companys out. If we do that then we’ll be in even more debt and the company is high and mighty living the good life.

  30. I’m going to have to agree with Shoe on this. This whole bailout deal stinks – if for no other reason than it was getting PUSHED HARD as soon as it appeared, and the original was no good whatsoever!
    Factor in all the reasons given by Shoe above, and it’s not something I want. Sure, times are going to suck but we’ll be better off in the end without the bailout.

    1. its getting pushed hard because those politicians will be getting PAID… kind of disgusting that money buys votes but that is the reality.

  31. There is the wierdest shit in that bailout bill.. since when is there $3 BILLION in mental health included in an economic bailout plan? oh wait, because those of us who think this plan is insane are going to need mental health care!!!

  32. It’s time for crunch time. I don’t like socialism. I am a hard core capitalist. I have spent my life helping people, but they have to help themselves too and carry their own weight.

    It is time for everyone to start working as hard as Shoe’s core group of friends do. If everyone did that, all the financial problems would be solved. Government should just leave the financial markets alone. The market eventually corrects everything to the appropriate levels whether someone tries to manipulate it or not.

    Let’s keep things rolling the way the constitution was written. Also a fine document if you haven’t seen it. Just google US constitution.

  33. Really this is a brutal killing of the stocks. This is mainly due to loan defaulters…

  34. I’m with you on this. Putting our money into companies that failed because their own stupidity like giving people loans that had no or bad credit is their fault, not ours.

    1. You have to remember, they gave them loans on extremely high interest rates ect. It seemed smart at the time.

  35. Great article here for another perspective from TCS Daily… a tease

    “How many of you have stopped making your mortgage payments just because the market value of your home has fallen?
    Less than 5% would be a fair estimate. Yet a much more significant amount of the collective mortgage debt in the USA (not in any stage of default) has been arbitrarily erased from institutional balance sheets. Even within the “toxic” products the government would purchase, 80% of the loans are solid and meeting their monthly commitments. The cash flow from these products is more than adequate to keep things moving, were it not for Sarbanes-Oxley.”

    Also, if you think the New Deal was bad, wait until you see how Obama “fixes” things!

  36. BTW, if you noticed, Wachovia is up 10% today… 🙂
    Just need to wait for the right moments to buy and sell… Financials are too hot, but check out other sectors… I think utilitiess are good now – ED (Consolidated Edison) for example… Pays nice dividends and more safe than 75% of other sectors in this time.
    There are always good picks. Berkshire Hathaway is good, but Buffet is ready to retire, watch the stock go down when he does. 🙂
    There are risks everywhere. Cash is not a good option as I think fake inflation is a good way for the government to raise the prices on the houses right now and decrease the amount of foreclosures that way. 🙂 Or something similar. If you have cash, it depreciates, if you have stock – the price of the company goes up with inflation…
    Cramer says: Do homework before you buy. 🙂
    Buffet says: Don’t lose money. Ever. 🙂
    Those 2 rules are the way to make the money. lol

  37. The stock market is the hardest market to play. Is even hard for specialist that all that do is looking forward to making you money from stock but sometimes not even them can handle it. Anything can make the stock drop, anything! I would be you and I would invest my money in not such long investments with little security.

  38. When markets tank, tech does poorly. Before tech falls however you see semiconductor stocks fall. Most tech needs materials so it makes sense that if fewer materials are being bought… tech will head south.

    It’s gone south.

    When an economy weakens more people get sick and biotech picks up. Gold and biotech seem to be “safe play” favorites in tough times. BCRX is one such stock, on the biggest down day this week the stock jumped 6%.

    My best advice would be not to buy stock unless you are aware that all stocks in a given sector will usually rise and fall together as a whole and your job is to pick the most potentially profitable/best of the crop when the entire sector is positioned well.

    I love the stock market, unfortunately my online efforts aren’t as far along as your Shoe to support my playing in the market. Maybe in a year or so :p

  39. I have faith that everything will be ok. We stand together against all.
    Everything will pan out just fine. Great info!


