Answering Readers’ Questions…

Hi Everyone:

If I don’t get to post for the next couple of days that’s because I’m in a non-wireless zone, so hopefully I will be able to wish you all a happy Thanksgiving on Thanksgiving, but if not:

Happy Thanksgiving!

OK, now more questions. This first one is very important because remember all the financial posts I had done and how if Barack Obama were to win our situation would actually get better, not immediately, but it still would be less dire even in the short term.

Well, I’ve been thinking a lot about that. I can feel the panic in the air as I’m sure all of you can, but I also have a feeling with this aggressive restructuring of the market we are currently undertaking, the beast will be tamed to a large degree. I’m not saying there won’t be people losing their jobs, and several shaky years when people will feel unsure about their employment, their investments and what’s going on in the world financially, but I am feeling (and seeing) that this Pluto aspect (once Obama is officially in office) will actually be more about restructuring then about total devastation.

It’s as if we were in a big car barreling down a freeway at 150 MPH, headed toward a sink hole when the passenger yanked on the car steering wheel and the car lurched away from our certain death, totaling the car, but everyone lives, and has varying degrees of injury. 

So while that sounds kind of insane and scary, and it is. Our future is not nearly as bad as it would have been. We have in a way, saved ourselves from certain disaster. We will still have to pay for the sins of corporate greed, but I believe their days (at least for several generations to come) of being robber-barons is over. And the world as a whole (if we stay on this path) will find its way out of crisis.

So here’s the first question from Anonymous:

From Anonymous:

The big concerns expressed by some economists, is the perilous time before the inauguration which obviously coincides with your prediction. Evidently, in the 1930’s, the delay between the Hoover administration and FDR’s was disastrous. It appears that Obama’s administration has been getting the message and he is inserting himself into the Bush administrations’ management of the economy. Do you see a possibility of the tsunami being avoided if this trend continues? (Hope springs eternal)

Hello Anonymous,

I won’t go as far as saying the tsunami will be entirely avoided because there’s only so much Obama can do until he becomes president, but I do feel his inserting himself into the situation is absolutely a blessing to us, and will soften the blow a great deal. I feel this for a number of reasons:

1) He is reminding us (while we are panicked) that there is a competent leader who will carefully and cooly appoint the right people, and delve right into this on day one to fix the problem. This is kind of like cuddling your baby when he has an ouchy. This in itself I feel is helping to some degree to reassure us from total panic.

2) He is making good well measured decisions that are inclusive of all sides of the argument, further reassuring us that he is willing to listen to whatever idea is best no matter what side of the aisle or whether it be left, right or center. I think this is very important right now that the best idea win, politics aside.

3) We are in uncharted territory here with the economic crisis, and conventional wisdom isn’t going to work. Even the financial experts, deep in the pit of their hearts know this, and we can all smell their fear. This is exacerbating the market because they keep lying to the public when they are aware that they really can’t give advice right now, there is too much novelty, too much emotion and things are far too volatile to predict. But Obama’s measured, cool demeanor and show of strength really helps to calm this sector down. People respond to strong leadership which he is showing. 

I do feel that we’ll have a strange couple of years, and by the time its over we won’t recognize the way the market works anymore. It will be very different. It’s the end of capitalism as we once knew it.

It will no longer be a free for all anything goes as long as it can make money sort of ideology.

As I’ve said before in many posts, there will be new international banking, and trading laws that we will have to abide by, and the world will come together to make sure this never happens again. This means a lot of dirty underbelly will be exposed and rooted out, and a new way of doing business will be ushered in.

So it’s really hard for me to know how many companies will collapse under the weight of these new laws, and how many will be strengthened by it, but my gut feeling is it will be corruption darwinism, with the worst offenders dying off. That being said it will take awhile to discover all the nooks and crannies of these company’s books, and the market will be pretty nutty for awhile.

From Amber:

Denise, I found the information on t mobile and when they filed the merger with the security and exchange commission to become t mobile. I hope this is sufficient info. 

Here’s the chart:

  

Hi Amber,

I don’t see anything catastrophic here. It looks like they will be fine through this, they may actually expand into other communication services, the worst of it is they may have to lower their prices, or cut rates and try to go into encouraging usage in a more traditional home phone kind of way.

Jean

Hi Denise,

Can you give me some advise on a couple of mutual funds? I had originally thought that I would just hold them through this – but if it is going to get much worse, perhaps I should sell. I just don’t know how low they will go, or how long it will take for them to recover.
MEURX
MDISX
Thanks,
Jean

Hi Jean,

Can you give me the stock names and also if you have their first trading or incorporation date in case I don’t have it in my database. If you can’t find it don’t worry I’ll try to find it, but if you can find info on it, then I will be able to answer you much more quickly.

Cathy

Hi Denise,

I am interested in the stocks for Boeing (BA) and Airbus (EADSY) – how this ecomonic crisis will effect them and should we hold out for the long-term?

Hi Cathy,

Here are 2 charts I found for Boeing:

There will be opportunity for them to be more profitable, but they have to make some major changes. It looks to me that this stock will be very volatile for the next couple of years, and go through some very major shifts, even perhaps changing what they are known for making and potentially getting more into experimental or innovation orientated/research driven work. That’s there best chance at staying valuable. Otherwise as Pluto makes opposition after opposition to Mars, Mercury (the chart ruler), Pluto and then the Sun, this company could go under, but that won’t be for awhile, not until about 2020. So you have some time here to decide when the best time to sell is.

I couldn’t find anything for Airbus. Do you have their incorporation date or the start date of when they began trading? If so please post it in a comment and I’ll run a chart for you.

Best wishes and many blessings to all of you.

And of course have a great Thanksgiving!

Denise