Is the stock market going to tank?

[iceman]

Benny wants a depression because the ex took all his money and he wants everybody else to be as broke as him.

[Benny Profane]

And she bought a bunch of thongs, knowing I'd be tortured every night dreaming of how she looked in them.

[iceman]

That would be depressing.

[mcsquared]

Yeah, but what is he saying? What's his game?

He's going "double or nothing" Benny. Make sense now? Oh wait...

[Toadman]

He bought a $100 a share public company for $44 billion to make money..

Buffett sees a huge barrier to entry into the RR biz. How many RR's are left in America? Look at the economies of scale to move a ton of freight on steel tracks over concrete and asphalt. He sees a future of Americans buying cheap Chinese garbage, and America selling commodities on a weak dollar. It's a win-win for Buffett. Of course if what Benny sees comes to fruition, then Buffett has a high priced RR that he can play with at Christmas time.

[Benny Profane]

http://www.pbs.org/wgbh/americanexperience/crash/

[liv2ski]

http://www.pbs.org/wgbh/americanexperience/crash/

Interesting thing is though, Big Ben being the great scholar that he is of the great depression has done everything opposite of what was done back then.
He has thrown in America's future at bailing this out and propping that up, when last time around, they said, "fuck it, capitalism baby, either sink or swim as we are not bailing your ass out".
Sure banks collapsed, businesses went under, real estate and stock values plummeted, etc, etc., but eventually, America came out of the whole thing as the most powerful economy on Earth.
Now look at us. We have mortgaged our souls to bail this out and prop that up. Sure, many of us have avoided the short term pain of the 1930's, but I am convinced this country will never return to it's former economic glory. Our children and their children's children are fucked IMO.
We will see. I think this is going to take at least 10 years to play out. I am just waiting for the next economic shoe to fall and the domino effect that eventually causes everything to blow up when the guberment says "sorry we can't pay the states the Federal Guberments share for education, roads, and the other stuff we promised to handle with your tax dollars. And well, there is no health coverage, your medicare is gone as are your social security benefits. Fucking China dumped all their US assets on the world market and now we aren't worth anything and no country will buy our debt so we are bankrupt. Carry on".
I really hope I am wrong. End rant

[Benny Profane]

http://www.nytimes.com/2009/11/08/bu...l?ref=business

[Brock Landers]

WH.G finally comes through with a coherent, readable monthly outlook.

www.pimco.com

[4matic]

Buy Utilities seems like a good strategy for the conservative investor.

[nealric]

Interesting thing is though, Big Ben being the great scholar that he is of the great depression has done everything opposite of what was done back then.
He has thrown in America's future at bailing this out and propping that up, when last time around, they said, "fuck it, capitalism baby, either sink or swim as we are not bailing your ass out".
Sure banks collapsed, businesses went under, real estate and stock values plummeted, etc, etc., but eventually, America came out of the whole thing as the most powerful economy on Earth.

Gimme a break.

If unemployment was at 23% like it was in the 30s you would be screaming for his head on a platter.

[Benny Profane]

Oh, wait, blue skies up ahead, the housing market is "stabilizing", uh.....
http://www.nytimes.com/2009/11/20/bu...l?ref=business

Now, where oh where will the 70% consumer economy get their spending cash with no job and no home equity? Hell, no home?

It all about the dollar these days. It goes up, market goes down, and the other way around. The "retail" investor is still in bonds. You know that the next crash is around the corner when Mr and Mrs America start piling whatever meager savings they have into the stock markets.

[liv2ski]

It all about the dollar these days. It goes up, market goes down, and the other way around. The "retail" investor is still in bonds. You know that the next crash is around the corner when Mr and Mrs America start piling whatever meager savings they have into the stock markets.

Yep, that is what I keep reading too: "Analysts said the dollar was the biggest force behind Thursday's trading, as it has been in recent months. A stronger dollar makes commodities more expensive to foreign buyers, and companies that produce the commodities make less money from them". http://www.msnbc.msn.com/id/34036815...s_and_economy/
But I think it is all bullshit. The market has been moving on low volume for a long time now. I think the big guys are trying to eek out up days to sell into which creates the next down day. The last of my covered call positions get called out tomorrow and I think I will sit tight for awhile waiting for the fall if retail sales disappoint in the coming weeks. Just my 2 cents.

