10 Reasons Why We Still Haven't Hit Bottom 93 comments
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Don’t get me wrong, I love this bear market rally. It makes me feel good. Makes me feel wealthier. Makes me feel more confident. But is it warranted? Even if it isn’t, sometimes just thinking the worst has passed helps the market recover more quickly than previously thought possible.
But remember, bear market rallies are usually the largest. And if you look into it, not much has changed but psychology. Here are my top ten reasons for why the worst may still be to come.
1) People are searching for the bottom
Most bottoms occur when no one thinks it is. The bottom doesn’t occur when people think the worst is over, but when everyone wants to get out. It’s the point that there just aren’t enough sellers anymore, and the market starts to guide higher. I think that since so many people suspect this to be the bottom, it is yet to come.
2) Liquidity still hasn’t returned
Even though recent Fed moves may increase liquidity in the future, many companies are still struggling with debt loads and cash problems. Even if the sun is on the horizon, many companies will be forced into bankruptcy, delaying the bottom's appearance temporarily.
3) This is a real recession
This isn’t some made up bear market like the tech-bubble, this recession is affecting peoples lives and their habits. Comparing this recession to the tech-bubble isn’t even reasonable. I hate to say it, but this time it’s different, like it always is. Real people will be affected. Every company will be affected.
4) People think they can’t win anymore
I’ll say it, buy-and-hold is dead. In no sense am I saying it doesn’t work, but people think it doesn’t work. They’ve been handing their money over to the ‘professionals’ for years, and they don’t have much to show for it. I think the return of capital coming into the market could be light as more and more people see the stock market as rigged.
5) Valuations still need to be cut and revised
Every valuation method we use to evaluate the ‘cheapness’ of stocks is worthless. P/E’s are only valuable when you know the forward P/E’s. PEG’s need to be revised because future growth may be slower. Earnings estimates still need to be guided lower, causing inevitable hits on the stock market's performance.
6) Technicals don’t work
Isn’t that crazy, technical analysis doesn’t work anymore! Tell me one technical analyst who foresaw the recent stock market crash. The answer is zero, because you actually had to know fundamentals and things that were going on to call it. The time where people can look at charts and decide what’s going to happen is over. People will need to be more involved and maybe, just maybe, know what the company they are investing in actually does. I think the slowing participation of technical traders will decrease volatility and delay the eventual rebound.
7) America may not be invincible
Ever ask yourself the question “What happens if no one wants our debt anymore?” Some possibilities: currency crisis, war, treasury bond default, massive sell off by Russia, Japan and China of dollar reserves, bank runs, food shortages, civil unrest, snowballing bankruptcies, systemic financial meltdown; skyrocketing interest rates and inflation when foreign central banks stop buying those little pieces of paper that promise them 3% interest paid out of our children’s future earnings. This is exactly the type of environment that makes these things possible. Throw away your arrogance, America isn’t invincible, we are just as prone to these things as any other modern country.
8) People hate each other
We hate the companies that steal our money (AIG) and we hate the people that are trying to save them (congress). It strikes me as odd that the worst run bank in the world (the US government) is trying to tell other companies how to run themselves efficiently. How about a pay-cut for our congress representatives for losing us so much money? Anyway, our children will be spending a huge part of their labor to pay interest on debt created by the profligacy of our generation. The long-term horizon is fairly bleak as well if we don’t get our act together.
9) We are in a downward spiral
Lower spending equals lower employment equals lower confidence equals lower productions equals lower spending equals lower employment equals lower confidence…..
If we had been saving during the sunny times for the rainy days, this would just be a recession. Too bad everyone’s broke. Even if they wanted to save now, where’s the money coming from?
10) Everything is 10 times worse than you think
Discretionary income falls by a multiple of wealth destruction. In other words, if you lose 25% of your household income, discretionary spending can fall 80%. You do the math. Unfortunately, this type of logic applies to too many other economic factors
And I’m the biggest bull of all.
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This article has 93 comments:
I'd like your opinion on the almost immediate reversal of opinion by nearly all pundits and market participants. We went from hearing doom and gloom from everyone and then over the course of a weekend everything changed.
With shorts being squeezed and people jumping back into the market what will happen when Q1 earnings and GDP disappoint?
6 years is not too much experience.
It'll be interesting to read this article a year from now.
I copied it and will republish 1-2 years from now.
1. Bearish posts on Seeking Alpha are coming thick and fast.
2. Everyone is saying "buy and hold is dead."
3. The press is full of "sky is falling" stories .
4. The Fed is swamping the market with liquidity yet no one is saying "you can't fight the Fed" anymore.
5. Most investors have given up hope.
6. House building has ground to a near-halt.
7. Oil prices are moving up again.
8. Australian coal contracts settled much higher than analysts expected.
9. The US dollar is finally weakening and will fall further as the fear driven "flight to safety" reverses. Cheaper dollar will improve US exports.
10. Everyone is in cash, and the market quite often moves in a direction to hurt the most people.
The homes being bought right now, are being bought at auctions.
Banks will not sell toxic assets because in two weeks M2M will be gone. They'll value them any way they like going forward, but they still won't lend.
Obama's plan to help 9 million homeowners with their mortgages will fail because the new mortgages will reset their interest rates in 5 years. It's the worst plan ever because it works just like Sub-Prime, Alt A, and Option Arms. We needed fixed rate mortgages at 4%, and instead we got the same scam that got us here.
What industries, activities, projects, programs, goals, and all in total are going to produce and generate general prosperity in America in the coming years on the macro economic scale necessary to accomplish this for the majority of the American people, and esp. your children and mine?
While technology, medicine, information, alternative energy, etc. etc. will certainly play their part, they have demonstrated that they alone cannot carry the day to the depth and degree necessary and required for general prosperity.
It seems to me that we must reasses our entire framework and begin to adjust immediately to meet new requirements or we are going to plunge and condemn an entire generation into a plight of poverty, uncertainty, and undeserved misery.
Ultimately, the stock market will reflect whatever degree of success we have or don't have in this regard.
How have we performed in the last ten years?
Better that this had been forseen and prepared for a generation or more ago. Are we up to the task?
(1) Commercial Real Estate is about to collapse. Watch out for GGP and Simon Property next week.
(2) House prices are still going down and will continue
(3) GM and Chrysler are teetering on Bankruptcy and very few people are buying a new car.
(4) FDIC are about to run out of cash. Most of the big banks ARE insolvent (off balance sheets exposure in the trillions) and one of them will eventually go down.
(5) Quantitative Easing is a final act of the desperate. If the Fed has to resort to QE then we are really in trouble.
(6) Tax Hikes are in the future
(7) etc, etc
It is not different this time - its just that we are in a 1929 - 1938 like depression, rather than a recession.
The market used to reflect what was actually happening, or expected to happen. The bailouts, stimulus plans, and fed reserve panic fixes are warping the markets as well as the value of the dollar.
