Royal Bank of Scotland Warns of Global Collapse

This didn’t get much play in the socialist press, so here’s the link:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnrbs118.xml

This is exactly what happens when you simply print money from thin air! Runaway inflation combined with an oil crisis; housing crisis; credit crisis; and pending socialism in the once greatest country on the planet should certainly be enough to cause a depression!

Of course, the one hope that we have to avoid this mess was presented by Maxine Waters: simply nationalize all those evil businesses that are making those evil profits! :bobble

http://www.groundreport.com/Politics/Maxine-Waters-Urges-Socializing-Oil-Industry-in-Sl

Mike

I’m not sure what to say… other than… ‘damn, this sucks’… But we saw it coming. We’ve been talking about the on coming depression for months.

…sure am glad I know how to gut and clean wild game.

Great post Mike,

I just got back from a few days out on Cape Cod. Before I write this remember one thing…I DID NOT solicit these opinions. This information comes directly from business owners and conversations I over heard at lunch and dinner.

TOUR BUS DRIVER for elderly folks traveling on 1, 2, & 4 week bus trips…
“I have to work every chance I get this summer, bookings are HALF of what they were last year. The last trip I did was a 4 week tour of New England, The bus seats 44 people, we had 11 on board!”

Restaurant owner…“This is as bad as I’ve seen it in 35 years in the business. We’ve laid off half our normal staff and are still struggling just to pay our bills, I don’t know how much longer we can last.” (This is a LEGENDARY Cape Cod restaurant, first class!!)

Hotel Manager…"Did you guy’s (addressed to me) shop around for rates? (No, why do you ask?) Our reservations are down 70% from last year. I was wondering if people are just shopping prices now a days? (No…people aren’t shopping PRICE for Hotels, they’re shopping price for FOOD!!!)

The thing EVERYONE must remember is these OIL PRICES are going to show up in our economy in FORCE about 1-2 months from now. I know they’re already having a HUGE impact, but the REAL knockout punch comes when business owners start LAY OFFS due to lost business.

At that point it really doesn’t matter WHEN you purchased your home, what matters at that point is FINDING A JOB TO KEEP YOUR HOME!!!

WE’RE NOT EVEN CLOSE to the full depth of this recession/depression. This is going to be VERY PAINFUL for EVERYONE.

But…let’s look at the bright side!!! The National Assoc. of realtors just said housing has bottomed out!!! WOOO HOOOOO…Glad that’s over!!! :banghead :banghead :banghead

The National Assoc. of realtors just said housing has bottomed out!!!!!! WOOO HOOOOO......Glad that's over!!!

I read that too. I wonder if that guy wears his cheerleading skirt and keeps his pom-poms at the ready when he writes his forecasts? Are they insane?

Mike

When are you going to talk about your falling Ford stock?

Well College Boy,(4444) or is it still High School boy?

I don’t own FORD STOCK. I OWN the RIGHT to BUY Ford stock at $7.50 until January 15th 2010. That’s known as an OPTION. So instead of me BUYING 20,000 shares of Ford at $5.35/share for a total cost of $107,000…I spent $20,000 in late March and purchased 200 January $7.50 calls at $1.00 each or $20,000. Those options are STILL worth 50% more than I paid for them!! (YES, even today) I’ve said this here before…this type of investment isn’t for everyone. But, I’ve seen this movie before…and LOVED THE ENDING!!!

You may have heard that Kirk Kerkorian just purchased MORE Ford stock than he originally planned. Kirk agreed to buy at $8.50/share. A whole lot of people sold him their stock. Mr. Kerkorian is a BILLIONAIRE, as he did with Chrysler and then with GM (he only made $35 MILLION on GM) he will have the last laugh a few years from now. By then Ford will have survived the recession, pent up demand will do for this car company what it has done 3 times in the last 30 years. SEND THE STOCK FLYING!!

This type of investing is NOT for NEWBIES. You better have “a set” if your gonna swim in this pool. I’m buying FORD’S FUTURE, NOT their PRESENT situation. Remember…once the news is GOOD, it’s TOO late!!!

