Will the DOW hit 5000?
- Thread starter fatherofcaitlyn
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Capitalizt
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The market will not go below 5500.. Mark my words. The government will not allow it. I doubt we will even hit 6k.
Kayden
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I really wouldn't care about it except for the fact I know we'll be footing the bill for all the bail outs. =\
If you're rich and have "money troubles" (no $10 million bonus) the government says, "times are tough, have a few billion."
If you're on welfare and have "money troubles", the government says, "have free money for having kids!"
If you're middle class and have money troubles the government says, "got a few bucks, I'm stretched a bit thin..."
If you're rich and have "money troubles" (no $10 million bonus) the government says, "times are tough, have a few billion."
If you're on welfare and have "money troubles", the government says, "have free money for having kids!"
If you're middle class and have money troubles the government says, "got a few bucks, I'm stretched a bit thin..."
k
Kayden
Banned
How can the government prevent the market from falling? Are they just going to print money until they can afford to buy up all the stocks on the market? Wouldn't that just make shit worse? Sure, our money isn't worth anything and our economy is collapsing, but the DOW is at 15,000!
[quote name='Capitalizt']The market will not go below 5500.. Mark my words. The government will not allow it. I doubt we will even hit 6k.[/quote]
[quote name='Capitalizt']The market will not go below 5500.. Mark my words. The government will not allow it. I doubt we will even hit 6k.[/quote]
BillyBob29
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[quote name='fatherofcaitlyn']Unless you're as good of a trader as BillyBob29, there are better places to put your money today and, possibly, for the next several years than the stock market.[/QUOTE]
It is really hard to say at this point. This joke of a stimulus package could give us a temporary uptick in economic activity, the continued success of the Chinese stimulus plan could also pull us up......as it is doing today.
There are going to be rallies within this on-going bear market and they will be extremely profitable, you just have to be ready to jump in at key support levels and to jump back out at the first signs of a reversal.
For example, the 700 level on the S&P is a vital long term support area. Combine the emotional support that big round numbers have with the oversold conditions plus the fact that 700 is the area of a long term trendline dating back to the early 80's and you have a good possibility of a bounce from the area....of course the news out of China this morning certainly didn't hurt either.
I do think we ultimately head lower but that doesn't mean there won't be very profitable moves to the upside within the longer term trend down.
The value, or lack thereof, of the stock market really comes from your timeframe. There are all kinds of opportunites for short term traders and very long term investors. If your time horizon is 30-40 years, then you should be dipping your toe into well positioned companies at current prices and you should continue to do so going forward should the market continue its decline.
Just a little food for thought......if we assume the S&P earns a total of $50 for the year, which is down for the $90 it was originally expected to earn but may still be a little on the optimistic side, and grant it a 12 multiple then you've got an index that is worth 600.....and currently trading at 722.
It is really hard to say at this point. This joke of a stimulus package could give us a temporary uptick in economic activity, the continued success of the Chinese stimulus plan could also pull us up......as it is doing today.
There are going to be rallies within this on-going bear market and they will be extremely profitable, you just have to be ready to jump in at key support levels and to jump back out at the first signs of a reversal.
For example, the 700 level on the S&P is a vital long term support area. Combine the emotional support that big round numbers have with the oversold conditions plus the fact that 700 is the area of a long term trendline dating back to the early 80's and you have a good possibility of a bounce from the area....of course the news out of China this morning certainly didn't hurt either.
I do think we ultimately head lower but that doesn't mean there won't be very profitable moves to the upside within the longer term trend down.
The value, or lack thereof, of the stock market really comes from your timeframe. There are all kinds of opportunites for short term traders and very long term investors. If your time horizon is 30-40 years, then you should be dipping your toe into well positioned companies at current prices and you should continue to do so going forward should the market continue its decline.
Just a little food for thought......if we assume the S&P earns a total of $50 for the year, which is down for the $90 it was originally expected to earn but may still be a little on the optimistic side, and grant it a 12 multiple then you've got an index that is worth 600.....and currently trading at 722.
