HP'ers have been saying it for over a month now. Been recommending folks get into cash, go defensive, hedge with gold, get out of stocks.
It's not too late. But it will be soon.
We're at a particularly wicked juncture. Consumer spending and confidence will dry up as housing prices fall, and the wealth effect (and housing ATM) ends. Inflation roars. Dollar falls. Iran blows up.
Why be exposed when you don't need to be?
Stocks fell sharply on Monday, with all three major indexes down more than 1 percent, as Federal Reserve Chairman Ben Bernanke said the Fed need to be vigilant to make sure inflation stays under control even as the economy starts to show a slower pace of growth.
Analysts said Bernanke's comments increased expectations the Fed will raise interest rates in June.
Shares of big manufacturers and other companies seen as more vulnerable to swings in the business cycle extended their declines. Heavy equipment maker Caterpillar Inc. and diversified manufacturer 3M Co. were among the biggest drags on the Dow industrials.
The Dow Jones industrial average was down 152.06 points, or 1.35 percent, at 11,095.81. The Standard & Poor's 500 Index was down 16.65 points, or 1.29 percent, at 1,271.57. The Nasdaq Composite Index was down 39.48 points, or 1.78 percent, at 2,179.73, and putting the Nasdaq back into the "loss" column for the year.
Bernanke said the U.S. economy was entering a period of transition, noting that "the anticipated moderation of economic growth seems now to be under way."
June 05, 2006
Crash 2006 Continues: Stocks tumble as Bernanke warns on inflation
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I just started a 401K where I work (6 months). Can I stop putting money into this account anytime I want?
If I can stop putting money into this account, how long should I sit on the bench before going back on the field?
put your 401k $$$ into a money market mutual fund selection - put in the max you can. it's free money from your employer when they match. Then when the time is right move it into stocks.
You all might as well get used to Bernanke playing this game for the time future. There is nothing he can really do about what is going to happen. Housing is headed into the toilet, and with it, the economy!
Nothing is safe at this point. The question from here on out is, where will you lose the least amount of money in the months ahead.
If one or two big banks go under, you could loose a large chunk of savings, because, by the time you will be allowed to get to your savings out, the dollar will have fallen quite a bit.
Max out their match and bury it in money market trash earning guaranteed interest. Get your own IRA based on GOLD. GOLD WILL BE $800+ an ounce by 12/31/06 if we're all still on this Earth!
Tough times ahead folks. Start a survival kit now- get small denomination gold coins- they will save your ass!!
I have guns and a few thousand rounds of ammo. That will get me further than coins
Why small denomination coins? I have been buying 1 oz coins. There will still be dollars used as currency. When you trade in your coin for dollars it will be at the current rate of trade. Then you can buy gas and food with the dollars.
I think I should have planted a garden this year to grow food. Will next year.
There is no reason for banks to fail with fiat currency. Banks only fail on a gold standard.
Guys......relax. Keith says this whenever there is a drop in the stock market.
Remember - this is the guy who thinks that the Dow will be at 8800 (2300 points lower than it is today) by the end of the year.
after dropping 5% - 7% since May 1, is another 20% by the end of the year that hard to imagine?
If the DOW isn't below 8800 by year's end I will stop taking investment advice from this blog.
"I don't think a recession is on the horizon. Lower consumer spending will be offset in part by higher capital spending by buisnesses"
Why would they?
You guys are hilarious. You just can't wait to dig into your Y2K bunkers, can you?
I got a little knocked around today except with BEARX. It eased some pain.
Wall Street hammers home-builders
Monday June 5, 6:06 pm ET
Shares of several home-builders dropped Monday, after housing giant Standard Pacific Corp. revised its earnings outlook and its stock was downgraded.
Standard Pacific, a major home-builder in the Sacramento region, experienced one of the largest drops during a dismal Monday on Wall Street. Fed Chairman Ben Bernanke told an international money conference that additional rate-tightening is possible to control inflation, prompting an almost 200-point fall of the Dow Jones industrial average -- and a 2.2 percent drop of the Nasdaq composite index.
I think that it is unlikely that we will see 2k point drop in the DOW, but I do think that it is a great time to be diversified. Check out the VICE fund (VICEX) I got in at the beginning and it has been a great fund. Expense ratio a bit high, but a great performer. The theory is that in good times and bad, people still smoke, drink, and gamble. Don't have more than one third of your cash in the market at this point.