Here’s what I know…

Obama is as good as elected. As long as John McCann keeps running his mouth about being in Iraq for 100 years… HE’S DONE. Put a fork in him.

Do you remember WHERE OBAMA is from??? CHICAGO!!! Do you THINK he’s gonna be the President who let’s Ford go under during his time in office???

Let me answer that one for you…HARLEY DAVIDSON and CHRYSLER (2 separate times) BOTH these companies received FEDERAL assistance to stay afloat. THERE IS NO WAY IN HELL A SITTING U.S. PRESIDENT (other than the MORON we have now) would let FMC FAIL. NOT GONNA HAPPEN.
If it gets REALLY bad, the Feds will do the EXACT same thing they did for Chrysler TWICE…CO-SIGN THEIR LOANS. You may find this hard to believe but I actually invest based on historical data. The FACT is the Dems will jump to Ford (and GM’s) rescue if they need it. Past practice has already been established for this.

This recession is SETTING the table for a BIG, BIG return for FORD. Will it get worse??? COUNT ON IT!! I can’t tell you where the bottom is. I don’t care where it is. I just know that by January of 2010 I’ll have most likely bought and sold 8 houses using that $100,000 I DIDN’T SPEND buying FORD STOCK OUTRIGHT!!! If 2008’s flips and past recession era buying and selling are any indication, that $100,000 should be (based on 8 homes in 2 1/2 years @ $40k ea+/- net) So in 2 1/2 years I’ll be around $350,000 profit. At THAT point I’ll buy those 20,000 shares for $150,000 and RIDE OUT whatever the economy has left to throw at Ford with a nice $200,000 EXTRA in my bank account or maybe I do only 4 houses and use THAT money. IT DOESN’T MATTER, I’VE ALREADY BOUGHT SOMETHING MORE VALUABLE…TIME!!! GET IT!!!

If you don’t have the sack to play, get out of the deep end of the pool!!!

4444,

You know what I’M DOING… Let’s hear YOUR ideas for investing in a recession???

Oh wait…Your a High School kid just entering College!!!

FORGET everything I just wrote…

I knew EVERYTHING when I was in college too!! Just ask my father. The funny part is… The older I get… the smarter my father becomes.

You’ll learn kid… believe me when I tell you this…COLLEGE will be the CHEAPEST tuition you EVER pay. Your REAL education will come AFTER college…and…

The REAL WORLD is gonna KICK YOUR @SS!!

The ones who succeed are the ones who can get up and STILL keep going even AFTER they FAIL, most people just get a job and forget about any hope of becoming wealthy. Only time will tell if you have the sac.

Good luck kid!!!

:doh :biglaugh

fdjake,
Great post…I can’t play into the baby bs drama with the end of the world scenarios people post…I smell opportunity when others smell fear…People are calling for gloom and doom in the RE markets and I just turned a %15 ROI property into a %500 ROI property …I love this market…I feel like I prepared my entire life for these times…Pigs get slaughtered in these markets (stock or RE)…I also feel that doubling down on Ford is ballsy but smart…Buckle up for a bouncey ride but I would bet size that you will look very smart a year out…

fwiw posts like 4444 are the reason I have relaxed my postings on this forum…I can’t stand $2 dreamers questioning my methods or my skills…I rather live in the real world and keep doing what I do best…Making real money not imaginary…

fdjake keep it up…You and I know the truth…

ouch, you’re hurting my feelings. I am not trying to fight with you I am trying to understand your investment idea. If you’re not receptive to other ideas you will fail just as much. I do appreciate your comments on this forum and I especially enjoy listening about your experiences and saving money. I feel like once you placed your BET, you are now more confident than ever and no one in here is being objective about the Ford situation.

So here is what I get from your “investment”:
1.) Fords future is bright and if it isn’t:
a.) they will be bailed out by the government
2.) A billionaire invested in this company so that makes him right
3.) The CEO, Alan Mullally, is going to completely turn around the company.
4.) Since the stock is down it has to go up in the future.
5.) Ford is going to instantly turn its brand name around and will become better than the rest.

