tlc8386

Why the Stock Market Should Crash

Totally agree what we are seeing is re-adjustments of value be it RE, business, the dollar in a deflationary environment. Many stocks are sporting lower PE's with decent divy's this is where you want to be for the so called crash which is what we experienced last year what we have now is the re-adjustment period of getting rid of bad businesses who were over leveraged, poor financials, thin margins.

Those who survive cut costs, got rid of dead wood, found new markets those who cried got killed. People are still spending you can't change poor habits in one year. They are just not spending as much. So we are chasing different dollars and the market has to adjust to this.

Employment is washing out the poor workers keeping the top working ones. Those who lose need to find a new gig, those jobs are gone. And because of this one reason is why we are not crashing because those top employees are still spending. Example would be the must have products for those type of people such as I-phone and the Storm.


On Nov 16 05:52 PM Adel Antado wrote:

> Nice article on why real-estate is on the decline, but the article
> does not speak to reasons why the stock-market will suddenly crash.
>
>
> The reality is that high-unemployment has always been good for the
> market since it puts downward pressure upon the cost of labor providing
> cheaper goods and services and higher profits for shareholders.
>
>
> What I see is a slower trend and narrower swings as our economy readjusts
> to tighter money at higher costs, the efficient companies doing much
> better than the market average while the less-efficient ones decline
> or disappear.Isn't that part of the cycle? The remaining companies
> will be more efficient and profitable substaining the market and
> more growth.

What About 'All That Cash on the Sidelines'?

The move has already been made by those who had to move their cash out of the .1% or less now in interest rates for MM funds. This is how we got this far up 46% since March. Rotation had to happen but yes some cash did not move because of the high risk owning stocks.

I would suggest doing a search on dividend paying stocks to see how much new money went into them especially those down with the rest of the fall. Those are now up 50% and holding.

As for health care the big miss is the CEO pay in healthcare which is the sole fraud of the entire system. Look what this one doctor wrote from webMD.

blogs.webmd.com/mad-ab...

Equities: In the Eye of the Storm

Well I am 50 no debt as well--and I will say it's not the boomers but those yuppies in the 80's that over bought--we all own our houses--have cash--worked hard for a living and pay the most taxes!

Dave Fry's Market Outlook for Wednesday

Well I have to say what a day---up and down and up and down---I took another walk and missed the leg down--(had to get fresh air)

I am thinking a lot of this has to do with options expiring this Friday.

The calls and puts are fighting it out to gain their position or at least come out of this mess.

Meanwhile seeing stocks go up and down shows you NO faith in the latest news of walmart---and fear is still out there

what this tells us is that any gains will be taken out---for how long I don't know if it will continue on after Friday's option expire---or till next week---

I have the feeling with more news out of the financials and more uncertainty that we have to be extremely careful--because where ever you see gains of late you are seeing that stock being sold off.

As for Benanke I hope he does nothing and allows this correction in inflation to continue to lower prices---if he floods the market with more money it will stop the correction.---dollar will drop more--gold and oil up---and stock market will continue to flucuate---more cheap money will only hurt us now---what I really want is for him to allow his moves to do their work--but not to sink the dollar any more.

You see some of this working with Walmart lowering their prices---housing has to come down---slower economy will cause pricing pressure and eventually lower inflation---but if Bernanke goes to far with rate cuts he will take out interest income as well---

He has to allow this correction to repair itself.

And the bankers have to reset their loans---I feel that is a seperate issue and should be addressed instead of it running into the overall economy causing this fear in credit.

Loss of construction jobs ect, materials can't be stopped due to demand--but they can stop the bleeding into the credit markets if only they wanted too----

Outlook for The Market, The Fed and Housing

Equity loans from the housing market is also a key part of the depreciation of value of ones home. Less equity will hurt future growth from loans as well as a person's willingless to pay back when their home is worth less than borrowed on.

These figures of equity loans could be a large amount of personal debt. How many will walk away if their home is worth less than what they owe and cannot pay back?

Preparing For Some Defensive Portfolio Adjustments

The problem becomes how well do we know this fed. And so far they seem to want this correction to continue. So protecting your assets is always a good idea but I don't feel safe in the strength of this market. Lots of liquidity out there. tina c.

Preparing For Some Defensive Portfolio Adjustments

The labor number coming in softer than expected is just the first crack the fed has been waiting to see. With all the noise in the correction from the housing sector it may feel inclined to make a statement. But the fed wants to see inflation correcting and it appears to be doing just that.
The fed will be very careful now with this labor number the spread from housing is affecting other areas as expected.
So shorting the market should be in very limited time frame because if the fed cuts this could turn around so fast the shorts will get caught.
This is why you see strength in the market: the anticipation of a fed cut.

Allowing the correction in housing is what the fed needed to slow down inflation after all it was running away in the housing market---tina c.