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

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Originally Posted by JakeMartinez

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.

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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.

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


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

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Originally Posted by maladroit

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

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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.

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

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

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

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Originally Posted by maladroit

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

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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.

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

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Originally Posted by 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

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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.

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

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Originally Posted by maladroit

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

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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'.