January 17, 2008

Wow, the DOW has crashed 2100 points now, and the NASDAQ is down almost 20% in the past few weeks. DOPES?


That 6% on CD's ain't lookin' too bad now eh?

So is gold, so is oil, so are Euros and so is pretty much everything HP'ers said.

Man, it must suck to lose hundreds of thousands on real estate, and then what little you had left lose it on the stock market crash.

Should have listened to HP. We were just trying to help.

86 comments:

Anonymous said...

CRAAAASSSSHHHHH!!!!!

Anonymous said...

There is worry in the brokage houses about the automated trading kicking in. Watch out below...

Anonymous said...

The herd is going to gold, euro and cash. What's next for the contrarian? It's still too early for stock or real estate.

Anonymous said...

When do trading curbs go into effect?

Anonymous said...

Bernanke is gonna cut a full point now

Anonymous said...

10,000 is in view

Anonymous said...

What Trading Curbs??

http://tinyurl.com/2s3ax8

http://housingpanic.blogspot.com/2007/11/nyse-lights-fuse.html

Mark in San Diego said...

Capitulation and Panic have really set in now. . .housing prices here in SD (Vegas and Phoenix) are falling faster than the market. . .even friends who bought 4 years ago are back to even. . .this will regress all the way to 2000 or 2001 prices. . .50% from top to bottom is in the cards.

BTW - Housing Doom has a big item about huge new LV casino in default. . .

Anonymous said...

Stupid, stupid, stupid- should have bought the gold at 560. And here I was waiting for it to fall to 530 because I thought 560 was too high.

keith said...

I'll have you all remember these words from our bible, Manias, Panics and Crashes - remember, no surprises for HP'ers:

"The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king."

Anonymous said...

What's next for the contrarian?

I am thinking wrist and head bands will be big again- ala 1970s

Anonymous said...

I need to up my BEARX exposure to 20%

This is getting scary.

When do we attack Iran to take my mind off of losing all this money?

Jymkata

Anonymous said...

Gold is pretty much flat. Is the government selling or investors?

How about silver does the gov. control that price also?

keith said...

Be careful trying to catch falling knives - I tried with EWZ and RSX the past couple of days and got burned in and out but sure would like to be in. But my shorts are on fire

I did buy Berkshire today - they'll be taking the bond insurance market now that MBIA and AMBAC are going to go under. And when those two go under, you know we're entering some historic times

Man, it's scary out there. This is what blood in the streets looks like

Anonymous said...

yeah, and this isn't over yet by a long shot. Washington Mutual reports earnings in about a half an hour (5 PM ET). That should be interesting!

Anonymous said...

The herd is going to gold, euro and cash. What's next for the contrarian?

Short GM.

Anonymous said...

The herd is going to gold, euro and cash. What's next for the contrarian? It's still too early for stock or real estate.

I don't see any herd going into gold or cash. Everyone is still pouring money into their 401K and IRA. I'm just saw the first local news story on gold prices on Sunday. I would hardly call that a frenzy. When gold prices hit $2000 by summer, then that might be the top

street guy said...

S&P closed below 1340 today. Unless the Fed gives us a 100 bp cut before the open on Friday, there will be blood. If they weasel out and only offer 50 bp, it's going to be a lonnng three day weekend.

Anonymous said...


Gold is pretty much flat. Is the government selling or investors?

How about silver does the gov. control that price also?



Investors might be liquidating to cover margin calls

Anonymous said...

"This is what blood in the streets looks like."

If you look at a graph of the DOW since say 1960 and you extrapolate a more natural curve based on historical trends, you will see that it should be between 8000-9000.

Blood in the streets- we aren't even close...

George L said...

you GOT to see the faces of the CNBC cheerleaders now!

Melissa Francis doesn't have that joker smile when she was trying to discredit peter schiff anymore. lol

hey Melissa, why so serious?

sam said...

Today we hit the 2005-2006 growth trend line (what the market would have done without the big bubble run-up into mid 2007).

Considering we've pretty clearly broken 2005-2006 trend, I'd say optimistically we have another 10% on the downside. Pessimistically, another 30%.