All of your investment theses are dependent on when you are buying the stock and not what you are buying. Right now Ford is in a crappy situation. Can you explain to me QUANTITATIVELY how this stokc is currently below its intrinsic value. I dont think you can honestly say 1,3,5 are 100% going to happen in the future. I dont see how you can say that this situation is not in the “too hard pile” to evaluate. Thanks a lot.

Ben Graham said it best: “You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right”.

As of now it seems like you don’t have any data, but reasoning that is subprime. You claim your investment will work because certain events will take place in the future. This doesnt seem like an investment–but a speculation.

Keep reading those “Investment books” kid. If you want to “understand” what I’m doing just ask. If you break my b@lls over it, fully expect to get a “lesson” in return. Your either a college freshman or a high school senior according to your previous posts. You wouldn’t walk onto the varsity football team and talk sht. DON’T DO IT HERE! Your playing with guy’s who are MUCH more experienced than you. If you want to learn that’s great. If you want to break blls, that’s great too, although it probably won’t be GREAT for YOU.

Here’s a book you REALLY need to read. It’s title is…

“Where are all the customers yachts?”

It’s a classic about how Wall St. Brokers make money off of fools who read books about intrinsic values, trailing earnings, peer segments, “MOMENTUM STOCKS” and other BS. Basically the same BULLSH*T your reading!!!

Here’s the deal. You recently told us you were just getting out of HIGH SCHOOL. Sit back and listen VERY CAREFULLY to what I am going to tell you about Ford. This is THE LAST time you will get this info from me.

Ford…in the last 2 years has sold off…

ASTON MARTIN…for $1 billion+
Jaguar/Land Rover…for $1.3 billion+
Next to go is VOLVO…estimates are around $3 billion

Now here’s the good part…EVERY ONE OF THESE DOGS has lost Ford money for YEARS.

THAT IS OVER.

Go to www.autoblog.com and scroll down to the press release from Ford regarding the plans to bring the EUROPEAN FORDS to this country.
Then read the “comments” section. The reaction to this news is OVERWHELMINGLY POSITIVE.

FORDS European line up OUTSELLS TOYOTA and HONDA!!! THOSE CARS ARE COMING HERE!!! GET IT???
They are NOTHING like the models sold in the U.S. Mullaly has said they will build the Euro cars here and in Mexico and NO LONGER build different cars for different markets around the world.

Can your Fragile Eggshell mind quantify how HUGE a savings that will be for FORD???
Google search Ford EUROPE and LOOK at the cars they sell there!!! It’s amazing!!! Ford has 5 of the top 10 selling cars in Europe, and their MARKET SHARE is growing by 9% a year!!! Brazil and China are EXPLODING for Ford. Sales there are up 200% year over year and they haven’t DENTED the potential in these markets.

Next up…A LANDMARK…I’ll repeat this…LANDMARK!!! UAW labor agreement signed last year. TOTALLY releases FORD from ANY Future contributions to RETIREES HEALTH CARE COSTS!!! Can your high school brain wrap it’s self around how BIG that is for FORD???

Ford currently has $40 BILLION IN CASH on hand. Thats $40 with a B.

Fusion, Focus, Edge and Escape are selling above projections. The Trucks ARE getting SLAMMED, and THAT is hurting Ford NOW, I’m not buying NOW, I’m buying 2010. Ford is CLOSING truck plants in this country. Some will be converted to build the new Ford Fiesta.
Google search Ford Fiesta and research The REACTION Ford has had to this GAS SAVER in EUROPE. It has won EVERY MAJOR award possible. It’s coming here in late 2009.

The new Lincold MKS will be out this summer. I’ve seen it. It is NOT like any Lincoln ever made. I would actually BUY THIS CAR. Ford has over 10,000 PRE-PAID oders for the car already. That’s a BIG number for LINCOLN.