[quote name='fatherofcaitlyn']Unless you're as good of a trader as BillyBob29, there are better places to put your money today and, possibly, for the next several years than the stock market.[/QUOTE]
Well it's certainly not in CDs. I'm glad I locked in at 4.25 for a year in October, but now the CD rates are below the savings account rates, which means interest is going to tank.
Well it's certainly not in CDs. I'm glad I locked in at 4.25 for a year in October, but now the CD rates are below the savings account rates, which means interest is going to tank.
thrustbucket
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[quote name='fatherofcaitlyn']Unless you're as good of a trader as BillyBob29, there are better places to put your money today and, possibly, for the next several years than the stock market.[/QUOTE]
It's likely a much more safe and profitable investment at this point to buy guns, ammo, and silver, than anything in the stock market.
It's likely a much more safe and profitable investment at this point to buy guns, ammo, and silver, than anything in the stock market.
Friend of Sonic
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[quote name='bigdaddy']Scary thing when Kayden is calling someone else stupid and is right.[/QUOTE]
My first instinct was to kill you where you stood, but since you got Kayden as well with that joke, I'll let it slide, you stupid double poster.
My first instinct was to kill you where you stood, but since you got Kayden as well with that joke, I'll let it slide, you stupid double poster.
BillyBob29
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[quote name='thrustbucket']It's likely a much more safe and profitable investment at this point to buy guns, ammo, and silver, than anything in the stock market.[/QUOTE]
Guns have proven to always be a relatively safe investment, assuming they are well maintained, and the Obama administration and the Dems are going to push for tighter gun lawas and restricitions. But if you are betting on the whole "end of the financial world" scenario you shouldn't just buy a ton of ammo, you should buy the equipment and learn to pack your own ammo.
Guns have proven to always be a relatively safe investment, assuming they are well maintained, and the Obama administration and the Dems are going to push for tighter gun lawas and restricitions. But if you are betting on the whole "end of the financial world" scenario you shouldn't just buy a ton of ammo, you should buy the equipment and learn to pack your own ammo.
thrustbucket
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It's too bad you can't buy stock in government, as that wold be the one sure stock to rise rapidly.
Trancendental
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[quote name='thrustbucket']It's too bad you can't buy stock in government, as that wold be the one sure stock to rise rapidly.[/quote]
T-Bills, T-Notes, T-Bonds
T-Bills, T-Notes, T-Bonds
BillyBob29
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[quote name='thrustbucket']It's too bad you can't buy stock in government, as that wold be the one sure stock to rise rapidly.[/QUOTE]
Why would you want to buy stock in a government that is overflowing with debt and that is reliant on a population that is also overflowing with debt?
Why would you want to buy stock in a government that is overflowing with debt and that is reliant on a population that is also overflowing with debt?
bigdaddy
Banned
[quote name='Capitalizt']The market will not go below 5500.. Mark my words. The government will not allow it. I doubt we will even hit 6k.[/quote]
How?
The Dow lost 26%+ this year alone! So you really think the Government will be able, or willing, to stop it from dropping "only" another 1300?
How?
The Dow lost 26%+ this year alone! So you really think the Government will be able, or willing, to stop it from dropping "only" another 1300?
speedracer
Banned
[quote name='BillyBob29']If your time horizon is 30-40 years, then you should be dipping your toe into well positioned companies at current prices [/QUOTE]
Who the shit is a well positioned company right now? The ONLY company I've been watching (I watch about 15 or so) that looks like it'll come out ok is Cisco.
Who the shit is a well positioned company right now? The ONLY company I've been watching (I watch about 15 or so) that looks like it'll come out ok is Cisco.
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thrustbucket
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[quote name='BillyBob29']Why would you want to buy stock in a government that is overflowing with debt and that is reliant on a population that is also overflowing with debt?[/QUOTE]
Because it's the one entity that will continue to survive as takes over many of the others.
