Your Questions About Money Making Stocks For 2011

Joseph asks…

Middle Class America how’s that Trickle Down Theory working for you ? Do you agree with the statistics ?

Here’s a few statistics

• 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
• 61 percent of Americans “always or usually” live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
• 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
• 36 percent of Americans say that they don’t contribute anything to retirement savings.
• A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
• 24 percent of American workers say that they have postponed their planned retirement age in the past year.
• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
• Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
• In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
• As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
• Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
• In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
• The top 1 percent of U.S. households own nearly twice as much of America’s corporate wealth as they did just 15 years ago.
• In America today, the average time needed to find a job has risen to a record 35.2 weeks.
• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
• or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
• This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
• Approximately 21 percent of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
• The top 10 percent of Americans now earn around 50 percent of our national income.

So corporations are moving operations out of the U.S. at breathtaking speed. Since the U.S. government does not penalize them for doing so, there really is no incentive for them to stay.

What has developed is a situation where the people at the top are doing quite well, while most Americans are finding it increasingly difficult to make it. There are now about six unemployed Americans for every new job opening in the United States, and the number of “chronically unemployed” is absolutely soaring. There simply are not nearly enough jobs for everyone.

Many of those who are able to get jobs are finding that they are making less money than they used to. In fact, an increasingly large percentage of Americans are working at low wage retail and service jobs.

But you can’t raise a family on what you make flipping burgers at McDonald’s or on what you bring in from greeting customers down at the local Wal-Mart.

The truth is that the middle class in America is dying — and once it is gone it will be incredibly difficult to rebuild.

John answers:

It isn’t working out for me. I feel like I have been Urinated on.

I went from the upper middle to being at the Poverty line. I don’t blame it on Obama I worked for a Corporation, and I witnessted the tactics they use first hand to destroy the Middle Class in the USA.

Lisa asks…

Otakon 2011 Questions?

I’m turning 13 this year and going to Otakon for the first time. I’m going to have to walk around with my mom the entire time, and I love yaoi. Obviously I can’t buy anything 18+ but, I wanna take pictures and buy shounen-ai/yaoi merch. Ex. Yaoi Paddles, etc. I was hoping for tips on how I could possibly do this. I know for SURE she’s okay with gays but she doesn’t know that I like yaoi. She generally doesn’t care for anime/manga. She calls me a geek and stuff. >_< I've heard that uneducated parents aren't usually good with this stuff so I'm asking about this. Should I explain to her what it is? And some more questions, how old do you have to be for the Rave? I’m pretty sure it’s 18+ but I wanna make sure. And how much money do you generally bring for merch? I’m planning to stock up on manga and things, and I want an idea on how much to save. Thanks!

John answers:

I’m sure the best thing would be to explain a little bit, about what yaoi is. In my personal experience, once my mother knew that I liked boy/boy things she passed it off as one of my ‘strange obsessions’ xD With yaoi, depending on how hardcore it is, most parents would be on the defense because you are so young to be reading such things. She sounds pretty okay with shounen-ai so I guess just telling her ‘I think boy-love is cute’ would pass. Being honest and open about it is much much better than hiding it and having her find out on her own. Take it from someone who ended up in the latter situation >_>

But yeah, do explain to her but try not to get into too much detail.

About the rave. It really does depend on the state/convention. I don’t think Otakon has posted anything yet? Sometimes they allow a 15+ kid to go in by themselves, sometimes with an adult, and other times it’s strictly 18+.

For merch you might want to bring around $30-40+ things can get a little expensive. Always be on the lookout for a cheaper sale and don’t forget about Sunday discounts! If I remember correctly, last year at AUSA the manga stand was selling them for around $3-7 a pop.

Charles asks…

Prime rate for Corporate America is down by over 5%, but the mortgage rates went down a fraction of that. Why?

