Every time I hear someone say that a certain bill is only to help Main Street and is designed to shun Wall Street I always shudder. In the same way, when a certain bill is passed that helps Wall Street and shuns Main Street I shudder. As a nation we must come to a realization that Main Street and the people like you and I need Wall Street to be healthy, and Wall Street needs Main Street to be healthy.

Let’s make one point clear before I go any farther. I firmly believe that Wall Street executive pay has been outrageous and I applaud all the efforts that are being put in place to limit the ridiculously high salaries that Wall Street executives have been raking in. In my opinion, the issue of executive payment is the only issue where Main Street and Wall Street diverge in a huge way.

The truth of the matter is most Americans have a decent amount of their hard earned personal finances invested in the stock market in one way or another. Many people have an individual account with things such as individual stocks or mutual funds. Many others have retirement accounts or employer sponsored 401k’s, which hold mutual funds and stocks. These people are hurting as the market has dropped 50% or more from its 2007 highs.

Clearly Wall Street and many of the corporate managers, especially at financial institutions, have let down Main Street. Those who have cooked the books or who have lied to investors about the status of their company should be prosecuted fully and have a severe punishment. At the same time as Americans we must realize that we don’t want to just say have a down with Wall Street agenda. Wall Street and Main Street have previously worked together quite well, and the goal should be for that to happen again in the near future.

I think today’s market drop is the conspiracy hatched by banks and analysts. Many retail investors are already out of the market. Today’s market drop is the blackmail to warn the government to throw more money at the banks without any oversight.

Ok, I am getting carried away. This is nonsense. Think about it. Everyone was praying for Senate to pass the stimulus bill. Now, there is an expectation to know all the details of bailout plan as quickly as possible. Treasury Secretary Timothy Geithner gave the speech about how the Fed is going to handle the crisis. However, market participants blamed that Mr. Geithner’s speech lacked details.

Hey guys, it’s the plan for one trillion dollars! It’s not your household budget. It will take time to come out with specific plans and actions. The bank managers and analysts want to see the green light to their industry as soon as possible. When they don’t get to see it, they screw up the market.

Referring to Mr. Geithner’s announcement, which didn’t specify how the government would determine the prices of underwater credit bets it wants to take off of banks’ hands, Richard Peterson, director of risk strategies at Standard & Poor’s in New York, said: “It’s almost like a chapter out of Dickens where you end with a cliffhanger wondering what’s going to happen next to the characters.” See… is the Fed running some kind of show?

We are in a real mess. It is getting more and more complicated. Obama or Geithner can’t do any magic to solve the issues in a day or two. It’s going to take lot of time. Banks that are salivating for tax payers’ money won’t get it without any strings attached to it. Hedge funds that are dying to take some money from Fed won’t get it easily as well. Everything will take time for careful evaluation and planning.

Until then, retail investors should not worry about daily swings in the market. Let the bank folks torture themselves with their own chaotic trading pattern. Let the rest of us stay away and move on with our daily lives.

To quote Stephanie Cutter, Treasury spokeswoman: “We understood that some might be disappointed that we didn’t announce a large bailout program. But our focus is on what will be the best comprehensive plan to protect taxpayer dollars, jump-start lending and bring forth a long-term financial recovery, not the hour-by-hour movement of the markets or a particular company’s stock on any given day.”

Today the stock market lost more than 4% after Barack Obama and Treasury Secretary Timothy Geithner unveiled the much anticipated bank rescue plan. This TARP Plan as it is often called is being setup to try to make banks able to lend to each other and consumers once again. What did the market not like about the plan? It seems as if the plan itself is a pretty good one, but many investors are worried that Geithner as well as Federal Reserve Chairman Ben Bernanke haven’t been nearly specific enough about exactly how the plan will be put into place and how it will be tracked. Investors have had enough of the uncertainty, especially surrounding the troubled financial institutions.

In the last few days the major banking stocks have been the leaders to the upside as anticipation grew of details and full transparency on the plan to rescue banks and get our economy back moving again. Today, banks were crushed and some major banks lost up to 20% of their overall value in a single trading session. Many market analysts said that Geithner offered very little in the way of substantive new ideas, and that is exactly what Wall Street as well as Main Street needs right now.