You want to make some money trading in this market, think about where the corrupt politicians are going to strike next. Right now, Ford, GM and Chrysler are prime.
Forget fundamentals or technicals, look for where Goldman Sachs and their politicians are going to manipulate things next.
I agree with following, and the 5 year interest rate reset absolutely reeks. It really doesn't even pretend to be a genuine attempt, does it?
Fitz919 wrote:
The bottom will be well below Dow 6,000. It could be this year or next year. The pain is only beginning. We will soon have too many homeless to count. The downward spiral is articulated perfectly.
On Mar 21 11:28 PM SeekingTruth wrote:
> It seems to me that we must reasses our entire framework and begin
> to adjust immediately to meet new requirements or we are going to
> plunge and condemn an entire generation into a plight of poverty,
> uncertainty, and undeserved misery.
>
If everyone understood these points we would already be at the bottom on the road to recovery.
It will take 10 years before the political resolve is there to address the crisis in the way that it needs to be addressed, and by then then things will be a hell of a lot worse. Moreover, Bush will have been forgotten and Obama will be getting most of the blame.
On point #2, the Fed can't fix liquidity on the lending side, they can only make money so cheap that they give it away to anyone with a pulse. Which is partially how we reached this point. Maybe the market will bottom when the government, not the investor, capitulates.
1) It may not be the best time to buy stocks but it is a good time. Where was the fear at Dow 14000+ and where is the opportunistic aggression of a Dow 7200.
2) I could be wrong but I see 4% Mortgages creating some RE purchases and increasing disposable income through Mortgage refinancings.
3) Credit cards dont alarm me as the first 15% loss is probably a loss of interest and fees rather than capital.
4) World leaders are acting more or less in concert and are actively engaged. When that happens things ususally improve.
5) Business activity and earnings from a macro sense appear to be bottoming. I dont see fewer homes being sold or fewer cars being sold in the future.
Finally I have to add that I have never found a time not to invest. Whatever you earn save some for yourself and invest it. It always is a great time to invest in the best and worst of market scenarios.
From: "TIAA-CREF" <tiaa-cref@messagin...
To: bpayne37@comcast.net
Sent: Friday, March 20, 2009 2:01:57 PM GMT -08:00 Tijuana / Baja California
Subject: A Message from TIAA-CREF CEO Roger Ferguson
A Message from TIAA-CREF CEO Roger Ferguson
Dear TIAA-CREF Participant:
The economic downturn continues to challenge investors. Whether you are currently receiving annuity income or are years away from retirement, you may wonder about the economy's long-term prospects and the implications for your financial plan.
I am writing to share my views and to remind you that TIAA-CREF is here to help you keep your financial plan on track.
Recession to Linger
It is likely that effects of the recession will be with us for much of the year. Equity markets will remain volatile, residential housing markets will continue to struggle, and unemployment will rise through 2009 and into 2010.
Many economists, including our own, estimate that U.S. Gross Domestic Product (GDP) will decline this year. We believe that even with considerable fiscal stimulus, GDP could fall 3% or more in 2009. Others will obviously have different views regarding the degree of contraction, but all readily acknowledge the difficulties we face in the U.S. and around the world.
While a sustained rally is unlikely in the near term, markets will eventually recover. Here are some signs of recovery that we hope to see: corporate earnings growth; rising consumption; stable housing prices; fully liquid credit markets offering an environment in which AAA-rated companies are able to borrow at normal rates; and renewed investor confidence.
What Can You Do in the Interim?
More than you might realize.
If you are still years from retirement, I encourage you to take this opportunity to review your long-term plan and ensure that your portfolio is positioned to take advantage of the recovery. If your holdings have fallen in value, try not to make those "paper losses" permanent by selling when the market is down. Consider your risk tolerance, desired cash balance, ability to invest using the dollar-cost averaging method, and other factors before you sell. Remember, too, that market declines may present opportunities to purchase quality assets now at prices that may represent excellent value in years to come. That is another reason why contributing regularly to an employer-sponsored plan is such an important aspect of a secure financial future.
If you have already retired, you too may be able to take steps to enhance your financial security. For example, you may wish to review your allocation to ensure that your portfolio is properly diversified, and consider rebalancing in order to maintain a prudent mix of investments consistent with your goals and appetite for risk.
TIAA-CREF specialists are here to help. They will take the necessary time to answer questions you may have, and to help you make sure that your plans remain on track — one reason, perhaps, why 245,000 people moved their money to TIAA-CREF last year. Please call our Telephone Counseling Center toll-free at 1 800 842-2776 to speak with a consultant or schedule an appointment, or call your TIAA-CREF advisor directly. If you prefer, we are also happy to work with your independent financial advisor to help meet your needs.
I also encourage you to visit our website, tiaa-cref.org, where you will find information on market volatility, highlights of TIAA-CREF's financial strength, and resources that could help you strengthen your portfolio.
Performance for the Long Run
You may wonder how TIAA-CREF is weathering these challenging times. As a major institutional investor, we are not immune from the general downturn in prevailing interest rates or the overall decline in the markets. However I am pleased to tell you that the company remains financially strong and stable, thanks to sober risk management and a long-term investment philosophy.
We ended 2008 with $363 billion in assets under management. While this represents a decrease of about 17% from the prior year, many other financial companies experienced much steeper declines.
The CREF Accounts, which are fully invested in the markets, experienced the greatest impact from volatility, declining 34.4% during 2008, based on total assets under management for the combined accounts.i This corresponds to the major declines in the markets; for example, the S&P 500 Index decreased 38.5% last year.
TIAA-CREF's variable annuity accounts and mutual funds have performed very well relative to peers, according to Morningstar. More than three-quarters (76%) of TIAA-CREF's variable annuities and mutual funds exceeded their category median over the three-year period ended December 31, 2008.ii
In addition, data from Morningstar shows that 99% of TIAA-CREF's variable annuity accounts and mutual funds had an overall rating of three, four or five stars across all asset classes (as of December 31, 2008). Morningstar ratings are based on risk-adjusted returns.iii
Our investment approach and risk management practices have also served us well on the fixed income side, enabling us to avoid exposure to the types of highly leveraged securities that have produced large losses for some financial companies. Unlike other firms, we have not had to avail ourselves of federal government funding. And although we are a market participant, and therefore susceptible to the illiquidity and dramatic pricing moves that sometimes affect fixed income products, our capital base is strong. The crediting rate for TIAA Traditional has remained highly competitive, despite recent reductions that reflect a generally lower interest-rate environment. The TIAA Traditional crediting rate has been higher than the average 10-year Treasury yield and the general rate of inflation for most of the past 28 years. We continue to maintain a strong capital position to support our contractual obligations, income guaranteesiv, and long-term commitment to you.
In Closing
The economic crisis is providing an opportunity for Americans to think anew about retirement security. It is also highlighting the advantages of TIAA-CREF. Dr. William Greenough, who developed the variable annuity – the foundation of CREF – and who chaired our organization for many years, once said:
"We should try to design a retirement plan to work well in times of peace and war, inflation and deflation, depression and prosperity, and all of the other words used to describe and explain the volatile nature of the American economy…"
Dr. Greenough said that in 1954.