The housing crisis is unprecedented; the same way that the first $700 billion bail-out ratified in about a week time was. I know that the mortgage rates are at record 40- year low, but it is not enough! We should have the interest rates at lowest ever as an emergency, the same way as bail-out for big corporations was. When you bundle 5 million foreclosures, it should become “too big to fail”, but it DID NOT because no one as powerful as the Treasury Secretary (who listens to the Wall Street) could tell the President to stop the failures (for whatever reasons) NOW. To stop the foreclosures (over 1 million in 2010), the government must figure out a way to reduce the 30-year fixed long term mortgage rates to about 3%. There should be certain percentage of loans with even lower rates for a 5, 10, and 15 year terms.The percentage should be figured out based on a formula that the economy could absorb when the loans would become due and have to be refinanced. The longer the term of the loan, the less of a future problem since over time the inflation as well as the reduced principal of the mortgage loan would take away the risk. Then, the mortgage payments would become affordable and it would become cheaper to own than rent. Investors would snap the rest of the properties to rent them. The foreclosures would stop. The banks would be in better shape since the potentially bad loans would become good performing loans. More people would qualify for a new loan or refinancing since the payments are lower with the lower interest rates. Now the government is trying to reduce and subsidize the principal amount of a loan to reduce monthly payments. This is not working since the home prices are falling further. If the interest rates go down, the property values will go up and payments become affordable at the same time. The wealth creation due to increased home values would stimulate the economy further. The guidelines for lending should be also modified to be more realistic without increasing risk. Banks must participate in loan risks. Fannie and Freddie should have a very limited role. The banks are now paying record low interest for saving accounts and should use the money with some kind of an insurance added to mortgage fees and then banks could participate in loan risks based on more realistic criteria.For example, if a person has not been late during the past few years, he would not be posing a new risk if his mortgage loan interest rate go down resulting in lower payments. He should be automatically eligible for refinancing with the lower payments since he has been paying the higher payments throughout the most difficult period during the housing crisis. Many big financial institutions got the government bailout money and manipulated the stock market to make record profit. Other companies on Wall Street recovered fast due to interest rates being near zero. For example, IBM had record profit because like many other companies they could borrow at 1%. as it was reported. Why can’t the homeowners on the Main Street be treated the same way and given cheap money to turn around the housing foreclosures. If it was good for the Wall Street, it must be good for the Main Street. The reality is the lobbyist from big companies have more influence over the government decisions than the middle and working classes. There were over 1 million foreclosures last year and the suffering is unimaginable among the children of these group of people. there will be even more foreclosures in 2011, unless the interest rates go down further. If interest rates go down it will stimulate the housing industry. The jobs created by the housing industry with lower mortgage rates would benefit the Main street and would bring down the unemployment rates. Without housing recovery, the economy will not recover fast and the unemployment would remain high.The Obama Administration was perceived to be sensitive to the plight of people living on Main Street, but it made the Wall Street its first priority for recovery, may be rightfully so. Now what? There is no excuse not tobe sensitive to foreclosure rates by letting it go through its normal attrition. The crisis was caused by the greed of Wall Street and “creative” and fraudulent packaging of the loans into securities. Now the common people, with good or bad credit alike, have to pay the price by seeing the equity in their homes vanish. Some of the inflated prices were unrealistic. On the other hand when is “enough” is enough. The suffering as a result of foreclosures have reached unacceptable levels in terms of human including innocent children. At least, the government should try as hard as it did to resolve the bankruptcy of AIG, Goldman Sachs, Citibank, GM, B of A, and others. In aggregate, the human suffering is the same as if one of the “too big to fail” companies. In other words, when you add a couple of millions of foreclosures together in a bundle, it

John answers:

Prime rate is an extremely short term loan and a completely different kind of loan than a home mortgage that may last 30 years. I have been in real estate since 1978 and have seen prime rate go up and at the same time the mortgage rate go down. They are not closely related at all.

James asks…

Has the Tea Party Already Backfired on the Wealthy?

You may wish to say that no it hasn’t. It’s picking up steam, and maybe Sarah Palin will run, and maybe the lifestyle conservatives and the wealthy class will do quite well under the New Conservatives.

Or you may wish to say that, yes it has backfired in at least these two respects:

1. By making Christine O’Donnell the GOP Senate Candidate in 2010. She is absolutely ludicrous as a human being, forget about being a candidate for the US Senate. She is plainly the essence of Tea Party, which means whackjob/nutbar. When she loses, the GOP’s hopes of getting a majority in the US Senate go out the window. So, the Tea Party has cost the GOP the Leadership in the US Senate. This means the Tea Party Movement has backfired to some extent. It has hurt the people it was trying to help.