I believe what we need now is a plan that holds Wall Street accountable, while still pushing for a way to make the banks able to get rid of these “toxic assets” that they have so broadly held for many years now. It is my hope that the details and specifics will increase and not be pushed into the background as they were a few months ago when Henry Paulson came up with a plan to save the banks. We all know how that one turned out, and quite frankly we don’t have the time for another one of those mistakes. This TARP plan isn’t just about Wall Street, it is about the banking system and the overall economy. The stakes are high, and time isn’t on our side.

Is it possible to network with other real estate investors without paying lot of money to Robert Allen kind of guys? I read good reviews about biggerpockets.com. This website has forums that are reasonably active. If you have questions about buying your first house or renting out your old houses or anything to do with real estate, check this out.  I believe that sites like this would be more useful for real estate investors rather than generic social networking sites like facebook or myspace.

If you are interested in real estate investing, check out the site. Investors only, not for speculators!

Related Link: Is it the right time to buy house?

A question that I hear quite a few Americans talking about throughout the week is the price of gasoline. Everyone is relieved that gasoline has come down by more than 50% off of its high of less than a year ago, but they are also wondering whether this drop is sustainable. Crude oil prices have now dropped below $40 a barrel and gasoline trades around $1.25 on the gasoline futures market at the time being.

What is behind the fall in oil and gasoline prices? The main reason for the drop in oil and gas prices is certainly the overall economic picture, which is obviously extremely bleak. There had been a strong bull market in oil because of strong global demand, but that demand has since waned significantly because of economic conditions. Simply put the average consumer is looking for a place to cut back on spending and transportation and fuel costs is one of the easiest to cut.

Was the huge rise in oil and gasoline prices over the last couple of years a blip and the recent drop is a return to normal or is the current drop a blip and when the economy returns to normal oil will once again gain steam? I think the answer lies somewhere between these two solutions. I would tend to think that global demand for oil and gasoline will strengthen quite nicely once again when the economic picture settles down, but part of the $147 oil was likely speculation that has been run out of the market for the time being.

In the end I think consumers should expect gas prices to stay low during the economic downturn, but I also think that consumers should try to enjoy the cheap gas prices while they can because once the economy turns around the price of gasoline is likely to rise once again.

I think so. I am not trying to time the market bottom for real estate. I don’t think any one can time the market top or market bottom. Based on what we are going thru today, it appears that buying a house is not a bad idea.

However, it’s not for every one. First of all, you should have steady income and stable job or business. Second, do not try to buy houses or apartments in areas like San Francisco bay area where the prices haven’t gone down much.

If you have a good feeling about your job or business, it’s better to buy a house rather than renting it. In the wild-wild-2006, you can get the loan with 0% down. Not any more. You should be able to make at least 20% down payment. If you put down less than 20%, it’s harder to get good mortgage rates. You will also need to pay for private mortgage insurance (PMI) in that case. PMI is bad, very bad.

Mortgage rates are hovering around 5.42% for 30 year fixed mortgage and 5.15% for 15 year fixed mortgage. If you can afford it, it’s better to go for 15 year fixed mortgage. The rates are higher for jumbo loans. Do not get adjustable rate mortgage (ARM) at this point of zero percent economy. (When the interest rates go up, you will need to pay more interest in ARM).

Home buyer tax credit of $15,000 approved by Senate also would also help the home buyers now. Buyers would get 10 percent of the purchase price of any home, up to $15,000, applied to their tax bill. Consumers would be allowed to spread out the credit over two years, making it possible for those who pay less than $15,000 in taxes to benefit. Anyone who buys a home within a year of the bill’s signature would qualify. Please note that buyers must occupy the house as their main residence for at least two years. This provision is in place to discourage the speculators and house-flippers.

After much of in-fighting and struggle among politicians, something positive is coming along. Senate Democratic leaders struck a deal late Friday with three moderate Republicans on a leaner economic-recovery package, clearing a path to Senate passage of fiscal stimulus plans.

Senators valued the compromise plan at $780 billion — well less than the $930 billion plan the Senate debated most of the day. Senate may note on this on Monday, hopefully. Stock market gained on Friday mainly because of the hope of senate passing the stimulus plan bill.