This summer Ford will roll out the new FLEX. I’ll quote AUTOMOBILE Magazine editor Jean Jennings. I think her comments may be of interest. “Once in a decade a car comes along that is an OUT OF THE PARK, GRAND SLAM for an Auto maker. That’s EXACTLY what the FLEX is for Ford. This car is going to sell in HUGE numbers.” Mullaly has made VERY conservative sales estimates of 100,000/ year. It may be of interest to note that he used the same numbers when the Edge came out. That car is selling at 60% OVER estimates!!

Kirk Kerkorian started like you…WITH NOTHING (definitely with more brains)
He bought Chrysler stock at $9/share in 1991 at the HEIGHT of the recession. 4 years later Chrysler stock was at $100+/share.
I DID NOT buy Ford stock because of Mr. Kerkorian. But having him buy HIS stock at $1.00/ share MORE than I can buy mine, is very COMFORTING!!! If you check the date on my original post you will also note I purchased MY OPTIONS before Mr. Kerkorian ever mentioned an interest in buying Ford stock. He has a track record of successfully investing in broken down car companies, that, and only that is the reason for the mention.

Due a little research on exactly HOW Alan Mullaly turned BOEING around AFTER 9/11. That stock went from $11/ share to over $100 under Mullally’s leadership. EVEN the UNION employees there credit Mullaly with the turn around. Same circus, different clowns.

I NEVER said “since the stock is down it HAS to go up.” I’ll write that off to your fragile eggshell mind.

I guess the FACT that Ford has TIED or BEATEN Honda and TOYOTA in JD Power scoring AND in CONSUMER REPORTS QUALITY and RELIABILITY RATINGS won’t have ANY impact on turning the Ford brand around??

I could go on…but I don’t want to bother you. Continue reading about how Ben Graham values stock. When you get the amount of money saved that WARREN BUFFET has those methods might work GREAT. Good luck making money using that system investing your weekly savings.

And lastly…If your going to be an investor in ANYTHING…your going to HAVE to make assumptions about events in the future. Like…can I sell this house for XXX,XXX amount of money, is there a possiblity something unforeseen will happen, are my estimates correct, ect. There’s no positive way to KNOW THIS. You estimate where the market will be and make your move based on past experience. Of which, I’ll point out, YOU HAVE NONE!!!

Rookie hit it right on the head. I think your a $2 dreamer.

I’ve done this before Spicoli.

WATCH and you may just LEARN something!!!

Our only hope is the elect Obama, he has the plan.

While we’re talking about cars, my sister recently bought a Toyota Prius. I drove it the other day and was VERY IMPRESSED. That thing gets about 50 mpg, which is better than my motorcycle! It is also very smooth and quiet. Toyota can’t keep them in stock and they’re only $22K.

I wonder if Ford has anything like that coming soon? If so, I haven’t heard about it.

Mike

They do…

http://www.soultek.com/clean_energy/hybrid_cars/the_future_of_fords_hybrid_vehicles.htm

As far as Obama goes…Who knows??? I just think by that time, ANYONE linked to George W. won’t be able to get elected Town Sheriff never mind President.

I live in Rhode Island. This State threw Lincoln Chaffee (Republican) out of the Senate and he was THE ONLY Senator to vote AGAINST going to war with Iraq!! He got the boot because NO ONE here wanted George W. to have a Senate majority. I think people here made a huge mistake on that one. But…I do think we’ll see the exact same sentment nationally this next election. The Replubicans screwed themselves. They have NO ONE esle to blame. George W. has completely and utterly DESTROYED that party.

:banghead
Haha. thanks for the insults. I don’t get how asking you about you’re Ford stock or LEAPS insulted you in anyway. I don’t get why I cant comment on your investment.

All I can say is this place has turned into complete crap because people mechanically praise crap that you type with BIG CAP LOCKS for no reason. You have still not used NUMBERS (in your style) to demonstrate how Ford is a valuable purchase RIGHT NOW. AS PROPERTYMANAGER SAID YOU DONT BUY PROPERTY FOR THE FUTURE YOU BUY IT FOR NOW. You’re ford Options (oh such a fancy name) is comparable to the same idiot that you would hate who bought a house because they figured it would go up in price in the future because of a greater fool. haha so numbers are bullshit when investing now. Tell that to your pal propertymanager. All the p/e, rent roll, 50% earnings is complete crap. No numbers needed for investing. You just look at their pipeline and their CEO and instantly know that the stock is going through the rough by the summer of 2010. You’re completely ridiculous. I guess I will always be a $2 dollar dreamer. I will never be the master property flipper, I guess :(.

