Auto Loans?

Hey! Everyone, Im looking to purchase my very first car pretty soon, within a couple of months(december). The car i%26#039;ve been thinking about getting is a 2000-2002 BMW (3 Series). I%26#039;m also going to take out a loan from my bank with a 5.99% APR rate for up to 36 are 72 months. The price of the car is about $14.000-$15.000. Do you think this is a good idea? And how much would you think my payments for the car would be?

Auto Loans?credit rating

Only you can decide if the cost is worth it. Just keep in mind the purchase price is just the tip of the tip of the iceberg when it comes to the total cost of owning a car. You should also budget for maintenance, repair, and insurance costs, which for a BMW tend to be higher than most.

You can calculate the potential payment yourself, here%26#039;s an online loan calculator: http://www.cars.com/go/advice/financing/...

A $15,000 loan at 5.99% for 36 months would come out to $456/month. However, this is not taking into account sales tax (if you have it in your state) or titling/registration fees. Also, for a car that old, they may not give you a loan for longer than 3-4 years.

Auto Loans?

loan

First off, do you have great credit? you%26#039;ll need it to get a 5.9% intrest rate. Second, how old are you? Most people wreck their first car(sad but true). Why does everyone seem to think they need a $15,000 first car? Also take into consideration what it costs to insure and tag your car.|||I dont have the best of credit, well in fact its kinda bad, but I was able to get car loan since I do have a job which is mainly what this place cared most about for me. They are one of these places that have multiple sources and they say like 99 percent approved. So I would give this site a try....

http://auto.deal4-you.com

Good luck.

Which will accure a better profit? I put 10,000 us dollars in a C.D. that yields 4% annually or 10,0

if markets are on the same pace over the next 5 years, would it be wiser to invest 10,000 dollars in gold bulion, as to a certificate of deposit through Bank of America with a percent rate of 4% anuall gain?

Which will accure a better profit? I put 10,000 us dollars in a C.D. that yields 4% annually or 10,000 gold?rate my teacher

The above posters are correct to a certain extent. The first person is assuming that EVERYONE should have a balanced portfolio. That may be true for the majority of investors, but not for everyone. There are people out there that concentrate in one area such as equities or derivatives and do very well.

Mslider2 is correct, gold prices do fluctuate and a 50/50 split is not a bad idea.

Is gold a good investment? The previous posters are correct in that gold prices can fluctuate, but if you are aware of that, then that%26#039;s half the battle.

Let%26#039;s look at a few things. First, a CD at 4% interest. According to official gov%26#039;t numbers, inflation is running 2%. I live and work in DC and I have many friends that work for the gov%26#039;t and they all say that the gov%26#039;t %26quot;massages%26quot; the numbers so data looks better than it really is. If you think the gov%26#039;t isn%26#039;t manipulating the data, then you%26#039;re living in a Polly Anna world. The inflation rate is actaully more like 8%, so your 4% cd (or even 5.07% CD) is not keeping up with the inflation rate. Second, because you have your money in the bank doesn%26#039;t make it safe. There are 2 things occurring right now that are going to severely impact the banking industry and IMHO will cause many bank failures:

1) The housing market is coming undone, and default and foreclosure rates are going up. With many lenders recently write zero down mortgages and median home prices falling, banks may not be able to sell their REO property for enough to cover the original mortgage. Yes, the banks do securitize their mortgage portfolios and sell the to Fannie Mae and Freddie Mac, but right now Fannie Mae is in such bad shape that they haven%26#039;t filed financial statements in years and has filed exceptions for those years. A failure at Fannie would be catastrophic

2) The banks have taken on HUGE derivatives risk exposure. Check this out, at the end of Q3, 2006 the top 25 banks in the U.S. had $5.9 trillion in assets. Do you know what their derivatives holdings are? According to the report issued by the Office of the Comptroller of the Currency (OCC), the total derivatives held by these top 25 banks is, get this ---------- $126 trillion; 2,035% of assets. Even at 40:1 leverage, that%26#039;s still $3.15 trillion, that%26#039;s still over 50% of assets. The fastest growing sector in their derivatives holdings are credit default instruments, ie, derivatives that protect them against a default. The problem is that counter-parties to these instruments are virtually none existent, which means if there is 1 serious enough counter-party default, it%26#039;s going to be a domino effect. Imagine for 1 second if over 50% of your assets were committed to the riskiest investments out there, wouldn%26#039;t that scare the pants off of you? Yet, our banks (JP Morgan Chase, Wachovia, Bank of America), etc have over 20 times the risk exposure relative to assets. That%26#039;s insane. These are just the top five banks. First column is derivatives holdings, second is assets:

