Wall Street Disaster

[unomi]

Referring to him as Ayn Rand's lover evokes some disturbing images but that's beside the point. Actually it's Jim Sinclair that Greenspan is in cahoots with not Noam Chomsky. See http://www.gold-eagle.com/greenspan041998.html and guess how AG has been investing his money for this past decade.

Great article, very apt.

Perhaps its time to reword 'fractional reserves' as 'notional reserves'

[russianrobert]

"It is interesting to me that we (global) can fight a "war on terror" for 10 years on several fronts and never get a bill."

The bill is that the national debt tripled under Bush, and that will be repaid through your taxes.

"Consider that WW2 cost the US $300 billion which was $4.3 trillion in 2006 dollars and was funded largely by $185 billion worth of war bonds."

Bush's war in Iraq has cost 4% trillion US.

"Has anyone been inconvenienced due to rationing."

During WWII, Roosevelt inplemented rationing of sugar, coffee, tires, and gas...nit that the US didn't have sufficient supplies, he just wanted US citizens to feel the same sort of economic pain that the English were.

"My taxes have not change significantly in recent memory. They are high but have not been seriously adjusted upward in amounts that suggest they are paying for this phony war."

US citizens have a lower tax load than most of the other industrialized nations. Considering that a gallon of gas costs $5US more in Europe and other countries, simply because of additional taxes.

For me this is the root of the problem in the US. US consumers rarely pay the real price for anything. Take gasoline. How much has/is the war cost/ing in Iraq? That's a war about oil, plain and simple. Now, how much are Americans paying for their gas? If gas prices in the states reflected the REAL cost there would be many benefits. Lower deficits and less consumption. Do Americans realy need two SUV's per family? Europeans have been driving smaller cars for ever. There would also be more incentive to develop alternative fuels and electric cars etc.

Edited October 12, 2008 by russianrobert

[flying]

For me this is the root of the problem in the US. US consumers rarely pay the real price for anything. Take gasoline.

http://www.babeled.com/2008/06/02/us-versu...ean-gas-prices/

[russianrobert]

For me this is the root of the problem in the US. US consumers rarely pay the real price for anything. Take gasoline.

http://www.babeled.com/2008/06/02/us-versu...ean-gas-prices/

The underlying cost of gasoline (pre tax) is not the issue. It's the cost at the pumps to the consumer.

I will repeat. If Americans paid the REAL cost of gasoline (what it costs them as a nation) that would have a positive effect on the deficit, enviroment, oil prices and the development of alternative fuels and cars. For everyone.

If there is a problem with addiction why keep the cost low?

[cloudhopper]

Can't you transfer those investments into bonds without paying the penalty? I guess it depends how you have your ira set up but i wouldn't think you would set it up so that you must keep it in the stock market. I'd check and put it in bonds although it's getting late and i imagine you lost a bundle already.

Good luck.

Yep! I sure have lost a lot. And unfortunately I have been unable to access my account (w/ Vanguard) from within Thailand. Now its is probably too late to "panic".

Why can't you access your Vanguard account from within Thailand? Do they block internet access from a foreign IP address? There is always something called a telephone....just a matter of calling during the correct business hours.

I have Vanguard and am moving to Thailand soon but want to access my accounts. Is this a real big problem because of being out of the country?

Regards,

Martian

When you get your computer online with an ISP in LOS give Vanguard a call on their 800# while online and they will set up your access. You will then be able to access your account from that machine only.

[lannarebirth]

Quote of the day re: markets

"This is worse than a divorce. I've lost over half my net value and I still have my wife."

[BEENTHEREDONETHAT]

Quote of the day re: markets

"This is worse than a divorce. I've lost over half my net value and I still have my wife."

Should be quote of the month!!!!!!!

[dingdongrb]

Here's one, not about the markets, but about the US Housing situation of recent:

(Halloween is going to suck this year!)

[Jingthing]

Let's have some fun with this. Who can predict the bottom? I say it is 7450 on the Dow Jones.

This has hit me big time. What a drag.

Reviving this thread about PREDICTING the bottom of the stock market crash.

As you can see I predicted 7450. Well it closed in the 7500's yesterday, a five year low. Will this be the bottom?

[dingdongrb]

Let's have some fun with this. Who can predict the bottom? I say it is 7450 on the Dow Jones.

This has hit me big time. What a drag.

Reviving this thread about PREDICTING the bottom of the stock market crash.

As you can see I predicted 7450. Well it closed in the 7500's yesterday, a five year low. Will this be the bottom?

Unfortunately I see it going lower but how low, I have no idea.... At this rate maybe the 5000 mark unless everyone's superhero, Obama can quickly resurrect it.

I just spoke to my sis back in Ohio and gas is around $1.60 a gallon there..... Going down as fast as the market....

[AlexLah]

The bottom wil be between 3 and 4 thousand.

