Elliott Wave International, the world’s largest market forecasting firm, receives thousands of questions every year from web site visitors and subscribers on their free Message Board.

Here the company shares 6 of the recent critical questions on the financial crisis and 6 answers provided by their professional analysts.

For more free questions and answers or to submit your own question, visit Elliott Wave International’s Message Board.

Q: Can increased government spending help stop the crisis?
What do you think about the new mortgage bailout plan – or bailouts and proposals for additional government spending in general? The opinions on whether or not this will ultimately work seem so divided…

Answer:
In Ch. 13 of his Conquer the Crash, “Can the Fed Stop Deflation?”, Bob Prechter writes; quote: “Can the government spend our way out of deflation and depression? Governments sometimes employ aspects of’ ‘fiscal policy,’ i.e., altering spending or taxing policies, to ‘pump up’ demand for goods and services. Raising taxes for any reason would be harmful. Increasing government spending (with or without raising taxes) simply transfers wealth from savers to spenders, substituting a short-run stimulus for long-run financial deterioration. Japan has used this approach for twelve years, and it hasn’t worked. Slashing taxes absent government spending cuts would be useless because the government would have to borrow the difference. Cutting government spending is a good thing, but politics will prevent its happening prior to a crisis. … Prior excesses have resulted in a lack of solutions to the deflation problem. Like the discomfort of drug addiction withdrawal, the discomfort of credit addiction withdrawal cannot be avoided. The time to have thought about avoiding a system-wide deflation was years ago. Now it’s too late. It does not matter how it happens; in the right psychological environment, deflation will win, at least initially.”

Q: In deflation, what’s best: to have no debts or preserve capital?
During a deflationary period, if you had to choose one or the other – debt reduction or preservation of capital – which one is MOST important?

Answer:
In Ch. 29 of Conquer the Crash, “Calling in Loans and Paying off Debts,” Elliott Wave International’s founder and president Bob Prechter writes; quote: “Being debt-free means that you are freer, period. You don’t have to sweat credit card payments. You don’t have to sweat home or auto repossession or loss of your business. You don’t have to work 6 percent more, or 10 percent more, or 18 percent more just to stay even. …the best mortgage is none at all. If you own your home outright and lose your job, you will still have a residence.” Of course, one could pay off some debts AND keep some capital – it all depends on an individual’s risk appetite and tolerance.

Q: Which news and events can move the market and which can’t?
I’ve noticed that a lot of times, the stock market does the opposite of what the news suggests it should do – or does nothing at all. Can you make a distinction, if there is one, between news that does not move the market and the news that does? I’m talking specifically about the news and anticipation of another bailout plan plus stimulus package that is supposedly rallying U.S. stocks right now.

Answer:
The subject of the news is almost irrelevant. What IS relevant is the state of investors’ collective mood at the time of the news release. If they feel bullish (or bearish), they will interpret just about any news story as bullish (or bearish) too. (Or “dismiss the news,” as financial commentators often put it.) If you need a good example, just compare the February 6 horrific U.S. jobs report with that day’s rally in the DJIA. Or, contrast the February 10 passage of the “$838 Billion Economic Stimulus Package” with a 300+ drop on the Dow. The important thing to keep in mind is that while the news can cause short-term price spikes, it has no effect on the longer-term trend; only social mood does.

Q: If this deflation deepens, will the US dollar crash?
Bob Prechter’s Conquer the Crash and your monthly publications like Bob’s Elliott Wave Theorist, you’ve been saying that in deflation, “cash is king” as the value of the dollar rises. But won’t the U.S. government’s spending spree cause the dollar to crash instead against the euro and other currencies?

Answer:
It’s very important to make a distinction between the dollar’s domestic and international values. In a deflation, the value of any currency – the U.S. dollar, in this case – rises domestically: As asset prices fall, each unit of currency buys more domestically-available goods and services. “Cash is the only asset that assuredly rises in value during deflation.” – Bob Prechter, Conquer the Crash, Ch. 18. However, the USD’s international value (as represented by the U.S. Dollar Index) in a deflation can rise OR fall relative to other currencies. If, for instance, the euro is deflating faster than the dollar, then the dollar’s value relative to the euro will rise, and vice versa.