2. By pulling the GOP to the right in the middle of a nation-critical tax debate, the GOP leaders have become intransigent and stubborn and have rejected Obama’s good faith offer to keep the Bush Taxcuts for all earners under 200K. Obama could on November 8, 2010 simply take his offer off the table and say, “OK I was rejected, so now the pre Bush Taxcuts rates go back into effect for everybody — those under 200K/year and those over 200K/year alike — let’s see if the new Congress that takes their seats in January 2011 is more reasonable than the present Congress” Obama can afford to do this because it does not hurt him at all with his own core constituency, 1% of whom earn more than 200K/year. Obama’s people don’t care what the tax rates are — they don’t pay income taxes.

So, there would be a massive exodus from the Stock Market, probably a crash down to about 8000 on the Dow, as people try to save their stock portfolios. People want the 15% rate on long term capital gains, and if they think it’s going to go up to 20% or 25% they will sell while they can get the lower rate. They can always buy the stocks back in February of 2011, at a new basis.

So, if this happens the Tea Party will have backfired on people like David and Charles Koch (who gave much of the money for the Tea Party Express). The Billionaires will lose billions. Now that is funny. The Tea Party again backfiring and hurting the people it was seeking to help.

Time wounds all Lunacy (and all heels).

It’s your ideas I’m seeking here, if you have any. I don’t want to put words in your mind. If your mind has got any actual words in it, this would be a time to type them up and send them to me — we could call it your answer. I love colloquy and engage in it freely with those who post thoughtful answers, so don’t be afraid to use your brain, if you have one (not just a tattoo on the back of your head of a slot and a sign “insert brain here”)

Doh!

C’est un cercle de philosophes — c’est comme un salon chez moi.

John answers:

I preety much agree with everything u said.

Except that even O’Donnell can be a threat, look at how Rove cleaned GW Bush up as a candidate? Enough propaganda can win over logic

Thomas asks…

[UK question] So… now where do I put my savings?

So, we have inflation running at 5.2% and interest rates at 3%.

You can bet that the banks will be passing on that nice little 1.5% rate cut to savers before you know it.

I don’t claim to be any sort of financial guru but that means that my savings are reducing in real value at the rate of 2.2% a year, right?

Some of my money is tied up in NSI bonds which are index-linked. But the rest of it is in ISAs and savings accounts. Accounts which had good rates when I opened them, but as far as I can see now have the same problem as keeping the cash under the mattress – the longer I leave it there, the less it is worth in real terms.

The Government are stealing my savings!!! But joking aside… what do I do now? I don’t dare stick it in the stock market because I just lost 30% of the value of my pension fund in the last month and I have no idea whether the FTSE has finished falling. I don’t dare buy property, because I KNOW that those prices haven’t finished falling.

So what do I do with it? Move it abroad? Buy a commodity? Spend it on junk because there’s no point in saving any longer? What?

I have about £75k, excluding the NSI bonds. Of this, about £25k is currently in cash ISAs. I can’t tie it up for too long – I want to buy a house in 2010 or 2011. All I want it to do is keep pace with inflation plus give me a bit of a return (since I am making that money available to the bank/whoever) to make it worth my while saving it instead of spending it.

I really have nothing to spend it on right now, anyway. I’m worried about my job, so blowing it on holidays and loose men is something I would doubtless live to regret if I later became unemployed and needed it to live on.

Thanks to the level of my pension contributions I am not a higher rate taxpayer.

Any advice for me?

John answers:

Inflation should have peaked. Interest rates have further to fall (UK). Cash will be useless, you need to invest in assets. The obvious choice would be high quality companies in the stockmarket. Cos. Like Shell and BP, Vodafone, Glaxo, Unilever etc.They have yields of between 3.5% and 6% and on a 2-3 year view should have growth prospects. Property shold be worth looking at in 2-3 years time. To diversify maybe look at an ETF, These can be ISA’d.
Remember it is never a case of “what we have”. Markets are always trying to discount the future, so you should be thinking “what will the situation look like in 9 months time?”

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