Dow drops below 9,000, S&P nearing 900

[GoldenBoy812]

I knew it was going to follow the bailout, but actually seeing it is truly something...

As fears of recession run about, credit freezing, and job outlook seems uncertain, money is trailing out of unsecured investment and headed into guaranteed forms of investment. As this happens, stocks will continue to fall. It is very likely we will see the Dow in the 7,000's and maybe even somewhere around 6,000. The last time the Dow was @ that level, it was 1996...

There are rumors that the Fed will now be backing the commercial paper market, which will hopefully free up the players in the market. One thing is for sure, they have to act fast and hard...

[killerweed420]

Just like the first 850 billion bailout its going to take atleast 45 days for the money to be released. More money ain't going to help. People need to prepare for a depression. Convert some easy assets to cash so you can ride it out. People that got sucked into the big buyers market of the last year and have taken all there cash and put it into ther 401k are going to be in deep shit.
I'm still sitting on my cash. I cashed out in 2000 when it became evident Bush was going to win. Republicans are good at sucking the economy dry.

The good thing in all this is there is talk oil may drop to $30 a barrel. $2 gas would be nice again

[Markass]

Gas is $2.57 here in oklahoma for 10% ethanol b/s...pure gas is still like $2.79 but I never ever thought it would go under $3 a gallon again...

I'm just glad that the problem can be solved by printing off $800 billion dollars that we don't have...oh wait..damnit..


And why do the taxpayers only deserve a $150 billion package...why don't they flip the bailout for the corporations and the bailout for the hardworking americans??? I'd like to have a couple thousand dollars rather than a measly 300 bucks..

[Breukelen advocaat]

Before assuming we're entering Mad Max territory, let's give the economy some time.
A lot of what is dragging down the markets may be hedge fund investors dumping their holdings, among other factors. The 700 billion plan has not even been implemented yet.

A few people will invest now, and make a killing when recovery happens.

[SnSstealth]

There are rumors that the Fed will now be backing the commercial paper market, which will hopefully free up the players in the market. One thing is for sure, they have to act fast and hard...

gooooooo socialism:yippee:..............:wtf:

this is country destroying bad. the worldwide markets crashed as soon as we passed this because weve proven that free-market dosent work. IMO

When are these power/money hungry assholes that are holding back our entire civilization back just so they can have that much more wealth? it reminds me of these banyan trees in my area. these trees grow amazing tops, very colorful and very heavy. to support the weight it grows hearty supporting "legs" growing down from the top. but when rich people want a nice pretty lawn, they cut all of this side branching off. this works fine and the tops thrive and look glorious. then one day a hurricane blows by and with no supprort structure the top falls crushing anything in its way. well all of our supporting "legs" are being chopped out and here comes the hurricane.

BTW I got out of my 401k in december, best move i ever made. my investments far exceed the national avg.;)

db:smokin:

[GoldenBoy812]

A couple of points.

What is going on as of now is considered a massive correction. After 911, the stock market sunk to a low of 7,300 points due to investor/ consumer confidence being rattled. Generally when this happens, prices begin to fall in an effort to regain sales figures, or at least move inventories out of lock due to the psychological effects of economic fear. This is referred to as market deflation, as prices were too high given the specific economic circumstances. Most of the time, deflation is bad for middle class Americans because as prices generally fall, so do wages. For example, if a farmer was making $100,000 a year off his crop, and a period of deflation occurs the following year, say raising the buying power of a dollar by 10%, that would equate to the farmer only getting $90,000 for his crop the following year. Of course, when he buys anything such as fuel, machinery, or whatever, he needs less dollars to purchase the same goods only one year ago. Many people might see this as a good thing, as the cost of gas is down. On the flip side, as many of you can attest, there are many fixed costs associated in life as well as business. If the farmer were to have a mortgage payment on the property, it will not fluctuate in accordance to deflation. Same goes for any big ticket purchases bought on credit. The value of the items the farmer has financed will also drop in accordance, even though he is still on the original nominal value associated with that good. Governmental solution is to provide easy credit to speed up the economy, because inflation is less of a concern than negative GDP growth.

What this shows us is that even if your buying power increases, your wealth is actually decreasing. This is exactly what happened in the housing market. Easy credit made it easier for loans to be issued. One of the main reasons for the demand for new money was in fact rising fuel prices. If the cost of fuel is increasing by 50 %, the money supply will have to fluctuate in accordance to the increased dollar demand of fuel. Instead of the money being used to spurn actual growth, people were buying houses, and the home builders industry was growing at an artificial rate. To top it off, lenders were leveraging collateral accounts in the range of 40:1; mortgage brokers also work on a volume commission, where they get bonuses for an increase of transactions. Therefore way to much money was flowing into the housing market creating a bubble that would eventually pop.

As sub prime home owners teaser rates stopped, and interest rates went back up as inflation fears became a target, mortgage payments on the whole increased. Foreclosures soon followed, which in turn lower the property value of the surrounding areas. Deflation roars its ugly head again as housing values dropped as much as 70% in some areas, even in non sub prime homes. What you had essentially were people making payments on a note valued at lets say $500,000, but the current value of their property was only $150,000. Then add the increased cost of fuel, and the increased costs of transportation of goods due to the rise in fuel prices and you have a situation where peoples overall wealth was diminishing.

As the defaults increased, the leveraged securities had to pay the piper, and the firms that were now responsible, for the remaining leveredge that would eventually cripple the ability to finance. No financing equals a drastic cut in sales (see GM), and forces firms to downsize by way of layoffs (cyclical unemployment).

Stock prices then tumble downward, as people cash out in hordes due to fear of loss.
------------------------------------------------------------------------

This has the potential to be very bad, but those who are calling this a depression need to use history as a tool.

When the Dow finished falling following the '29 panic, it dropped from the 330's to 41 points. The current equivilant would be the Dow around 1,500 points.

[Breukelen advocaat]

Thank you once again, GoldenBoy, for contributing your well-informed voice of reason into the discussion.

[daihashi]

gooooooo socialism:yippee:..............:wtf:

this is country destroying bad. the worldwide markets crashed as soon as we passed this because weve proven that free-market dosent work. IMO

When are these power/money hungry assholes that are holding back our entire civilization back just so they can have that much more wealth? it reminds me of these banyan trees in my area. these trees grow amazing tops, very colorful and very heavy. to support the weight it grows hearty supporting "legs" growing down from the top. but when rich people want a nice pretty lawn, they cut all of this side branching off. this works fine and the tops thrive and look glorious. then one day a hurricane blows by and with no supprort structure the top falls crushing anything in its way. well all of our supporting "legs" are being chopped out and here comes the hurricane.

BTW I got out of my 401k in december, best move i ever made. my investments far exceed the national avg.;)

db:smokin:

Good analogy.

I pulled all my investments about 3 months ago and have them sitting across 4 interest accounts at the moment. I'm waiting for signs for the market to stabilize; currently I'm at about 12% total YTD, far better than most people I know. I'm curious to see what will happen between Wachovia, Wells Fargo and Citibank. I may want to hop on that early depending on the terms and outcome of the situation.