When are you going to talk about your falling Ford stock?

4444, you’ve got to admit that you kind of started it with this shot at FDJake

You're ford Options (oh such a fancy name) is comparable to the same idiot that you would hate who bought a house because they figured it would go up in price in the future because of a greater fool. haha so numbers are bull**** when investing now.

Numbers are critical when you buy a rental property (or a property to flip). If you don’t understand the numbers and don’t buy right, you WILL lose money. With rentals (or flipping), you are in control of your business and if you make the right decisions, you will almost certainly make money.

I do not trade stocks at the level of FDJake or RookieNYC, but I have traded stocks for many years. In my opinion, unless you’re a big institutional investor with the inside knowledge, the numbers (fundamentals) are almost meaningless. Just look at the Bear Stearns situation. Only a few days before they collapsed, very few people knew that they were about to collapse. That was despite the myriad of detailed reports these companies publish. In addition, if you look at a corporate report, you’ll see that they are full of gibberish. Companies can make the reports say what they want them to say with creative accounting.

You are correct that buying LEAPS (long term options) is speculation. Even the name LEAPS (Long Term Equity AnticiPation Securities) tells you they are speculative in nature. What I believe FDJake is doing is making a long term prediction about Ford’s direction based on his personal knowledge of the company and top personnel at the company. FDJake’s success in his flipping business and commercial real estate ventures have allowed him to make more speculative plays like this one. If he’s right, the opportunity to make big bucks here is HUGE. If he’s wrong, he’s out $20K - no big deal for him.

I guess I will always be a $2 dollar dreamer. I will never be the master property flipper, I guess

I think you can become whatever you like. You have not tucked your tail between your legs and left the forum, even though you’ve taken a few shots. That shows the mental toughness that is needed in business. In addition, you’re on this forum learning the business and getting all sides of the issues. FDJake is not suggesting that new investors buy LEAPS instead of doing something safer. In fact, he has continuously suggested buying property at a huge discount and flipping quickly (a very conservative strategy).

I am not buying the Ford leaps either. I’m hoping FDJake is right that Ford will get it’s act together. It would be GREAT for the company. I did some reading about Ford and they certainly claim to be committed to innovation. However, after driving that Toyota Prius, it is clear to me that the US is still far behind the Japanese. That Toyota Prius is one outstanding hybrid (with 50+ mgh in real world driving)! If I could only get a sheet of plywood in the back, I’d buy one!

Mike

My 2 cents for all its worth…

4444 - by now you probably have realized that FDJake has a very strong opinion about his investment in Ford and based on what I read from his post he did his research and is using his experience. But the bottom line here is that he has a very strong opinion . Period. So what’s the point about arguing about it? It is his money, his analysis, his decision… And he will be the one that will make or lose money down the road. You don’t need to be right now. Time will tell if his strategy will work or not. And if he is still here and we are still here few years from now, we can always give him a hard time if he fails or give him kudos if he succeeds. (I hope for the second! :O)

FDJake - we appreciate you sharing your investing strategy and your thinking behind it. I really appreciate you taking the time to write about it. Now I know more about Ford than I wanted… :O) Having said that I really hope you are right… I am with 4444 on this one… I believe bying Ford stock or any other automaker is high speculation and risky business. Even if I agree with you that the likelihood of Ford going out of business is slim, I am not sure about it becoming a great company in the future. A lot of things have to change. And I am not sure if bringing European and Latin American models will work. I understand the economies of scale, etc… However the other side of the coin is that the success will be defined by your customers - you need to sell what your customers want to buy. European and Latin American cars are typically smaller than US cars. Europeans and Latin Americans typically buy what they need - most people probably don’t need an SUV or a truck. In Europe and Latin American those people will not buy an SUV. Here they will. My point - Ford may be able to save money by consolidating his platforms. However different markets need different types of cars…

I own a Honda Civic and a Chrysler Town & Country. I can tell you - I am very impressed with the Honda. I bought it used in 2003 (it is a 2002 model) and I have never had any problems - only one battery that went dead once. The Chrysler I bought new in 2006 - no major problems. But a series of small problems here and there - some screws that came loose, a power door that stoped working, a power window that wouldn’t close… And the worst part is that in my first year of ownershipt it lost approximately 50% of its value. The Honda is holding up much better… Just my 2cents on Japanese and American cars…

Hey I hope you two have a great weekend!