Source: Wall Street Journal

An economic stimulus plan, while it may be necessary, doesn’t mean that we can just sound the all clear in the stock market. I don’t particularly enjoy being a person who is so cautionary when the stock market seems so excited, after all I am cheering for the stock market to do well and I hope a bull market continues soon.

Why do I post about this today? I say this because today the S&P 500 rose by about 3% on investor optimism that the economic stimulus plan would be passed very soon. In fact, for the week the NASDAQ gained about 7%, which is quite startling given the amount of bad economic news there has been. Granted, the stock market’s performance over the last year has built in a lot of bad economic news, and I don’t necessarily think there is a huge downside from this point, but it simply doesn’t make sense for stocks to stage massive rallies at this point.

This morning the Bureau of Labor Statistics reported that nearly 600,000 Americans lost their job in the month of January alone. This was the single biggest monthly loss of jobs since 1974. The unemployment rate jumped to 7.6%, and it is sure to rise more in the coming months. Despite this data, the stock market was off to the races as if nothing was wrong.

There have been many arguments regarding what is the right type of economic stimulus for our economy at this point. Democrats and Barack Obama lean more toward creating jobs by spending money on infrastructure building, while Republicans want more tax breaks for small businesses. Since the Democrats have the majority in congress and the Presidency the final economic stimulus bill will certainly be more to their liking, but regardless of who’s version gets passed this will take a long time to work through. Just a note of caution to all investors, remember that we are in a completely different economy than any of us have ever seen, and a cure will take quite some time.

I’ve been a recent college graduate looking for a full-time job and it is never an easy task, but for those who have just graduated or who will be graduating soon things couldn’t be much tougher. Companies are slashing payrolls across almost all of the industries in the United States, and the world economy isn’t going to be doing any better either.

Even by October of last year employers were saying they would only increase hiring of college graduates by 6% year over year in 2009 compared to 17% in 2009. Fast forward now to February 2009 and every single company realizes now that things are much worse than they thought they would be at this time. One can be sure that the actual number of college graduates will either rise by less than 6% or more likely, it will actually fall year over year. After all, how can a company like Home Depot or Disney, which are both major college graduate employers, be hiring as many graduates as normal when they are slashing their workforce by 5%-10%?

What does it mean for college graduates in this tough economy? It means that no matter how good your academic standing is you are going to have to work especially hard to find an opportunity to get your foot in the door in 2009. College graduates should be less picky about starting wages and just get started in some kind of job that will help them for their future goals.

What should college students not do? If you are a college student don’t go change your major to health care or engineering just because they are the best places to find a job right now unless you really want to be in that industry for the long run. Despite the economy’s current struggles one must always remember that in order to succeed in a career endeavor you must enjoy what you do. In fact, recent statistics prove that your college education will help you find a job, even it is tough! Work hard and prepare yourself to be the best in whatever field you are most motivated to work in.

The simple fact that the economy is performingly terribly and consumers have very little money to be spending is a big drawback from starting a home business right now, but there still are some opportunities that could prove very profitable. In fact, starting a home based small business has some very nice benefits including very low overhead in most cases as well as reasonable operating expenses. The key is during a recession you must find an area that is going to do well despite the economy, not an area that will do well when the economy does well. I put together a few ideas to help out those who are looking to start a home business during this recession.

1. Medical Home Business- The medical and healthcare area is still booming and will continue to in the future as baby boomers continue to age. A medical billing business is one idea, or a medical transcription business is another.
2. Pet Care Business- The pet care home based businesses have been growing by leaps and bounds (no pun intended) in the last year or two. I don’t think they are anywhere near done in their growth cycle. Pet sitters is an area of amazing growth that should continue. Other ideas in the pet care home business area include: clothing and accesories, toys, or a doggy day-care.
3. Freelance writing/photography- The freelance world typically booms during a recession because a company can save money by hiring a freelance contractor rather than paying a full-time salaried worker with benefits. Flexibility and the ability to be your own boss are big perks of this type of business.
4. Green or environmentally friendly businesses- The world is making a strong push to become more environmentally friendly and green businesses can capitalize in a big way. This is another area that has already shown gains, but in my opinion there is tons of room for growth still to come.

All four of these areas are growing despite the struggles of the overall economy. If you are without work or want to take the reigns yourself consider starting a home based business in one of these growing areas.