Q: Won’t government bailouts turn deflation into inflation?
Trillions of dollars in bailouts “injected” into the economy – won’t they reverse deflation and turn it into inflation instead?

Answer:
Here is a quote from Bob Prechter’s October 2008 Elliott Wave Theorist: “Believers in perpetual inflation think that the government can keep assuming others’ bad debts infinitely. But it can’t. The only reason that Congress has gotten away with issuing this latest blizzard of new IOUs is that society is still near the top of a Grand Supercycle, so optimism and confidence still have the upper hand. But as pessimism and skepticism continue to wax and the economy contracts, the bond market will figure out that the Treasury will be unable to fund all these obligations with tax collections. Then Treasury bond prices will begin falling as if they were sub-prime mortgages. A collapsing bond market is deflation; it is a contraction of the outstanding credit supply. Recent bailout schemes will not reverse the deflationary freight train. They will serve only to confuse the marketplace and hinder the efficient retirement of bad debts, thus exacerbating the crisis and aggravating investors’ uncertainties and thereby falling right in line with the declining trend of social mood.”

Q: When will recession end – and DEPRESSION begin?
When do you think the economic DEPRESSION will officially begin?

Answer:
It took mainstream economists over a year to recognize the “official” start of the recession! Because a depression is a much bigger and rarer event, the delay with its “official” recognition will likely be even greater. Not to mention the fact that, interestingly, there is no “official” definition of a depression; even if there were one, ours here at Elliott Wave International would probably differ. Rest assured, though: We intend to update subscribers on any “progress” in that direction.
——————————————–
To read 30+ additional questions and answers on the financial crisis, investing, capital safety and more, visit Elliott Wave International’s free Message Board.
——————————————-
Elliott Wave International (EWI) is the world’s largest market forecasting firm. EWI’s 20-plus analysts provide around-the-clock forecasts of every major market in the world via the internet and proprietary web systems like Reuters and Bloomberg. EWI’s educational services include conferences, workshops, webinars, video tapes, special reports, books and one of the internet’s richest free content programs, Club EWI.

Detroit Free Press
http://www.freep.com/apps/pbcs.dll/article?AID=/20080824/COL07/808240435/1081

New car sales are likely to be curbed

Planning to cover the college tuition this fall by tapping into an existing home equity line of credit? You could need to turn to Plan B.

Big-name lenders are reducing or shutting off existing home equity lines of credit in Michigan and elsewhere. The latest move was by Morgan Stanley.

Lenders are taking action in some cases because borrowers don’t have a reasonable shot at repaying all that money since the home isn’t worth all that much anymore.

Sellers, buyers suffer

The home equity crunch hurts consumers and consumer-driven companies, including Detroit’s automakers.

Art Spinella, president of CNW Research in Bandon, Ore., said new car sales are likely to continue to struggle in some states because some home equity lines have been trimmed or reduced to nothing. He noted that one-third of new vehicle sales in California were made with the use of a home equity line of credit.

This month, Morgan Stanley, the second-largest U.S. securities firm, told thousands of homeowners in Michigan and elsewhere that it would unilaterally close their home equity lines of credit.

The letter stated: “Our recent review showed that your home value has declined significantly since the time you opened your HELOC.” Some homeowners had barely tapped into their existing lines. Consumers are required to continue to pay at least the minimum payment due, if any, each month.

Some homeowners did say they were later told they’d be given a chance to appeal through a “walk-by reappraisal” within 30 days.

Christine Pollack, a Morgan Stanley spokeswoman in Purchase, N.Y., declined to comment last week on the home equity changes.

Subject to change

Even if you haven’t received notice of a change yet, you cannot be certain that you won’t later be told that you can no longer borrow up to the limit.

Chase began reducing or freezing existing home equity lines of credit nationwide in March. More than 150,000 Chase customers saw changes in their home equity lines. The changes affect less than 20% of Chase’s home equity customers.

Tom Kelly, a spokesman for Chase in Chicago, said Chase is using an automated system to review current home values and compare those values with credit lines that had been extended earlier when home values in many markets were higher.