[liv2ski]

Gimme a break.

If unemployment was at 23% like it was in the 30s you would be screaming for his head on a platter.

Keep drinking the koolaid buddy. I am certain it is well over the 17% reported here. http://scallywagandvagabond.com/2009...-rate-is-17-5/
http://www.nytimes.com/2009/11/07/bu...fWMHr4Hya50DRA
And I have been screaming for his head and the rest of the fucking useless politicians running this scam on the American people.

[Rubicon]

It all about the dollar these days. It goes up, market goes down, and the other way around.

The charts are almost perfect mirror images of each other.

[Benny Profane]

WH.G finally comes through with a coherent, readable monthly outlook.

www.pimco.com

"The Fed is trying to reflate the U.S. economy. The process of reflation involves lowering short-term rates to such a painful level that investors are forced or enticed to term out their short-term cash into higher-risk bonds or stocks. Once your cash has recapitalized and revitalized corporate America and homeowners, well, then the Fed will start to be concerned about inflation – not until. To date that transition is incomplete, mainly because mortgage refinancing and the purchase of new homes is being thwarted by significant changes in down payment requirements. The Treasury as well, has a significant average life extension of its own debt to foist on investors before the Fed can raise short-term Fed Funds."

[nealric]

Keep drinking the koolaid buddy. I am certain it is well over the 17% reported here.

If you are going to play that game (official unemployment numbers undercounting), unemployment was probably 40% in the 1930s.

Bottom line is that things aren't anywhere close to 1930s bad- and if they were, people would be clamoring for more bailouts.

[Benny Profane]

Have patience. It took a while for the 30s to be the 30s. We are only a little over a year into this. There was a very nice rally right after 29. Then things really went to shit.

[Brock Landers]

If you are going to play that game (official unemployment numbers undercounting), unemployment was probably 40% in the 1930s.

Bottom line is that things aren't anywhere close to 1930s bad- and if they were, people would be clamoring for more bailouts.

So true. If people want to bitch about what Bernanke has or hasnt done, despite studying the Depression for most of his life, you may be sitting a little too comfortably and have no idea what 12+ years of poverty and depression and homelessness and 40% unemployment are truly like.

FDR and the govt stopped involvement in the economy and things went to shit so badly and for such a long time, you cannot even compare how things are right now. Boo hoo, I cant afford a baseball ticket or I have to downsize my 5-series.

What Bernanke and the rest of the government has done is avoided a decade-long (minimum) situation that only a World War can fix

Have patience. It took a while for the 30s to be the 30s. We are only a little over a year into this. There was a very nice rally right after 29. Then things really went to shit.

Exactly! Because the government stopped its involvement! This is exactly why rates are still low and there are more programs to keep the economy afloat. Otherwise, it sinks like a stone like the 1930s

[Benny Profane]

Forget about the 30s. That was too long ago. Most of America lived on farms. 5% owned stocks before the crash.

Reference Japan in the 90s to today. Yeah, different economy and culture, but a much more similar situation to ours. It all started with a huge banking failure brought on by a residential and commercial real estate bust, with the government propping up the cronyism in the banking industry and auto industry afterwards with stimulus spending. Sound familiar? How'd that work out?

[4matic]

At this point we are just approaching the depth of the 79-83 recession. The difference is this one came swifter. The 79-83 recession was much worse than now imo because inflation was rampant, Interest rates were astronomical, and wages were very low relative to prices.

High cap equities derive so much income internationally (Intel 85% for example) that they are buffered from weakness in the US economy.

That said I have moved to 50% income to 50% equity. If we can get to 1200 Sp00 this year I'll go to 70/309 minimum looking for at least a 10% pull back next year.

[Brock Landers]

Forget about the 30s. That was too long ago. Most of America lived on farms. 5% owned stocks before the crash.

