"I'll never buy stocks again"
"The market is rigged"
"I've lost everything"
"I'll never be able to retire"
"F*ck Jim Cramer"
"Dow is going to 2,000"
"Stocks are a horrible investment"
Yes, music to my ears. HP'ers know I'm not a perma-bear. I believe everything is cyclical. And I believe the chart below isn't just a chart, it's a fortune teller.
Keep your eyes and ears out for disgust, despair, despondency, depression and capitulation. I believe we're getting there.
Now on housing, that's a different thing. I'm STILL hearing denial.
Fire away...
77 comments:
I believe folks are just leaving the denial stage and starting with the Fear!!!
They still have George W Bush faith.
We do know that you're not a perma-bear, Keith. But we also know that you are consistently ahead of the curve.
One of the hallmarks of a bubble is that experts short the market and get burned because they shorted too early. I think you may be doing something similar in calling a bottom.
Stock prices will not bottom until we begin to reach the bottom in the real economy. With no end in sight for the massive housing inventory overhang, no end in sight for foreclosures and falling home prices, I see this recession as far, far from over.
The economy is in a vicious cycle.
So far, all efforts have been addressing this crisis as though it is merely one of liquidity, not of solvency. This crisis is one of solvency and our elected monkeys still don't realize it.
You know this, Keith. I think you see it but you are having trouble believing what your eyes are telling you.
Let's be honest, the housing bubble was pretty easy for us to call. It seems even more obvious to us in retrospect.
But the idea of another Great Depression is such wild, inflammatory hyperbole that we're embarrassed to speak of it. But that's what all our eyes are telling us.
anyone else notice increased Buffett bashing from the press and on blogs? didn't this same sort of thing happen just before the last big bubble deflation (tech bubble bust)? probably means more correction in the market.
also, anyone else notice the huge price spread for BUD? Stock is trading in the high 50's but ImBev is to acquire them at $70 before year end. Will tight credit kill this deal? Worst case scenerio probably includes an exchange of shares instead of all cash. And can ImBev really handle BUD's debt level?
Have seen a lot of big cap stocks with P/E's below 10. Are these value traps still?
Am feeling compelled to put in really low offers on ETFs like IGE. But Krugman thinks commodity prices may go lower (recent Charlie Rose interview). But I can't help but think with all the newly minted money entering the system inflation has to take off soon.
And putting in bids for stocks in similar situations as BUD. With the markets volatility, am even low-balling BRK-B. Who knows, low-ball orders (good till filled, limit orders) may fill.
Whenever I make a prediction, I'm usually wrong. This actually brings me comfort to some extent - since my predictions usually are about gloom and doom, I'm happy to be proven wrong. I had predicted badly on Y2K and let the whole world know -- a bit embarrassing, but at least the world kept turning.
In essence, for a long time I felt that if I shared my predictions about doom and gloom, they would not come true. I almost felt responsible to share my pessimistic views, so that they would be proven wrong and everything would be fine.
Unfortunately, I've been spot on about a lot of things lately. I would like to share my prediction for the future, and I hope for it to be proven wrong. But there is one underlying premise for all the predictions I've made lately that have come true, and my opinion of this underlying premise is unwavering. So I'm afraid that my predictions this time are indeed going to come true.
Here's the underlying premise that has led me to believe why my predictions have come true thus far:
The administration has never looked after the best interests of the United States of America. In fact, their interests are in direct opposition to the well-being of our country. They are not going to have a change of heart. So buckle up for one hell of roller coaster.
"Incompetence" was their small, agile shield used to acquire their goals. But there was no real incompentence here. Most of their goals have been achieved, and there's more to come.
I should add that this started with Clinton (possibly before), so it's not necessarily a polarizing issue. Some people would vote for the Devil if he ran for the Republican OR the Democratic ticket - this has nothing to do with the two-party stranglehold on our country that lets us believe we have a choice.
I hope I'm wrong about this. I hope I'm wrong about the underlying premise.
And I hope Dick Cheney hasn't memorized the Koran.
The system is certainly rigged, but not because of some conspiracy.
The simple fact is that the boomers are reaching an age where they can no longer work, and need to pull money out of the market to pay living expences. At the same time younger people can't put much money into the market as they a) Have no savings b) Are up to their neck in credit card debt, student loans, mortgages, car loans and so forth.
As more money is pulled out than goes in prices must necessarily come down, and continue to do so for years, and years, and years.
I give you this retort:
AP: Traders relieved despite Dow ending down 3.6 pct.
http://biz.yahoo.com/ap/081025/financial_meltdown.html
Why we are in the "desperation" phase: People are talking about a rate cut, yet more stimulus, and the "America: Too big to fail" strategy forcing foreigners to bail us out.