For people who have no investments; this is a GREAT time for you to prepare to dump some serious money into the market. You will probably be seeing 100% returns or more over the next couple of years (assuming the market stabilizes soon/before end of 4th quarter.).

edit: I should add an addendum, I don't want people blaming me for bad investment decisions so I'll add this. If you are able to determine that a company is more profitable than what it's trading at and you diversify your investments... then it will be a good time to invest.

There are many things to look at when trying to determine if a company is profitable or not. I won't go into details but I'll say these two things....

There is a formula out there to do this

AND

Although it's a bit outdated... pick up The intelligent Investor and Security Analysis. It will teach fairly good basics for stock market investing.

Investing is long term. Look at any one who's been successful in the market.. they ride out the rough times. For instance Warren buffet just dumped 3 billion into GE because he determined it was worth more than it was trading at; however he did it safely... 3 billion dollars is about 1.4% of Buffets net worth. He didn't go crazy and dump all his money into it.

So figure out what's profitable.. and only dump a fragment of your net worth into it.

[SnSstealth]

sorry for the doom and gloom, i had just watched the 60min. bit on how the top companies created this whole mess by offering securities on bad investments that they had no money to cover. but since its not called insurance its not regulated. 4 times the national debt 60-80 trillion dollars floating on mathematics and the govt(including the guy who asked for the 700 mill) didnt see this coming? all the while guys being paid 50 mill a year are gonna get bonus checks from us for letting, no making, this happen. disgusts me to where i cant even pay attn. normally.

db:mad:

[DaBudhaStank]

I have the ultimate solution to this whole problem. People need to stop caring so much about money and stop being so FUCKING greedy. Thats all anyone cares about anymore, money. Why do people invest? Because they want more money. Why do people go to college for years and years to learn business? So they can make more money. I frankly don't even give a shit anymore. I blame everyone who decided it'd be a good idea to make as much money as they possibly could, investors and business execs alike. Money does not make you happy and is not the solution to the world's problems. It's a shame that most people don't understand such a simple concept. I could give two shits if I had a million dollars or a thousand, as long as I'm happy. And if anyone thinks that only money will make them happy, they really dont deserve life.

[GoldenBoy812]

sorry for the doom and gloom, i had just watched the 60min. bit on how the top companies created this whole mess by offering securities on bad investments that they had no money to cover. but since its not called insurance its not regulated. 4 times the national debt 60-80 trillion dollars floating on mathematics and the govt(including the guy who asked for the 700 mill) didnt see this coming? all the while guys being paid 50 mill a year are gonna get bonus checks from us for letting, no making, this happen. disgusts me to where i cant even pay attn. normally.

This is not caused just by the people on Wall street, this is main street
America's fault in equal accordance. Why were people taking mortgages they knew they could not pay? Whey were people taking equity loans based on the value of their houses to buy things? Why were residential mortgage brokers given the green light to pool available finance in housing? Why were investment banks leveraging collateral @ 40:1?

The bigger question is, when will we have actual transparency in the credit markets?

[SnSstealth]

i agree many americans caused this by buying what they cant afford. they are very high on the list. but what about a guy I worked with at my last job. early fifties married both with jobs, 401k, didnt have cable(saw it as a waist of money). 4 years ago hurricanes start passing thru our state. same house, same insurance for 20 years. that year and the three after they doubled his rates each year till he had to get from someone else at a high price. never made a claim for anything in 24 years. now hes in trouble of losing just like the others when hes done nothing wrong. lest hes expected to have a 30 year crystal ball.

db:smokin:

[Dutch Pimp]

232 years of doing things, mostly right...now, we have "screwed the pooch"-(Right Stuff)....:s4:..all empires fall from within.

[Coelho]

all empires fall from within.

Well... Osama Bin Laden already had warned that the empire would fall... but nobody quite believed him...

Anyway... what bothers me most is some rumours i heard about this global financial crisis... ive read that it would be used as a perfect excuse to set up a New Order, with global control, first of markets, then after it of governments, and lastly over people. THAT would be bad... :eek:

[Dutch Pimp]

:s4:America?...going out of business sale?...76% off?

[Breukelen advocaat]

Well... Osama Bin Laden already had warned that the empire would fall... but nobody quite believed him...

Anyway... what bothers me most is some rumours i heard about this global financial crisis... ive read that it would be used as a perfect excuse to set up a New Order, with global control, first of markets, then after it of governments, and lastly over people. THAT would be bad... :eek:
Bin laden is a subhuman piece of garbage. His extremeist theological opinions have no credibility whatsoever.

Nobody in government is smart enough to run a New Order with global control - they don't even know how to handle the old one.

[JakeMartinez]

I don't think the system is going to last under this pressure. Remember, stocks are indicators of what's going on in the economy, not the economy itself.

These big falls are from shaken investor confidence stemming from a few key causes.

1: The housing bubble crash & subprime loan scandal

Everyone started buying homes that are way beyond their means to pay, and corrupt bankers counted on them to default on these foreclosures to make them filthy rich as they keep turning around the property to new borrowers, etc. etc. It was only a matter of time before that led to a collapse of the housing industry.

2: Costs of Energy and Living

Obviously, these costs have gone way up without a corresponding raise in wages, which (coupled with those being foreclosed on), has made it much harder for the average american to spend money on more than what they need to survive. Thus, the economy slowwwwwwwwws down.

Those are the root causes. They, in turn, triggered these.

3: Credit Crunch.

Banks and people have less money, so banks are less willing to lend money to them. Our system depends on loans to create new money, according to the fractional reserve system, and money therefore is gradually losing its value. With loans slowing down, we could easily see a contraction on the horizon.

4:Consumer confidence, trust, and investor confidence.

Everyone's rattled by what's going on. Investors are hanging on every word the government says, hoping their precious investments are safe. Consumers are afraid of companies they rely on being crippled and the possibility that their employers won't be able to pay them, and gradually our trust in each other is being eroded.

What can we do to fix it?

I believe our system is doomed to collapse eventually, so the sooner it does, the sooner we can make a new, socially relevant system.

I won't say what system could replace ours, but I know socialism, free market trade, and communism aren't the answer.

If we wanted to keep the system, though, the only way we could get it running again is to nationalize a LOT of debt.

I'm not comfortable with that idea. I didn't do anything to deserve such a massive amount of liability.

[thcbongman]

Good analogy.

I pulled all my investments about 3 months ago and have them sitting across 4 interest accounts at the moment. I'm waiting for signs for the market to stabilize; currently I'm at about 12% total YTD, far better than most people I know. I'm curious to see what will happen between Wachovia, Wells Fargo and Citibank. I may want to hop on that early depending on the terms and outcome of the situation.

For people who have no investments; this is a GREAT time for you to prepare to dump some serious money into the market. You will probably be seeing 100% returns or more over the next couple of years (assuming the market stabilizes soon/before end of 4th quarter.).

edit: I should add an addendum, I don't want people blaming me for bad investment decisions so I'll add this. If you are able to determine that a company is more profitable than what it's trading at and you diversify your investments... then it will be a good time to invest.

There are many things to look at when trying to determine if a company is profitable or not. I won't go into details but I'll say these two things....

