One Thousand Posts
December 20th, 2007 by 
reality
For the thousandth entry, I repost #1, my introduction from August 17th., 2004.
A blog of thoughts about financial and economic issues, in the hope that someone might find them useful. Or at least give me a record of my attempts to understand the world around me. I’m an independent investor whose only source of income is the investment returns on my assets. As a result, I care about truth and reality, not the smoke screens put up by the self-interest of the investment industry and the government. That doesn’t mean I won’t trade along with a lie, but it does mean I want to know that I am doing so.
There is a famous saying from George Soros, the well-known hedge fund operator:“Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend, and step off before it is discredited.”
Words to heed. This blog will contain my thoughts on what’s fact and what’s fiction along with editorial asides and rants that will no doubt have a decidedly libertarian and Austrian (economics) bent. Nothing in this blog should be taken as investment advice of any kind.
I think I have done OK on recognizing the false premise, but I’ve stepped off way too early. A learning experience. I would also like to extend my thanks to those who have come across my blog and posted comments. Truth comes out best from argument and discussion, and I welcome your views, whether we agree or not.
Posted in Retirement, Strategy & Scenarios | 
December 20th, 2007 at 10:04 am
I didn’t step off until early this year when my REIT started really under performing and I couldn’t find any info why. They performed quite differently from equities in 2004-2006 but began moving in lockstep early this year (along with EVERYTHING else it seemed). It was obvious at that point that something was very wrong with the market and I have been looking for the proper investments since. I am severely limited in my 401k and do not really have anything I can invest in that I consider appropriate for this market. Your blog is one of the ones that helped me understand why the market is acting so strangely along with Bill Fleckenstein and the other contrarians talking about the credit bubble. I can feel things getting worse but I am amazed how long it is taking to face the music.
December 20th, 2007 at 2:21 pm
This is a great site. The poster above mentions Fleckenstein; he’s somewhat entertaining, but not a true contrarian. He’s a permabear. Permabears will not help you make money. Coincidentally, I was cleaning my files and came across a speech Fleckenstein gave on 10/02 titled, “Spinning Financial Illusions: The Story of Bubblenomics.” He made a number of valid points and stated that tech stocks would fall 50%. Since that speech, the Nasdaq is up 142%. Timing and flexibility’s everything.
December 20th, 2007 at 2:28 pm
Congratulations on your thousandth post!
Sadly, everything that I need is going up in price whilst everything that I own is going down in price.
But it is nice to know that the train is coming and I can at least try to get out of the way.
December 20th, 2007 at 6:07 pm
President Bush just signed a bill that eliminates federal taxes due from homeowners who have had mortgage debt forgiven as part of a foreclosure or the renegotiation of a loan.
http://www.realestatewebmasters.com/blogs/gulf-coast-associates/3798/show/
So much for punishing real estate flippers…
December 20th, 2007 at 6:30 pm
Cheap pandering, little revenue actually given up. Taxes aren’t applicable if you’re insolvent, and most of these folks can probably show that they are.
As a bankruptcy attorney I know says “You can’t get blood from a turnip.”
December 20th, 2007 at 8:03 pm
“What taxes cannot be discharged in bankruptcy? Income taxes less than three years old; taxes filed less than two years ago and taxes assessed less than 240 days ago will not be discharged in a chapter 7 filing. While a chapter 7 filing may not be right for you, an attorney may well recommend that you file a chapter 13 which is a payment plan.”
http://www.etaxes.com/bankruptcy.htm
Sadly, a profitable investing strategy this decade was to liar loan your way into as many houses as possible, rent them out to pay the teaser rates, heloc the increased equity, hide it overseas, and then file for a bailout/bankrupcty when the ponzi scheme ran out.
I wonder how many people actually did that?
Anyway, life may not be fair but I still believe that financial reality will prevail in the end ;).
December 20th, 2007 at 9:13 pm
It’s my understanding that the forgiven debt is not taxable if you are insolvent.
December 21st, 2007 at 2:27 am
You have to show that you are insolvent. If your assets are more than your debts you have to pay the taxes.