Somewhere mid next year.

Why?

Because that is the plan.

Now you cannot say you did not know, I told you.

[OriginalPoster]

The bottom wil be between 3 and 4 thousand.

Somewhere mid next year.

Why?

Because that is the plan.

It's fortunate that they told you their plan.

[lannarebirth]

The bottom wil be between 3 and 4 thousand.

Somewhere mid next year.

Why?

Because that is the plan.

Now you cannot say you did not know, I told you.

It's going to up 500% in 6 months? Cool.

[AlexLah]

I mean the DOW.

[Jingthing]

I am sticking with my mid 7000's low prediction. Doesn't cost me a penny to say so, so why not?

[OriginalPoster]

I am sticking with my mid 7000's low prediction. Doesn't cost me a penny to say so, so why not?

I like you, you're funny, you can be my caddy.

[Jingthing]

I am sticking with my mid 7000's low prediction. Doesn't cost me a penny to say so, so why not?

I like you, you're funny, you can be my caddy.

Thanks, but at this rate I won't have car fare to the golf course.

[VegasVic]

I am sticking with my mid 7000's low prediction. Doesn't cost me a penny to say so, so why not?

You are probably not far off, the DOW could even dip below 7000, but the risk-reward ratio as a short is just not there anymore! There is a record level of cash on the sidelines worldwide and with interest rates coming down all over the world there just are not many places to put that cash, so while the DOW could drop to 7000, it could just as easily rocket off that level to 11000 within a weeks time Gold shares have been way oversold and I have been trading them with some nice success for about 6 weeks now, but you have to be nimble. Today was a good example, the market was basically flat most of the day and then in the last 30 minutes there was a 500 point short covering rally. The shorts are more nervous than the longs because they know that the market is near a bottom, and they also know that there is all that cash on the sidelines with itchy trigger fingers just waiting to pounce.

[siam4ever]

With housing prices coming down and prices on stocks coming down and prices for oil coming down why is everyone so worried? Do you really like paying more for everything? There was a time when people saved their money and enjoyed low prices when they spent it!

[Jingthing]

With housing prices coming down and prices on stocks coming down and prices for oil coming down why is everyone so worried? Do you really like paying more for everything? There was a time when people saved their money and enjoyed low prices when they spent it!

Sounds like you are talking about a deflation scenario, which is about as bad an economic symptom as you can imagine. Sure if you are one of the lucky ones with cash to spend, lower prices are good for you. But not good for the bigger picture. Consider people's retirement accounts which may have lost half their value, etc. etc.

Edited November 22, 2008 by Jingthing

[retiredebt1]

Well the Aus mkt is down in sympathy with the US markets. All those people that shouldnt have gotten a home over the last 2-3 years - are defuating on loans . Mortgage backed securites are blowing up - hedge funds are getting clobbered and shutting doors - several mortage cos are going bankrupt - and WMT and HD are reporting slower sales -- portending to a weaker US consumer buying less on the margin - hang on brother - this could get ugly unless Berneke cuts the fed funds rate ... soon.

Thanks for sharing this information..

[siam4ever]

With housing prices coming down and prices on stocks coming down and prices for oil coming down why is everyone so worried? Do you really like paying more for everything? There was a time when people saved their money and enjoyed low prices when they spent it!

Sounds like you are talking about a deflation scenario, which is about as bad an economic symptom as you can imagine. Sure if you are one of the lucky ones with cash to spend, lower prices are good for you. But not good for the bigger picture. Consider people's retirement accounts which may have lost half their value, etc. etc.

Nobody's retirement account lost half its value. That's what people need to realize. They've entirely lost the concept of "value". The inflated numbers associated with real estate and stocks had little to do with their "value". They mistook the concept of value with a pyramid scheme. It's time to get back to basics and low prices are a wonderful place to start.

[Jingthing]

It's time to get back to basics and low prices are a wonderful place to start.

Sure, if you're buying.

However if you are selling something like a house, you are FUBAR!

I remain hopeful that we have reached the bottom. And this economic bloodletting was probably necessary, however painful, so in that sense I agree with you. But where this goes from here remains totally uncertain. Even expert economists don't know that, as they are seeing economic indicators they have never seen before. A large part of this situation is real, and a large part is PSYCHOLOGICAL.

Edited November 22, 2008 by Jingthing

[JimsKnight]

With housing prices coming down and prices on stocks coming down and prices for oil coming down why is everyone so worried? Do you really like paying more for everything? There was a time when people saved their money and enjoyed low prices when they spent it!

Sounds like you are talking about a deflation scenario, which is about as bad an economic symptom as you can imagine. Sure if you are one of the lucky ones with cash to spend, lower prices are good for you. But not good for the bigger picture. Consider people's retirement accounts which may have lost half their value, etc. etc.