Reference Japan in the 90s to today. Yeah, different economy and culture, but a much more similar situation to ours. It all started with a huge banking failure brought on by a residential and commercial real estate bust, with the government propping up the cronyism in the banking industry and auto industry afterwards with stimulus spending. Sound familiar? How'd that work out?

If most of America living on farms meant the depression didnt really have an effect, what do you mean? Sure there were more farms. But not everyone in the U.S. works for Goldman today either. Back then the trouble with the banks and the general economy was the inability to promote growth. Which means jobs. The value of stocks themselves going down was only one piece of the puzzle. Now its a greater piece, but the fact that a 12 year shitty economy existed doesnt matter if it was 1930s or even earlier. Shitty economy with high unemployment would not be tolerated today. And Bernanke hasnt.

As for Japan, one of the major reasons for continued shittiness is the whole cultural idea of saving. They save too much money to dig themselves out of a recession. You know how the government is trying to promite spending and consumption and all that? The Japanese stick the money under a mattress. When you take this idea and multiply it by many trillion dollars, the government doing their fiscal things doesnt matter, there is no fuel to fire up the economy

[wcf3]

Reference Japan in the 90s to today. Yeah, different economy and culture, but a much more similar situation to ours. It all started with a huge banking failure brought on by a residential and commercial real estate bust, with the government propping up the cronyism in the banking industry and auto industry afterwards with stimulus spending. Sound familiar? How'd that work out?

I'd concur that the collapse of Japan's asset bubble in the early 90's is the closest parallel to our recent adventures. On the other hand, the Japanese consumers had a positive personal savings rate, very little personal debt and the nation as a whole had a positive balance of payments. As such one could argue that our situation is even worse than theirs was.

A little history quiz: When did the Nikkei index hit its all time high?

[liv2ski]

Reference Japan in the 90s to today. Yeah, different economy and culture, but a much more similar situation to ours. It all started with a huge banking failure brought on by a residential and commercial real estate bust, with the government propping up the cronyism in the banking industry and auto industry afterwards with stimulus spending. Sound familiar? How'd that work out?

That is more my concern for sure than a 1930ish meltdown in employment. If the stock market tanks, I will trade the fucker down, so that doesn't worry me. If real estate values tank, I will be pissed I didn't sell some stuff, but I doubt I will lose money on homes bought in the 1980-1990 and then maybe my kids can afford to buy something. No, what really pisses me off is the fucking deficit spending and bail out mentality of our government. Kind of like these assholes:
"We do think that the combination of these measures will help to prop up the Japanese economy, particularly once the fiscal spending measures come into play around the second half of this year," said Collyns at a news conference in New York. "So we do expect Japan, in fact, to register a couple of quarters of positive growth later this year.''

IMF expects the April stimulus package of 15.4 trillion yen to help the country through 2009 and 2010, as Japan has been aggressively propping up its economy and coming out with various measure in the wake of the global financial crisis.

But the report warned that the series of fiscal stimulus steps that Tokyo has taken had expanded its deficit to an increasingly precarious level. ''With the deficit projected to be close to 10 per cent of GDP in 2009 and net debt to exceed 100 percent of GDP, room for additional stimulus is close to being exhausted. Attention should shift now to putting in place an ambitious medium term plan to secure fiscal sustainability,'' it said. http://www.domain-b.com/economy/worl...recarious.html

[liv2ski]

I'd concur that the collapse of Japan's asset bubble in the early 90's is the closest parallel to our recent adventures. On the other hand, the Japanese consumers had a positive personal savings rate, very little personal debt and the nation as a whole had a positive balance of payments. As such one could argue that our situation is even worse than theirs was.

A little history quiz: When did the Nikkei index hit its all time high?

Totally agree the consumer there is in way better shape than credit maxing out Americans with no savings.
The Nikkei average hit its all-time high on December 29, 1989 when it reached an intra-day high of 38,957.44 before closing at 38,915.87. Its high for the 21st century stands just above 18,300 points.
It will be interesting to see US repeat the same cycle.