There is a formula out there to do this

AND

Although it's a bit outdated... pick up The intelligent Investor and Security Analysis. It will teach fairly good basics for stock market investing.

Investing is long term. Look at any one who's been successful in the market.. they ride out the rough times. For instance Warren buffet just dumped 3 billion into GE because he determined it was worth more than it was trading at; however he did it safely... 3 billion dollars is about 1.4% of Buffets net worth. He didn't go crazy and dump all his money into it.

So figure out what's profitable.. and only dump a fragment of your net worth into it.

I'm glad you mentioned Warren Buffett. You can be for sure this guy will keep making money. He didn't take the bait on the tech boom because he didn't understand the business model. People secretly snickers at him at the time, but once the bubble hit, Buffett came out as a genius as usual.

I think the most important thing with investing is to invest in companies you understand. Which is why it's important to do the homework, look at companies financial reports, SEC filings, perform the various calculations you need to determine the financial health of the company, investigate what they do and how they model their business and compare with other companies in the same industry. The more you learn, the more successful you'll be at investing.

Right now it's a gold mine. Personally I'm waiting on whether the market drops further which I think it will. Then it's christmas.

[killerweed420]

We need a good war. America loves a good war and its always good for the economy. I'm thinking France. Certainly we should be able to kick there ass and then we would finally have one in the win column.

[Breukelen advocaat]

Our neighbor to the north would be more convenient, plus it would finally put to rest their preposterous claim to have to have beat us in the War of 1812.

[silkyblue]

We need a good war. America loves a good war and its always good for the economy.




we are in a war dude

[daihashi]

Right now it's a gold mine. Personally I'm waiting on whether the market drops further which I think it will. Then it's christmas.

You and me both.. I already know one stock I'll be buying up if McCain wins.

GE... who builds nuclear power plants? Who builds windmill turbines... oh GE will be a gold mine and Buffet even decided to dump some money in, albeit only 1.4% of his networth, but Buffet is no fool. I'm waiting for a few more factors to come in before I jump on that bandwagon.

[Revanche21]

Socialist bailout for the stupid Capitalist.

[GoldenBoy812]

I don't think the system is going to last under this pressure. Remember, stocks are indicators of what's going on in the economy, not the economy itself.

See the 1980-1981 recession. My dad bought a house during that time, and his interest at that time was 13%, and that is with jumbo prime credit and a 50% down payment. Things were much worse then, minus a credit freeze.


Everyone started buying homes that are way beyond their means to pay, and corrupt bankers counted on them to default on these foreclosures to make them filthy rich as they keep turning around the property to new borrowers, etc. etc. It was only a matter of time before that led to a collapse of the housing industry.

It is never of the best interest to any bank/ lender to spurn default. Defaults lower property values, hence they will lower the nominal value of future loans until it restores itself. Foreclosures make nobody rich...


2: Costs of Energy and Living

Obviously, these costs have gone way up without a corresponding raise in wages, which (coupled with those being foreclosed on), has made it much harder for the average american to spend money on more than what they need to survive. Thus, the economy slowwwwwwwwws down.

False! Wages associated with increased fuel costs have most definitily gone up. For instance, trucking companies/ owner operators would either have to raise costs associated with inputs (fuel) or go out of business. Since trucks are still on the road, i would believe they raised prices. This is an example of demand pull inflation...


Those are the root causes. They, in turn, triggered these.

3: Credit Crunch.

Banks and people have less money, so banks are less willing to lend money to them. Our system depends on loans to create new money, according to the fractional reserve system, and money therefore is gradually losing its value. With loans slowing down, we could easily see a contraction on the horizon.

Money is not the issue, as fractional reserve banking is dependent on a reserve system (The Federal Reserve) that has in theory, unlimited money. Interbank lending has doubled in cost the last two months (LIBOR). The slowdown in interbank lending has in essence froze credit markets, or at least made it unattainable for so many.


4:Consumer confidence, trust, and investor confidence.

Everyone's rattled by what's going on. Investors are hanging on every word the government says, hoping their precious investments are safe. Consumers are afraid of companies they rely on being crippled and the possibility that their employers won't be able to pay them, and gradually our trust in each other is being eroded.

Just as in all recessions in the past, this one will be accompanied with unemployment and negative growth. Black Monday, of 1987 saw a decrease of 22.6%, still the single day record; more than the '29 crash, more than the '32 crash. Employment is still relativily high, and growth is expected to halt, and not expected to decline until the holiday season.


What can we do to fix it?

I believe our system is doomed to collapse eventually, so the sooner it does, the sooner we can make a new, socially relevant system.

I won't say what system could replace ours, but I know socialism, free market trade, and communism aren't the answer.

If we wanted to keep the system, though, the only way we could get it running again is to nationalize a LOT of debt.

I'm not comfortable with that idea. I didn't do anything to deserve such a massive amount of liability.

EVERY person who has bet against The United States of America has LOST! What is going on at this moment has happened throughout the 20th century (minus credit markets but that is another story in itself, and will be repaired as the bailout takes effect, just watch LIBOR). This is what they call the business cycle.

Things will get better in time, you can bet on it:jointsmile:

[SnSstealth]

.........Things will get better in time, you can bet on it:jointsmile:

I hope your right Golden. Throughout my experiences with our gov't, (9yrs active Army, 4 yrs at Ft Knox brig) I have lost ALL faith in our gov't as well as the people. We won't even get so much as a minor hippie rebellion. Our country is so set in make money, make money...cry, cry, cry....That no one is gonna change shit. Candidates winning the popular vote, but not the presidency. Cheney shoots someone, Laura Bush kills someone.Lose soldiers lives over oil...Then people complain about how fucked up shit is, and forget about it 2 days later, and continue taking it up the ass....
I hope your right, I sure as shit don't want to be.
whiskeytango

[GoldenBoy812]

I hope your right Golden. Throughout my experiences with our gov't, (9yrs active Army, 4 yrs at Ft Knox brig) I have lost ALL faith in our gov't as well as the people. We won't even get so much as a minor hippie rebellion. Our country is so set in make money, make money...cry, cry, cry....That no one is gonna change shit. Candidates winning the popular vote, but not the presidency. Cheney shoots someone, Laura Bush kills someone.Lose soldiers lives over oil...Then people complain about how fucked up shit is, and forget about it 2 days later, and continue taking it up the ass....
I hope your right, I sure as shit don't want to be.
whiskeytango

Popular vote was intentionally avoided by the founding fathers because of their distrust of democracy. Up until the 17th amendment, senators were elected by state legislature. The electoral college was put in place to avoid the excessive nature of democracy.

We are not a democracy, but instead a republic. Therefore popular vote is not needed.

[JakeMartinez]

We'll see what happens, Goldenboy. Especially if the countries we owe money too decide to dump it to cut their losses.

[GoldenBoy812]

We'll see what happens, Goldenboy. Especially if the countries we owe money too decide to dump it to cut their losses.

Then they lose big time!

If not, then the world would collapse! Since we have not collapsed in even grimmer times, i doubt it will happen now. Even if it does, it will not matter because we all will be cavemen/women!

