Wamu 12 mo CD = 5%. Take it? It's FDIC insured.

Bob111 · Sep 6, 2008

Quote from Mvic:

Their 8 1/2 2010 paper is 41% YTM. Tod bad that is not FDIC insured, though maybe it is Hank Paulson insured?

right on man! i got some @ 40%YTM.

Quote from runningman:

why are you on a trading site talking about 5% per year as a good return??? After inflation and taxes, its a negative return. You can buy PFE or T and get around a 6% tax advantaged dividend.

6% is cool, but what about price fluctuation? OP going to get is principal back no matter what, bond holder likely too...how about stock(bag) holder?
does 1% really worth it? don't thik so...

runningman · Sep 7, 2008

This site cracks me up. I can't believe you folks are seriously talking about CDs.
{Giant Al Gore Sigh}
Certificates of depreciation only make money for the bank that issues them. Watch:
5% CD - 25% taxes = 3.75%

3.75% < Inflation

So you geniuses are putting your funds into an investment guaranteed to underperform inflation and that is illiquid. Wow, sign me up. With a bank that could potentially fail.

seasideheights · Sep 7, 2008

Since some people have strategic reasons for keeping some cash in a CD, the question still remains. If the money is 100% FDIC insured, does it make sense NOT to take the 5%?

m22au · Sep 7, 2008

The WaMu 5% CD is OK, so long as:

(1) You remain within FDIC limits

AND

(2) You realise how troubled the company is, and the likelihood that you'll have to deal with the hassle of getting your money from the FDIC when WaMu fails.

Bob111 · Sep 7, 2008

Quote from runningman:

This site cracks me up. I can't believe you folks are seriously talking about CDs.
{Giant Al Gore Sigh}
Certificates of depreciation only make money for the bank that issues them. Watch:
5% CD - 25% taxes = 3.75%

3.75% < Inflation

So you geniuses are putting your funds into an investment guaranteed to underperform inflation and that is illiquid. Wow, sign me up. With a bank that could potentially fail.

here is an example why some of us are looking into cd's,bonds,principal guaranteed securities(yes, i agree-rates sucks,and it's not even match inflation):
you making decent money,you have no debt,no house payments,you doesn't have any crazy hobbies. most of your profits come from daytrading,you have no system for long term investing, you "system" is not scalable to handle millions. what YOU going to do with the money in this situation?enlighten me, please, i'm all ears

Thank you

runningman · Sep 7, 2008

Quote from Bob111:

here is an example why some of us are looking into cd's,bonds,principal guaranteed securities(yes, i agree-rates sucks,and it's not even match inflation):
you making decent money,you have no debt,no house payments,you doesn't have any crazy hobbies. most of your profits come from daytrading,you have no system for long term investing, you "system" is not scalable to handle millions. what YOU going to do with the money in this situation?enlighten me, please, i'm all ears

Thank you

you could put it in BRK-- more liquid than a CD, better returns, better taxation of gains.
From what I understand, the guy who runs BRK has a pretty good handle on long term investing.

dandxg · Sep 7, 2008

Quote from m22au:

The WaMu 5% CD is OK, so long as:

(1) You remain within FDIC limits

AND

(2) You realise how troubled the company is, and the likelihood that you'll have to deal with the hassle of getting your money from the FDIC when WaMu fails.

Yes Agreed. When I briefly thought about Indy, I called FDIC and they said that on a joint accnt. up to 200k and interest guaranteed too. Makes me think why the hell did the big wig and FIDIC , who is also one of the big wigs and Indy not now there were serious problems? :mad:

As was pointed out if you don't have faith in the USD, they are all fiat money, then whom? I have checked EU rates and they are even worse around 2% last time I checked. The countries that offered a phenomenal rate, and would let me open a non-resident, account was Serbia, not exactly stable last time I checked.

Daal · Sep 7, 2008

buying high yield troubled bank CDs and debt to piggyback on the taxpayer should have a name. I suggest 'pulling a Gross'

Bob111 · Sep 7, 2008

Quote from runningman:

you could put it in BRK-- more liquid than a CD, better returns, better taxation of gains.
From what I understand, the guy who runs BRK has a pretty good handle on long term investing.

the guy was pretty old too..what happens with BRK, if he dies?
what happens with your money in event such as 9/11? 2000-2002 market?
people may have a hundreds of reasons to put money into cd's or some other fixed income instrument.
cd have no liquidity problems as far as i know.another solution is cd ladder

Bob111 · Sep 7, 2008

The countries that offered a phenomenal rate, and would let me open a non-resident, account was Serbia, not exactly stable last time I checked.

there is plenty of countries with decent rates on cd( Australia,new Zealand,SA)
but you have to go there in order to open an account. that's one thing.currency risk is another. plus many other little things. we talk about it here,on ET while ago.no easy money.