I'd short the entire city of Las Vegas if I could, houses grossly overpriced, they're running out of water, and its a general slum.
But the closest I can come to that is shorting Station Casinos (STN). The company has a monopoly on all the casinos catering to the locals market. When the HELOC well dries up this company will burn.
XHB is a relatively recent Homebuilder ETF. I have been rolling over puts on individual homebuilders and replacing them with XHB puts. So far the performace has been tracking the homebuilders pretty well on a day-to-day basis.
The main advantage is that the premiums are lower, and you avoid any crazy W. Lyons type disasters.
The main disadvantages are that trade is thin, spreads are wide, and so far it doesn't have LEAPS.
Buy GOLD. It never goes down, they don't make any more gold and people always want to own gold! Besides, it is cool to bury gold on your backyard or in your freezer!
Huge profits 100% guaranteed! No risk!
yep...Keith is an bonehead, sucka, buying into the commodity bubble. Just as all the "doctors and dentists" are in the market, it will take it on the chin. Bake makes a great point as well. Seriously Keith, you really are not bright. You just cheerlead hype all day long. You buy tops and sell bottoms. Not good!
Take BEARX for any cramping, short CTX for any headaches, and you will be just fine!
The DOW is still up 300 points for the year........geez.
Take a deep breath............ breathe........ breathe........there.
Everyone can come out now.
Y'all need to stop being so afraid. Anyways, if you are so sure the market is going to drop.....go crazy on shorting stocks why don't ya?
Geez
i am short all the home builders and long PAAS and NEM precious metals hpe this play protects my net worth which is 5 mil;lion dollars
Gold went from $800/oz. in 1980 down to $250/oz. in the late 90s....that's a drop of 70%.
Watch out for all the hype about gold. These gold marketing companies keep up a steady drumbeat of propaganda about hyper-inflation, fiat currency, stock market crashes, gubmint confiscation etc etc blah blah blah. They just don't quit and the answer is always GOLD.
Own a bit of gold but not too much.
sounds like Keith needs to buy himself some grillz. He's about as samrt as one of those rappin',crack slingin' bruthas he makes fun of in Tempe. I heard a rumor he is a brutha too...is it true?
the market is up nicely since last fall. What are all you pissed off liberals talking about? Gotta love this "downtick" crowd. The best is how all you suckas are super long gold. This will be so ugly. I know so many novices that are long with you; and THIS is a anti-bubble blog? Wow!
People are starting to get pissed about loosing money in RE and the SM. Blame yourself.
>>I have guns and a few thousand rounds of ammo. That will get me further than coins
I have some yellow rock. They tell me it is worth a lot. may I trade it for some of your food?
>>The DOW is still up 300 points for the year........geez.
Next week your statement will read 'the DOW is only down 300 points for the year.'
Gee did we have a bus drop off all the Anonymous Dow players that got squashed in yesterdays 200 point loss.
Its only money people relax we know you are trying to sell your $300,000 flat it will get sold soon enough by the bank for half that price.
So take your meds watch Your loving savior George Bush on TV at the mexican boarder and get on your knees and pray to Saint Anthony.
Got stupid and was in stocks yesterday. And have recently bought some gold coins. All down today. Out of the stocks and will hold the coins (for a while anyways).
The land investment is the best. Highly illiquid though, but a long term safe bet.
Hey Gang,
Howz 'bout a little compassion for our fellow citizens who are ignorant of larger market trends (such as housing) 'cause these folks are too busy working and supporting their families to spend any time on economic matters.
Bernanke is leading the sheep off the cliff. Does this sound familiar? How about the DOT com days, looks very similiar to those days!
After going through 2 stock market crashes I can't believe I'm stuck in another one!!! S__t! I must be a moron to think that because I'm in mutual funds that I should be safe. Gawd, when will I learn!!!
It doesn't matter if I switch funds to European or Asian or Emerging or South American or whatever, I'm still hooped.
Thank god for real estate holdings! Wait, there's a correction under way there too!!!
I'm still hooped.
The Canadian/American dream is turning into a nightmare.
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