- JP Morgan Chase $62.6 trillion $1.17 trillion

- Bank of America $25.5 trillion $1.19 trillion

- Citibank $24.5 trillion $816 billion

- Wachovia $5.2 trillion $517 billion

- HSBC $4.1 trillion $166 billion

Just the top 5 banks have $121.9 trillion in derivatives holdings, and $3.859 trillion in assets; they account for over 96% of the derivatives holdings. This is a time bomb waiting to go off.

So, just because your money is in the bank doesn%26#039;t mean it%26#039;s safe. Ask anyone that lost their money in the bank runs of the 1930%26#039;s or anyone that lost their money in the S%26amp;L crisis of the 80%26#039;s.

Gold does indeed fluctuate, but if you look at the longer term trend, you can compensate for that. For example, from 1980 to 2001, gold was in a 21 year secular bear market. It bottomed at around $255/oz. But since 2001, gold has been in a bull market, and it%26#039;s only 5 years old, so it%26#039;s got a ways to go. For example, from 2001 to the end of 2006, gold is up 145.48%. In 2006, alone, gold is up almost 20%. That%26#039; vastly better than 4% from a CD.

Also, consider this; gold made it%26#039;s highest closer ever at around $850/oz. gold is currently trading around $630/oz. which is $220 below it%26#039;s all time high, but if you adjust for inflation, in order for gold to match it%26#039;s all time high in inflation adjusted terms, it would need to be trading around $2500-$3000 oz., thus it%26#039;s $1870-$2370 below it%26#039;s inflation adjusted highs, thus has a ways to move.

Now, I%26#039;m not saying buy gold instead of investing in CD%26#039;s. I only went through the above discourse to give you a fuller picture of what%26#039;s going on. Many people will tell you do/don%26#039;t and then only give you have the picture. Yes, gold prices fluctuate, but it%26#039;s trading well below it%26#039;s inflation adjusted price. Yes, banks are generally safe, but they%26#039;ve overexposed themselves to alot of risk. It doesn%26#039;t mean the banking industry is going to implode, but with that much derivatives risk exposure, the chances are much greater that it can implode.

The one poster is correct in saying don%26#039;t buy gold until you%26#039;ve done your research. Not only such you thoroughly research each sector, but you need to really do some soul searching ask ask yourself %26quot;how much risk am I willing to take and am I willing to take that kind of risk in gold%26quot;. For the first poster, a diversified portfolio is right for them. They subscribe to the ideology %26quot;Don%26#039;t put all your eggs in one basket%26quot;. I on the other hand subscribe to the ideology %26quot;Put all your eggs in one basket and watch that basket%26quot;. That%26#039;s because that%26#039;s right for me. I%26#039;m an inherent financial risk taker, so I%26#039;m willing to take on the additional risk of an undiversified investment regimen. Those that are more risk averse need a diversified portfolio. You must find what%26#039;s right for you. If you can handle the risk and feel you can get more bang for your buck from gold, then go for it. But, if you can%26#039;t handle the risk, then under no circumstances should you invest in gold.

Which will accure a better profit? I put 10,000 us dollars in a C.D. that yields 4% annually or 10,000 gold?

loan

It appears you know little about investing. These are not choices an investor would make.

A good asset allocation will contain bonds, CD%26#039;s, Stocks, REITS %26amp; some commodities (like gold %26amp;/or silver), in percentages that creates a balance that you fell easy with.....

A CD gives you a safe place to put your money.After taxes and inflation your cash has less buying power. Gold can go anywhere (up or down). It%26#039;s speculative %26amp; for most people should be less than 3% of all their investments.|||According to

www.bankrate.com

National bank of Kansas city is currently paying 5.07 percent for a 4 year $10,000 cd.

in 4 years that gives you about 20 percent or $2000

Gold can go up or down, and is very flexible.