We know how challenging this economy can be. I can assure you that we will continue to uphold our mission, managing prudently, maintaining our long-term perspective, and building on our financial strength so that we may continue to serve you.
Sincerely,
Roger W. Ferguson, Jr.
President and Chief Executive Officer"
Who is right?
Surely you are very young and do not remember the 1970s when people truly had no money and 1 bank one a day was failing.
I don't like most of the things going on in this country, but I can't relate them to figuring tops and bottoms---which, by the way, in my view is a waste of time.
I'll tell you and anyone else: if you can forecast the direction of indices, then you can make boxcar loads of money trading index futures.
As I've noted on this site before, back in the `80s when we could first trade index futures, I was a fool and thought I could predict the direction of the DOW, simply because I'd been watching it for so many years; and so, jumped in with both hands trading.
After a couple of weeks trading, I realized that my belief was very wrong. I traded successfully for four years, but after my awakening never---not even one day---did I try to predict direction.
If you're an investor, put more effort into learning about companies, their expansion and growth plans, their products, their marketing, and real earnings, and you'll be the better for it.
If you're a trader, it doesn't matter what your catatyst for selling or buying is. What matters is your money-managing ability. This you should put every effort into mastering.
I've found that I do much better never thinking of bottoms or tops or even looking at the indicies at all.
From an old cat who bought his first stock in the mid-1960s.
The best to your investing.
2)Wait till the tide turns before betting on which boats will rise with the incoming tide.
To Artful Dodger, from another "old cat" who bought his first stock in the late 60's. just in time to gain enough investing experience - already had the hubris - to position myself for the fiasco of the mid 70's.
IMO we are not staring into the abyss of the Great Depression, No, IMO we are staring into the abyss of the GREATER DEPRESSION. and this will be the legacy of the Obamanation = good intentions, no experience, and lack of competence coupled with plenty of hubris.
1) Why does it seem that only the Mutual Funds crowd (TIAA-CREF above, my Mutual Funds company, and others) are the only folks that want us to buy and hold and put money into the Market? Why are these same Mutual Funds so proud of beating the returns of the S&P 500 by a few percentage points?
2) Why are we as citizens more interested in what politicians are giving us than what kind of job they are doing for the country? Congressional approval ratings have been dismal, but we keep reelecting these folks because they deliver the "one thing" that we want - lower taxes for the middle class, health care, neighborhood "pork", etc. And why do special interest groups weild so much power?
3) Why do we keep looking at inflation the way we do? I don't know about you folks but my food bill is up, my utilities are up, my health care and doctor bills are higher, my local taxes are up, my Mortgage payment hasn't gone down (I am looking at refinancing), my car payment hasn't gone down, my gasoline bill has gone down - but for how long. I am just not replacing that car, washing machine etc. - but the repairs for these items will probably go up. Have a plumber, etc. come over and see if that bill is down.
4) Why can't we tax the some of the perks that our elected officials receive - just to the point that we tax the rest of us? If we end up taxing the populus for health care - will Congress tax their benefits?
5) Why are some of the most important pieces of legislation being passed when noone even knows what is being voted on? What is so urgent that these things can't even be posted for two to three days before a vote is taken? With the recent clamour for transparency what better place to start than within the government?
6) Why don't we just post a "blame list". We can go all the way back to George Washington and asign some level of blame for this crisis and be done with it. We need to accept what happened, ascertain the part we all played, try to learn from it and move on. Let's start thinking about today and tomorrow - yesterday is gone.
6) Why is it that the rules are set up so that the individual investor loses? Noone can call a bottom until the "big money" decides to come in. I've been researching Mutual Funds and I don't remember seeing as much cash in these funds than I seeing now and I go back aways. Why can't we know more about where these folks and Hedge Funds are putting there money? I am not real big on conspiracy theories, but I do belive that these folks can have dramatic short term influence and excersize it to their benefit. Look at all the short clobbering, runups and rundowns on rumors.
8) Why is only Madoff going to jail? (See 7 above also) Where is everyone else in this mess? Why are we beating up super hard on the AIG folks? It seems that at least people some people in Governemt knew that this was happening. Why shouldn't we have a hearing where we get Dodds, etc in front of a panel and get them to explain their part? By the way why do all of these Congressional Inquiries turn into a forum to beat people up rather than a search for what happened or is happening? Everytime Congress convenes one of these shows we should have some Congressman that are on these committees questioned by a group of Consumer advocates.
P.S. I wander what the IRS would say to me if I did some of the things that were and probably are being done by our elected and appointed officials.
Also what about those sweet Countrywide Mortgages - whatever happened with that?
More thoughts:
1) I and others are going to need to replace that car and washing machine. Maybe sooner than later.
2) Obama should have bought those helicoptors - Bernacke will use them
3) A decline in the dollar is not all that bad. Maybe it will give us the incentive to build things and ship them overseas.
4) The Government (except for military and essential - Congress is not essential and they should"t be allowed out of their homes) should take a two week nonpaid forlough. It will help tremendously with the budget. We will get a respite from all of the apparent smoke screens that are being foisted on us. Investors won't need to worry that a new bomb shell will drop.
5) I am not confident going back into the market until a whole lot more transparency is introduced. Government, Large investors, especially Bank Balance Sheets. If I miss the bottom so be it. There will be many more in my opinion if we keep on this path.
THEY NEVER DID, TELL US SOMETHING NEW.
EVERY TECHNICIAN HAS A DIFFERENT IDEA AS TO HOW TECHNICAL ANALYSIS WORKS, THAT ALONE PROVES IT'S A FARCE.
ha ha
this shows its going down again.
I think the most important part of this discussion is that almost everyone is right. Someone could state all the reasons why we have not hit bottom, could be right, yet we may indeed have hit bottom.
The arguments for both sides are not only valid, but extremely accurate and persuasive. The hard part is determining which argument has more evidence to support its cause. Even so, the argument that is more valid sometimes loses, especially in the case of the stock market. If anyone says they can predict the stock market, they can't. The stock market is an untamed beast where investors can only predict its direction by using the best information they can get, and yet, they are sometimes still wrong.
I am glad this article has brought out many of the reasons we HAVE and HAVE NOT hit bottom. I hope everyone could use this as part of their continued research to improve their portfolios performance.
Thanks again,
Ryan Vanzo
We won't be on the bottom for some time.
There is *zero* faith in the US Financial institutions. Banks don't trust each other. The Fed is simply printing currency ("expanding their balance sheet" is just plain ludicrous- they're just running the printing presses) which will prolong the pain.
The bottom will come when faith returns......... if ever.
Foreign countries are discussing the removal of the US $$ as the standard currency for trade. Watch out if this happens! The value of the US Buck will fall fast.