[SnSstealth]

Popular vote was intentionally avoided by the founding fathers because of their distrust of democracy. Up until the 17th amendment, senators were elected by state legislature. The electoral college was put in place to avoid the excessive nature of democracy.

We are not a democracy, but instead a republic. Therefore popular vote is not needed.

then i dont ever want to hear that "your vote counts" crap ever again

[daihashi]

then i dont ever want to hear that "your vote counts" crap ever again

Well your vote does count. More so at the local level where you elect Senators and Representatives that make up the electoral college. So when voting for your local and state government, think about what type of people you would want to be president and make sure they have the same mindset as you. That is the best way to make your vote towards the presidency count.

Furthermore in a close race such as this year popular Vote may actually be a factor if McCain can win the undecided states and maybe steal one of Obama's weak states from him. Which isn't that far of a possibility.

:hippy:

On an offnote topic. I finally got pics up. Took me a while but it's worth the look. :D

[SnSstealth]

well cant lobbyists buy electorate votes just like they do congressmen? or to put it a nicer way, are electorates forced to pick what their constituents vote for or can they pick who they want?

db:smokin:

[daihashi]

well cant lobbyists buy electorate votes just like they do congressmen? or to put it a nicer way, are electorates forced to pick what their constituents vote for or can they pick who they want?

db:smokin:

Well they can pick who they want but historically they vote along side the popular vote. Only 4 times in US history has a candidate won the electoral vote without the popular vote. In that regard whoever you vote into office on your state and local level does reflect in presidential elections

Usually lobbyists buy politicians in senate and the house after they've been put into office. So your vote does still count on the local and state level. :thumbsup:

[dragonrider]

This stock market crash is very disturbing.

I personally have lost a great deal of money in the last year and a buttload of that has been in the last two weeks. I do not have the time or expetise to research individual compaines or the incliniation or discipline to monitor them myself after buying their stock. So my investments have moslty been in mutual funds in my 401k plan and my IRA accounts. And I have typically not tried to time any market trends, so I stay invested through the ups and downs. This has been a hard time to stay the course, but if that is your stretegy, you really have to stick with it.

Today is a perfect example of why you can't just jump out if you invest broadly in mutual funds with a stay-the-course strategy. On Friday, the Dow was in the middle 8000's. At this moment on Monday, it is over 500 points up, back over 9000 again. If you freaked out on Friday and told your broker to sell everything Monday morming, you missed a 500 point rally.

Often the way the market operates during these severe downturns is that after it hits a bottom, it RACES back in a rally that lasts only a few days. That is what all the volatility is about. You get swings of hundreds of points in a single day because investors are selling the market down, and then jumping back in with every uptick, not wanting to miss the rally. The rally sputters, and they all jump back out. But one of these times it will be for real, and the rally is going to take the market back up and keep it up. I do not think that is very far away. You canot afford to miss that. If you sell now and miss the rally, you have locked in your losses.

The compaines traded in the stock market do have intirnsic value. So many of them have been so beat up in this crash, that their stock is trading at bargain prices. If the market can reach the psychological turning point where investors have FAITH that these prices are bargains and the economy is really not going to completely collapse, money is going to flood back into the market. At least that is my hope and belief.

I am young enough that I can spend another 10, 15, 20 years waiting for my investments to regain their losses. The people we should all be worried about are the ones who don't have that long. Maybe they should not have been in the market in the first place, given that they need the money sooner. But you can be sure that their are a lot of boomers on the edge of retirement who just lost 20% or more of their retirement nest egg, dumped all their stock in a panic AFTER THE LOSSES, and will now miss the rally as it comes back. This might be you or maybe your parents or aunts and uncles. Those same people may have also been counting on their home equity for retirement --- sell the big house they have owned for years, take the profit, and downsize to something smaller and cheaper for retirement. With the losses in housing in that last couple of years, that strategy is a losing one too, just at the same time the stock market implodes.

You can be sure there are thousands, if not millions of people right now being told that after the losses in housing and the stock market, they cannot afford to retire like they thought they would just a year or two ago. I hope it is not you or your parents.

For those of you who have a lot of years ahead of you, like me. If you have faith that the economy is probably not going to completely collapse, like I do, then this is a good time to be looking for some buying opportunities. There are compaines whose stock is trading at bargain prices right now. Also, I have always been interested in investing in rental real estate, but the numbers just did not work out in my local area for long-term, cash-flow-based real estate investing. It looks like the prices have dropped almost enough to make it work. If I can get the financing (damn credit crisis!), I am going to start taking a close look at that again.

[GoldenBoy812]

Nice post:thumbsup:

I am not sure if anyone has mentioned this before, but if you are close to retiring, it is wise to limit risk factors to less than 33% of your portfolio value. This money should be put into guaranteed stores of wealth, such as government issued bonds. Gold is also a viable option, but a caveat awaits in the form of storing/securing the gold. If you have a safe at home, it might just seem "safe", but it could very well be stolen or broken into. The other option, a safety deposit box is very good, but that does cost money as well. You will have to balance such decisions based on your own specific goals, desires, and situation.

Right now, i am mostly playing with financial stocks but advise anyone to stay away from them unless you have the time and expertize to monitor their swings. I repeat, this is a very volatile industry at the moment and you can lose a considerable amount of money if you are inexperienced.

Some safe picks include consumer staples, more specifically companies you can locate at a grocery store. There is no guarantee that they will hold value, but will most likely be less affected by a recession.

Lastly, do what is right for you, and try not to get pulled in by greed.

Another caveat: these are just my views and opinions, so consult a trusted professional before making any commitments.

[dragonrider]

Another caveat: these are just my views and opinions, so consult a trusted professional before making any commitments.

I'd like to add this same caveat to my post above. Everyone needs to make their own decisions and seek out the advice of professionals --- not just anonymous members who post on a weed forum!

I think the market will turn around, and I do not think the economy will completely melt down. So I am going to stay invested in my mutual funds and seek out some buying opportunities in rental real estate for long-term investments. But that is just me. No one knows for sure what will happen, so we each need to be responsible for our own choices.

[dragonrider]

Ok, this is exactly what I was talking about earlier. Today the market closed with a 940-point gain on the Dow --- biggest single-day point gain in history! Holy crap!

Who knows what tomorrow will bring? Will the rally hold? Will it drop back again? I think it is likely some investors will take some profits tomorrow and slow the rise or even set it back, but who knows? If you are long-term, buy-and-hold, stay-the-course investor like me, it doesn't really matter that much. But if you are long-term, buy-and-hold, stay-the-course investor who got spooked, forgot your strategy, and sold on Friday, then you just missed out on a 10% gain that you are never going to get back.

When the market is this volatile, unless you are a professional investor who trades minute-by-minute, you cannot take advantage of these wild fluctuations, and you only hurt yourself trying. I think it is going to be crazy like this for awhile.

[JakeMartinez]

This huge gain we saw today is more proof of the market's current volatility. Even in a bear market (more losses than gains), steadiness is what keeps people from panicing.

A lot of analysts say this is proof that we've hit bottom and are going to start rising again, but a few people who've been in the stock market a long time (like Jim Cramer on CNBC) say it's better to ride it out until the market's had a few months to prove it's a bull again. He reasons that most bear markets have short-term bounces upward periodically allllllll the way down.