  40. Jeremy:
    Its great to hear that you have taken a strong position on this issue…too many times, people just sit back and do nothing. I wrote some pretty blunt emails to the congressmen in my home state last week. I just got a response back from one today; basically saying she was going to pass the bill. What people dont realize is that yes this Trillion dollar injection of money will indeed get the economy going for THE SHORT TERM. The real problem with the economy is the overspending of the government. In the long run, our currency and monetary system is going to get a major shillacking due to this…and all of the other bad decisions made in Washington. Spending more money does not help a country get out of debt…its going to come back and bite us.

  41. indeed. they can’t just be given access to the money, without proper oversight and accountability. still, doing nothing may not be the way to go here.

  42. I didn’t lose a dime in fact i had some gain… But it is troubling how a few days ago they mostly voted no and now its been approved… they just bought some time to keep the stocks low to be able to buy more shares since they know they were going to vote yes anyway. That way they got more bang for their buck!

  43. I said a similar thing one post ago, in the Southwest Airlines. Gonna stay away from stock for awhile and am glad that I took everything out from the mutual funds earlier this year.

    But of course you could buy now, too, and eventually make money…

  44. You are right on and explain it even better than I have. They are not only going to take our tax money, billions and maybe over a trillion, to give to failing banks. That makes absolutely no sense. If you ask me the government is not someone I would trust to invest my money. I mean, look at the deficit. It goes beyond that because it is a complete abuse of power. Who’s going benefit? Not us, just the fat cat ceos that destroyed the companies to begin with.

    1. haha yea that is pretty long I guess you just skim through it and find the important stuff from it

  45. Congratulations to you taxpayers who who were adamantly opposed to the $ 700 billion bailout. The House of Reps voted against it. Immediately the stock market plunged to its biggest point loss in history (777 points on the DOW). International markets are plunging around the world. The U.S stock market has lost $1.4 TRILLION in value, thats 2X the $ 700 billion plan. If we had completed the $ 700 billion bailout, most or all of it would have been recovered and there may have even been a taxpayer profit made of up to $ 2 Trillion.

    Everyone is way over-exaggerating the bailout at $700 Billion. What people don’t understand is that this money is not being spent – it is being invested in assets (loans) at fire-sale prices. These loans will be restructured and re-sold over time and taxpayers will make a profit.

    We are collectively $ 1.4 Trillion poorer today. This number may increase if panic ensues. Be prepared to watch your Pension Plan fold up and not pay any benefits, your IRAs and 401Ks go to half of what they were. Be prepared for many of your insurance providers to fold up and not pay you a dime. Be prepared for your employer to stop giving you a paycheck because they can’t get the short term loans and cash they need to make payroll or manufacture products to sell.

    The taxpayers have just shot each other in the foot. Why – because of a complete misunderstanding of how our economy works and because the media has fueled the fire of populist emotion without clearly explaining the logical conclusion of these bailouts – which are not nearly that bad. Lets just hope its not a fatal wound. see my blog on this at

    1. Wow buddy. Well said.

      It’s great to see that some people are not eating into everything CNN will feed them and stuff they hear on the news.

      1. Thanks. Its a shame that more people don’t
        understand economics. Where do all of the financial
        institutions put their money? In stocks, bonds, money
        markets etc. They don’t realize that when fear and panic
        occur, everybody sells and there is a run on all
        investment types that will affect people in ways they can’t

  46. I am with you on this one. The bailout bill is a big mistake and will do nothing but take my tax money and give it to failing companies so they can waste it. People messed up, now the mistakes need to be paid for by the people that messed up. We do not need to go into greater debt as a country and pay a bunch of interest, and have our kids paying taxes so that we can give a bunch of money to people that messed up. I vote pitch forks an lanterns lol. Its garbage, let it fail and people will wake up and start living right and not spending more then they have. Its simple. If you don’t have the money you can’t buy it.