On Mar 21 03:45 PM sr9web wrote:
> It's not that we haven't "hit bottom", because we indeed have - a
> very bumpy bottom, which we will bounce along on for some time. Rather,
> what hasn't happened is that we haven't started back up yet (not
> for real any way). Why is that? You tell me - what's happened recently
> or is happening now or will happen soon that would make things move
> "up"? The answer is nothing. Housing is dead in the water. Lenders
> are dying on the vine, jobs are being lost and anyone left alive
> in the stock market is a trader, not a bull. Things move "up" when
> there's lots of easy jobs and easy money around and they stay "down"
> until upside pressure builds. There's no upside pressue building
> and there won't be for at least another year.
my question is: what happens to all this volcanic negative emotion the sheeple are feeling? it's looking for someplace to go--like lightning looking for ground. spmebody gave me some recent issues of vanity fair magazine and mike schnayerson's articles are a sorry but lucid indictment of the criminal cooperation between congress and banksters.
Besides most technical traders don't try to predict the market, but ride the trend and limit our losses when we are wrong.
On Mar 21 05:15 PM Vobogeck wrote:
> TEN REASONS WHY WE HAVE HIT BOTTOM:
>
><snip>
> 10. Everyone is in cash, and the market quite often moves in a direction
> to hurt the most people.
LMAO! That is *so* true. One addition.
11. Mainstream comedians decide it is time to pillory the "mainstream" media and others for not predicting this all in advance. Populist comedians must be experts at knowing what it is that others should have known, but always after the fact. Can't we pillory those comedians for not predicting in advance that their targets were ignorant of what was coming?
HardToLove
Compare today to 1974...
Doom & Gloom: Today vs. 1974/75
www.planbeconomics.com.../
Alt-A and Option AR Mortgages are still causing the housing market to correct and that process still has another few years to play out. Government Programs do not seem to be "helping" even the so-called "responsible" home owners.
Credit card defaults are about to start to cream the consumer sector financial industry this year
Unemployment continues to rage.
China itself is calling the viability of U.S. Treasuries into question.
Oil prices are edging up and will explode if any interruption to supply occurs.
Add to all of that the reality that the about eight trillion dollars worth of derivatives (mainly credit default swaps) seem likely to still blow up. Even after U.S. taxpayers pumped two trillion dollars into the banking system the shortfall against those potential derivative losses is over four trillion dollars.
On Mar 22 06:15 PM Stocks Simplified wrote:
> "Technicals don’t work" What? I am for most part a technical trader
> and I can tell you this year has been a very profitable year, all
> thanks to good old technical analysis.
>
> Besides most technical traders don't try to predict the market, but
> ride the trend and limit our losses when we are wrong.
>
All kidding aside, I agree that we have not hit bottom yet, too much mess, too much debt and still too easy for people to lose more than they have.
In late 2005 through 2006 I was calling for relatives to sell extra real estate because in my relatively uninformed opinion, the fact that house prices went up so ridiculously fast as compared to everything else tripped my Isaac Newton indicator...
Prices HAD to correct so that new and young buyers could afford to come in. Also, any system where people HAVE to essentially gamble for the ability not to eat cat food when they retire is a disaster.
Not everyone is cut out to gamble well and just as in the casino and backroom games, there are many scams out there. Anyone with a system to sell is likely a con artist, and does not have your best interest in mind.
Unfortunately for now, it's the only game in town...
But the E portion is also used to determine the Safety of the Dividend on the Common.
GE cuts its common stock dividend by 2/3rds but no one seems to notice. Takes effect in 2nd half of 2009. Cuts by DD and DOW (a 96 year trend broken).
Pointing to The PE ratios of the DOW or S&P and looking at comparable PEs over the last 100 years to determine over/under valuation is an excercise in futility. If the Common stock dividends are not safe, then earnings aren't as strong as projected by analysts and have yet to be lowered.
This is something I remember seeing during the 1072-1982 time frame. I can't remember which Quarter of which year. A PE ratio of 100 on the DOW and a negative quarterly number.
I Am Not going to do a Search for you, I am telling you what I remember. Because Trailing PE ratios are based on what has already happened and Forward Projections for a worsening economy are purely Tier 3.
IMHO
almost everyone appears to have forgotten the original problem.
There is no sign of a new regulation regime to control CDS, MBS, Banks or Insurance companies. A quick look on this site comes up bare, (Bear?).
The Government is pouring huge quantities of money into this damaged vessel.
Confidence is supposed to grow from a process that makes no logical sense. Yet in a mad way it seems to be working.
Everyone is looking for the bottom. No-one is looking for the hole.
What they expect is an Abyss. That's why, you will find the Vast Majority here Invest in Gold.
When I hear people talk about how we should go out and buy cars, with what should they be bought with? We're in a financial crisis, why are people being encouraged to take on debt?!?!?! That is why we are in this mess. We've created a false economy spending well beyond our means. We created a false stock market by falsifying revenues and looking for daily doubles. Both these created a real estate bubble, which kept the first two moving full speed.
We need to bleed before we can heel. Trying to stop the bleeding with the same tactics that got us into this mess will only make things worse.
1. Americas economy was run by Wall Street Sociopaths and their government servants which n the end showed that they didnt have a clue about economics...........and to ice the cake .....they are the ones that are trying to save america..............DOW TO 3000 with any luck. Then hyperinflation.......then possibly a war and history here we come again!
It was part of the reason (not the people but the shows themselves) that fueled this mess. Showing people making $ 100,000 for 4 weeks worth of work? And we didn't have a sense of entitlement?
Think "March, 1930".
No doubt there were people saying what you are saying now, then, and they would have been right if it hadn't been March, 1930.
On Mar 21 05:15 PM Vobogeck wrote:
> TEN REASONS WHY WE HAVE HIT BOTTOM:
>
> 1. Bearish posts on Seeking Alpha are coming thick and fast.
> 2. Everyone is saying "buy and hold is dead."
> 3. The press is full of "sky is falling" stories .
> 4. The Fed is swamping the market with liquidity yet no one is saying
> "you can't fight the Fed" anymore.
> 5. Most investors have given up hope.
> 6. House building has ground to a near-halt.
> 7. Oil prices are moving up again.
> 8. Australian coal contracts settled much higher than analysts expected.
>
> 9. The US dollar is finally weakening and will fall further as the
> fear driven "flight to safety" reverses. Cheaper dollar will improve
> US exports.
> 10. Everyone is in cash, and the market quite often moves in a direction
> to hurt the most people.
2. Credit card defaults are also baked it, and frankly not much of a problem compared the RMBS and CMBS. My wife and I have no credit card debt, she has a card that charges 35% interest if we did, I'd say those supplying that credit have something of a cushion.
3. Unemployment is a symptom, not the disease. And yeah, we are aware of that one too.
4. China: So? Hold on, you say if we print more money our currency devalues, no way!
5. Oil prices will go back up with demand, supply is not currently a problem. Even a 3MM barrell a day "interruption" would not be a big deal right now. At the peak a 0.5MM interruption out of Nigeria frequently moved the market $5-10, now it doesn't even make the news.