There's a lot of January selling from people who scratched their heads at the end of last year and said, "Why is the market up in 2007?". Might as well sell now before cap-gains gets jacked up by the Dems.

LI Surfer said...

Do people think Gold is bubble proof? We have an assett bubble, all commodities included. Gold at 500 was a buy, but is it at 1000? Maybe, for a while.....

prince said...

And, what exactly makes the Euro special?

paper fiat curency, with nothing behind it.

I'd stay away from it

Anonymous said...

"The herd is going to gold, euro and cash. What's next for the contrarian? It's still too early for stock or real estate."

I took a short position in commercial real estate(SRS)today. It may take a little while to develop but the malls and office space will likely get hit soon.

Edgar said...

Buy the financials. Nowhere to go but up baybee!

Anonymous said...

"I don't see any herd going into gold or cash. Everyone is still pouring money into their 401K and IRA. "

There have been commercials on TV and the radio around here for two weeks from brokengold.com, goldkit.com, and local jewelry stores letting everyone know that gold is at historic highs and they need to sell their jewelry.

Couple that with the fact that I have heard two coworkers say they were dumping stocks and buying gold.

you can bet the herd knows.

cheap trick said...

Hmmmm... I seem to recall DOPES and other big-nut Bushco members LAST YEAR saying we all HPer's have tin foil hats!

Bwaaa!!!!!!

They also said that banks will never fail! And that the stock market will never crash! And that the housing market will never crumble to dust!

They are the true sheep! They believed everything Bush and his cronies said! And guess what people, THEY WERE ALL LIES! TRAGIC LIES! AND NOW YOU LOST YOUR ASS! (or soon will) BWWWAA!

But whatever you sheep do, just remember, dont pAnIc!!!! It's just a massive loss of money! No big deal.

Malcolm said...

>Anonymous said...
>Bernanke is gonna cut a full
>point now

And therein is the problem. They think that rate cuts eliminate the problem. So, in the end, when they have rates at zero and the core issues still remain, what do they do then? (aside from run and hide)

> Keith said….
> remember these words from our bible

The original book by that name covers this situation pretty well too:

“And the merchants of the earth shall weep and mourn over her; for no man buyeth their merchandise any more”

@ gold fever….

Some 20+ years ago, the Hunt brothers tried to corner the silver market. The price shot up so much that people were melting down their grandmother’s silverware for the metal value.

(http://www.24hgold.com/viewarticle.aspx?langue=en&articleid=194254_SILVERFINGER_History_of_Silver)

If you have gold coins, try to avoid the temptation to do the same. If you keep yours while everyone else is melting theirs, the drop in population will make yours worth more.

@ Keith Again

> and cash becomes king

Based on a poll you ran earlier, most of your readers have little to no debt. Based on the type of person who would generally read this type of blog, I have to assume that a majority of your readers have been stocking up on cash for years. I know I have.

You asked before if living within your means was going to become the “in” thing. It may not be the “in” thing, but it’s going to be life whether you like it or not.

eric in vegas said...

"Capitulation and Panic have really set in now. . .housing prices here in SD (Vegas and Phoenix) are falling faster than the market. . .even friends who bought 4 years ago are back to even. . .this will regress all the way to 2000 or 2001 prices. . .50% from top to bottom is in the cards."

-----------------

In Vegas a 50% cut is for the best areas of town. The shitty areas 65-75% is in the bag.

keith said...

I'll be the first to say that nothing feels good right now - not my shorts, not my longs

Just one thing

Cash

Cold hard US$ cash

Today

Markus Arelius said...

Why got to cash?

Let's be specific. You mean Euro or Pound cash?

Because going to US Dollar cash is about as equivalent as going to Charmin cash these days.

Anonymous said...

Time to buy stocks for a BIG bounce. Whenever this blog starts talking about the market and direction, it goes the opposite direction.

I am a fan of the blog and it has been right on the long term. But if you look at short term posts, any comments usually short term are wrong as it represents an extreme in emotion.

hope has arrived said...

http://abcnews.go.com/Video/playerIndex?id=3354674

brokersleaveyoubroke said...