There is a good chance these days that the company you invest in will get nationalized pretty soon. Might as well bet on the big hungry fish in the pond.
[/QUOTE]Because it's the one entity that will continue to survive as takes over many of the others.
There is a good chance these days that the company you invest in will get nationalized pretty soon. Might as well bet on the big hungry fish in the pond.
BillyBob29
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[quote name='speedracer']Who the shit is a well positioned company right now? The ONLY company I've been watching (I watch about 15 or so) that looks like it'll come out ok is Cisco.[/QUOTE]
First of all, by "well positioned" I basically mean has a balance sheet strong enough to survive the current downturn, assuming it lasts another few years, and be positioned to take advantage of the early stages of growth in the next upturn. What do you consider to be "coming out okay?" Cisco came out of the dotcom crash "okay" and has done basically nothing since, as far as the stock action is concerned.
I would also be looking at multinational companies that can grow without the US, specifically companies that will benefit from China. Materials, commodities, agriculture plays.....the core components of building infrastrucuture. Cisco is a good example of a company that will survive but I personally think that if you want a play on networks you may want to look at something like AKAM. It is a higher beta play than CSCO but they are performing very well right now during this downturn so they will be well positioned during any economic upturn.
With a multi-decade time horizon, diversification is extremely important. Off the top of my head these are companies that I think are setup to be good LONG term plays but I would also say that going all in at one time on any of these companies would just be insane:
On the materials, commodities, basic infrastrucuture side: CAT, JOYG, FCX, X, GLD, AEM (a high beta play on gold), RIO.
On the energy side: COP, OXY, HES, CHK, BTU, VLO, DVN, RIG, ENER (alternative energy), FSLR (very high beta solar play but they are the best positioned solar play at this point).
Financials......yes, financials but this list is very short: GS, JPM, MS.....they will survive and they will thrive when all is said and done.
Consumer: WMT, COST and I will throw V and MA in here as well since they have no credit risk and profit purely on a transaction basis and the move from cash transactions to credit transactions that is still increasing on a global scale during this downturn. V is better than MA though, IMO.
Tech: This is actually pretty tough. There are the easy survivors like MSFT or INTC but there really isn't a lot of margin expansion or real growth on the horizon for these guys. MSFT is okay down here but I'm not real excited about its potential. I don't really care for the chip names but you wanted exposure then I would with something like SMH, the ETF of the chip setor. IBM is doing great, HPQ should be okay assuming they are successful in their continuing efforts to steal IBM's service model which is basically where all of IBM's growth is coming from. AAPL is decent but the risk/reward still isn't really in your favor at this point, IMO. I really like RIMM in the 30's not only as a long term growth play but also as a potential takeover target in the future. QCOM is also well positioned globally. On the telco side you've got plays like VZ or T.
This is getting a little long, to wrap things up I also like plays like DIS, PM, MO, KFT, JNJ.
But then again, I don't believe in buying anything and just forgetting about it. At the very minimum, every position in your account should be re-evaluated on a quarterly basis and just to be clear I'm not saying these companies should be bought TODAY, I'm saying they should be well positioned to surive this downturn and prosper during the eventual upturn.....whenever that may be so you may want to watch them, start researching them and possibly buy and little here and there on pullbacks to clearly defined support levels.
First of all, by "well positioned" I basically mean has a balance sheet strong enough to survive the current downturn, assuming it lasts another few years, and be positioned to take advantage of the early stages of growth in the next upturn. What do you consider to be "coming out okay?" Cisco came out of the dotcom crash "okay" and has done basically nothing since, as far as the stock action is concerned.
I would also be looking at multinational companies that can grow without the US, specifically companies that will benefit from China. Materials, commodities, agriculture plays.....the core components of building infrastrucuture. Cisco is a good example of a company that will survive but I personally think that if you want a play on networks you may want to look at something like AKAM. It is a higher beta play than CSCO but they are performing very well right now during this downturn so they will be well positioned during any economic upturn.