4444,
Let me just share this with you. When you find yourself going back & forth with members on this site, just stop. Always ask yourself this question. " Is this helping me reach my goals?" If the answer is “No”, then stop doing it. It’s a waste of valuable time. You don’t have to prove someone wrong for you to be right. If you open your mind to the opinions on this site and take what you want from it, you’ll learn faster and be a better investor. Just my 2 cents. Happy investing. :beer

One more point here…

Think about this for a minute…I have laid out a VERY detailed investment strategy concerning Ford. I have NEVER suggested anyone do what I’m doing.

So WHY would I post this???

The answer is… This is EXACTLY how I learned to invest SUCCESSFULLY!!

When I started out 18 years ago I could never seem to pick a stock that went up. I was buying stocks the way most people buy real estate. RETAIL!!! What I learned from a very clever elderly investor was DO NOT try to pick the next Microsoft. That’s impossible. It is FAR EASIER to identify companies that have been beaten to death by Wall street and wait for a change… These companies didn’t survive for decades without some very smart people being involved. In almost every case a MAJOR management change is made and a turn around plan is put in place.

Research that turnaround plan…Does it address the problems at their core???

Once that is determined you must wait for a catalyst that will make a difference in the companies bottom line…

Then…Buy the stock early and be prepared to take some lumps initially.

YOU MUST BE PATIENT!!!

I get NOTHING for posting this information…NOTHING!!

What YOU may get (and we ALL will see) is a front row seat to this style of investing.

It has worked for me on NUMEROUS occasions over a long period of time. I have made REAL MONEY doing this. If I’m right… I win…and anyone reading these posts will win if they simply REMEMBER the strategy. It becomes a tool in your box.

The reason this method works for ME is…it is almost identicle to buying distressed real estate. I’m buying THE UGLIEST car company on the street right now, and I’m buying at a HUGE discount.

You guy’s can be the judge of the final out come. If it turns on a light bulb in someones head I’ll be happy. I can not STAND the outright BULLSH*T people are sold regarding investing in stocks. It is no different than the BS people get fed regarding real estate investing. In my experience if you actually did the complete OPPOSITE of what you are normally told, most people would be making money. But in most cases, that’s not what happens.

I just don’t have the patience to listen to a HIGH SCHOOL kid who hasn’t invested in anything other than clearasil, mouthing off about a subject that cost me real money to understand. I have no problem explaining my thought processes to anyone. I DO have a problem with a high school kid breaking my b*lls about something that I post here to simply get REAL INVESTORS thinking. NO ONE has to follow my advice. Just watch, learn, and possibly repeat, or don’t. The final decision is yours.

That’s it…

So getting back to Propertymanager’s original post. My wife & I have jobs in healthcare. They seem to ride out tough times better than other industries. I’ve worked in construction and felt the pinch of the early 90’s witha layoff. Since being in healthcare for 13yrs., It’s been solid even in tough times. People can make choice to build or buy certain things. But they can’t choose when they’ll get sick or not. We’ve also been able to build up some reserves to help in case the tough times get too tough. I’m still far from being financially free, but I think it’s important to get your own financial house in order before investing. Especially with tougher times coming down the pike. I’m hoping to be able to buy at huge discounts for at least a few years.

My wife is a Nurse and certainly will be able to ride out the storm. I knew for some time that the ‘storm’ was coming. I always tell her that she’ll be the one with a job in the end. As you mentioned, health care establishments seem to weather far better. Disease and injuries aren’t going into recession anytime soon!