This is like the 1987 crash in slow motion. Where's Paulson? Haven't heard a peep out of him this week. He must be in a bunker somewhere.
Things are getting really interesting, it must be time for Keith to go on another trip.

Anonymous said...

When do trading curbs go into effect?

Why use trading curbs when you have the PPT? Watch for big bounce tomorrow to fool idiots like DOPES.

keith said...

With the NASDAQ falling 20% in a matter of days this is beyond a correction - it's a rout or a panic

I'm itching to buy

Patience

Patience

Look at the charts for goog, aapl, brk-a, stp, ewz, rsx and, well, everything

we're oversold, but that doesn't mean it can't go lower

Anonymous said...

is dopes in scottsdale?

Princess Mononoke said...

OMG! You have me totally RLMAO right now with that photo! Thanks Keith.

michael said...

"What's next for the contrarian?"

u.s. dollar.

Anonymous said...

I wouldn't touch this stock market even with Mike Norman's d!ck.

happy homeowner in the stix said...

Well...maybe it's time to pick up some index funds or SPDR's if you have a long time horizon (at least seven years, better if it is ten plus).

Think of it as a 20% off sale. ;)

Is that contrarian enough for you guys?

Princess Mononoke said...

Yeah I agree with HH in the Stix, I'm a big fan of SPDRs and ETFs.

These indexes are already diversified, of course this is depending on which one's you choose.

JoseMananito said...

Fantastico to see the marketa going down, down, down..I hopa lotsa Gringos loosa all their dinero, have to sell house and usa their putas to survive and then the gobermento sends me a grande cheque.
Viva el Presidente Busho for helping me come to this country and feeding me and my big familia.

Anonymous said...

Markus: You gave me a great idea:
Get me 10 trailers of Charmin

Anonymous said...

Watch what happens when the market reopens Friday and crashes again.

Stupid Idiot Moron As*hole Worst Human Ever Born Geprge W. Bush will continue to suck his thumb and kiss the Arabs on the lips in public.

He should be forced out NOW. Let him resign or go into exile.

No trial
No jury
No warning
No second chance
No Nothing. Either OR...

Ron said...

My Advice:

1. Bullets
2. Guns
3. Seeds
4. Water
5. Food

Yeah we are getting there closer and closer.

Anonymous said...

i am confused. i have been sitting in an all cash (USD) position since november 2007. i hear that cash is king, and then i hear that inflation and currency devalue against euro, etc. will make my dollars worthless. which is it, cash, or not?

shtove said...

Keith, stop giving out investment advice. Hold your counsel and just keep posting on every twist and turn in this drama.

keith said...

Here's my investment advice

Don't buy real estate

That's it

Other than that, I have no idea how someone can best protect themselves from this meltdown and disruption

I look to HP'ers and people like Buffet, Schiff and Roubini for investment advice

LauraVella said...

Also...

Think about all the folks who took out equity loans and plowed that money into the market. I simply can't imagine...

Now thats a two big time loser.

Fasten your seat belts. we're going down!

Anonymous said...

hope has arrived said...

http://abcnews.go.com/Video/playerIndex?id=3354674


Haha! The media is like oh shit... everything's going to hell.. the sheeple are catching on.. quick.. we need a distraction.. bring out those ufo quacks and give us some ghost stories and don't forget the terrorists.. the terrorists!!!

Anonymous said...

I sold out 90% of my stocks in early May when the S&P500 was at 1501. Since then I have earned that measly 5% plus dabbled with some shorts, some silver and some gold. My total return is 12% since May.

Had I stayed where I was I would have lost 11% up to now.

FUCK YOU WALL ST, I kicked your ass.

Anonymous said...

I look to HP'ers and people like Buffet, Schiff and Roubini for investment advice

---

Buffet? Uhm he bought a shitload of BofA when it was in the mid $50s.

Not smart.

Anonymous said...

Couple that with the fact that I have heard two coworkers say they were dumping stocks and buying gold.