With a multi-decade time horizon, diversification is extremely important. Off the top of my head these are companies that I think are setup to be good LONG term plays but I would also say that going all in at one time on any of these companies would just be insane:
On the materials, commodities, basic infrastrucuture side: CAT, JOYG, FCX, X, GLD, AEM (a high beta play on gold), RIO.
On the energy side: COP, OXY, HES, CHK, BTU, VLO, DVN, RIG, ENER (alternative energy), FSLR (very high beta solar play but they are the best positioned solar play at this point).
Financials......yes, financials but this list is very short: GS, JPM, MS.....they will survive and they will thrive when all is said and done.
Consumer: WMT, COST and I will throw V and MA in here as well since they have no credit risk and profit purely on a transaction basis and the move from cash transactions to credit transactions that is still increasing on a global scale during this downturn. V is better than MA though, IMO.
Tech: This is actually pretty tough. There are the easy survivors like MSFT or INTC but there really isn't a lot of margin expansion or real growth on the horizon for these guys. MSFT is okay down here but I'm not real excited about its potential. I don't really care for the chip names but you wanted exposure then I would with something like SMH, the ETF of the chip setor. IBM is doing great, HPQ should be okay assuming they are successful in their continuing efforts to steal IBM's service model which is basically where all of IBM's growth is coming from. AAPL is decent but the risk/reward still isn't really in your favor at this point, IMO. I really like RIMM in the 30's not only as a long term growth play but also as a potential takeover target in the future. QCOM is also well positioned globally. On the telco side you've got plays like VZ or T.
This is getting a little long, to wrap things up I also like plays like DIS, PM, MO, KFT, JNJ.
But then again, I don't believe in buying anything and just forgetting about it. At the very minimum, every position in your account should be re-evaluated on a quarterly basis and just to be clear I'm not saying these companies should be bought TODAY, I'm saying they should be well positioned to surive this downturn and prosper during the eventual upturn.....whenever that may be so you may want to watch them, start researching them and possibly buy and little here and there on pullbacks to clearly defined support levels.
Medium_Pimpin
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In September I thought 7000 would be the low, but now i wouldn't feel safe calling 3500 as a low, that would be a %75 retracement from the top.
By the time the stock market recovers we will be in hyperinflation mode, with all the money printed during this recession/bailouts finally coming into circulation.
By the time the stock market recovers we will be in hyperinflation mode, with all the money printed during this recession/bailouts finally coming into circulation.
speedracer
Banned
[quote name='BillyBob29']First of all, by "well positioned" I basically mean has a balance sheet strong enough to survive the current downturn, assuming it lasts another few years, and be positioned to take advantage of the early stages of growth in the next upturn. What do you consider to be "coming out okay?" Cisco came out of the dotcom crash "okay" and has done basically nothing since, as far as the stock action is concerned.[/quote]
I should have made myself clearer so you didn't have to backtrack like that. I'm biased because I'm a hardware guy so I watch the Cisco, HPs, etc. I'm also old enough to remember Cisco surviving the last fall "ok", which in my book was great. But since there's really not been growth since then, you're essentially right. It's weird that I've never questioned their growth (as far as stock price).
That's one of the best posts I've ever seen. I'm going to comb through all the suggestions. Thanks a ton dude. Food for thought.
I should have made myself clearer so you didn't have to backtrack like that. I'm biased because I'm a hardware guy so I watch the Cisco, HPs, etc. I'm also old enough to remember Cisco surviving the last fall "ok", which in my book was great. But since there's really not been growth since then, you're essentially right. It's weird that I've never questioned their growth (as far as stock price).
That's one of the best posts I've ever seen. I'm going to comb through all the suggestions. Thanks a ton dude. Food for thought.