6. All the derivitives are not going to blow up. Consider the government is simply not allowing banks with significant counterparty risk to fail right now.
I know I've struck a sarcastic tone, but the six points mentioned below are very old news at this point. For the bears out there, show me something new! The biggest thing I see is setting the pricing side of the equation in motion for selling RMBS and CMBS at this point. Just because there's a plan to buy doesn't explain why anyone would want to sell.
On Mar 22 09:26 PM mac.barron wrote:
> If you think that the market is at or near the bottom right now please
> explain how each the following situations are going to be worked
> out:
>
> Alt-A and Option AR Mortgages are still causing the housing market
> to correct and that process still has another few years to play out.
> Government Programs do not seem to be "helping" even the so-called
> "responsible" home owners.
>
> Credit card defaults are about to start to cream the consumer sector
> financial industry this year
>
> Unemployment continues to rage.
>
> China itself is calling the viability of U.S. Treasuries into question.
>
>
> Oil prices are edging up and will explode if any interruption to
> supply occurs.
>
> Add to all of that the reality that the about eight trillion dollars
> worth of derivatives (mainly credit default swaps) seem likely to
> still blow up. Even after U.S. taxpayers pumped two trillion dollars
> into the banking system the shortfall against those potential derivative
> losses is over four trillion dollars.
On Mar 21 05:58 PM PROXIMO wrote:
> "this recession is affected peoples lives", "They've handing over
> their money to the 'professionals' for years," ----Someone ought
> to proof these articles before they are posted.
On Mar 22 08:52 AM jstratt wrote:
> I appreciate the authors perspective. We can debate about whether
> the bottom is in but I would encourage investors to think long.
>
>
> 1) It may not be the best time to buy stocks but it is a good time.
> Where was the fear at Dow 14000+ and where is the opportunistic aggression
> of a Dow 7200.
>
> 2) I could be wrong but I see 4% Mortgages creating some RE purchases
> and increasing disposable income through Mortgage refinancings.<br/>
>
> 3) Credit cards dont alarm me as the first 15% loss is probably a
> loss of interest and fees rather than capital.
>
> 4) World leaders are acting more or less in concert and are actively
> engaged. When that happens things ususally improve.
>
> 5) Business activity and earnings from a macro sense appear to be
> bottoming. I dont see fewer homes being sold or fewer cars being
> sold in the future.
>
> Finally I have to add that I have never found a time not to invest.
> Whatever you earn save some for yourself and invest it. It always
> is a great time to invest in the best and worst of market scenarios.
A marvelous self-refuting comment. It's tough being a contrarian bear when bearishness is rampant.
I thought November was the bottom, but when it when below 7200, everyone just cr*ppped, thinking "where is the bottom?" As of today we are above several levels of support from that bottom.
We may retrace, but then again buy a company at single digit PE that will survive until 2011 without going BK and you'll have a winner.
It is probably a good time to buy if and when it retraces.
Uh, they've been replaced by " buy foreclosure" infomercials and 'buy gold' ads.
Using the equity market as a proxy for the broader economy, the Nikkei fell from around 38,000 at the height of the bubble in the late 1980s, down to around 7,000. During the five-year period of quantitative easing, 2001 to 2006, the Nikkei rebounded by about 100%, moving back to the 14,000 neighborhood. Importantly, however, the minute the Japanese government stopped the spending, the stock market came tumbling back down to around 7,500, near where it hovers today. Note that at no point did it get anywhere near the bubble high of over 38,000.
Back here in the US, if history repeats itself the DOW will fall to somewhere around 3000 and recover to somewhere around current levels and then back down… how low no one knows.
Instead of trying to detect the "market's bottom", track the historic prices of the stocks in your own portfoloio.
On Mar 22 04:02 PM Ryan Vanzo wrote:
> Thanks for all the comments everyone, I usually write-up a personal
> response to every comment but there has been a lot more than I expected.
> I'll writeup a general response to everyone:
>
> I think the most important part of this discussion is that almost
> everyone is right. Someone could state all the reasons why we have
> not hit bottom, could be right, yet we may indeed have hit bottom.
>
>
> The arguments for both sides are not only valid, but extremely accurate
> and persuasive. The hard part is determining which argument has more
> evidence to support its cause. Even so, the argument that is more
> valid sometimes loses, especially in the case of the stock market.
> If anyone says they can predict the stock market, they can't. The
> stock market is an untamed beast where investors can only predict
> its direction by using the best information they can get, and yet,
> they are sometimes still wrong.
>
> I am glad this article has brought out many of the reasons we HAVE
> and HAVE NOT hit bottom. I hope everyone could use this as part of
> their continued research to improve their portfolios performance.
>
>
> Thanks again,
> Ryan Vanzo
My sentiments exactly. Till housing value STOP declining and Unemployment stabilizing everything else is wishful thinking. No wonder majority lost nearly 50% in 2008 and didn't learn a thing about REAL Economy!
Cure the ills of DEBT with more DEBT and encourage more CONSUMPTION to artificially pump up the Economy, Housing value and other deflating asset prices is akin to recreating the MADEOFF Economy with phantom wealth, ONE MORE TIME! This is called INSANITY but the Mkt likes it!
I've never shorted a stock in my life, but I am seriously considering it right at this moment. In Aug of last year I was sitting on the sidelines (very long on cash) licking my chops waiting for the crash so I could get back in again (stocks). When Paulson started to talk up the "Band Bank" idea, I though, Wow! This depression won't last long. These guys are all over it. I started jumping back in just before the rug got pulled. I was so proud of myself for even beating Warren Buffet to the punch.
I made the same stupid mistake back when Guithner seemed to be getting all over it. The Bad Bank idea got shot down again in Feb. by Obama with the excuse that it would be too difficult to accurately price the assets. What! Didn't they ever hear of high speed computers and online streaming databases?!!
Being a Taurus in times like this is not easy. If I didn't know better, I'd say that our leaders are actually trying to stretch this downturn out as best they can. But not intentionally, right?!!
Isn’t that crazy, technical analysis doesn’t work anymore! Tell me one technical analyst who foresaw the recent stock market crash.
James E. Gill III
There you go.
The Madoff's of this country (and more are popping up daily) have ensured that billions of dollars once invested in the market will NEVER come back. The market may rally. The rally maybe sustained for some time. I doubt it but it is possible. The bigger picture is that America is broke. No matter what the government does the relief will be temporary. Just as water will find it's own level, housing prices and the market will eventually find true value and we aren't even close to that today!
1. The financial arms of the big three car companies (and probably many others) are making loans to sell cars AT ANY PRICE! That means 110% debt to income, foreclosure, charged off credit card debt, credit score of any kind-- doesn't matter, we can find you a loan. As one car company financier told me personally, "You can sleep in your car, but you can't drive your house to work."