Besides, based on what I'm hearing about the economy itself (not the stock market), we're far from hitting the bottom of this crisis. This is going to be a long, hard winter.

Side not, has anyone gone grocery shopping lately? The prices are getting out of hand! For a five pound bag of potatoes, it was 4 bucks when I went today. I thought potatoes were the poor man's food...

[daihashi]

This huge gain we saw today is more proof of the market's current volatility. Even in a bear market (more losses than gains), steadiness is what keeps people from panicing.


Or it could be that it's not a clear indicator of anything.. considering it's Columbus days and many financial institutions are closed.. thus having no picture of what the bond market looks like.

Truth is you can't judge anything by today. Although I'll agree that we have not hit bottom yet; but for an entirely different set of reasons than what you propose. :hippy:


Side not, has anyone gone grocery shopping lately? The prices are getting out of hand! For a five pound bag of potatoes, it was 4 bucks when I went today. I thought potatoes were the poor man's food...

I went grocery shopping last night actually. Prices have actually gone down slightly; which correlates to the drop in price of a barrel of oil, making transportation a little cheaper.

Not sure where you're doing your shopping at :wtf:

[JakeMartinez]

Or it could be that it's not a clear indicator of anything.. considering it's Columbus days and many financial institutions are closed.. thus having no picture of what the bond market looks like.

Truth is you can't judge anything by today. Although I'll agree that we have not hit bottom yet; but for an entirely different set of reasons than what you propose. :hippy:



I went grocery shopping last night actually. Prices have actually gone down slightly; which correlates to the drop in price of a barrel of oil, making transportation a little cheaper.

Not sure where you're doing your shopping at :wtf:

My local Wal*Mart.

Why do you think we're still on the downward spiral, then?

I think it's the fact that we haven't addressed the myriad of root causes to our crisis...we're just treating the symptoms for now. I think we might hit some serious inflation issues in the near future, what with adding 700 billion to the money supply, which (at the end of the day) will equal roughly 6.3 trillion dollars in new money based on the fractional reserve system.

I attached a chart of the U.S. money supply...see that huge spike once you get to where we are now? That's not a good thing.

[GoldenBoy812]

My local Wal*Mart.

Why do you think we're still on the downward spiral, then?

I think it's the fact that we haven't addressed the myriad of root causes to our crisis...we're just treating the symptoms for now. I think we might hit some serious inflation issues in the near future, what with adding 700 billion to the money supply, which (at the end of the day) will equal roughly 6.3 trillion dollars in new money based on the fractional reserve system.

Not quite, as the money appropriated has yet to be inserted into the system, as well as the nature of the bailout. Do you consider a person who has the best possible credit you have ever seen, heard, or thought about getting a loan as inflation (fractional reserve banking aside)?

Here is another way of thinking about it. Think of it as the American tax payer giving a loan to wall street so that main street does not turn into a ghost town. And even if wall street cannot liquidate/ recapitalize the entire amount, the tax payer will foot the bill. That part does suck big time, but it is better than the alternative.


I attached a chart of the U.S. money supply...see that huge spike once you get to where we are now? That's not a good thing.

Interesting graph, but it is undoubtedly wrong. That illustration lacks something vital, known as the M3, which is the focal point of your debate. Not only that, your chart has too dominant of a slope this early in the game. At best, it is a rough estimate.

Ill explain later, as it has been a long day:jointsmile:

I hate life right now, everything is fucking dry:(

[daihashi]

My local Wal*Mart.

Why do you think we're still on the downward spiral, then?

I think it's the fact that we haven't addressed the myriad of root causes to our crisis...we're just treating the symptoms for now. I think we might hit some serious inflation issues in the near future, what with adding 700 billion to the money supply, which (at the end of the day) will equal roughly 6.3 trillion dollars in new money based on the fractional reserve system.

I attached a chart of the U.S. money supply...see that huge spike once you get to where we are now? That's not a good thing.

Well the problem is that 700 billion hasn't been added YET! And we are just now finding out how those funds will be used. In addition to this the problem is not just a local problem; it is an international problems and many of the World banks and governments have also just passed bills to put forth a bailout bill similar to the US. I believe Germany is proposing 500billion, Great Britain is only putting out like 70 Billion, and so on and so forth.

Until the entire international community puts those funds to use as well (they are in the same boat as us) then we will see a stagnant market at best. Currently the market is 'reacting' to something they shouldn't be.

There will be another decline soon. This is a short spike and we are sure to see it drop off again. I anticipate the Dow stabilizing somewhere in the 8500 range.

In addition to this who wins the election will play a major factor in what will happen to our stock market. Another reason I am very much against Obama. People don't realize that taxation on corporations directly effect everyone underneath.

YEAH!! let's stick it to those people that pay for our jobs, that pay for research and development of new goods, that give us benefits (well large corporations anyway). Let's screw those people who work in a competitive free market where they must compete against other companies to provider as low of a marketable price as possible!!!

Oh wait.. if we tax them more and hurt their profit lines.. then they'll have to protect their investors or else they'll back out of their companies. So let's cut pay scale, let's cut jobs, let's cut back on research and development, let's scale back what benefits we'll offer, and we'll have to raise the price of products to compensate for the taxation that's to come.

In addition, people don't realize that many small businesses do make more than 250k a year. I believe people have a misunderstanding what actually identifies a small business as a small business. It is these same small business owners that have recently been accounting for 70% of new jobs created in the United States.

Let's kiss that good bye.

These are all factors that also will affect the market.

We will know more about the economy in general once the US and the rest of the world are on the same page; we will know even MORE about our National economy once the election is over; which honestly I think to some degree the market is reacting to that as well since people have convinced themselves Obama will win the election (and maybe he will.. who knows; he does have the lead currently).

I have more I want to what effects us outside of what I've stated currently; but I'm pretty worn out and this is getting long winded. Maybe I'll come back and post a follow up.

[maladroit]

the dow is crapping out AGAIN today? it's getting so bad that you can't even bribe capitalists anymore!! HA!

the federal reserve stopped reporting M3 back in 2006 so the money supply chart posted earlier is the best estimate available:
FRB: H.6 Release--Discontinuance of M3 (http://www.federalreserve.gov/releases/h6/discm3.htm)


hey goldenboy, you're a financial wizard: can you explain what's happening in column 3 of this fed reserve banking chart? non-borrowed reserves seems like something that should be a positive number:
FRB: H.3 Release--Aggregate Reserves of Depository Institutions--October 9, 2008 (http://www.federalreserve.gov/releases/h3/Current/)

[daihashi]

the dow is crapping out AGAIN today? it's getting so bad that you can't even bribe capitalists anymore!! HA!


If you understood the stock market and had a firm grasp on what makes the economy churn then you would understand that the DJIA staying stagnant or even dropping was to be expected. The gains we saw yesterday were superficial and you should expect them to drop off again soon. Currently we are only down 50 points today; which considering what happened last week and then the Rally yesterday, is a much lower drop than what I was expecting. I was positive we'd see a 200-300 point drop, but then again the market hasn't closed yet and anything can happen.