    1. If all US people think same like you then this type of situation would never happen.People always dream to spend more than they have.You can’t stop them.So it will happen again and again.I also don’t like this bailout thing.But would you like to see a lot of people without any work around you?Then your taxes may be wasted in giving them social funding.

  47. The market always goes back up… Even if it crashes it will eventually go back up. Right now and in the near future is actually a great time to invest money if have the opportunity to put your money in and wait it out. As long as you pick companies that aren’t going anywhere your set.

        1. They can tank and so can any other company out there. Govrnment, which are deemed safe, can tank themselves. But in times of a shrinking economy or a troubled economy those sectors will prove to be the safest investments.

        2. The thing with pharmaceuticals is you need to know whether or not the drug will be passed by the FDA. when I pick pharmaceuticals I look for new drugs that are being developed and have a high chance of making it to the market.

          for example:
          The HPV vaccine by Gardasil will soon be required by all immigrants who want to legally come to America. Stock for the company who makes it (Merck & Co., Inc.) has gone down a bit making it a good time to buy.

  48. Sorry to disagree with you Shoe, but I think this plan is going to actually be good for the American people. First of all, the money is going to buy bad mortgages and such so that the banks will be able to lend money without pressure and then the money will flow freely.

    Also, if they do not give out this 700 billion, the American economy is going to lose a LOT more. Take Monday for example. The American economy lost 1.2 trillion dollars in one day. If this bill was not here, it would easily be another 2-4 trillion dollars. So depending on how you look at it, this is a bargain.

    Also, the government’s objective is not to turn on a profit on this loan, rather to get the american people out of their misery as fast as possible. They’ve put in this money fully understanding they may never see it again.

    That’s my point of view…

    1. here is a link to the proposal. as originally written it basically allowed the government to over-write any mortgage out there, making it a government socialist over-write of free markets. yes it would take off the banks hands the overwhelming amount of mortgages, but it turns it over to the government where now the government decides what mortgages are out there… if that is the case, why have free markets. let’s just turn everything over to the government. its already bad enough we have the Federal Reserve which is nothing more than a bunch of private banks that lend money to the government for eternal interest payments and NOW we have to bail them out of their private messes too? so we give them money for the national debt through the reserve and we bail them out and socialize the financial sector? where are we going with this?? yes, a bail out is necessary but it should have been covered by the strong banks and just re-insured by the government.

      1. This makes no sense at all. The whole reason we are in this mess is because there are little to none strong banks left. Even every strong bank in the entire US coming together could not have collected $700 Billion. They have their own problems to cover, and they are not going to give all their cash reserves or even take up loans themselves so they can help out their competitors.

        And yes, while this does not follow the rules of a free market, sometimes you have to make your own hybrid. Every system has it’s own flaws and if you never use another system to beat those flaws you will be running a doomed country.

  49. I own a retail store and I keep all my cash sales in a box in my room. I deposit nothing!

      1. Umm, is that sarcasm or are you for real? Because unless you have more than $100,000 (or $250,000 now) in that cash box, you’re losing out on some good % interest.

    1. Yea Microsoft, I mean come on, look at all the amazing things they’ve brought us >_< Just today I was having fun with my coding messing up in IE6

    2. What is it about Microsoft that makes you want to invest in it? How much is it going to go to?

    3. Have fun…. With Ballmer as CEO I see Microsoft filling for bankruptcy within the next decade.

  50. There’s no doubt that many great enterprises have been started in challenging times, when most people are running for cover. Be brave and take that leap…

  51. Never been a fan of gambling… opps, I mean ‘investing’ on the stock market. However, I have dabbled in the past, but only with what I could afford to lose.

    Dare I say it, but IMHO, recessions are a good thing for some of us. I like to save and never ever get anywhere near the red. This is helping me get my first foot on the housing ladder for sure.