What happens to all these new car loans when buyers default in waves as they are sure to do with unemployment rising?
2. Credit card debt takes anywhere from 6-9 months to charge off as an uncollected account-- in effect, to stand up and be counted (reported on balance sheets) as money that finance and banks companies cannot recollect. Unemployment only passed 8% a month or so ago... fall out won't be seen until 2010 or more.
3. Right now only about 10% of mortgage applications are approved and the vast majority of those are refinances. Yet we still have 14 months of inventory in unsold real estate in Florida... you do the math. Cash buyers make up a VERY large percentage of new home buyers right now.
4. Loan production volume began to skyrocket with the refinance boom of 2002/2003 and continued with 100% loan to value lending on for second mortgages and purchase loans in the following years. ARMs are written on 1 to 7 year resets-- but it wasn't until the end of 2006 that home values began to decline to the point that homeowners couldn't sell or refinance those ARMs. 2006 plus 7 years-- that's 2013, folks, and outside of this administration's forecast for returned GDP growth.
5. All major banks have recently increased their margins on credit card interest rates beginning with Bank of America last summer. What used to be prime plus 2.99% is now prime plus 6.99% for excellent credit (oh, and buy the way--- they have also been diligently lowering your credit card limits and closing open unused lines so that your total outstanding debt to credit limit ratio is less favorable than it was last year even if you've made all your payments on time and have steadily reduced your outstanding debt). Any time your credit score drops as it will with a balance to limit ratio of 25% or more on your open lines of credit, credit card companies can charge you higher rates of interest. So your excellent credit last year entitled you to prime plus 2.99% (approximately 8%) then, but your only fair credit now will get you a very generous prime plus 10.99% (approximately 14.50%). So much for the FED giving us a break on the interest rates. If you've lost your job in the last year, chances are that your credit card minimums have gone up to compete with your grocery bills now. I wonder which will win.
6. American consumers have over 1.2 trillion in unsecured credit card debt that they cannot eliminate by refinancing into their mortgages has they have done for the last eight years. As of October 2008 only just over 4% was in default. Coincidentally, it was around that time that consumer spending began to fall. So now that the banks have had a bailout for all their bad mortgage debt where will the money come from to bail them out for all their bad credit card debt??? And if consumers are just now figuring out that they should slow their spending how much farther do we have to fall? Kind of hard to imagine that you can't get by for a while when the average person with good credit can leverage THREE times their annual income on the unsecured credit cards!
7. Oh, and don't let me forget to address the foreclosure crisis while I'm at it... you haven't seen anything yet. Foreclosures have been in moratorium since before Christmas 2008 pending the new housing bill and stimulus legislation. Some banks already had loans more than 12 months in arrears BEFORE that time and either couldn't foreclose because they weren't staffed to handle the volume or wouldn't because they didn't want to take further hit to their balance sheets as all their assets were being written down. Better to hold it at an undetermined value than sell it and confirm what an idiot you were by showing how much money you lost.
And one last tidbit, in case you were not in the loop for this one, Bank of America, Citigroup, and Chase are the largest credit card issuers in the country, but GE has a pretty big toe in that lake as well which may be another component in their tanking stock price.
On Mar 21 03:02 PM Ryan Vanzo wrote:
> Questions and Comments Welcome
By the time the blogs / media / pundits start saying "we've hit bottom!" it will have long since come & gone.
My favorite thing to do is buy when things look bleak, then cost average if things get bleaker. I've always preferred buying on the downward slope rather than the upward one. There's 2 cents for you to invest..... =)
www.ft.com/cms/s/0/1ed...
Big Bank Insider, directly above, already took care of number two nicely:
"2. Credit card debt takes anywhere from 6-9 months to charge off as an uncollected account-- in effect, to stand up and be counted (reported on balance sheets) as money that finance and banks companies cannot recollect. Unemployment only passed 8% a month or so ago... fall out won't be seen until 2010 or more."
V.P. also wrote an incoherent sentence about his wife's usurious credit card that made no sense whatsoever.
3. V.P. has dismissed unemployment as a relevant economic indicator. What can I do with that? Do you win points by stating that it is a well known problem? If you were naked in a freezer could you avoid hypothermia by pointing out that it is a well known effect of freezing temperatures on the human body? If you don't get why the economy is crashing nobody here can help you.
4. Again, V.P. say absolutely nothing here regarding China deciding to cut its losses on the U.S. Dollar or provide a credible reason why such action is unlikely. In the one day since I put my original comment in China has made even more noise about getting away from the U.S. Dollar but pay no heed V.P., because you already know everything on earth that there is to know, right?
5. Regarding oil supply interruptions all I can say is: my bad. I actually could have been more clear. By "any interruption" I was talking about a serious event like Israel blowing up Iranian reactors or a major terrorist strike against Saudi Arabia or a Cat 5 hurricane wiping out a major refinery. These types of things can and do happen and they won't wait for our economy to get back on track before they occur. Still, in researching I did find this little tidbit:
www.marketwatch.com/ne...={61278BBD-AEBE-4DC4-B...
Note the anticipated rise in demand is in the developing world. As the oil industry gears down, there will be trouble getting production back up and the lag will push prices up. Maybe some new flex-fuel tech or something will come along to bridge the gap but I'm not holding my breath.
6. As for the pending derivative defaults you really believe that the government can just toss another three or four trillion into the Abyss?
I don't have any short positions on U.S. markets. I've said here on S.A. several times that I'd love to see a turn around and that I'd prefer to be harvesting hidden gems from the domestic small caps any day to pouring over these oddball Asian infrastructure players, European REITs and Canadian Energy Trusts. I really WANT a massive turn around but I don't see how.
On Mar 23 01:35 PM VP of Common Sense wrote:
> 1. The Alt-A etc. problem is fading. Sure there are more out there
> but there were triple the recasts in 2008 as there will be in 2010.
> Plus I think we are ALL aware of this issue at this time, it's "baked
> into the cake".
>
> 2. Credit card defaults are also baked it, and frankly not much of
> a problem compared the RMBS and CMBS. My wife and I have no credit
> card debt, she has a card that charges 35% interest if we did, I'd
> say those supplying that credit have something of a cushion.
>
> 3. Unemployment is a symptom, not the disease. And yeah, we are aware
> of that one too.
>
> 4. China: So? Hold on, you say if we print more money our currency
> devalues, no way!
>
> 5. Oil prices will go back up with demand, supply is not currently
> a problem. Even a 3MM barrell a day "interruption" would not be a
> big deal right now. At the peak a 0.5MM interruption out of Nigeria
> frequently moved the market $5-10, now it doesn't even make the news.
>
>
> 6. All the derivitives are not going to blow up. Consider the government
> is simply not allowing banks with significant counterparty risk to
> fail right now.
>
> I know I've struck a sarcastic tone, but the six points mentioned
> below are very old news at this point. For the bears out there, show
> me something new! The biggest thing I see is setting the pricing
> side of the equation in motion for selling RMBS and CMBS at this
> point. Just because there's a plan to buy doesn't explain why anyone
> would want to sell.