“We’re trying to protect both them and us from owing more than the house is worth,” Kelly said.

Kelly said last week that such reviews are taking place every month.

National City Corp. said it may be notifying borrowers that access to further credit on their line has been suspended because of a significant decline in the home’s value or a decline in the borrower’s credit score.

“We’re facing an unprecedented time in the housing industry, and we believe it’s prudent to assess and address risks that arise due to significant changes that have occurred since the original line of credit was extended,” said Bill Eiler, a spokesman for National City.

Some parts of the country will get hit a lot harder than others, and it will take them longer to recover.
By Jerome Idaszak, Associate Editor, The Kiplinger Letter

We’re forecasting a mild, short contraction ending well before the year is out. With housing and lending industries hurting, factory production and retail sales falling, employment shrinking and consumer incomes slowing, there’s no question that a recession is under way. But relief is already in sight.

Still, some parts of the country will be hit a lot harder than others. In states that led the housing boom, including Florida, Nevada and Arizona, as well as Southern California, thousands of jobs in construction and real estate services are disappearing as home values fall. Frost Belt states are in pain, too, especially Michigan and Ohio because of troubles in the beleaguered auto manufacturing industry.

But look for a turnaround soon, with expansion returning in the second half of this year. The fiscal stimulus from Washington and the accumulated interest rate cuts by the Federal Reserve plus other moves will translate into a 2.5% growth in the economy for the third quarter and a similar pace in the fourth quarter. Next year, though, we expect a tepid 2% or so gain in gross national product, and it may feel even slower to some. John Silvia, chief economist with Wachovia Corp., says, “We’re still working through the housing crisis, and we’ve got credit problems to deal with.”

The individual Alternative Minimum Tax (AMT), implemented in 1969, is a parallel income tax system that was created to prevent 155 wealthy Americans from aggressively using tax credits, deductions, and legal tax shelters as tools to help them avoid having to pay federal income tax. The idea was simple: Create a minimum tax that ensured everyone pays Uncle Sam his due.

Fast forward to present day and you’ll find millions of middle-income Americans are now getting snared by the AMT. The main reason the AMT now reaches into the pockets of the middle-class is because regular income tax brackets are indexed for inflation but the AMT thresholds are not. The result has been the steady expansion of households who find themselves hit by the AMT — especially households with a large number of children, education credits, residential energy credit and/or state and local taxes.

Why haven’t Americans been clamoring for an immediate overhaul to the AMT? Thus far, the full effects of the AMT have been deferred by Congress enacting a series of temporary patches — boosting the amount of the AMT exemption.

The last temporary fix to increase the exemption, however, expired at the end of 2006. If Congress fails to ratify another provisional one-year increase in the next few months, the number of households paying the AMT will escalate exponentially from approximately 4 million in 2006 to nearly 23 million for 2007.

To determine if a taxpayer owes tax under the AMT, filers must calculate their taxes under both the regular tax and AMT systems — making the “Alternative Minimum Tax” tax a bit of a misnomer considering taxpayers must pay the higher of the two. The biggest factor impacting AMT filers is that they are no longer eligible to claim certain deductions and exemptions (i.e. education credits, child care credits, and the deduction for state and local taxes).

Sound complicated? It can be if taxpayers don’t plan ahead and use the tools that are available to them as a significant portion of taxpayers may be surprised when they are suddenly hit with a big tax bill, plus possible penalties come next April. Some planning tools are even free, such as the tool offered by 2nd Story Software, Inc., makers of the popular tax program TaxACT.

“It seems unlikely that lawmakers will fail to pass another patch to serve as a quick fix to hold down the reach of the AMT. Guessing wrong, however, could prove costly. Unfortunately, there are a vast number of factors that will trigger the alternative tax for any given taxpayer,” says Stephanie Behrends, spokeswoman for 2nd Story Software.

“TaxACT Preview is a taxpayer’s ally, allowing users to perform what-if scenarios to determine their estimated tax liability,” she says. “Users simply need to step through the TaxACT interview entering their forecasted income and deductions for the tax year by answering simple questions in layman’s terms. TaxACT simultaneously calculates your projected tax with the regular tax system and the AMT system based on the taxpayer’s tax bracket and the most recent tax information available.”