Well 2 co-workers is definitely the herd. How many co-workers were talking about RE the past few years? Go tell someone to invest in gold and 9 out of 10 will think you're crazy

LauraVella said...

Anon said:"Investors might be liquidating to cover margin calls"


Thats my feeling as well. I sold most of my gold shares 6 months ago.

I'm going to wait until springtime to buy back in.

Anonymous said...

1. why do some idiots still not realize that gold is an inflation hedge? as long as the currency is being destroyed by bernanke, gold will move the opposite way. the dollar might firm against other weaker currencies, but it will not firm against gold until they stop the printing presses and raise rates like volcker

2. any bounce will be an opportunity to sell. the market is headed back to 2004 levels before all this fraud began

Ed said...

"happy homeowner in the stix said...

Well...maybe it's time to pick up some index funds or SPDR's if you have a long time horizon (at least seven years, better if it is ten plus)."

I did just that. Bought SPY this afternoon.

Malcolm said...

Anonymous said...
>i am confused. i have been sitting in an
>all cash (USD) position since november 2007.
>i hear that cash is king, and then i hear that
>inflation and currency devalue against euro, etc.
>will make my dollars worthless. which is it, cash, or not?

I’m not an expert, so my advice isn’t any better than anyone else, but here are my thoughts:

The weakening of the $ is important, but it is only important if you travel out of the US, or buy a lot of foreign goods. (gas included, but that’s not something you can do anything about)

Stocks will still have value, but they’re not liquid. You can be rich on paper, but you can’t buy a loaf of bread with a stock certificate, your money is locked down.

While the devaluation of the $ isn’t a good thing, it will be (domestically) offset by an increased buying power. When no one has money, prices will be driven down as businesses scramble for what few $ are still around.

A good example of this would be the famous picture from the 1930’s depression showing a broke stock broker trying to sell his new car for $100 in cash.

A better example would be to compare the cost of illegal goods and services (drugs and prostitution) in rich neighborhoods and poor neighborhoods. The cost for similar goods and services are nearly 5 times more in richer neighborhoods. Not because there is any difference between the services in each neighborhood, but because the market will always react to the amount of available cash.

Likewise, when lots of people have money, prices go up. A good example of this would be the mining towns of the 1800’s, where everyone had gold, and the price of a bag of flour was $50.

Imagine, for a moment, if people woke up one day and they couldn’t use credit cards. With no credit, the only thing that would matter would be cash. Those who are cash rich would survive, those who have no cash wouldn’t.

The crunch we are experiencing will cause a lot of surprising effects. People who always appeared rich will suddenly be poor. People who always looked poor will suddenly look rich.

If it were me, I would keep my money in $, at least until the panic stops. The market will recover eventually, but you could drive yourself nuts trying to call the bottom. Horde cash, and sleep soundly.

@ keith: sorry for the long post, I have a bad habit of running on.

Anonymous said...

All these bottom callers. Bounce this. Bounce that.

Do I see any home builders declaring BK yet? Nope. We need more single digits and BK.

Gold still over $850 an ounce. Yes, gold is an asset too and will decline. Oil will decline. Copper decline etc.

The trend is your friend and now grandma is going to be unloading.

whitetower said...

Hold on -- popcorn's up.

Well, all I have to say is [munch, munch, munch] that this is a really great show [munch, munch, munch]. Can't wait for the grand finale [munch, munch, munch].

Anonymous said...

"I took a short position in commercial real estate(SRS)today. It may take a little while to develop but the malls and office space will likely get hit soon."

Take a little while to develop? I bought it at 72, what did you pay today?

Anonymous said...

Buy Yen as the carry trade continues to unwindind and leverage gets cut

Anonymous said...

"Look at the charts for goog, aapl, brk-a, stp, ewz, rsx and, well, everything

we're oversold, but that doesn't mean it can't go lower"

Oversold!? Stick to housing Keith!

Amtex said...

Thank you Housing Panic! I had a long history of bad financial moves until I found this blog.

I sold my overpriced house in south FL. in 2005 for a large profit and now rent for less than half the carrying costs. Prices are below where I sold so I will wait a while and then buy back in for cheap.