>
> On Mar 22 09:26 PM mac.barron wrote:
Hi Ryan,
I just read your article “10 Reasons Why We Still Haven't Hit Bottom” in which you write, “6) Technicals don’t work.” I was on the phone with a trade at Schwab the end of 2007, when I was also looking at the Dow on bigcharts.com on the Advanced Charting page. I remember saying to the trader, ‘Oh my gosh, look what I see. I have just plugged in the DJI on the Monthly/Decade, and the MACD has just crossed down very clearly.” I wish I had been wise enough to heed the very clear technical downturn signal of the MACD that I saw in October 2007. In terms of technicals, I think it depends on what is plugged into the charts, and at what timeframes. That downturn signal was very clear even earlier the beginning of August 2007 if you look at the MACD on the 5 Year Weekly chart.
What’s fascinating to look at on the 3 Year Weekly chart is the MA Envelopes on the Upper Indicators. I have noticed that eventually stocks meet the MA Envelopes. If you look at it right now, you will see how stock moved up from their low to fill in the MA Envelopes, where they are right now.
On the 1 Year Daily chart, things are starting to look a little top heavy, both on the slow stochastics and the MACD. So far, the MACD is widely heading up. I’m curious what the earnings season will bring, and if, indeed, as you prognosticate, there are still “10 Reasons Why We Still Haven't Hit Bottom.” Truthfully, I think we are beginning to see light at the end of the tunnel, and that there will be buyers coming in at lower prices, rather than sellers seeking to sell off their stocks. Of course, everything can change as world events change.
The question now, since the charts are looking a little top heavy, “Is this an opportunity to buy stocks at such low prices, even though, some of them have double their price off their lows, or, will we have an opportunity to buy the banking stocks, copper stocks, etc. at lower prices again?”
I’m curious if you believe all stocks will trend lower from here, and if not, which sectors are more likely to veer lower again? The tech sector seems to have done well. And now, the housing stocks have doubled from their bottoms.
Thanks for giving this some thought. I would love to know what you think after looking at the charts again by plugging in the indicators I have spoken of above.
Linda from Tahoe
On Mar 21 03:02 PM Ryan Vanzo wrote:
> Questions and Comments Welcome
Just put up a monthly chart with a 13 period moving average..if you are above it...you are long...below...you are short.. not all that complicated... I agree to disagree with you
We will ride out of the bottom when the big three emerge from the chapter 11 as lean and mean machines. America will fight back and win. I think Obama administration will let the big 3 to do a scheduled chapter 11 to smooth the ride. This could take a year.
I believe the bottom can be defined as when the second of the big 3 auto makers is in the chapter 11.
On Mar 21 08:31 PM The Mad Hedge Fund Trader wrote:
> I bet better than 50/50 we have. There have been 14 bear markets
> in the postwar period with an average 25% decline. This bear market
> is down 58%, and it still may have farther to go. No wonder everyone’s
> risk models are blowing up. This time it really is different. Over
> the last 100 years the average return on stocks has been 10% a year,
> with 40% of that coming from dividends. Today there are dozens of
> prime industrial companies offering dividends rates in the mid teens.
> Why investors are not loading the boat with General Electric (seekingalpha.com/symbo...)
> stock yielding 12% at $9/share is beyond me. Take systemic risk out
> of the equation, and investors will leap at these.
>
your description of Obamanomics was perfect. Just like a beginner chef preparing a meal; good intentions, no experience, lack of competence and plenty of hubris. What do you get? A burned meal that tastes like shit.
newby
On Mar 22 11:05 AM petyaczar wrote:
> 1)When the tide is going out, it lowers ALL boats that are still
> afloat.
> 2)Wait till the tide turns before betting on which boats will rise
> with the incoming tide.
>
> To Artful Dodger, from another "old cat" who bought his first stock
> in the late 60's. just in time to gain enough investing experience
> - already had the hubris - to position myself for the fiasco of the
> mid 70's.
>
> IMO we are not staring into the abyss of the Great Depression, No,
> IMO we are staring into the abyss of the GREATER DEPRESSION. and
> this will be the legacy of the Obamanation = good intentions, no
> experience, and lack of competence coupled with plenty of hubris.
>
>
Any seasoned railbird at the horse racing track will tell you that.
Any bettor that places his wagers according to these "experts" deserves to loose their money. Wagering on the horses is a "sport". So is the stock market. Those looking for "inside tips", "bollinger curves" and other such alchemy in a stock market that has gone into the Middle Ages deserve their torture.
"How about a pay-cut for our congress representatives for losing us so much money?"
The best sentence in the whole article, but unfortunately, Barney Frank, Chris Dodd and Maxine Waters will be reelected and Rahm Immanuel and Tim Geitner will retain their positions. Recovery will begin when these destructive people are gone.
Look for a deeper bottom and more nationalization, common stock being wiped out and bond holders forced to convert to common stock.
The fed has been a good predicter of the direction of the market.
Pay attention or pay the price.
The inflation of corporate titles is real! I actually work in the mailroom.
You can create doomsday senarios for anything, and the impact on the economy/markets/whatever will of course be negative.
China won't dump our debt because they need us. They probably hate our guts, but since they pegged the yuan and their economy is a house of mirrors that depends on a nation 1/4 their size, I really don't care.
Unemployment is a valid economic indicator, but peaks in unemployment do not generally line up with equity troughs.
As far as derivitives go, frankly, I think you are guessing.
All you need to know is bear markets unfold in a 3 wave downtrend and bull markets are a 5 wave uptrend. We are now in the 2 nd wave uptrend before the devastating 3rd wave down.
If you follow this simple yet proven rule you will not go wrong.
Here ends the lesson.
not a farce: s&p long term chart, double top 1550, breakout failed = game over.
On Mar 22 02:33 PM jimmy46 wrote:
> 6) Technicals don’t work"""""""""""
>
> THEY NEVER DID, TELL US SOMETHING NEW.
>
> EVERY TECHNICIAN HAS A DIFFERENT IDEA AS TO HOW TECHNICAL ANALYSIS
> WORKS, THAT ALONE PROVES IT'S A FARCE.
I don't know if this is the bottom. There is one reason however why I think that there is a long way to go yet. That reason is that the government is as corrupt as Wall Street. Special Interest groups are still ruling the country. The "pay to play" is still alive and well. The AIG scandal is a prime example. And yes Geithner turned a blind eye to AIG bonuses.
Why do you think that the government stood still, while Madoff was running his giant Ponze scheme for over 20 years? Is it because of the lack of laws? Or is it maybe because he belongs to a special interest group, which is considered untouchable.
Once again, great input!
Sentiment (Bullish Percents, Summation Indices and Percentage of Stocks above key MAs) started to peak late 2006 into early 2007, but this came in an environment of end-phase gluttony generated by excessive bullish media leading to a market which tagged on another 15% worth of gains before it truly started to rollover. It would have taken an iron will to have shielded yourself from the news and stepped back.