BillyBob29
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[quote name='Medium_Pimpin']
By the time the stock market recovers we will be in hyperinflation mode, with all the money printed during this recession/bailouts finally coming into circulation.[/QUOTE]
Very likely which is why you want to have exposure to commodities and materials companies that will actually be able to use the inflation that will be felt throughout the system in their favor. I think oil bottomed in the low $40's and that you can be long oil from this general area, on pullbacks, unless we get word out of China that their stimulus plans are not working and that growth continues to slow. If China's stimulus plans fail, then oil could easily see $25.
In my last post I mentioned the agriculture plays but I forgot to list names, these names would be POT, MON, MOS, AGU. A word of caution though, while I do think all of these companies are well positioned for the long term, these are EXTREMELY volitile plays so just be aware of the constant 5-10% intraday swings in these plays if you look into them. If you can't stomach big swings both up and down, look elsewhere for a play on the prices and demand for food.
By the time the stock market recovers we will be in hyperinflation mode, with all the money printed during this recession/bailouts finally coming into circulation.[/QUOTE]
Very likely which is why you want to have exposure to commodities and materials companies that will actually be able to use the inflation that will be felt throughout the system in their favor. I think oil bottomed in the low $40's and that you can be long oil from this general area, on pullbacks, unless we get word out of China that their stimulus plans are not working and that growth continues to slow. If China's stimulus plans fail, then oil could easily see $25.
In my last post I mentioned the agriculture plays but I forgot to list names, these names would be POT, MON, MOS, AGU. A word of caution though, while I do think all of these companies are well positioned for the long term, these are EXTREMELY volitile plays so just be aware of the constant 5-10% intraday swings in these plays if you look into them. If you can't stomach big swings both up and down, look elsewhere for a play on the prices and demand for food.
BillyBob29
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I've been considering it. Right now the trading partnership I run is just open to family and friends but I've been getting interest from others that would like to participate. I've been looking into the legal/tax/SEC implications of opening up the partnership to a larger group and how much more time it would require on my part to handle a larger group of clients. There are really a lot of things to consider and I like the freedom and flexibility that I have right now.
paddlefoot
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[quote name='speedracer']I should have made myself clearer so you didn't have to backtrack like that. I'm biased because I'm a hardware guy so I watch the Cisco, HPs, etc. I'm also old enough to remember Cisco surviving the last fall "ok", which in my book was great. But since there's really not been growth since then, you're essentially right. It's weird that I've never questioned their growth (as far as stock price).
That's one of the best posts I've ever seen. I'm going to comb through all the suggestions. Thanks a ton dude. Food for thought.[/quote]
speedracer, I have a question for you or anyone else that would like to answer.
Speaking with friends and family 55 or older, none of them seem to think this is as bad as the early 1970's (didn't speak to anyone about the 1930's).
Is this just their perception or is it reality?
That's one of the best posts I've ever seen. I'm going to comb through all the suggestions. Thanks a ton dude. Food for thought.[/quote]
speedracer, I have a question for you or anyone else that would like to answer.
Speaking with friends and family 55 or older, none of them seem to think this is as bad as the early 1970's (didn't speak to anyone about the 1930's).
Is this just their perception or is it reality?
fatherofcaitlyn
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[quote name='paddlefoot']speedracer, I have a question for you or anyone else that would like to answer.
Speaking with friends and family 55 or older, none of them seem to think this is as bad as the early 1970's (didn't speak to anyone about the 1930's).
Is this just their perception or is it reality?[/quote]
Regarding the 1930s, anybody raising a family in 1930 would be in their late 90s (18+79) today.
Regarding the 1970s, they like the 80s and 90s are over. By comparison, our current situation is still unfolding. In five years, we all may be of the mindset that the recession of 2008-? was severe but brief. On the other hand, we might still be in the middle of it and be unable to grasp how much better off everything was during the Bush II era.
Speaking with friends and family 55 or older, none of them seem to think this is as bad as the early 1970's (didn't speak to anyone about the 1930's).