I agree that the market can trade at any value, reasonable or not, and we can get another mania. The Dow can shuffle components until we get 30 that WILL rise.
But...
These are only momentum trades, quick dips, if you will. Buy and hold is a dead end.
Why? There is that little thing called politics; all those people who are getting crushed in the real world who will not go down without a fight.
Do you realize how stupid and dangerous McCain is being by trotting out the word "socialist"? Ironically, he is legitimizing socialism by reminding people just how much they depend on it TO SURVIVE!
In other words, "if Obama is a socialist, then I am too!" because Obama is not even a socialist, he is a self-serving careerist! Just like most people in America!
Just like when the Asians figure out that they don't need to export us things in exchange for paper, the average brainwashed Boomer will leave the workforce and their animus towards taxes will disappear!
They will "rediscover" the virtue of the income tax! And our generation will be faced with a democracy that is a Gerontocracy.
Don't forget the trillions of off balance sheet debt from entitlements!
The markets have been consistently losing 5-10% per year after inflation for 8 years, AND THOSE WERE THE GOOD TIMES!
PS I love your blogs, there is an honesty you won't find elsewhere.
I think it's going to be panic next week, hasnt happened yet.
The dow needs to gets below 7200, but even that's too high - especially for an economy with no earnings going forward.
We still have not seen the capitulation that will indicate bottoming.
Although on CNBC...they think we are already past the bottom.
I think there will be several more waves of panic selling(and buying), we saw one very early on Friday, and a gradually lightening of volume that will indicate capitulation. The big players will move out of the market. Probably done by December, but how long it drags bottom is the real question. Months, or years.
Remember, its always a good time to buy, they arent making any more land, buy now or be priced out forever!
Our stupid leaders should always remember that all of the American Economy (domestic) is based on the success of the American Family. Once that sucess is gone, depression, despair, buddy-can-ya-spare a dime comes on. Our good life grew well enough when people were "reasonable" with the lives they wanted to live: Dad worked hard, 3br/2ba/1500 sq ft ranch/one newer car, and sometimes one older car. "Reasonable" was the key word. This lifestyle fed the economy. There was honest, hard work and savings accounts. No hummers and bonus rooms and granite tops. Look back and see just how good it was and it was SUSTAINABLE!! Well-doers could build them a bigger house, since they sold the paid off ranch and put the money forward. There were no Immediate Gratifications then. Hard work, savings, planning, core operations that were safe and doable. Then the crooks came and people jumped in hard and fast and now the price is PANIC TURNING TO DESPAIR. Sorry.
No argument here Paul - I'm always early. Which makes me think the market has a good amount to fall before it gets better, since I'm feeling more bullish now
I'm also thinking there's ONE way out of this disaster now.
A new stock market bubble.
Watch the politicians do anything and everything they can to reinflate this thing
Stay tuned...
Heard a reporter last night say that the 5% increase in home sales may mean that the housing correction is under way!
The stock market (DOW) could fall to 4,000 to get to its historic low P/E of 6.6.
The stock market is rigged - look at the last 30 to 60 minutes of trading.
Also, look at the oil market - I wonder if oil prices have fallen due to the upcoming election?
Finally, look at the Comex market (paper compared to physical).
Hmmmmm........
"The Nuremberg Trials were a series of trials most notable for the prosecution of prominent members of the political, military, and economic leadership of Nazi Germany after its defeat in World War II. The trials were held in the city of Nuremberg, Germany, from 1945 to 1949, at the Palace of Justice. The first and best known of these trials was the Trial of the Major War Criminals before the International Military Tribunal (IMT), which tried 24 of the most important captured leaders of Nazi Germany."
and
"AP
Asia, Europe reach consensus on financial crisis
Saturday October 25, 7:07 am ET
By Christopher Bodeen, Associated Press Writer
Asian, European leaders reach broad consensus on dealing with financial crisis
BEIJING (AP) -- Asian and European leaders said Saturday they have reached a broad consensus on ways to deal with the global financial meltdown and will present their views at a crisis summit next month in Washington."
Anyone sense a Nuremberg II in which the big crime was what funds, er "campaign contributions", politicians took which allowed for this entire mess to develop? Phil Gram, George Bush, Bill Clinton, etc., and serial abusers like Alan Greenspan, Angelo Mozilo, Hank Paulsen, Investment bank heads and their runaway securitization scheme, Chris Cox, etc., ALL go down before an international tribunal. And just following orders (i.e. "going with the flow in this era") won't be an allowable defense. Nothing but time while enduring a miserable economic scenario will make this future materialize.
panic
Well, I feel the stock market will recover some.... and I mean some... around mid November.