I took the profits and bought gold at $400...I am so far up I can cash in some and let the rest ride for a while.

The trifecta? I listened to you people and got out of the stock market in early June 2007 when it was 13750. Put that money in a 6% CD. That move saved me almost $100,000 so far!

I would have never made any of these moves, let alone all three, without this blog.

THANK YOU....THANK YOU...a million times I THANK YOU!!

not the real dopes said...

Hey HP'ers:
.
.
.
Ya know what I call DOW/NASDAQ/S&P "crash"?
.
.
.
S&P RSI @ 28.9
DOW RSI @ 29.8
NASDAQ RSI @ 28.7
.
.
.
MAJOR oversold condition.
.
.
.
I call it buying opportunity.
.
.
.
Besides that, why would you hold cash if inflation is 10,000% like you idiots all believe?
.
.
.
DOPES!!!

not the real dopes said...

Hey HPers:
.
.
.
It's spelled "BUFFETT" with two t's.
.
.
.
He's not lookin' so smart, hanging on to BofA after they dropped $2B on CFC.
.
.
.
Soros dropped them like a hot potato when he heard that.
.
.
.
We won't know how Buffet(t) reacted to their outright purchase of CFC for a few months.
.
.
.
But we know he was hella not interested in CFC when the rumors were flying that he was gonna buy them.
.
.
.
DOPES!!!

WINGS said...

AMTEX says:

I would have never made any of these moves, let alone all three, without this blog.

THANK YOU....THANK YOU...a million times I THANK YOU!!
______________________________

WINGS says:

God bless you my son. You are welcome child. Go forth and prosper.

Go forth and be fruitful and multiply for the world needs more commonsensical persons such as yourself.

Avoid Gucci and fake Rolex's my brother.

Peace be upon you, shala akbar kadooki.

Anonymous said...

Thank You HP

You kept me from buying a house in 2006!

You kept me from holding equities into 2008!

Keith - I appreciate your acknowledgment that you don't quite know what to do with investments right now.

I am very concerned about Gold though. It FEELS like a BUBBLE. EVERYONE in on the trade. It is DIFFERENT. Can only go up, way way up....

We know how this ends!

As for me, CASH. It will weather the DEFLATION the best.

When the velocity of money slow - CASH is KING!

Anonymous said...

"Take a little while to develop? I bought it at 72, what did you pay today?"

Good for you! But as long as the buffet is open it's worth showing up. Too bad I'm not a genius like you but I try.

Princess Mononoke said...

Anonymous said...
>>>Buffet: Not smart.
January 17, 2008 11:11 PM
==================

Hhhmm... on the contrary! This man does NOT make a move unless he is absolutely certain of the result he wants to achieve. In the BofA scenario, I'm sure Buffet could use a write-off.

Princess Mononoke said...

I would also recommend keeping cash in safe in your house. Just enough to get you buy for a short time. Be creative as to where to store it.

We may be FDIC insured up to $100k. However they may not immediately redeem our deposits.

and WE need cash to exchange for goods and services, basically our daily living expenses! CYA...

Anonymous said...

Gold being down is not unexpected, whenever the major markets tank people sell their gold to cover their losing positions. It'll be back over $900 in no time.

Keith, thanks for putting it all so succinctly. Our neighbors are seeing their home values fall to less than they are worth, their 401K value drop 20%, and the dollars in their pockets lose money every day.

I'm glad that I am long in gold, Chinese RMB and Swiss Franc. Weeeeeeeeee!!!

Anonymous said...

Great synopses Malcolm. Right on the money. Thanks for taking the time to post!

borkafatty said...

Cash has been my king since August...But dopes said I was on Dope...

Andrew Hac said...

Dubya Shrub + Penis Shooter = "Little Boy" + "Fat Man"

This nation and its Americano citizen is as toasted as a snapper turtle skewered on a stick from head to ass all sizzling, juices dripping, fat popping over a bed of white hot charcoal grill.

Americano = Grilled Snapper Turtle

Heeeee... Haaaaa... Arrrrr...