Visitors need only to complete the site’s free online registration to gain access to TaxACT’s Online Deluxe Preview version. The tools available at www.taxact.com allow users to generate a forecasted federal and state income tax refund or liability amount – which will provide valuable insight into their tax situation. Once the final version of TaxACT releases in early January 2008, users can easily finalize their tax return and print and/or e-file their federal tax return for just $9.95.

Do you have more questions regarding the AMT and how it may impact you? More information is available at www.IRS.gov — just enter keyword “AMT” or “Alternative Minimum Tax”.

(ARA) – Like many baby boomers, Sarah Vick and her husband decided to downsize to a smaller home after her two sons went off to college. When they started sorting through their belongings, Vick realized she had 22 sets of china. Some she’d bought herself, while others had been inherited from her mother, grandmother and aunts.

“I was overwhelmed,” says Vick. “I had china patterns I didn’t even know the names of from the 1920s and 1930s, and I also had crystal, silver and collectibles. Really the only time I used my fine china was during the holidays, so I didn’t need all these collections, but they’re special to me.” Vick knew she wouldn’t have room at her new home for all of her pieces, meaning she would have to get rid of them.

“I felt so guilty having all these patterns I couldn’t use, but I just didn’t want to sell them at a yard sale; they mean so much to me,” she says. “That’s why I wanted to help someone else who might be looking for these same pieces to complete their own set of their family china.”

But where could she turn to for help? In the past, Vick had purchased pieces from Greensboro, N.C. based Replacements, Ltd., the world’s largest supplier of discontinued and hard to find china, crystal, silver and collectibles, so that’s the first place she checked.

“We not only sell tableware, we buy pieces as well,” says Randy Foster, Replacements’ vice president of product operations. “We are really able to help customers like Sarah out in that we’re able to bring two needs together. We connect those folks looking to sell something they don’t want or need anymore with someone who may be searching for a special piece in their grandmother’s pattern they never thought they’d see again.”

Other sellers include those going through lifestyle changes, such as Susan Dubois, who decided she no longer wanted her wedding china following her divorce. “Selling my china marked a way to start healing so I could move on with my life and start over,” reflects Dubois. “It really wasn’t about the money, but I’m a single mother of two teenage sons, so the extra cash really did help out.”

Foster says Replacements also hears from folks who stumble across forgotten treasures stuffed in a closet or hidden away in the attic. With spring cleaning around the corner, would-be sellers need to keep in mind that the company is looking for quality merchandise, and doesn’t buy every pattern. Inspectors need to physically examine pieces to make sure they’re in good condition before making a final offer. “Obviously we wouldn’t buy anything that is chipped or cracked,” says Foster. “I also think a lot of customers are surprised to find out we buy by the individual piece, they don’t have to have the entire set.”

Vick says it’s not a problem if the seller is stumped and doesn’t know the name of their collections. Replacements’ free pattern identification service can help figure out that information. “I put some of the patterns I couldn’t identify in a box and sent them over to Replacements’ research department,” Vick remembers. “They were not only able to identify the pieces, they told me what they were willing to pay for them.”

Replacements research team identifies approximately 65 patterns every day. To find out more about selling to Replacements, Ltd., contact the company at 1-800-REPLACE or visit

(ARA) – As children, many baby boomers went through a familiar right of passage — the IQ test their parents forced on them to learn just how intelligent they were. Today, many of those baby boomers are increasingly concerned about their “retirement IQ,” or where the stand on the path to a successful retirement. According to Thrivent Financial for Lutherans research, 71 percent of boomers say the lack of money is the single most important issue preventing them from accomplishing the things they wish to do in retirement.

The struggle they and many others face is getting a clear picture of where they are and what they need to do to reach their retirement dreams. “People want help seeing the big picture of retirement,” says Pam Moret, Thrivent Financial executive vice president of marketing and products. “Because everyone’s situation is unique, getting a good assessment and some immediate recommendations on what to do can be critical in creating financial security for your golden years.”