Might be a run through March or so.
Then look out for the market to drop again to the lows we are seeing now.
I don't see your "Stock Bubble" until 2010 at the earliest. But, things change everyday.
I will be watching for it. If I see it, I probably will jump in. Right now I am on the sidelines
since Jan. Watching everyday.
Seems like next week we will see really big drops.
The futures ALREADY are -500 on the Dow
for Monday!!
http://www.cnbc.com/id/17689937
Monday & Tuesday will be a wild ride.
I don't know why the market held at only -300 on Friday, but that should not happen next week.
Casino stocks are getting crushed!
Vegas is falling apart... I mean the whole town! The house of cards has finally come down. Pun intended....
Sorry Keith, but a New Stock Market Bubble is years away.
Too many ordinary Americans feel burned after looking at their 401K statements this month.
The PTB may try all they can to re-inflate this thing, but it will be like trying to pump air into a flat tire that has a 6" long gaping slash in it.
Since everybody is seeing the end of the world just around the next corner we are most likely near the bottom in the stock market.
Same is not true for the housing market. Unemployed people or people worrying about their jobs don't tend to buy houses.
Also historically stock markets tend to bottom well before the economy bottoms. Anyway, I've been buying stock all week. Medical, consumer goods, energy, gold, industrial, they're all on sale right now with P/E ratios being the lowest in half a century.
Of course if we slip into a depression all bets are off, but I really don't think it will get that bad.
Everyone that I know that is invested in the market wishes that they had more cash . They think they could make a killing if they had alot of cash to invest now. That does not sound like a bottom to me.I bet people had this same belief in 1929,1930,1931,1932,1933.My opinion is that that when we hit the bottom wee are gonna stay there for a while...
I agree with you. We are not going to see real estate prices going up for another ten years.
despondency
(dĭ-spŏn'dən-sē)
n.
Depression of spirits from loss of hope, confidence, or courage; dejection.
We are not close. Everyone is hoping to catch the bottom and make lots of money. When the final bottom happens dow 5000 s&p 450 etc… the majority will be worried about survival not daily ticks on a stock chart.
There is something to be said about the flight to quality and the US dollar that is going on right now. This did great things to the US economy and stock market after the 1998 Asian meltdown.
Actually I have been bottom feeding on strong companies with now 20% dividends - MLP's like pipelines, etc. I check the balance sheets to see if they are good for the money. . .not betting the family jewels, but taking positions here and there that hedge funds have dumped.
Long way to go yet, we know the bottom when we get the next fake war.
"Horrible investment"? Capitulation?
When it comes to Russian stock indices - down 78% from their tops - I still read calls for a huge, immediate V-shaped bounce and/or a once-per-lifetime opportunity. A rally must be likely but psychological indicators are not there. If things are different in the US, I'd say that might point to "decoupling". :)
when kirk kivorkian (?) pulled his money out of ford (and why did he put it in anyway did they promise a better built car and lied) at a loss of millions of dollars when ford's stocks sank to 2.17 a share didn't he see something wrong when they were selling at 4.27 a share (duh) so you are right people will unload at any price losing millions because they fear they will lose everything. money is not the root to all evil it's the love of money. for a small piece of paper it carries alot of weight. that mean mean green.
Paul, I agree with your comment. It summed up my response and was very nicely written.
Keith,
We know you're itchin'. And I agree there will be a time to buy again.
But what about thinking through some rules of thumb.
I believe (feel free to correct me if I am wrong) that the market usually bottoms halfway through a recession. Now what we're seeing today ain't usual and it may be a depression. But if I took that as a rule of thumb and the projected when I believe this recession started and project how long i think it could last - it might provide a target date range for bottom. I'm not looking to call dead bottom here - just get somewhere in the vicinity before I start buying in again (kind of like not trying to sink a 20 foot put - just trying to get it within 3 feet of the hole).
Thoughts?
Well, the Alt-A and option ARM mortgages are just starting to hit the fan and will continue to do so for the next 3 years.
I don't know that you can call a bottom in the stock market until retail spending has collapsed and commercial RE having taken a dump. A lot of these Worst Buys, Circuit Shittys, Home Despot, bLowes, Harbucks, Orifice Despot, OrificeMax, McDonalds, Burger King, Red Robin, PF Chang, car dealerships, Macy's, Nordstroms, Ambercrombie and B!tch... stores will have to close.
Seriously keith, you can't call a bottom in the market before these events unfold.