I for one am not shocked and was anticipating the market to drop again after yesterday's rally. I have quite a bit of money I'm looking to reinvest shortly to buy up stocks at bargain basement prices. It's very rare that you get an opportunity like this. Maybe 1-2 times in your life time.

I am not as concerned as most people. The media is pandering to the nervous/scared crowd. It keeps people glued to their chairs and watching their station; which boosts ratings.. which allows them to sell more air time.

Don't believe everything you hear on the news. Remember that the news is a business too.. they need to make money and will market their news.. or really their opinion pieces that they try to pass off as news to certain demographics.

[maladroit]

hey jake,

thanks for that scary money supply chart...i agree with you about the threat of inflation from printing money...there is also another inflationary threat: interest inflation...foreign debt holders have uncle sam by the balls now...japan has been buying increasing amounts of US treasury notes, but they were making noise about reducing their US 'investments long before the subprime crisis broke wide open...when freddie and fannie failed, the US treasury got so scared of what japan might do that they directly contacted japanese financial institutions to beg them not to sell US treasury notes:
http://www.marketwatch.com/news/story/us-treasury-reassures-japanese-investors/story.aspx?guid={B5CC7053-F4A5-4E9C-9DC3-383259C21157}

china is the second largest foreign holder of US treasury notes...in 2007, the bush administration tried to bully china into revaluing it's currency against the US dollar, and the chinese replied by threatening to sell their US treasury notes...the bush administration instantly dropped the threat:
China threatens 'nuclear option' of dollar sales - Telegraph (http://www.telegraph.co.uk/finance/markets/2813630/China-threatens-%27nuclear-option%27-of-dollar-sales.html)

that is a good example of how the national debt is a greater threat to US national security than terrorism...foreign debt holders have the power to control/hurt the united states in ways that bin laden can only fantasize about

now the us treasury is back in japan and china, passing it's begging bucket around...if i recall correctly, ten years ago china owned about $100 billion in US treasury notes...now it owns about $520 billion...for a few years, chinese commies were buying about half of all new US treasury notes...during the red scares, the government warned people about commies hiding under our beds...more recently, they invited the commies to get into the beds with us...meanwhile, china is building a prosperous middle class that will be four or five times the size of the US middle class, which has been eroding as the manufacturing jobs are exported and replaced with service jobs and financial activity

thanks to the low and negative personal savings rates, the USA is dependant upon foreign countries to finance it's debts...these foreign countries are worried about US fiscal negligence and falling exchange rates so they naturally want higher interest rates to compensate them for the risk of holding US treasury notes...if that happens it will be like throwing an anchor out behind the US economy, but it will still be better than blowing a hole in the bottom of the ship by defaulting on US gov't financial committments

[maladroit]

good luck with your investment strategy...one man's loss is another man's gain!

[daihashi]

good luck with your investment strategy...one man's loss is another man's gain!

I lost about 11-12% this year prior to the Fannie and Freddie collapsing. I pulled out shortly after anticipating other markets to crash also. Looks like I was right. I would be in the crapper otherwise.

So I still lost money this year, but not as much as most people have.

[maladroit]

i didn't lose a cent...i got out of the stock market completely in the summer of 2001...it's tempting to throw it all back in while things are low, and ride it up again, but i don't trust the system at all now...i think the system is fixed to benefit a minority at the expense of the majority and when the minority screw it up for the rest of us, they get bailed out with our tax dollars

you'll get your money back but this roller coaster ride is going to continue for a while, and the dow jones is going to be knocked up and down everytime a new report comes out...i bet you could time your trades to cash in on the reporting schedule:
Report Schedule (http://www.mrci.com/reports.htm)

[daihashi]

i didn't lose a cent...i got out of the stock market completely in the summer of 2001...it's tempting to throw it all back in while things are low, and ride it up again, but i don't trust the system at all now...i think the system is fixed to benefit a minority at the expense of the majority and when the minority screw it up for the rest of us, they get bailed out with our tax dollars

you'll get your money back but this roller coaster ride is going to continue for a while, and the dow jones is going to be knocked up and down everytime a new report comes out...i bet you could time your trades to cash in on the reporting schedule:
Report Schedule (http://www.mrci.com/reports.htm)

Investing is not short term and if you keep that mentality then that is the exact way that you lose.

If you think the system is fixed then I wonder what other conspiracies you believe in. You can figure out if a company is undervalued and profitable or if it's trading at what it's worth; or if a stock is overhyped and over valued.

The stock market does require a lot of research but it's not magic or voodoo like some people would want to believe. :wtf:

There's a reason why people pay close attention to trending.

[maladroit]

i am not much of a conspiracy theorist...i believe oswald shot kennedy...i believe man landed on the moon...i do not believe the rockerfellers or the bilderbergers or the jews control the world via their secret societies

but i know for a fact that a lot of people didn't play by the rules and it wiped out $?? trillions in capital around the world...this isn't the first time and it won't be the last...i like to gamble, but i don't lay bent bets with crooks

[daihashi]

but i know for a fact that a lot of people didn't play by the rules and it wiped out $?? trillions in capital around the world...this isn't the first time and it won't be the last...i like to gamble, but i don't lay bent bets with crooks

If you honestly believe that then a man like Warren Buffet would be in the poor house. He's stuck it out thick and thin through the hard times in the market.

I am calling you out and I would like to see your evidence of said 'fact'.

[maladroit]

the evidence of said fact is the subprime crisis which is currently ravaging economies around the planet


i like warren buffet but he's one of the guys who is in on the fix...ya think he doesn't get different stock info than you? berkeshire hathaway controls $200 billion....he's too big to fail


BTW: i also believe al qaida and 19 muslim hijackers did 911...sometimes i feel like i'm in the minority on that one

[JakeMartinez]

To me, the 9/11 issue is too suspicious to call either way.

Back on topic, the Fed doesn't publish M3 anymore, so apparently it's not important.

We're supposed to be getting 3Q balance sheets at the end of this week, which will be a much better indicator of what's going to happen in the near future.

[daihashi]

the evidence of said fact is the subprime crisis which is currently ravaging economies around the planet

This is not evidence, like many of your posts this is your opinion. Economies trend also, they go up and down; that's just what they do for a number of reasons that I won't get into. Seeing as how you chose to try to take on Goldenboy on several economic topics and insist that you're right.. you should have the knowledge base to determine why this happens. It's not magic or voodoo and can often times be predicted.

I am by far no economic or investment genius but I foresaw the fall of the mortgage industry, as well as I saw this market crash coming and took measures necessary to protect myself.

Again; you state opinion in your rebuttal of the following statement I called you on:

but i know for a fact that a lot of people didn't play by the rules and it wiped out $??


i like warren buffet but he's one of the guys who is in on the fix...ya think he doesn't get different stock info than you? berkeshire hathaway controls $200 billion....he's too big to fail

Do you think Warren Buffet always had that networth. You act as if he did not build up to it. Investment takes time. Investment is long term. The reason why Warren Buffet has 200 billion is because when everyone was pulling out of the market he would stay in and buy up stocks.