So where does one go to get their retirement IQ? ThriveQ (www.ThriveQ.com) is an online tool that gives users a scare-free assessment — a ThriveQ score — that ranks each individual on their retirement path without generating a shocking multimillion dollar savings total that leads many people to despair.

“Seventy-one percent of boomers wish they had begun saving for retirement upon landing their first job, and 86 percent advised Generation X to start saving as soon as possible,” says Moret of the survey findings. “They know something needs to be done, but they need an easy, non-intimidating way to get into a better position for tomorrow.”

ThriveQ is based on seven key principles for retirement. First, have a vision. Focusing on the things that inspire you will keep you motivated to do what’s needed to be better prepared for retirement. Second, plan ahead because it’s never too late or too early to start preparing for retirement.

Controlling spending, the third principle, is another important step toward retirement success. “Your values are your best guide to determining your spending,” says Moret. “By spending only for those things that are important to you and your family, you can keep debt to a minimum.”

Fourth, once you control your spending, it’s time to save and invest. Saving too much is always better than saving too little. Simple steps, like incorporating automatic savings programs, can make saving and investing as painless as possible.

In realizing retirement dreams, rethink work. This fifth principle centers on thinking of working past the minimum retirement age, or cycling in and out of work for several years. It may be the opportunity to follow your passion, a way to stay connected or a chance to be your own boss.

Sixth, protect your future through insurance and other means to ensure you can withstand any financial surprises. Finally, think about giving back and making a positive impact on others in retirement. By seeking activities that enrich your life and the lives of others — via helping others through gifts of time, talents and treasures — you actually are preparing yourself for a happier retirement.

Created by Thrivent Financial in cooperation with author and gerontologist Ken Dychtwald, Ph.D., a world leader on the effects of an aging population on the marketplace and retirement, ThriveQ helps individuals find their unique retirement vision and measures progress toward that vision, while encouraging actions that will help them achieve their goals.

The questionnaire takes about 10 minutes to complete, with each user receiving their ThriveQ — a score ranging from 1 to 1,000. Based on their score, participants will also be assigned to one of five groups according to their retirement readiness: Survivor, Provider, Striver, Thriver and Thriver +.

After a user receives a ThriveQ score, they also see their score as compared to other ThriveQ users and are given three customized recommended actions based on their answers. Participants can also save their score and track their progress as they accomplish the recommended actions, thus improving their score over time. The site also offers real-life examples of people taking steps to achieve their definition of retirement success.

Learn more about how to achieve your goals for retirement by visiting ThriveQ.com.

Courtesy of ARAcontent

18kt white gold case and pearlmaster bracelet with 2 rows of 174 diamonds and 14 large diamonds along the center. Mother-of-pearl dial with diamond hour markers. Bezel set with 40diamonds. 31 jewel chronometer movement. Synthetic sapphire crystal. Concealed clasp. Case diameter 29mm. Date displays at 3 o’clock position. Rolex Oyster Perpetual Lady Datejust Pearlmaster Diamond Ladies Watch 80309PM. Rolex Model Number 80309.

Just in case you were wondering what to get for your honey’s next birthday. You can see hundreds of more reasonably priced women’s watches and other jewelry at NeverEnufjewelry.com.

Steve Nison’s self paced learning guide tests users on their understanding of [tag]Japanese candlestick[/tag] patterns using multiple charts with detailed explanations.

The Candlestick Course explains patterns of varying complexity so you always build on a solid foundation. Take your knowledge to the market, test, move ahead to the next pattern or review and retest.

Nison integrates candlestick patterns with the more conventional Western chart patterns you already know to speed your candlestick learning.

It’s a newspaper, it’s a Web site–it’s all of the information that comes rolled up in every edition of The Wall Street Journal and much more, available online. Anyone who wants to stay on top of U.S. and international news, especially economic and technology-oriented stories, will find {tag]The Wall Street Journal Online[/tag] to be a valuable asset. Forbes has called it “simply the best business news site on the Web.”

The interactive Journal delivers stock quotes on demand, continually updated news, a customized news- and portfolio-tracking service, access to extensive archives, and “briefing books” for 22,000 companies and more than 7,000 U.S. mutual funds.