I know some old-timers who were planning on retiring, but have announced that they will be delaying their retirement. One can only assume that this is because their home value and 401k have dropped so they have to keep working. Is this "capitulation"?
Went to a pub in Belmont Shore Fridat night - the place had at most 10 people in it. Some were commenting how "empty it is tonight".
So many people here had been living off of credit as well, and now that it's over, they have no money of their own to spend - so restuarants, bars, department stores, etc... are emptier and emptier.
Denial is now giving way to the admission of the bitter truth - things are getting really bad here as well in the beach cities.
As a matter of fact, I've seen more bank owned properties here then in some of the inland cities.
It's not a good sign at all, but it's just the beginning for much harder times to come.
Just because Keith likes Obama does not mean we skip to Hope stage. Not like I'm voting for McCain either.
You nailed that one right on the head.
Moderate living - we'll be forced to come back to that now, which is actually a good thing.
Sure, there's going to be losses, but just like gambling at a casino, no one forced people to take risk they couldn't handle.
There is no way to prevent massive losses now.
Greed is *NOT* good.
Anonymous said...
Our stupid leaders should always remember that all of the American Economy (domestic) is based on the success of the American Family. Once that sucess is gone, depression, despair, buddy-can-ya-spare a dime comes on. Our good life grew well enough when people were "reasonable" with the lives they wanted to live: Dad worked hard, 3br/2ba/1500 sq ft ranch/one newer car, and sometimes one older car. "Reasonable" was the key word. This lifestyle fed the economy. There was honest, hard work and savings accounts. No hummers and bonus rooms and granite tops. Look back and see just how good it was and it was SUSTAINABLE!! Well-doers could build them a bigger house, since they sold the paid off ranch and put the money forward. There were no Immediate Gratifications then. Hard work, savings, planning, core operations that were safe and doable. Then the crooks came and people jumped in hard and fast and now the price is PANIC TURNING TO DESPAIR. Sorry.
The stock market could bottom in the next year, but it is damn irrelevant. The average American hasn’t been affected by the crash -- yet. But they will be affected by the recession.
Take my example: most of my freelance contracts dried up this year. My wife and I adapted to a 30% pay cut. My wife’s job (and our health benefits) is likely to end in March. Another 60% paycut. My remaining full time job almost covers the mortgage. Fortunately we have no other debt and a substantial cash cushion. And we are currently stockpiling 2 years food in the house.
But wait! I work for a 40 person company. The very kind that will be affected by Obama’s “Joe the Plumber” tax. The owners may get tired of paying a 39% personal income tax on top of hefty corporate tax on a pain in the ass business that is barely profitable. And that corporate tax is certain to rise as the Democrats punish those "evil corporations."
So if I’m lucky (1) my company gets sold to an Indian publisher that needs a U.S. pre-press subsidiary. And if I’m really lucky my new masters will offer me minimum wage and no benefits. Another 50% pay cut! or, (2) the owners will simply shutter the business while there’s still money in the bank and return the assets to the major stockholders (themselves).
So the scenario I’m planning against is that my wife and I go from a $110,000 annual income to zero in 11 months. Repeat that story with 100 million households and next year you'll get your "despair."
But then again, 2009 may be even more ugly: Has anyone else noticed the National Debt clock passed $10.5 trillion yesterday? And that it is rising at a quarter trillion a week! How long do you suppose that can continue?
Keith,
Now your trying to pull and prep the markets back up through your stupid blogs so that they favor you! You Slime.
Your such a wussy, your praying that the markets go back up so you don't lose a penny of your investment within the last few weeks! Well i got news for you, were heading for a great depression and all your investments will be wiped out!
You hide behind a blog but never show face, be a man and show your face!
There is no bottom!
I agree with you Keith, the government injection of money will prop this looser up like a sub prime loan! I don't think anyone could have predicted oil dropping and the dollar rising.
Who could have predicted that our economy collapse would have more impact on the Middle East than any war! GW should have wrecked this thing long ago to fight them terrorists!
Hey where the hell are all those folks screaming about gold just a few weeks back???
There are no sure things...just keep to the basics
1. Don't panic
2. Buy when everyone else is panicking
Kieth,
New stock market bubble?
How about Iraq. It's either going to blow up like Iraq or it's going to blow up like Dubai.
It is possible for despair to last as long as the irrational exuberance.
According to Kevin Depew of Minyanville, $100 invested in the S&P 500 in Dec 1999 would be worth $74 today (i.e. $26 less), and that includes dividends paid all of those (8) years.
Meanwhile, a 3-month T-Bill is up over 31% over the same time, which is a proxy for cash. You COULD put it under your mattress, but that obviously won't pay interest.
