Good evening Detroit. If you followed the Detroit 3 bankruptcy saga, I’m sure the news from Capital Hill over the past few weeks has sounded VERY familiar. Hopefully, we’ll reach another happy ending, but don’t hold your breathe. At this point, I hope Chrysler decides to focus internally and delay their IPO until sometime next year!
When it comes to investing, we (individual investors) can only control our money…much like a captain can only control his ship. Otherwise, the captain is at the mercy of mother nature, just as we are at the mercy of the markets.
After fielding many, many questions related to the countries financial situation over the past few days, I decided to pull together a small link-fest of information for the joltleft.community.
To kick things off, last night the House of Representatives passed the Boehner budget bill by 71 votes (281-210). 2 hours later, the Senate tabled the same bill (59-41). Back to the drawing board guys and gals.
Friday also saw revisions to GDP which took the previous estimates from bad to worse. GDP, or gross domestic product, is the sum of goods and services produced in the country, and is used as a measure of economic health.
Based on the revised numbers, Barry Ritholtz sums up the situation nicely:
…[this means] the hole we’re trying to climb out of IS DEEPER than originally thought. [emphasis added]
That is a whole bunch of “not good”.
Need More Info?
Here are some links that I have been forwarded, which do a pretty good job of capturing the information you need:
Answers to the 7 big “what-ifs” of debt default – By Lauren Young (Reuters via Yahoo!)
A very cool interactive graph – Countdown to the default deadline – By Christine Kang (Yahoo!)
And this just can’t be good – Money Funds Report Biggest Redemptions of the Year Amid U.S. Debt Impasse (Bloomberg)
Of course, not everyone agrees – U.S. Debt Crisis Is Contrived, James Grant Says (Bloomberg)
Trading/Investing the News
With the US markets in a correction, the European banks on the ropes, and our own economy stalling, now is not the time to take risks. Make sure you have stop losses in (if possible), and make sure that your allocation percentages are correct. Unitl the situation gets a little clearer, read the following from an article by James Saft (Reuters):
“If we see some sort of debt deal, you may be tempted to buy the subsequent rally that will follow. Don’t.” . He goes on to outline the poor state of the current US economy.
The Big Picture
Investors Business Daily
Bespoke Investment Group
About Joel Wenger:
Mr. Wenger is an investor, trader, entrepreneur, and business manager. In his “spare time”, Joel is also an avid motorcycle racing fan and back-country skier. He currently works as a strategy consultant in the greater Detroit area and writes columns for joltleft.com as the Detroit Investing Examiner.
Joel’s investing knowledge is shared via Invest-Safely.com, one of the most comprehensive and user-friendly investing resources on the web, as well as the Invest-Safely Blog.
Have a question for Joel? Contact him here…