Your take on the economy - Posted by Ben (FL)
Posted by Ben (FL) on March 24, 2001 at 09:34:04:
My mother-in-law is a financial planner with Salomon Smith Barney. She has been doing this for a long time, and has been EXTREMELY successful. One of her clients is on the Federal Reserve Board of Governors with Mr. Greenspan. She never went to col, and anytime I have a problem with Citifinancial, The Associates, or any of the other jillion financing subsidiaries of CitiGroup I just send a letter. The letter mentions that , her long time friend (the guy who was her mentor) is now the Chairman of CitiGroup. All this just to let you know she know’s what she is talking about.
She has been a “partner” on several of my real estate deals. I have several houses I bought using her cash (actually the money is secured by stocks…ouch). I have tenant/buyers in them and she and I both are reaping positive cash flows for the next 12 to 24 months from them.
She had a very disturbing conference call with the big time gurus in New York. One of the top analysts pointed out that in 1929, the biggest hurt to the economy was not the very rapid fall in the market from around 380 to around 160, it was the years-long steady drop, after that, down to 36. This top analysts is seeing some similar signs in today’s market to the market back then. My mother-in-law is now very concerned about being highly leveraged. If something major happens, it’s cash and bonds that will be king and queen.
To those of you who are educated and knowledgeable about the economy and the markets, what do you think?
If a major market recession or depression does come, as far as I can see, the only steady renter will be Uncle Sam through the HUD program. Buyers will be few and far between. Those with lots of CASH will be able to buy at pennies on the dollar, as long as they can hold out for the recovery.