So basically this confirms that we've been in a bear market for 8 years, and stocks can hardly be considered a good investment in a bear market, UNLESS you're actively managing to catch sector rotations, playing shorts, hedging, etc. It's no longer a "buy and hold" market, as those days are long gone.
Depew thinks it'll take 4-6 years for the market to return to a bull market, where you can buy and hold.
I'm also thinking there's ONE way out of this disaster now.
A new stock market bubble.
Watch the politicians do anything and everything they can to reinflate this thing
Keith, you're overlooking that this is BIGGER than just the U.S. stock market: it's occurring WORLD-WIDE, where yesterday the European and Asian markets led the way down. Our government can't turn this around anymore than they could 'control' U.S. housing prices one way or the other.
I'm starting to realize just how strong 'free markets' really are: despite all the attempts to intervene, they have a way of making those who think they have control look like fools, and eat some humble pie!
Kerkorian is down some $700 Million for having invested in Ford a few months ago, and just this week he was forced to throw in the towel and start selling Ford shares, as his Vegas resort stocks are also taking a beating.
Buffett's sign of confidence in the market also is turning on him, as GS is worth less than his warrants allow him to buy.
These guys must be unaware of the example of J.P. Morgan, who tried to buy U.S. Steel in 1929 as a sign of confidence in the markets, only to see prices tumble EVEN further after buying.
What hubris to think THEY can change the course of market direction: NO ONE is THAT big.
It is so hard to predict what will happen. I continue to go with Roubini's opinion, because of all the various "experts" I have followed, he has been the most accurate in his predictions so far.
So, per Roubini, stocks have 20%-30% more to go. Commodities have 20% more to go. It all bottoms out in the Fall of 09. Unemployment to 9%-10%. Housing continues to decline. Recession through 09. Stay away from dollar denominated assets. A dollar crisis is a real possibility as well as inflation in the longer term (which I think is where Schiff's outlook then begins - i.e dollar will be toast, gold will be king, get into foreign stocks, etc.)
In other words, we're in for some rough few years.
Best advise: Hook up with a financial manager that knows what the crap he/she is doing. (if you're not comfortable handling your own finances). You can lose hard in this environment.
Just my 2 (debt free) cents.
Just a cute picture from the Financial Armageddon blog:
Halloween Must-Have?
Given the scary moves that share prices have been making lately, the following get-up may well turn out to be this year's "must-have" Halloween costume.
See the costume: http://tinyurl.com/5frmw8
"A new stock market bubble." How? They can only inflate it so much.
Anon @ 3.29PM
Two cars and a 1500 square foot house is sustainable? I don't know what definition of the word you are using but that's still incredibly wasteful. 1000 sq feet and no car is what I call barely sustainable.
Yeah Keith, but you jumped backed in the market way too soon. You must be losing money like crazy. I'm all cash waiting for the REAL capitulation, which will come.
60% off 14,000. Asia is already down 60% from their recent highs and Europe quickly getting here. We're not even close but our turn will come. We're not special and never have been.
Keith, were is the money going to come from to blow up the stock market? Are you saying the government will print trillions and buy stocks with it? That didn't work out too well for Zimbabwe.
A new bubble is a "way out" Keith? What do you mean? If anything, a new bubble would set us up for a severe depression.
1. Oh really, so tell that to the people who were invested in the market for the last 10 years. S&P is down 17% for that period. And if you picked individual stocks since then you're f*cked.
2. What, you don't believe that this market is rigged? Do you believe in GE earnings, since it's proven that they were picking number out of their arses a week before issuing it? Now they getting loans from Bernanke to pay the bills.
3. How can you believe in the current P/E if the entire market is upside down with gov injecting taxpayer cash into rotten balance sheets? Do you believe in P/Es? How do you know the market is really cheap then? Dividend yield, which dividend yield if most of them will be cut?
This is exactly true - we are already in a deep recession - it's the majority of the country that determines the continual downward trend we are seeing.
Honestly, I'm really shocked to see how severe this is getting.
Never in my life have I ever seen anything like this - major businesses, stores and restuarants closing after years of service.
Unfortunately, this is just getting started, and the stock market (based so much on emotion) will fluctuate up and down for a few more months, until it's pulled further downward along with the sinking economy.
Paul E. Math said...
We do know that you're not a perma-bear, Keith. But we also know that you are consistently ahead of the curve.
One of the hallmarks of a bubble is that experts short the market and get burned because they shorted too early. I think you may be doing something similar in calling a bottom.
Stock prices will not bottom until we begin to reach the bottom in the real economy. With no end in sight for the massive housing inventory overhang, no end in sight for foreclosures and falling home prices, I see this recession as far, far from over.