So, tell me, does the average Americano take it enough in the butt yet by the forceful penetration of "Little Boy" + "Fat Man", or do you want more "Enter The Dragon" ?

Americano = Being Entered By The Dragon up the Kazook

Heeeee... Haaaaa... Arrrrr...

Anonymous said...

I’m not an expert, so my advice isn’t any better than anyone else, but here are my thoughts:

The weakening of the $ is important, but it is only important if you travel out of the US, or buy a lot of foreign goods. (gas included, but that’s not something you can do anything about)

No, you are no expert. The fed made this argument in front of congress. Vertually every expert or economist pointed out their stupidity. I don't need to do it here. Try to remember a doller is a container designed to hold or preserve wealth. The fed has blown a thousand holes in it and will continue to do so. Experts, are familiar with the various containers that hold wealth. Most select containers that are slightly more scure than the titanic.
Signed Amerika.

Max said...

My take:

1. Decline in RSX may signal the end of the commoditties run. It was fun, but it had to end. $100/barrel was crazy.

2. Gold, besides "an inflation hedge" is also a lot of many other things - like a commoditty, an industrial material, etc. Thus, it can be in a speculative run up as well. My bet is that it is in fact the case, and gold will fall. The reason is the huge number of radio commercials peddling gold to the J6P. Run away from everything that the J6P knows about.

rufus10 said...

Mostly through Peter Schiff "Crash Proof". SUPERB book. Should be REQUIRED reading in ECON 101. I worked for WFC and have some insights....what a debacle has been
delivered upon the American public.
It's time to correct the problem.
No more apathy.

Anonymous said...

Keith said:
...aint looking too bad...so are Euros "

Careful Keith,
You dont want to offend all the loser Euro haters on this blog.

devestment said...

I bought gold at $255 and silver at $3 when everyone was in tech stocks. NO LIE!

I sold a % of gold/silver at $700 and another day before yesterday at $900.

My bet is that we are one "ore" two rallies from the top.

I'll dump more at the next peak and all of it if the shoe shine boy is in on the action.

Today no one wants dollars, so that is what I am buying!

I am trading overvalued assets for worthless dollars.

Fundamentally gold is overvalued as it is selling for twice what it costs to mine it.

Been there, done that.

edd said...

The crowd looked down at
Chicken Little, and they laughed.

Then all were crushed by the sky.

john said...

Malcolm,

Back when people said cash was king, the $ was still tied to gold and "as good as gold".
Gold is not illiquid as stocks. It will always be sold, and for a lot of dollars, because the govt will inflate if only because it can now.
Gold is still cheap if you don't look at its nominal value. Look at it's historical ratio to the S&P, to oil, to housing or other asset prices.
It's also not being valued as money now, but it might in future.

Anonymous said...

I think it's the Fox Business Channel effect. On October 15, 2007 the day before Fox launched, the Dow was at 14,093. I've never doubted that Fox was bad for the markets, but this sort of compelling empirical evidence speaks for itself -- hardly a coincidence.

Of course, it may just be that FBC has Peter Schiff on every couple of days.

http://bigpicture.typepad.com/

Keyser Soze said...

Exciting times...equities becoming reasonably priced, houses too.
WooHoo.
It's easy to say: "Buy when everyone is fearful and sell when everyone is greedy." It's much more difficult to put it in actual practice with your hard earned money.
COP - now
C - soon
BAC - soon
AEA - now
DYN - now
WFC - soon

Hobo said...

"My Advice:

1. Bullets
2. Guns
3. Seeds
4. Water
5. Food

Yeah we are getting there closer and closer."

Add to that:

Chickes for fresh eggs and a chicken every sunday. Rabbits -multiply quickly, don't take up much room and is great protein.

http://codenameinsight.com/thingstohave.htm

This should cover the rest. . . .

Get your families passports in order and children who do not have a passport get them one now.

Neighborhood co-ops. One family grows tomatoes, kale, corn etc.

This is coming, our new territories will be clusters of neighbors for protection, bartering and food sources. I'd volunteer for home schooling in my territory. . . .

Think of the wild wild west.