If in doubt, I would split the difference and go 50-50, 5K for each.

Certainly the CD would be safer and more sure|||Neither. Don%26#039;t invest in gold. Don%26#039;t invest in gold. Don%26#039;t invest in gold. Don%26#039;t invest in gold. The previous poster was right. Since you don%26#039;t know much about investing you shouldn%26#039;t do it. Learn how first. Then you can make money instead of losing it. Read some books and Yahoo finance. Take a class on it. Don%26#039;t do it until you know what you%26#039;re doing.

What Caused Liquidity Crunch? Can happen in 2007? take a look :?

What Caused the Liquidity Crunch?

Last week the Dow Jones industrial average fell 4.2%, the steepest drop since March 2003. Financial shares took a beating on growing evidence that problems in the sub-prime mortgage market are spreading, making financing the corporate buy-outs that drove the market%26#039;s rally more difficult.

Many financial market participants are of the view that there is a definite deterioration in credit conditions, which means less liquidity for private equity, stock buy-backs, and business expansion. Fed officials, however, have downplayed this claim.

In an interview with the Wall Street Journal on July 24 the president of the Philadelphia Federal Reserve Bank, Charles Plosser, said that the present slump in the housing market is not going to trigger a liquidity crunch and a consequent general economic recession. The reason for this is that banks are unlikely to curtail lending since their balance sheets are in good shape. Plosser attributes this to financial innovations (financial engineering) in the last 10 to 20 years that have enabled banks to distribute much of the risk.

Plosser adds:

Does that say nothing bad can happen? Of course not. But it means I%26#039;m a little more sanguine that that whole view of a credit crunch is probably not as applicable now as it might have been 10 or 20 years ago鈥? Banks in this district are pretty healthy 鈥? Their biggest complaint is not housing mortgage defaults and credit crunch, it%26#039;s the yield curve. They%26#039;ve got money to lend.[1]

(Banks as a rule lend at long-term rates and raise funds at short-term rates. Hence they prefer an upward sloping yield curve 鈥?when long-term rates are higher than short-term rates. At present the yield curve is relatively flat, which undermines profits from lending.)

Fed officials including Plosser present the current housing slump as the outcome of irresponsible lending by mortgage brokers and various other mysterious forces. On this logic it is the role of the Fed to monitor the situation in the housing market and, if required, to interfere in order to prevent the housing slump from spilling over to the rest of the economy.

We suggest that what we are currently observing in the housing market is the deflation of the housing bubble, which could be a precursor to a widely spread liquidity crunch. The deflation of the bubble is the result of the Fed%26#039;s boom-bust monetary policies. Here is why.

We define a bubble as activity that has emerged on the back of the loose monetary policy of the central bank. In the absence of monetary pumping this type of activity would not have emerged. Since bubble activities are not self-funded, their emergence must come at the expense of various self-funded or productive activities. This means that less real funding is left for true wealth generators, which in turn undermines real wealth formation.

When new money is created, its effect is not felt instantaneously across all markets. The effect moves from one individual to another and thus from one market to another. In short, monetary pumping generates bubble activities across all markets as time goes by.

It is quite likely that the loose monetary policy of the Fed between January 2001 and June 2004 has laid the foundation for the emergence of various non-productive activities. (The federal funds rate target was lowered from 6.5% to 1%.)

An easy monetary stance coupled with fractional-reserve bank lending has given rise to an abundance of money out of %26quot;thin air.%26quot; Between Q3 2001 to Q4 2004 the average yearly rate of growth of our monetary measure AMS stood at 7.5%. This should be contrasted with the rate of growth of 2% in Q2 2001 and 0.9% in Q4 2000. The illusory prosperity that the bubble activities have generated in fact amounted to the consumption of real savings and to a weakening of the pool of real funding 鈥?the heart of real economic growth.

Since June 2004 the Fed has reversed its monetary stance. The fed funds rate target was raised from 1% to 5.25% currently. In response to this the growth momentum of our monetary measure AMS has been in visible downtrend since Q4 2004. The yearly rate of growth fell from 7.1% in Q4 2004 to 1.4% in Q2 2007.

Once the Fed tightened its stance this started to undermine various activities that emerged on the back of the previous loose monetary stance. In short, these activities have come under pressure.