The economy is in a vicious cycle.
So far, all efforts have been addressing this crisis as though it is merely one of liquidity, not of solvency. This crisis is one of solvency and our elected monkeys still don't realize it.
You know this, Keith. I think you see it but you are having trouble believing what your eyes are telling you.
Let's be honest, the housing bubble was pretty easy for us to call. It seems even more obvious to us in retrospect.
But the idea of another Great Depression is such wild, inflammatory hyperbole that we're embarrassed to speak of it. But that's what all our eyes are telling us.
This time is REALLY different because we ran out of immediate bubbles and we don't have a robust industrial park any longer to recoup, and developed countries are deep in debt and still injecting trillions everywhere with no end in sight (to be paid someday).
We've blown all existing bubbles that existed out there in a short period of time: tech, housing (twice), credit, commodities, and the biggest of them all....drum roll please:
GLOBALIZATION BUBBLE!
Globalization was one of the biggest ponzi schemes after housing. Do you see emerging markets decoupling? All I see is Argentina insolvent, Pakistan and Russia in trouble, Iceland and Korea bankrupt, Brazil selling 50 billion USD a day to keep their currency from collapsing, emerging bourses hitting circuit breakers almost daily, etc. I rest my case.
.
WHAT THE HELL ELSE ARE YOU GOING TO INVEST IN?
.
In other words, "if Obama is a socialist, then I am too!" because Obama is not even a socialist, he is a self-serving careerist! Just like most people in America!
Yeah but you forgot that the democrats, along with Obama, need a socialist regime to gain and stay in power. Hence Michelle Obama promising American citizenship to 20 million illegal illiterates during her convention speech, as the DNC made a sweet deal with Mexican radical groups like La Raza.
Obama will give citizenship to 20 million illegals overnight, to pay for voting favors to the Hispanic community, then dump all those 20 million on expensive Universal Healthcare and other welfare services, paid by the productive middle-class and small business owners. That's how you buy votes and stay in power at taxpayer expense.
Watch your health care costs skyrocket. And I won't be surprised if the democrats come up with a plan to put a bunch of those foreclosed homes in Section 8.
They're already promising a welfare-feel good-stimulus check as soon as Obama wins to make the sheeple happy, and to hide the fact that their campaign-money machines Fannie Mae and Freddie Mac, along with Barney Frank, had a huge part in this financial mess.
Once again I ask:
What planet do you (and the MSM) live on?
Last night I went out as I do every Friday night. As is the case every week, the restaurant and 2 bars I hit were overflowing with people. I'm talking 3 people deep waiting to get a drink overflowing.
Here we are what 2 years into this supposed recession you're all convinced is here and it's next to impossible to get a dinner reservation.
Im buying stocks. 10 years from now you will be kicking yourself for having stayed on the sidelines.
Foreclosure king surfs troubled home waters
So what advice does Nordine offer those concerned about the real estate market?
Don't sell unless you absolutely have to. Don't buy until 2010, when prices should be at 2000 levels. And apply every spare nickel to paying off your debt, including mortgages.
Don't trust ETFs. No deposit guarantee and who's the counterparty anyhow?
Mine was AIG, so I sold two months ago after reading MISH...
PS! Don't always agree with MISH though, with the Elliot wave nonsense and that stuff.
What panic? I can't see how anyone could NOT see this coming. Does anyone really think that stocks are worth what the S&P says they are? Did most people just forget about Enron and Worldcom?
This site I hate to say it is getting pretty tired. Same old rhetoric of how Bush and Congress and corporate america screws everyone over. If they are a bunch of bloodsuckers, then don't buy from them. Why didn't anyone learn from Enron? Do you post on this site for fun?
Seriously, even if the Dow Jones falls to 500 points it's not like its the end of the world. It's just a big $$$$ $cam.
Buy GE, they only have 3/4 of a trillion in debt. u can't lose.
Jack Welch was a joke of a CEO!
GE's name is General Electric, not the Credit Market/Corporate Sponge man Inc. It was founded by Thomas Edison, the inventor of the incandescent light bulb along with half the other stuff of the early 20th century. Nowadays, instead of creating the new RCAs, they're basically a loan shark for companies and individuals. That's Welch's legacy, the original American technology firm (predating the Honeywells, the Texas Instruments, and the others), now another sleazy intra-institutional Bank of America for companies.
Aside from big tobacco stocks, there's nothing else to buy in this market expect for the typical bear market type of MFs. And even those, you've got to be careful that they're not run by folks who miss-time the shorting patterns.
