Tuesday, August 9, 2011


My $5,000 "Retirement Fund" in Steel Stock is now worth less than $3,000.  The Stock Market "Crashed" yesterday and is nose diving again today and I wonder what all this means?  Where is the $2,000 that I lost?
I wonder who got that?  I wonder how hard they had to work to get it?
   The Stock Market "Lost" over a Trillion dollars yesterday.  One day.  I wonder where it went?
   What was supposed to happen with our credit down grade is money should be harder to get.  A little higher interest and money would become scarce.  No one would loan us any.   In theory that should make existing investments more secure, old money better than new money.
   That is not what happened.  The Bond Market (people loaning us money) went nuts!  Lots of money entered the Bond Market and Stocks plummeted.  Now, what the hell could this mean?
   Bonds are often "long term investments", meaning over five years, often ten.  I remember buying them in grade school, a left over from WWII.  We would buy them at .25 cents a week and $17 dollars would buy you a Bond with a face value of $25 dollars ten or so years later.  Yes, Bonds are loans and they are based on faith.  In ten years things will get better.
   Stocks have become a "right now" investment, more closer to gambling than investing.  With computer generated buying and selling and day trading lots of money changes hands hourly and a great deal of money is lost or won in an hour.  Today the economy is in the tank and stocks are more like lottery tickets, pretty unusual if you should win.
   Nothing is related to any of this.  In the last three years Schnitzer stock has seen a high of $117 and a low of $23 and sits at $40 now, going down still.  The price of steel keeps climbing, always inching upward and never in retreat.  Buying steel stock in not the same as buying steel.
   America should have a quadruple AAAA+ credit rating, no, not because our industry is so great and not because of our banking system.  We need to improve those.  We should have the highest credit rating simply because we are the only "dream on the table".  In this game of Monopoly it is our best card to play.  The world knows this even if we have lost that card in the shuffle.  They still want to loan us money.
   I will keep my steel stock.  I like telling people that "I own Schnitzer Steel".  I think my little ownership of the corporate world gives me license to be critical of it.  And voting gives me the right to be critical of my own country and our complaining bickering political system that drove us into this mess.
   There is no second choice, no one else at bat, no other political system, no other country, no other economy.  Now is not the time to fold 'em, not yet time to count your cards.  We are the only game in town.

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1 comment:

AutumnLeaves said...

Wish I had an answer Jer. I am so sorry about the 2k loss though. I hope it rights itself soon. Equilibrium.