FYI, his mentor was Benjamin Graham; a person whose books I mention fairly frequently whenever the stock market is the topic. I suggest you go pick up The intelligent Investor and Security Analysis for some preliminary reading to get a basic understanding of how the stock market works and how to figure out what stocks are profitable and which are not.


BTW: i also believe al qaida and 19 muslim hijackers did 911...sometimes i feel like i'm in the minority on that one

I should hope so since Bin Laden flat out said "we did it"

[GoldenBoy812]

The cognitive dissidence displayed has led me to refrain from partaking in yet another circular argument. There are several posters here who operate strictly from an agenda standpoint, which has gotten boring as of lately.

A few points to make:

First off, there is such thing as a business cycle. :thumbsup:

Secondly, liquidation and recapitalization is the life blood of a recovering market. Right now, this is being artificially implemented. There are a great deal of reasons for doing so, one is to forestall a global currency crash. Money as we have today, is not real. It has ballooned to the point where economies that partake in fiat after a period of time require even more fictional measures to live. I truly believe that what we are experiencing now will be a constant decade function, where the need will only increase in a given period of time; until bailouts are occuring every month and band aids no longer work.

If unilateral (true) deregulation of the markets is not achieved, they will eventually implode. All fiat has failed, at a rate of 100%. It is only a matter of time. I only hope i am dead and gone when it does happen.

[maladroit]

ok daihashi, i'll explain it to you in more detail

if people were playing by the rules, why are fannie and freddie and AIG and lehman the subject of a federal inquiry in the usa? why is the FBI currently investigating the financial activities of 19 large corporations related to the subprime crisis?
mortgage inquiry and FBI investigation:
FT.com / Companies / Financial services - Mortgage collapse inquiry widened (http://www.ft.com/cms/s/0/d58d9886-8a9b-11dd-a76a-0000779fd18c.html)

i do not believe the financial industry played by the rules by gambling the rest of the world's money on risky mortgages...even you, a person who confesses to lack depth of insight on economic and investment matters, saw this mortgage crash coming...why is it so hard for you to believe the masters of the universe on wall street also saw this coming and did nothing to avert it, and even spread their bad decisions around the world, perhaps in an attempt to dilute the crash they saw coming by exporting bad investments to foreign banks without disclosing the risk?

regardless of regulation, financial institutions have a legal obligation to make prudent decisions with other people's money...i believe their fiscal negligence (a crime) borders on fraud (another crime)...people skirted around the rules to make bad decisions that rewarded them personally at the expense of the rest of the world...that's not just my opinion either: dozens of class action lawsuits have been filed against those people for "negligence, fraud, failure of financial statements to comply with GAAP, failure to disclose information regarding loan packages sold to investors, predatory lending, excessive fees, securities fraud, violations of state consumer protection laws, and many other types of substantive claims":
Kilpatrick Stockton LLP: Subprime and Credit Markets Litigation (http://www.kilpatrickstockton.com/legalservices/services_detail.aspx?ID=SPM)
Law.com - Criminal Prosecutions Predicted to Surge Over Financial Crisis (http://www.law.com/jsp/article.jsp?id=1202425138326)

the crimes committed are not restricted to executives on wall street...the crimes extend all the way down through the system to the individual mortgage brokers on main street...corruption and crime infests the system - that violation of the public trust will take years to correct (if that is even possible)

it will be a cold day in hell before i trust them again, and judging by the dow jones, i think the invisible hand of the free markets is pissed off too

[maladroit]

"First off, there is such thing as a business cycle."

- it is very difficult to prove a negative assertion, but it is a lot easier to prove that something exists:
ECRI | Economic Cycle Research Institute (http://www.businesscycle.com/)
Global Business Cycle Indicators Member Website - The Conference Board (http://www.conference-board.org/economics/bci/)
IngentaConnect Publication: Journal of Business Cycle Measurement and Analysis (http://www.ingentaconnect.com/content/oecd/17293618)

[daihashi]

ok daihashi, i'll explain it to you in more detail

if people were playing by the rules, why are fannie and freddie and AIG and lehman the subject of a federal inquiry in the usa? why is the FBI currently investigating the financial activities of 19 large corporations related to the subprime crisis?
mortgage inquiry and FBI investigation:
FT.com / Companies / Financial services - Mortgage collapse inquiry widened (http://www.ft.com/cms/s/0/d58d9886-8a9b-11dd-a76a-0000779fd18c.html)

i do not believe the financial industry played by the rules by gambling the rest of the world's money on risky mortgages...even you, a person who confesses to lack depth of insight on economic and investment matters, saw this mortgage crash coming...why is it so hard for you to believe the masters of the universe on wall street also saw this coming and did nothing to avert it, and even spread their bad decisions around the world, perhaps in an attempt to dilute the crash they saw coming by exporting bad investments to foreign banks without disclosing the risk?

regardless of regulation, financial institutions have a legal obligation to make prudent decisions with other people's money...i believe their fiscal negligence (a crime) borders on fraud (another crime)...people skirted around the rules to make bad decisions that rewarded them personally at the expense of the rest of the world...that's not just my opinion either: dozens of class action lawsuits have been filed against those people for "negligence, fraud, failure of financial statements to comply with GAAP, failure to disclose information regarding loan packages sold to investors, predatory lending, excessive fees, securities fraud, violations of state consumer protection laws, and many other types of substantive claims":
Kilpatrick Stockton LLP: Subprime and Credit Markets Litigation (http://www.kilpatrickstockton.com/legalservices/services_detail.aspx?ID=SPM)
Law.com - Criminal Prosecutions Predicted to Surge Over Financial Crisis (http://www.law.com/jsp/article.jsp?id=1202425138326)

the crimes committed are not restricted to executives on wall street...the crimes extend all the way down through the system to the individual mortgage brokers on main street...corruption and crime infests the system - that violation of the public trust will take years to correct (if that is even possible)

it will be a cold day in hell before i trust them again, and judging by the dow jones, i think the invisible hand of the free markets is pissed off too

Honestly debating with you is like talking to my 2nd grade teacher who insisted I was wrong when I tried to explain exponential power (yes this is a real story).

In any case, I never said I had lack of knowledge.. I said I'm not an expert. I definitley have a fairly good understanding of how things work. Something I can't say the same of for you. I totally understand why Goldenboy avoids you now.

Also your points here have nothing to do with the stock market and "a fact that a lot of people didn't play by the rules and it wiped out $??". The mortgage and loan crisis is a predecessor to the economic crash. We were talking specifically about Stock market investment in the dialogue we had going.

You're really stretching to try to defend your statement. Stay on topic, but no difference to me; you are not a person I can debate with because you are not open to ideas outside your own.

[maladroit]

"Honestly debating with you is like talking to my 2nd grade teacher"

- sorry if it sounds like i'm talking down to you but you're asking me to explain the painfully obvious like so:



"your points here have nothing to do with the stock market and "a fact that a lot of people didn't play by the rules and it wiped out $??". The mortgage and loan crisis is a predecessor to the economic crash. We were talking specifically about Stock market investment in the dialogue we had going."