"The average American hasn’t been affected by the crash -- yet. But they will be affected by the recession."
----------------------------------
The stock market is always forward thinking, so you think lay offs are bad now, just wait until the market decline hits employers. 2009 is going to be grim on the job front.
Keeping your job is what matters most in deflation.
Hmmm, correct me if I'm wrong but isn't the S&P 500 down 18% for ten years and 14% for five? And before that we had the tech bubble, the Asian crisis of 1998, the other housing bubble, the crash of 1987...
Oh yeah, it seems that people who aren't permabears have all figured out.
Enjoy your retirement in pverty while you play the Stock Market Casino. Hey, but Warren Buffett did it a gazillion years ago, so it must be good, right? Right?
Last night I went out as I do every Friday night. As is the case every week, the restaurant and 2 bars I hit were overflowing with people. I'm talking 3 people deep waiting to get a drink overflowing.
Yep, and I've seen people buying Krispy Kreme and iPhones.
DOPES
A few thoughts. Just throwing some shit out there.
Phase 1: now until december 1, high volatility but general downward trend
Phase 2: sometime after dec 1 until late 2009 we get a psuedo-recovery in stocks, credit, liquidity, the economy, even housing
Phase 3: 2010, shit hits fan, potential inflationary holocaust.
Reasoning:
Fact 1: subprime resets are tapering off
Fact 2: alt-a and prime resets don't kick into high gear until 2010
Fact 3: the fed and treasury are finding every excuse in the book to give anyone pieces of paper and numbers on a computer and call it 'money'.
Fact 4: hedge funds are facing massive redemptions, forced to sell all stocks, good and bad
Fact 5: retiring baby boomers sells stocks, bonds, mutual funds, both reducing demand for stocks and increasing supply - equilibrium price is the intersection of supply and demand.
There are a million factors I didn't include, pro and con. And Keith is right - they are doing everything they can to create money and, if they succeed, there will be a bubble in something. The question is whether they will succeed in a permanent way.
All you wackos saying I'm buying stock now and in X years I'll be laughing at you because you stayed on the sidelines.
Consider this, we're on the sidelines because we are still waiting for the bottom. After it bottoms out there will be anywhere form 1-3 months of a buying opportunity so there's no real hurry to buy anything now.
By not buying anything now while the market is still bottoming, we are saving ourselves a bunch of sleepless nights and about 2000 strands of hair from falling off or turning grey.
Just wait till the welfare checks start bouncing. and foodstamps get cut...(The goverment will need to cuts services by 50%)
THEN you will see PANIC..
and you thought the Rodney King thing was a big deal
See you at the gun store......
seems to me the real The crap didn't hit the fan until 2-3 years after the market crash
Question: What is a Depression?
Answer: A depression is a severe economic downturn that lasts several years. Fortunately, the U.S. economy has not experienced a depression since The Great Depression of 1929, which lasted ten years. The GDP growth rates were of a magnitude not seen since:
1930 -8.6%
1931 -6.4%
1932 -13%
1933 -1.3%.
During the Depression, unemployment was 25% and wages (for those who still had jobs) fell 42%. Total U.S. economic output fell from $103 to $55 billion and world trade plummeted 65% as measured in dollars.
The Depression was aggravated by poor monetary policy. Instead of pumping money into the economy, and increasing the money supply, the Fed allowed the money supply to fall 30%. The "New Deal" created many government programs to end the Depression, but government programs alone could not end it. Unemployment remained in the double-digits until 1941, when the U.S. entry into World War II created defense-related jobs.
We probably won't see a depression like that again, simply because the government has learned how to avoid it. Many laws and government agencies were put in place because of The Great Depression with the express purpose of preventing that type of cataclysmic economic pain.
what solution to 500 trillion dollar derivitives unfolding, unwinding and no counter party buyers????????????//
Most people see if a stock is "good value" by checking out the P/E ratio. The trouble is, the "E" (Earnings) are based on current or slightly historical activity. The future for the earnings are heading down for many companies, big time. This makes the P/E ratio go UP, as in - not good value.
Consider the Christmas retail season which is coming up. Many families will be without a home, a job, or both. I expect this to be a VERY lean christmas for a lot of communities. So don't expect doorbusting iPod sales, or other extravagences. The consumer based economy will be tested then -- and I expect it to surprise on the downside. This will set the stage for another round of reduced Earning. And so it goes into the middle of next year. So - is NOW the right time to invest in a this cycle of the economy? I don't think so. Give it time.
On saying that, short term rallies where you kick yourself for not jumping in are likely. It is the nature of investing that there is a lot of regret involved. However, a fortnight later you may be relieved you are still out of the market when a new low is created.