Now we are in a market where the reverse is true. Both fundamental and technical analysis is getting trashed. The former brutally exposed by the shenanigans of Wall Street which collapsed the validity of nearly every earnings report of companies with a hint of consumer loan exposure; who can trust an earnings report and by association, fundamental analysis now? Where were the Ivy league MBAs or CFAs at calling this mess back in 2006/07? Nowhere. Not even Warren Buffett escaped the carnage and no one would deny his extraordinary sway in been able to formulate a deal at the best possible terms; is anyone blaming Buffett for not calling the top? No - I didn't think so.
Sentiment has sharply recovered from the lows of late last year (new all-time lows at that) but like in 2006/07 where markets made new highs in the face of weakening sentiment, now markets are making new lows in the face of strengthening sentiment.
Cycle analysis suggests a bottom won't complete until early 2010 but on improving sentiment there is ground for optimism. The bigger questions is when will the secular bear market end? Again, cyclical analysis suggests we are only half-way there but at least we can expect a respectable counter rally before we have to start looking downwards again.
Technical analysis is not rocket science, it's a tool to derive risk probability based on the psychology of the market place. Do you think people slapped Barry Ritholtz on the back when he was crying foul on the housing market in 2007? No, he got a far more dismissive response from the same people who think Technical Analysis is nothing more than tea leave reading.
People continue to challenge Technical Analysis as if its some panacea for their own failings; presumably these same individuals lost money using either fundamental analysis, or worse still, relied on others to make their investment decisions for them.
Hopefully the lesson will have been learned and now people will accept the importance of doing their own research, research which encompasses the best parts of fundamental (dividend screening) and technical (sentiment) analysis. It's not to late. Few will have emerged unscathed but at least stocks trade at values not seen in over 10 years. Opportunities will avail of themselves, just don't be throwing what reserves are left at one stock in one day.
Declan
On Mar 21 06:16 PM Chabsentia wrote:
> VObogec: The cheaper dollar is what Causes the price of Oil to go
> up. The reason that the cost at the gas pump did not go down relative
> to the Price of Oil when it went down from 150 to 40 dollars is
> because this quote you see for $40. etc is for Brent/ Texas Intermediate
> Crude and not the fact that we import 60% of that Oik from Overseas
> so the price of Oil that is quoted is misleading because it is not
> most of our source, Oil goes up when the Dollar is worth less to
> compensateOil depends on the Price of the Dolllar,Supply and to some
> extent Speculation on Oil Futures.Global Demand is down and the only
> reason the hasn't been affected is that all other Currencies are
> down. China is starting to recover amd is now predicting 8% annual
> Growth. Demand is starting to pick up and so Oil and the CBO came
> out yesterday and said that the Deficit for the Obama Bill will
> be 2.3 trillion more than he states and the Fed is pumping money
> also and Geithner couldn;t manage a piggy Bank. This is Inflation
> galore and the crash of the Dollar and the Market is reflecting it.
On Mar 21 06:16 PM Chabsentia wrote:
> VObogec: The cheaper dollar is what Causes the price of Oil to go
> up. The reason that the cost at the gas pump did not go down relative
> to the Price of Oil when it went down from 150 to 40 dollars is because
> this quote you see for $40. etc is for Brent/ Texas Intermediate
> Crude and not the fact that we import 60% of that Oik from Overseas
> so the price of Oil that is quoted is misleading because it is not
> most of our source, Oil goes up when the Dollar is worth less to
> compensateOil depends on the Price of the Dolllar,Supply and to some
> extent Speculation on Oil Futures.Global Demand is down and the only
> reason the hasn't been affected is that all other Currencies are
> down. China is starting to recover amd is now predicting 8% annual
> Growth. Demand is starting to pick up and so Oil and the CBO came
> out yesterday and said that the Deficit for the Obama Bill will be
> 2.3 trillion more than he states and the Fed is pumping money also
> and Geithner couldn;t manage a piggy Bank. This is Inflation galore
> and the crash of the Dollar and the Market is reflecting it.
The economy is being held hostage by the Oil Refinerys !
The CRACK PRICE of oil to turn crude into fuel is only high if you operate the refinery 12 hours a day.
2 hour start up -- 8 hours of production - 2 hours shut down.
Operate 24 a day and gas prices drop to under $1.30 and people will start moving again.
NATIONALIZE THE OIL REFINERYS ---- SCREW THE BANKS.
On Mar 27 02:46 PM dave mckay wrote:
> I laugh when people say that buy and hold does not work. Just pick
> 3 stocks at the very top of the market in 1972. IBM, Proctor and
> Gamble and ConEd. You would have made a fortune. With ConEd, those
> shares you purchased in 1972 would now have a dividend rate of approx.
> 50%, with todays dividend payout! Try that with bonds or any other
> kind of income tax-sucking, market timing scheme.
On Mar 26 02:00 PM VP of Common Sense wrote:
> Ok, serious question for those that see this as a simple bear rally:
> what would you need to see to be convinced otherwise?
1. Get the Government to pick a plan & stick to it. Stop the two or three times a week major changes.
2. Throw out Mark-2-market so the banks can afford to lend and not have to immediately write loans down to "Exit price". If you can't live without M2M, put it in the notes rather than letting it create phantom income and phantom losses.
3. Go after naked shorts with fines & make the shorts disclose to the SEC just like longs do.
4. Put back the up-tick rule, but from the previous day's close.
5. Watch for investments that are being manipulated, such as CDS and work to off-set the manipulators. For example, the Government could sell CDS contracts on the too-big-to-fail companies, or they could have AIG do it and they might be able to stop some of the manipulation.
6. Work to clear out the real estate inventory rather than coming up with delaying tactics.
7. Work with the bankers and brokers and insurance companies rather than forcing more accounting restrictions, stress tests and tougher examinations.
8. Why is our Government selling short term debt and buying back long-term?
Well - that's a start. In general, nothing has been fixed by all the Government spending. The biggest growth industry is the Federal Government and agencies such as the FDIC.
1) Revenue growth instead of big revenue declines in companies.
2) Profit/earnings not from cost cutting, but from margin expansions or real sales increases.
3) Housing prices that have stablized instead of continuing to fall
On Mar 26 02:03 PM silver-bug wrote:
> I'm glad we share a common viewpoint. I like your suggestion on point
> 8... let's cut salary of the mofos that are running this country
> into the gutter.. or better yet, fire them!
On Mar 27 02:46 PM dave mckay wrote:
> I laugh when people say that buy and hold does not work. Just pick
> 3 stocks at the very top of the market in 1972. IBM, Proctor and
> Gamble and ConEd. You would have made a fortune. With ConEd, those
> shares you purchased in 1972 would now have a dividend rate of approx.
> 50%, with todays dividend payout! Try that with bonds or any other
> kind of income tax-sucking, market timing scheme.