We have seen that the effect of changes in money supply (i.e., creating and supporting various non-productive activities) on various markets operates with a variable time lag. As a result of this, the effect from past changes in money supply can continue to assert its dominance notwithstanding more recent changes in the money supply. (Past loose monetary policies can still provide support to various bubble activities despite more recent tight monetary stance.)

We suspect that the tighter stance since June 2004 is only now starting to gain momentum with the housing market being hit first. This means that sooner or later the various other parts of the economy are likely to exhibit difficulties.

In short, the fall in the growth momentum of money is going to put pressure on activities that sprang up on the back of previous loose monetary policy. (Remember that bubbles are supported by means of loose monetary policy that diverts real funding from wealth generating activities. Once the money rate of growth slows down, this slows the diversion of real wealth, i.e., slows down the support for these activities.)

When various non-productive activities start to deflate, this tends to exert a direct and indirect effect on the quality of bank assets notwithstanding financial innovations. Obviously once this happens banks tend to curb their lending growth.

Does this imply that the United States is heading for a serious liquidity crunch and severe economic slump? We suggest that this will be dictated by the state of the pool of real funding.

If the pool of real funding is still growing then commercial banks are unlikely to curtail their lending 鈥?at the worst, they might reduce the rate of lending expansion. This means that instead of being liquidated, various false activities might be forced to slow down their pace of expansion.

Obviously, if commercial banks were to significantly curtail their lending then this could be indicative that the pool of real funding at the disposal of Americans is in trouble. Should commercial banks trim their lending it is likely to lead to a fall in money supply and to a liquidity crunch, all other things being equal.

For the time being, overall commercial bank lending is still expanding although at a slower pace. After climbing to 11% in November last year the yearly rate of growth fell to 8.3% so far in July. (In the week ending July 18, bank loans increased by $23.3 billion.)

Another possible source for a liquidity crunch is the Fed%26#039;s policy of targeting the federal funds rate. In the week ending July 25, the Fed%26#039;s balance sheet (also called Fed Credit) fell by $3.669 billion. The yearly rate of growth fell to 2.7% from 3.1% in June and 4.2% in March.

The decline in the pace of monetary injections by the Fed could be indicative that the current fed funds rate target of 5.25% is too high relative to economic activity. In short, a weakening in economic activity puts downward pressure on interest rates. To protect the target of 5.25% the Fed is forced to slow down its monetary pumping.

It follows that liquidity could come under severe pressure if the Fed decides to cling to the current fed funds rate target whilst the economy is weakening.

We can thus conclude that as the effect of the tighter monetary stance of the Fed since June 2004 gains strength the chances for a widely spread liquidity crunch are rising. The entire issue could further exacerbate should the Fed cling to the current fed funds rate target whilst the economy is weakening.

______________________________________...

Frank Shostak is an adjunct scholar of the Mises Institute and a frequent contributor to Mises.org. He is chief economist of Man Financial, Australia. Send him mail and see his outstanding Mises.org Daily Articles Archive.

What Caused Liquidity Crunch? Can happen in 2007? take a look :?construction loans

This morning the feds lowered the rate banks borrow money at. This is like having a crack in a dam and sticking chewing gum in it to stop the leaks.

What Caused Liquidity Crunch? Can happen in 2007? take a look :? loan

when youve spent several trillion dollars on a futile war and then had very low interest without curbing borrowing youve created massive debt. nudge interest rates up a tad and bang - suddenly noone can pay anymore. Second, trillions pouring into compulsory superannuation is creating huge upward pressure on inflation - when al that money comes on stream prioces will go up and onylthe greys / oldies will be able to buy. In the meantime some of the most incompetent and corrupt people in the business are handling all that money and putting it into schemes sure to fail, the running off with thier big fat commissions as it all goes bung. the best investment is a bunch of gardening tools - nothing else is going to be of much value soon.|||I bellieve the credit lequitidy crunch is an offshoot of the Subprime mortgage mess. Now that homeowners loans--the bad ones have been called,banks are tightening thier rules with lenders. Another factor no one doesn%26#039;t know what these mortgages are tied into. Already the subprime has spread into commidities like the oil market for OPEC expressed thier fears of it yesterday.