    I know, I know, that sounds really heartless as many people will or have already lost a lot and I understand that, but still…

  52. Good article, I’m not sure 100% what to think off the bailout yet, but I’ll def give it a read!

    1. Read my post above or go to my blog here for a good explanation of why you should support the bailout.

      Sadly, too many people don’t understand how / why they would be adversely affected if a bailout doesn’t happen. The entire world is waiting on the US Government. Lets just say that if this doesn’t go through you will see massive withdrawals from stock and bond markets and money market funds from the world’s institutions and private citizens. This can lead to a complete collapse of the economy and tremendous hardship.

      Don’t listen to all the people who think they’re bailing out fatcats. If they have their way, they will soon be in a soup kitchen after its too late to do anything about it.

  53. For sure all those fat cats will get away with fat pockets, just like the Countrywide head, it’s business as usual!

  54. I’m no fan of the bailout. When I look around online I see all kinds of interesting options people who know more about economics than I do have offered. Many of them make a lot more sense to me as things that will help with the problem.

  55. I feel that the economy sucks right now cant get a job also everything is going up in price really sucks but in history there has been up and downs this is the big drop in the roller coaster we call America!

  56. How will the credit crunch effect your affiliate business if it escalates to credit cards. I would love to here some opinions.

  57. I know things are rough right now, but I think that the media and people speculating has caused it to get worse…

  58. Shoe, you really need to brush up on your history. While the New Deal did not end the Great Depression (WWII did), it certainly didn’t cause it. You have to go deep–and far far Right–into historical theory to find anyone who supports that claim. If you really feel that the New Deal prolonged and caused the Depression you are absolutely voting for the wrong man. Seriously you should vote for McCain.

    Obama, like most with a brain and a heart–including Adam Smith himself–realizes that there is one major problem with the pipe dream of a totally “Free Market”. It’s called Self Preservation, aka everyone is looking out for themselves. The market will never correct itself as long as so many are getting rich off it’s downfall.

  59. Though I think the bailout plan is a load of crap, when it comes to the stock market there are plenty of TRADES to be made and not INVESTMENTS. Most investments in this market are going to be extremely volatile since almost everyone is at a state of panic due to the bailout plan. If you know how to play the market and make quick trades you can still make money.

  60. These are the times that the rich can become wealthy by bargain hunting stocks to buy.

  61. Shoe…I think you should take your own advice,

    “I do not understand the stock market and have always said I have no business investing in something I do not understand. I just wish I would have practiced it.”

    and blog about something you do know about. You don’t have a clue what the bailout is intending to do, nor do you know what caused the Great Depression.

  62. People don’t understand or remember that just 2 weeks ago, two money market funds announced that the value of investor’s principal dropped below $1 a share. Money market funds are supposed to pay interest on a fixed principal amount that is deposited. They are supposed to be the safest place to put cash besides a T-Bill or a bank savings account.

    Guess what, when the news came out that the amount that people had invested dropped below their original amount, the money market funds suddenly look very risky – like a stock mutual fund. Why did this happen – its because the government allowed Lehman Bros to fail due to bad mortgages. A panic run started where individuals and institutions started pulling money out of what they thought were “safe” money market funds. Those money markets had to sell a lot of bonds to raise the cash for redemptions, further driving down prices of everything.

    This event is the one thing that caused Secretary Paulson to put together an emergency plan overnight. To stop worldwide investors from pulling out of everything.

    Folks – Forget about the fat cats. This is all about you and your financial security or lack of it.

  63. I am with you on this. I have been watching many congressman’s reactions and it seems the only ones real excited about this are the same ones who have always protected the big wall street people and the other ones are the ones who got their earmarks placed into the bill. The bill went from 3 pages to over 400 pages because of all the extra’s put into the bill including 6 million for Wooden Arrow makers and another 300 million for Puerto Rican Rum makers. It has just become ridiculous.