Nobody's retirement account lost half its value. That's what people need to realize. They've entirely lost the concept of "value". The inflated numbers associated with real estate and stocks had little to do with their "value". They mistook the concept of value with a pyramid scheme. It's time to get back to basics and low prices are a wonderful place to start.

Siams hitting the sweet spot here, only too many of the sheep bought into the bricks and mortar ivory-tower complex.

For us that have actually fixed the roof while the sun is shining certainly don't loose sleep over the lack of credit or crappy stockmarket outlook

Just watch the house come crashing down and look on as they (try) to get it going again.

It's all a big cycle and that's what people didn't understand when it all started last year.

[AlexLah]

There is no problem, let's just keep our head in the sand, OK?

[dingdongrb]

With housing prices coming down and prices on stocks coming down and prices for oil coming down why is everyone so worried? Do you really like paying more for everything? There was a time when people saved their money and enjoyed low prices when they spent it!

Sounds like you are talking about a deflation scenario, which is about as bad an economic symptom as you can imagine. Sure if you are one of the lucky ones with cash to spend, lower prices are good for you. But not good for the bigger picture. Consider people's retirement accounts which may have lost half their value, etc. etc.

Okay, let's just say for the sake of argument that everyone's savings (being current or retirement) has been cut in half. But if the cost of goods has lowered by half, gas is but maybe not all things so for the sake of argument let's say they are, then what's so bad? The only thing I could see is with the retirement savings cut in half and then prices of goods rise before retirement comes. (But hey isn't that going to happen anyway?)

[Jingthing]

Thats last post is ridiculous. American baby boomers were ALREADY on average way behind on saving for retirement and remember most have NO pensions. This makes things very grim for older people. Looking at today's gas price break is so incredibly short sighted its hardly worth replying to, sorry.

[OriginalPoster]

With housing prices coming down and prices on stocks coming down and prices for oil coming down why is everyone so worried? Do you really like paying more for everything? There was a time when people saved their money and enjoyed low prices when they spent it!

Sounds like you are talking about a deflation scenario, which is about as bad an economic symptom as you can imagine. Sure if you are one of the lucky ones with cash to spend, lower prices are good for you. But not good for the bigger picture. Consider people's retirement accounts which may have lost half their value, etc. etc.

Okay, let's just say for the sake of argument that everyone's savings (being current or retirement) has been cut in half. But if the cost of goods has lowered by half, gas is but maybe not all things so for the sake of argument let's say they are, then what's so bad? The only thing I could see is with the retirement savings cut in half and then prices of goods rise before retirement comes. (But hey isn't that going to happen anyway?)

For particular individuals it might not be so bad. The problem with deflation is that if the public expects prices to fall, they will postpone purchasing discretionary items, which in turn reduces demand, which in turn causes price to continue to fall, which in turn further encourages consumers to delay purchases until prices fall further -- all of which together can create a downward spiral.

Edited November 22, 2008 by OriginalPoster

[JimsKnight]

Thats last post is ridiculous. American baby boomers were ALREADY on average way behind on saving for retirement and remember most have NO pensions. This makes things very grim for older people. Looking at today's gas price break is so incredibly short sighted its hardly worth replying to, sorry.

Then Americas Baby Boomers are gonna have to start putting the Boom back into baby and get working again!

Tough words but its what will likely have to happen.

Already in the UK there is talk of the retirement age being cranked up to 70 years old...

[Jingthing]

Thats last post is ridiculous. American baby boomers were ALREADY on average way behind on saving for retirement and remember most have NO pensions. This makes things very grim for older people. Looking at today's gas price break is so incredibly short sighted its hardly worth replying to, sorry.

Then Americas Baby Boomers are gonna have to start putting the Boom back into baby and get working again!

Tough words but its what will likely have to happen.

Already in the UK there is talk of the retirement age being cranked up to 70 years old...

They won't need to legislate that. People will want to work longer anyway for obvious reasons. But if you haven't noticed unemployment is on the rise so that idea is easier in theory than reality. Also, older people staying longer in the workforce suffocates opportunities for younger people. There is no pretty easy answer here, but celebrating the economic meltdown is just outrageous (unless you personally profited, I will give you that one).

I agree with Obama on this one, prices spiraling down is a DISASTER:

Obama says drafting bold economic stimulus

CHICAGO (Reuters) - President-elect Barack Obama said on Saturday that he was crafting an aggressive two-year stimulus plan to revive the troubled economy, warning that swift action was needed to prevent a deep slump and a spiral of falling prices.

"If we don't act swiftly and boldly, most experts now believe that we could lose millions of jobs next year," the Democratic president-elect said in a weekly radio address.

Obama, who succeeds President George W. Bush on January 20, said the economy could get worse before it gets better.

"We now risk falling into a deflationary spiral that could increase our massive debt even further," he said.

Edited November 22, 2008 by Jingthing