Dow is down...AGAIN.

O...M...G...

My portfolio and 401k are bleeding money. I thought the bailout was supposed to help. Good thing I don't need that money anytime soon.

"The goggles...they do nothing."

Senate votes on a revised bailout plan tonight

So, I got into work this morning and found out that the Senate will vote on a revised bailout plan tonight. This new plan will increase the amount that is currently insured by the FDIC, so that would be good. However, this new plan will include a package of business and energy tax breaks that the House of Representatives originally rejected. So now, even if the Senate passes this plan, the House might still reject it. We're just gonna see what happens today.

House of Representatives rejects $700B bailout

If you haven't heard already, the House of Representatives rejected the $700B bailout plan that was tentatively hashed out over the weekend. So hang on hard for this economic crisis to drag on a bit. Most the representatives voted against the plan (228 - 205) due to lack of confidence in it and that the presidential election is so close. Neither party wants to be faulted if the bailout fails (For the record, the majority of Democrats wanted the bailout while the majority of Republicans didn't).

What does this all mean for us? Well, for the taxpayers out there who were worried they'd have to shoulder the $700B bailout, they don't have to worry about that anymore. But with Washington Mutual failing last week and Wachovia pretty much pimping themselves to Citi, I'm gonna take a guess and say that a couple more banks will fail. The frozen credit market will get more frozen. People will find it harder and harder to get funding for houses, cars, etc. Companies will have a hard time getting funding to do business (including paying employees). Sure this is all a wild guess. But at the moment, anything is a wild guess.

Critics of the bailout plan stated the plan did not address job losses and other stuff. And I know the plan does not touch previous contracts that grant "golden parachutes" to executives of companies that seek bailout. But I still feel we should do something instead of waiting for things to turn around. I agree that the billionaire executives have to be held accountable for the companies that they drove to the ground, but to say no to a bailout plan because we don't want to be the ones to fix it is pretty silly. It's almost NIMBY-like, if you ask me.

Oh by they way, stocks plunged when it appeared the bailout would be rejected. The House held the vote open for an additional 40 minutes, even pointing out markets were going down to convince the nay-sayers to switch votes. But of course that didn't happen. Anyhoot. At the current moment, no bailout plan = shrinking 401ks, IRA's, investment portfolios, etc. If I were you, I wouldn't look at your retirement plan. Let's see what happens when the House votes again.

Market's not looking any better

After seeing my newly purchased shares of Freddie Mac (FRE) go as high as $2.95/share with the market on news that a bailout might pass yesterday, stocks fell as the day wore on with no announcement of a bailout. FYI, FRE closed at $1.85/share yesterday. Ouch. Then I went home and watched CNN before bed. What good news there huh? Talks among the President, Treasury, and party leaders left the bailout situation worse, with the Dems accusing Republican presidential candidate John McCain for messing up what was to be the bailout plan. And to add salt to the wound, Washington Mutual went down yesterday.

Markets are down on this new situation, but I'm thinking things will be better once another bailout plan is put together again. Some think it can be as early as this weekend. We'll see about that.

Bought some more FRE

I couldn't help it. I was checking on the market and noticed that Freddie Mac (FRE) has nearly doubled in price. Based on what I've read, I still think FRE has the potential to go up to at least $3.00/share. So I bought 100 more shares. Not a lot. It's about $253 worth. Again, I don't want to put too much money in. The market is trading higher today though. Investors are really betting on the government doing the $700B bailout for Wall St. So confidence is pretty high right now. Let's see what happens.

Following the market again

So with all this volatility in the stock market, I'm following it a bit closer again. It looks like people are selling off shares of AIG to recognize the gains from last week. Share prices are down to $4.30 (but still a pretty good return if you had bought it last week at $2.20). Last week, I kinda thought the peak would be around $5.00 anyway, so this drop made some sense. I also peeked at a headline mentioning that AIG has officially accepted the $85B loan from the Fed. I would think this would push the stock up as it means AIG has time to restructure and possibly sell off some of its business. But then again, I did hear that the $85B loan has a pretty high interest.

Yesterday, I sold off my measly shares of Verizon and threw the proceeds back into the market. I got 50 shares of Freddie Mac ($1.37/share). I have a feeling they'll do okay with the government holding them. It's not a big investment, but I didn't want to throw too much money in on a hunch I have, especially with this shaky market. It's not the same feeling I got with AIG. I also got 33 shares of Sirius radio. They finally merged with XM, so I think they'll do pretty well once they work out all the details and the dust settles. They were cheap too at $0.87/share. Again, no fresh money. Just some movement with my very small portfolio. I have more money in my Prosper loans than the stock market (not including my 401K, of course).

As of now, the biggest movers right now are Freddie Mac and Fannie Mae, so my call is right so far. Should I have put more money in it? Maybe, but I think I'm fine where I am.

Need to trust myself more

So I am really really annoyed right now. Last week, when the Fed announced they were going to bail out AIG, I peeked at the stock price and thought, "Hmm...it's a great deal right now, and the general public will most likely invest in AIG with news of this bailout." It was at $2.20/share. I wound up not putting any money down and instead just made a pick on the Motley Fool, an investing website. Well, last I checked today, AIG was at $4.81/share. W. T. F.

Why am I annoyed? Well, I thought about putting some money down and ride it for a bit. With $85B in the bailout loan from the Fed, AIG has 1-2 years of breathing room while they sort things out. With the market the way it is, 1-2 years of "stability" is pretty attractive. So, let's see what would've happened if I put in $1,000. That would've bought 450 shares of AIG (minus commisions). If I decide to sell today and manage to hit it at $4.81/share, that would've meant $2,154.50 in proceeds (minus commissions). That's $1,154.50 capital gain (yes, there will be taxes) from about a week of holding the stock.

What makes this more annoying was that when it hit $3.30, I thought about going in again. You know, $1,000. That would've been $433.00 capital gain. Oy. What can you do? AIG could still potentially go up, but I don't think it's worth it now. Besides, it takes a bit of time for me to transfer the $1,000 over to Sharebuilder, so I guess it really didn't matter. Still sucks though.