  64. The bailout plan is garbage, and any plan that they make that doesn’t involve giving tax relief to companies that bring jobs back to the states and promoting buying American will be garbage. The problem is not the debt it is that all the money we are spending is leaving the country.

  65. i’ve always hated the stock market.. you never know what’s going to happen tomorrow…

    1. Tomorrow does not matter unless you trade every day… Investing involved long term goals.

  66. The financial crisis is due to bad mortgage debt they say which I believe is true. they blame the bigshots at the banks and they definitely deserve a lot of the blame. The thing I never hear mentioned is that the people themselves are to blame too. Many people have defaulted on their mortgages because they mortgaged their house to values way over what the houses were worth so that they could buy a new car, new tv, new whatever. They couldn’t save up for it and had to have it now. So the people who’s houses have been foreclosed (not 100% but a large majority) are also to blame along with the banks and the appraisers who appraised these houses for much more than they were worth.

  67. Half of this mess is simply consumer fears pulling out their money but it’s a no brainer why they’re doing it. It’s our liveliehood.

  68. […] This Bailout is one of those things. They want to take a trillion dollars (or 2 trillion depending on who you ask) (btw that 700billion is bullshit its way more) and invest it in these banks that failed? … and thats it? …[Continue Reading] […]

  69. do you know any way to invest in online market/business ?

    paypal have an investment option in mutual funds like thing.

  70. […] This Bailout is one of those things. They want to take a trillion dollars (or 2 trillion depending on who you ask) (btw that 700billion is bullshit its way more) and invest it in these banks that failed ? … and thats it? …[Continue Reading] […]

  71. I am really frustrated with the way everything is going with the country right now. I can’t wait for a change.

  72. Hasn’t your man WB always said that the best time to get interested in stock is when no one is? I’m shocked to hear such gloom and doom uttered from you Shoe. There is sick cash to be made in the next few years by the people who have the balls to be buyers now. This “correction” has been coming for a long time. And it could also get worse. Definitely teach your daughters Chinese and Spanish as an insurance policy for their futures. America will one day right its debt-ridden ways. Like an addict that has hit bottom. We will have to. Excessive credit is the downfall of our empire. But life will go on. I can only see bad times ahead in the next 30 years as the Baby Boomers drain what’s left of our once prosperous system. But we have many great companies that will continue to dominate. BofA as well as Wells will only get stronger. There are so many once-in-a-lifetime deals to be had now for the patient investor. It’s time to feel like an oversexed guy in a whorehouse. For now, the worst is over. Time to be nibbling again.

  73. My friends who invested heavily in the stock market are praying for the bailout to work. One buddy told me he lost big with Bear Sterns and Lehman. The lotto says “You gotta be in it to win it”. Same odds after all.

  74. […] StockMarket And The Bailout […]

  75. Shoe, Shoe, Shoe,
    Please don’t talk economics your insight of the bill and the Great Depression is wayyyyyyyy off. If you need economic help go to my blog.

  76. The stock market its all screw up, I can’t figure it out why yahoo stocks keeps dropping by the day, and how low its gonna get, there are 2 stocks I keep my eyes open for: yahoo and Zagg.ob, which is the invisible shield, that I think is gonna get big with everyone wants to protect their iPhone, mac books, etc. worth checking it out.

  77. Shoe, Shoe, Shoe,
    please stay away from economics, your insight of the bill and the great depression is woefully inaccurate. If you need economic info check out my blog.

  78. The credit crisis is spreading. For the first time ever, the State of California needs to ask the Federal Government for a $ 7 Billion loan to be able to make payments to schools, payroll, and also pay unemployment benefits. The need to borrow money is normal because cash collections from taxes are uneven relative to the time payments have to be made.

    Normally, state governments and municipalities borrow money in the form of short term loans from the credit markets. But the credit markets have been shutting down, no one wants to take the risk of lending money to someone else and risk not getting paid back. The interest rates on the loans that are available are sky high. Lenders are worried that California’s economy may collapse and they won’t get paid back. Other states are canceling plans for infrastructure projects as they can’t borrow funds.