- the stock market doesn't exist independently of people in financial industry who don't play by the rules...that's like claiming enron's stock performance had nothing to do with the crimes committed by their executives



"In any case, I never said I had lack of knowledge.. I said I'm not an expert"

- lacking depth of insight means the same thing as not being an expert...it wasn't an insult...i lack depth of insight into many financial issues too...i'm still waiting for someone to explain what 'non-borrowed reserves' means on the federal reserve link i posted earlier in this thread because i lack the depth of insight to understand the term even though i know exactly what the individual words mean

insight
Noun
1. a penetrating understanding, as of a complex situation or problem
2. the ability to perceive clearly or deeply the inner nature of things

Collins Essential English Dictionary 2nd Edition 2006 © HarperCollins Publishers 2004, 2006

[GoldenBoy812]

To ensnare corruption as the chief cause of economic collapse is naive. The Keynesian model (AD/AS) boldly predicts such booms and busts. I am not a Keynesian, but failure to recognize its dominance in the field of economics is a mistake. The reason i am not Keynesian is because it relies on the false assumption that governments are perfect, and people are not. Where in fact, governments are a product of the people, so i must decline such a tempting school of thought.

JMK's proofs are perfectly correct, and are based on a very interesting principle. "in the long run, we are all dead". Therefore, mortgaging the future for the present (short run) is how our current economic models and actions work. The question begs to be asked, "when do we eventually pay the piper?"

The markets will recover no doubt about it. That is in fact the business cycle...

[maladroit]

i do not believe i am lacking informed judgement by stating the fact that issuing instantly-approved risky mortgages and reselling them without proper disclosure is not part of any legal business cycle

that would mean the FBI is naive for investigating 19 large corporations in relation to the subprime meltdown when all the answers they were looking for could be found in book keynes wrote prior to the great depression

call me naive if you want, but i think people are going to end up in a cell because of their role in bringing down the global economy, and i am looking forward to seeing justice served

[daihashi]

Since I'm done wasting my breath debating you on this.. I will reply to everything you posted in a non political/non business way.


"Honestly debating with you is like talking to my 2nd grade teacher"

- sorry if it sounds like i'm talking down to you but you're asking me to explain the painfully obvious like so:

I asked you to explain in regards to the topic of which our dialogue consisted. That was stock market investing. I did not ask you how the Mortgage crisis effected it. The question that was posed was a generic one and required a basic rebuttal comprising of how to invest in the stock market with everything else aside.

Instead of answering this question directly; you chose to "prove yourself right" by going around the question and indirectly attacking it.

I did not think you were talking down to me at all in your repost. I have much thicker skin than that.




"your points here have nothing to do with the stock market and "a fact that a lot of people didn't play by the rules and it wiped out $??". The mortgage and loan crisis is a predecessor to the economic crash. We were talking specifically about Stock market investment in the dialogue we had going."

- the stock market doesn't exist independently of people in financial industry who don't play by the rules...that's like claiming enron's stock performance had nothing to do with the crimes committed by their executives

Again, we were not discussing how the rest of the financial industry ties into the stock market. We were discussing investment and the stock market itself in a general sense. You seem to fail to realize how you did not actually answer my question but rather went around it to make it appear as if you were right and my questioning you was unfounded. You do this in many of your posts. Most of the time I let it slide but I feel it's important that people see this. Hell, maybe you don't even realize you're doing it; although I doubt it because it happens in every post you do. Look at the "what do you think?" thread where I make a simple comment how the person's comment wasn't exactly tasteful and they were criticizing McCain supporters of something similar. It was a personal observation of mine but you chose to chime in to try to be right and prove me to be wrong.

Sorry buddy... you can't prove me wrong on a personal observation since that would be my own opinion and an opinion is neither right nor wrong.



"In any case, I never said I had lack of knowledge.. I said I'm not an expert"

- lacking depth of insight means the same thing as not being an expert...it wasn't an insult...i lack depth of insight into many financial issues too...i'm still waiting for someone to explain what 'non-borrowed reserves' means on the federal reserve link i posted earlier in this thread because i lack the depth of insight to understand the term even though i know exactly what the individual words mean

insight
Noun
1. a penetrating understanding, as of a complex situation or problem
2. the ability to perceive clearly or deeply the inner nature of things

Collins Essential English Dictionary 2nd Edition 2006 © HarperCollins Publishers 2004, 2006

Now you're arguing semantics and being slightly condescending. While I may not be an expert, I do not lack insight. Saying I have lack of insight is very similar to if you were to call me ignorant; since you like to quote definitions here is the definition of ignorant for you:

ignorant
One entry found.


Main Entry:
ig·no·rant Listen to the pronunciation of ignorant
Pronunciation:
\ˈig-n(ə-)rənt\
Function:
adjective
Date:
14th century

1 a: destitute of knowledge or education <an ignorant society> ; also : lacking knowledge or comprehension of the thing specified <parents ignorant of modern mathematics> b: resulting from or showing lack of knowledge or intelligence

While the definitions are not identical, they are very similar.

Furthermore I was not using the word expert in the way you tried to apply it; I used the word expert as in "Novice, Intermediate, Advanced, and Expert".

I would say I lie somewhere between Intermediate and Advanced.

This is further evidence on how you just can't let a topic go and must insist on being right.

Thank you for the tons of examples you have exemplified over your numerous posts for me to reveal your true nature. :thumbsup:

Again I'm done debating things with you; but I may take time out to call you out when you try to act like you're above it all. :hippy:

[maladroit]

sorry to make you waste your breath...i enjoyed our discussions...happy trails!

[5016169]

I think this was engineered by the elite that really run this country. I think the first bailout attempt for $700 billion w/ only 3 pages was a scam. They knew everyone would get pissed off. We contacted our reps and they *surprise* came threw and voted no. Then it comes back, filled with an additional $150 billion in bullshit and 400+ pages and it passes. WTF? I think they planned it to happen that way. Just like the Patriot Act was so conveniently available after 9/11. Back to the volcano ... :hippy:

[GoldenBoy812]

I think this was engineered by the elite that really run this country. I think the first bailout attempt for $700 billion w/ only 3 pages was a scam. They knew everyone would get pissed off. We contacted our reps and they *surprise* came threw and voted no. Then it comes back, filled with an additional $150 billion in bullshit and 400+ pages and it passes. WTF? I think they planned it to happen that way. Just like the Patriot Act was so conveniently available after 9/11. Back to the volcano ... :hippy:

Look at the 17th amendment. There you will find the real reason such unethical practices (democracy) are now all too common...

I am as libertarian as anyone you know, but the fact remains, i do not want to suffer, nor do i want to see my fellow citizen(s) suffer. Things have to change from the outside in, but in order for that to happen, we have to press for that very change.

Does that constitute as an inside out change? Who knows, but the fact of the matter is popular choice is not always the "right" one. Natural mechanism's will begin to expose this. The "right" choice is not always the best choice. Sooner than later, the line between best/ right will not be nearly as gray.

Live now will not always be an option... Be thankful if you are truly able to be bestowed with that option:jointsmile:

[maladroit]

memory lane:

july 30 1997: dow jones closed at 8,254 (roughly where it was earlier this morning)

july 1 1997 hong kong returned to china (roughly where it was in 1898)