My rule in the stock market is exactly the same with any kind of gambling - Only put in what you are prepared TO LOSE.
Many laws and government agencies were put in place because of The Great Depression with the express purpose of preventing that type of cataclysmic economic pain
----------------
Where have you been over the last few weeks. Burried in your deep convictions?
You can repeat your wishful thinking 100 times but it won't change reality.
Over the last decade many laws that were institued during the great depression have been changed or repealed, haven't you heard of Glass-Stegall? Go do you research.
In the 30s more than 50% of the population lived in an rural setting and were necessarity to produce essentials. Today 80% live in an urban setting and a much larger number contribute to non-essentials.
If everybody started tightening their belts, imagine the devastation as the percentage of our population working on non- essentials is huge. With half of urbanites not working, the unemployment rate could reach 40%as 25% unemployment in the 30s was equal to half the urbanites.
But our enumployment number will NEVER show the true rate because amny boomers will forced into retirement and won't be counted as unemployed.
I'm geeting stock advise from a clown that buys boyscout uniforms on Ebay is his primary source of retirement money.
He is showing off how smart he is by preaching the sell everything spew.
The seceratary at our office is predicting bank failures are just beginning.
May be it's time to buy...
When you are right you are right. There is no too early.
I may have lost 15% shorting the nitrogen fertilizer companies because I was early. But I knew I was right and now ALL the money is mine.
I LOVE REITs now. LOVE them. I may have been too early. But my God look at the Dividends and they are RISING every quarter!!!! Right is right.
"If everybody started tightening their belts, imagine the devastation as the percentage of our population working on non- essentials is huge. With half of urbanites not working, the unemployment rate could reach 40% as 25% unemployment in the 30s was equal to half the urbanites.
But our enumployment number will NEVER show the true rate because amny boomers will forced into "
Actually, as soon as the one's 9 months of UI is up, one will be taken off the roster and be either marked as underemployed (a part-timer or given up the search) or self-employed. In essence, this will then not be a true unemployment depiction, as each 6-9 mos cycle will have people coming and going. All and all, official unemployment may peak at 10-12% but it could actually be closer to 30-40%, with a lot of seasonal part-timers. I suspect that at it's worst, the media will be spinning tales about how much worse it is in { Singapore, Korea, Britain, Spain, etc } w/o revealing the angle that mom & pop businesses, still exist in large numbers abroad than here with our national chains so that an ~18% rate in Malaysia might actually be closer to a 9-10% actual rate (with people huddling in family businesses) then here.
Just wait till the welfare checks start bouncing. and foodstamps get cut...(The goverment will need to cuts services by 50%)
THEN you will see PANIC..
Hmmm...have you forgotten that Obama promised to raise tax on middle-class to "transfer the wealth" to parasites?
Oh, and a little accounting 101 for the AAPL-pot smokers who live in mommy's basement: Wealthy individuals who earn above $250k can invest most of their earnings into tax free Munis, to keep it away from your Messiah and Pelosi's plan of "punishing the productive and ambitious". Or do you really think that they got wealthy by being stupid?
Your mommy and daddy's paycheck will pay for Obama's welfare heaven, not the wealthy.
Glad to help.
It's no longer a "buy and hold" market, as those days are long gone.
Capitulation is approaching ;)
Next year stock market will go up atleast 50%. Get in now. All those left the train will start boarding later.
It's simple math. 310 Million People are still alive are eating and living their lives. I doubt they will be 175 million next year. Stock market itself was not overpriced in this scenario. This was financial/debt bubble not the economical.
S&P had 25% in financial cos. before this started. Now after 46% correction and ongoing bankrupties, financials has come down to 12%.
All this is a preparation for next year's rally.
Strong cos. will survive and weak cos. will go out of the system.
Companies who do not need debt/finance from Wallstreet (BS) are priced as if they will go out of business.
This is the time to be optimistic and greedy.
It's all great darwinism.
Quote from Einstien: There alway lies a huge opportunity in the midst of crisis.
Afterthought said...
> the average brainwashed Boomer will leave the workforce and their animus towards taxes will disappear!
> They will "rediscover" the virtue of the income tax!
Today I overheard a discussion between three seniors: don't raise the sales tax but the income tax. That is in their best interest, and they are a large voting block.
Screwed Pooch:
> I don't think anyone could have predicted oil dropping and the dollar rising.
Mish Shedlock at Global Trend Analysis called it two years ago. He also expect a gold rise after the hedge fond have finished selling off their overleveraged gold positions - let's see how that turns out.
Still too much - this is a great time to buy stocks/stocks are at a great value - mentality.
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