    The government bailout is desperately needed to calm down the markets.

  79. , but don’t buy into this stock market thing…it seems like to me a ploy to somehow manipulate the upcoming presidential election somehow. I’m going to start hiding my money in a shoebox 🙂

  80. Hey Shoemoney! I like your blog, and I read it occasionally. I have to question your statement that the New Deal lengthened the Great Depression. Can you give us your reasoning?

  81. I definitely agree with you, and it will be interesting to see how it all plays out. I recommend everyone buying a big drum for water and enough food to last a few months, it just takes one thing to go wrong before the shelves dry up in the grocery store, if only for a few weeks. You’ll be glad you did. Just buy stuff you eat, canned chicken, soups, etc.

  82. This really looks bulls*it, first doing all things and then getting bailout for the same and at wat the cost of 700Billion $ :O this money could have evaded poverty from the world..

  83. Do you remember what ‘s happened in 1990 in sweden it is the same today with financial system. The sweden do the same than Paulson and take 3years to recovery. The BIG DIFFERENCE they do the job to fix the problem for sweden population.”strict regulation”

    Remember Japan it was the same problem but they take 20 years
    to recovery. And the plan Paulson show up it is the same than Japan…
    $700 billions is not enough to digging the problem and fix it. The next president have to make at least $300 billions more. To clean the mess.
    This problem is big they need just a “NEW DEAL” otherwise the bad guy’s will mess up again the system…

  84. its strange to hear that ‘u dont understand the stock market’.Though,i still feel that these are the times to go cherry picking the stocks and make a healthy shopping list.The markets are down – and -out and that always gives an oppurtunity to pick up value stocks at dirt cheap prices.keeping away from banking stocks will be the only catch according to me

  85. The politicians have sold out…..enough said. One day they will be held accountable for this debt…..not the people of the United States!

  86. It’s scary how dead on Jim Rogers has been for years about predictions of our economy, the falling dollar, commodities, etc. YouTube has some excellent clips if you have the chance just search for Jim Rogers. Here’s a good one:
    Get rid of Bernanke, get rid of the Federal Reserve!!

  87. well i agree that without proper knowledge investing into stock market is just like getting yourself into pit assuming that it’s not there

  88. An economics professor of mine used to always remind us that government cannot create wealth. It can only transfer wealth from party A to party B. That is what is happening with the bailout.

  89. You could shove all of your money in gold. Or just BUY actual gold, and keep it in a safe deposit box or safe at home. No one questions what gold is worth when things are bad; but it’s always good. People that support fiat money systems over those of gold or silver materialist…well…enjoy your ‘consumer confidence indecies.’ Also, you could move to Mexico, where there are American gated communities, everything is cheap, and your money turns to eleven times it’s value once you hit a hundred miles or so past the border. Just some thoughts of mine.

  90. Warren Buffett gives great quotes. My favorite- “Wall Street is the only place people ride in Rolls Royces to take advice from people who came in the subway.”

    In my childhood the idea was to save money. Then people started talking about needing to keep up with inflation. Then the focus was to diversify. Then people were made to feel like morons if they weren’t making a killing in the market (like we are all meant to be Gordon Gekko). All this moved people away from saving cash like my grandparents, which brought more benefits than just a penny saved. It moved people from focusing on saving and building, to laying it all on black or red for one big score.

    It takes hair stylists more time to get a license than it does a stock broker or financial advisor to get their’s.

  91. Several weeks after this post it seems like the bailout hasn’t calmed the markets. Locking in your money in CD’s will provide you safety of principal and a rate of return. In the year that the stock market is down 40% my CD’s have earned me about 5%..

  92. Simply wish to say your article is as amazing. The clearness in your post is simply spectacular and i can assume you’re an expert on this subject. Well with your permission allow me to grab your feed to keep updated with forthcoming post. Thanks a million and please carry on the enjoyable work.

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