Closed at 7797 I say we go back to 2001-2002 and test the 7100 level. Also, I read this morning these dire predictions of 6400 by Nicole Elliott, technical analyst at Mizuho Corporate Bank. http://www.cnbc.com/id/27799264 Down down the ring of fire, It burns burns!!!
I didn't think I could laugh today after another miserable day on Wall Street. But ghettocheeze made me do it. Nice job.
I was talking to my good friend, the "financial wiz," and he said that he really is at a loss to predict where the bottom of the market might be. When I asked him if we could hit 5000, he stared at me, shook his head, and said, "God help us, it's not out of the realm of possibility. I sure as hell hope not, because the impact on the country of this crash will affect huge numbers of Americans for years, if the bottom were reached today. If you'd asked me last week if 5000 were possible, I'd of laughed in your face. You're lucky that the two of you stayed out of the market and aren't financially dependent on stocks. This is killing a LOT of people, including me." Too right!
This is part of what "living within our means" mean. We couldn't do it off our free will so the choice is taken from us.
not to be rude but your friend is a little out of the loop if he thought 5000 was only possible until he saw the action today. you should read a book called Crash Proof by Peter Schiff. it's a couple years old but he pretty much nails everything.
yup...and we still aren't learning our lesson as these things develop. if you watch the congressional hearings people always keep asking if certain measures being taken will help banks ability to lend. excessive dependency on easy lending is the problem that got us into the mess and the only real solution is to find a way to change that. the solution is not to find a way to get ourselves back on that lifestyle because it is completely unsustainable.
Plus, these financial banks are still black boxes and are either encouraged by the government to be that way or the government is looking the other way (while gouging out its eyes) to avoid the uncomfortable truth. All through the 700b bailout talks, biz analysts were claiming how we wouldn't be like Japan because "we were more upfront about our troubles". Anyone who still believes that now probably wants to be lied to.
The important distinction is to get banks to lend, but not "easy lending"...that's the fine line that was crossed and has led to so much value destruction. Coupling greed of borrowers with the greed of lenders and you've got today.....
I ran into a competitor of mine in a customer's office last week and we chatted out in the parking lot. This guy was about 2 years from retirement. But his 401K has been blown up so much he feels like he cannot retire. I feel sorry for him and people like him. Part of the problem he owned up to was his investments were still nearly 100% in the high risk category even though he is up in years. How many millions are in the same boat? I'm fortunate enough to still have 20+ years of working to recover.
Not sure if this has ever been posted. Wall Street Nostradamus... <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/2I0QN-FYkpw&color1=0xb1b1b1&color2=0xcfcfcf&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/2I0QN-FYkpw&color1=0xb1b1b1&color2=0xcfcfcf&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object> Here's what he thinks of Obama... <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/sMdF1CiQAkA&color1=0xb1b1b1&color2=0xcfcfcf&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/sMdF1CiQAkA&color1=0xb1b1b1&color2=0xcfcfcf&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object>
Remember some political party leaders belonging to that party in love with the color red and the letters G. O. P., that called for privatization of Social Security, so everyone could invest that money in the stock market, instead? Millions more could have been even further up a creek had that desire been allowed to happen. Pretty scary thought, isn't it. Don't worry. I'm not miffed in the least. You don't know my buddy. He's not "out of the loop" at all. The fellow's made and lost and made more money than I care to think about, for many, many years. The guy is looking for the bottom of the market, like everyone else, and he's going to invest a great deal when he thinks it's reached. That's the trick, isn't it? Knowing when the bottom's been reached and knowing it before everyone on the planet does. Bet wrong, and you can get hurt badly. Bet right and you can make a killing. My friend has had a hell of a lot of fun watching this play out. Kinda crazy, really, but he says we're in historic times, so he's going to enjoy it. Go figure. I can't, and I've known him for 30 years. He says that since we're not in the market, we should consider investing. It won't be too terribly long before there will be no place to go but up.
"It won't be too terribly long before there will be no place to go but up" Theoretically that's true, but there is historical precedent for the market to languish at about the same value for a decade. Market value is driven by the perception of future earnings ... growth. There has to be some catalyst creating new money or at least giving the perception it will generate new new money to get people risk their current value, In the Industrial Revolution it was the increased efficiency of machines, in post-WW2 it was the application of manufacturing infrastructure developed for the war effort, the dotcom boom was the result of the promise of computerized efficiency and the bull market of 2002-2007 was built on the money creating effects of easy mortgage credit. They all boom until the potential for value creation is approached. The sine wave flattens, no one wants to risk their value being last one out and the curve drops the other way. I'm no expert on anything other than I have participated painfully in the crash of '87, 2001 and 2008 but I have learned this: don't get in until the trend is solidly up, take profits and minimize your risks, get out as soon as you feel the trend is headed down. Make your judgments on your feel for general mood of the market. The stock market is about fear and greed; it's an exercise in group psychology more than financial prowess. That being said, the drop in energy prices is our saving grace here; the perception that the costs of doing business is getting cheaper. That will be basis for what ever number we settle at. But, I had hoped that alternative energies, efficiency innovation and invention would be the new catalysts for the next bull market though it wouldn't be one of those steep climbs. If oil stays cheap we may languish at what ever market bottom we set in 2009.... until some catalyst we can't imagine yet promises wealth creation.
Hi Bill: The issue I had with privatization was not how they were proposing it be enacted, it was with the deceptive "headed to bankruptcy" fear mongering displayed regarding the issue. Paul Krugman has noted, for example, that: Naturally, we could debate the veracity of either argument for a considerable period of time. However, it would be moot, in my opinion; and only a furthering of efforts by the Bush administration to pull the discussion away from more important points: The reason that such arguments are uninteresting to me is that the entire rationale for social security is being misconstrued in any attempt to privatize it. Social Security is NOT a retirement account. It is social insurance. Attempting to frame it or design it in any other way defeats the purpose of the legislation and it's "true" goals. Yes you can get higher returns (in theory) via the stock market - but the goal is not maximized returns at all! My two cents.
I think it's highly odd to discuss Social Security in this topic when the funds are the first to be/have been pilfered by both parties, and it's very unlikely, given the huge back breaking deficits, that people in their 40s will get to see any of it.
In my opinion, your quoting Krugman is alot like me quoting Walter Williams. They are both brilliant economists, but they both have politcal axes to grind. Your point that Social Security is only an insurance account is a very strong point: however, the demcratic party has not treated it as such. The demonization of republicans over Social Security is a tool long used by the dems. Maybe, with President Obama in charge, a middle ground can be found that can address the issues of life expectancy and population imbalance. That is the true cause of the problem. If politicians would quit using the issue as a election wedge, the solution doesn't seem to be that difficult.