Is this just their perception or is it reality?[/quote]
Regarding the 1930s, anybody raising a family in 1930 would be in their late 90s (18+79) today.
Regarding the 1970s, they like the 80s and 90s are over. By comparison, our current situation is still unfolding. In five years, we all may be of the mindset that the recession of 2008-? was severe but brief. On the other hand, we might still be in the middle of it and be unable to grasp how much better off everything was during the Bush II era.
speedracer
Banned
[quote name='paddlefoot']speedracer, I have a question for you or anyone else that would like to answer.
Speaking with friends and family 55 or older, none of them seem to think this is as bad as the early 1970's (didn't speak to anyone about the 1930's).
Is this just their perception or is it reality?[/QUOTE]
I was born in '77 dude. I was talking about the tech crash of 2001.
haha.
Speaking with friends and family 55 or older, none of them seem to think this is as bad as the early 1970's (didn't speak to anyone about the 1930's).
Is this just their perception or is it reality?[/QUOTE]
I was born in '77 dude. I was talking about the tech crash of 2001.
haha.
Capitalizt
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I feel much more cheerful after reading this..
http://market-ticker.denninger.net/archives/852-Whats-Dead-Short-Answer-All-Of-It.html
Thursday, March 5. 2009
Posted by Karl Denninger in Editorial at 09:57
What's Dead (Short Answer: All Of It)
Just so you have a short list of what's at stake if Washington DC doesn't change policy here and now (which means before the collapse in equities comes, which could start as soon as today, if the indicators I watch have any validity at all. For what its worth, those indicators are painting a picture of the Apocalypse that I simply can't believe, and they're showing it as an imminent event - like perhaps today imminent.)
* All pension funds, private and public, are done. If you are receiving one, you won't be. If you think you will in the future, you won't be. PBGC will fail as well. Pension funds will be forced to start eating their "seed corn" within the next 12 months and once that begins there is no way to recover.
* All annuities will be defaulted to the state insurance protection (if any) on them. The state insurance funds will be bankrupted and unable to be replenished. Essentially, all annuities are toast. Expect zero, be ecstatic if you do better. All insurance companies with material exposure to these obligations will go bankrupt, without exception. Some of these firms are dangerously close to this happening right here and now; the rest will die within the next 6-12 months. If you have other insured interests with these firms, be prepared to pay a LOT more with a new company that can't earn anything off investments, and if you have a claim in process at the time it happens, it won't get paid. The probability of you getting "boned" on any transaction with an insurance company is extremely high - I rate this risk in excess of 90%.
* The FDIC will be unable to cover bank failure obligations. They will attempt to do more of what they're doing now (raising insurance rates and doing special assessments) but will fail; the current path has no chance of success. Congress will backstop them (because they must lest shotguns come out) with disastrous results. In short, FDIC backstops will take precedence even over Social Security and Medicare.
* Government debt costs will ramp. This warning has already been issued and is being ignored by President Obama. When (not if) it happens debt-based Federal Funding will disappear. This leads to....
* Tax receipts are cratering and will continue to. I expect total tax receipts to fall to under $1 trillion within the next 12 months. Combined with the impossibility of continued debt issue (rollover will only remain possible at the short duration Treasury has committed to over the last ten years if they cease new issue) a 66% cut in the Federal Budget will become necessary. This will require a complete repudiation of Social Security, Medicare and Medicaid, a 50% cut in the military budget and a 50% across-the-board cut in all other federal programs. That will likely get close.
* Tax-deferred accounts will be seized to fund rollovers of Treasury debt at essentially zero coupon (interest). If you have a 401k, or what's left of it, or an IRA, consider it locked up in Treasuries; it's not yours any more. Count on this happening - it is essentially a certainty.
* Any firm with debt outstanding is currently presumed dead as the street presumption is that they have lied in some way. Expect at least 20% of the S&P 500 to fail within 12 months as a consequence of the complete and total lockup of all credit markets which The Fed will be unable to unlock or backstop. This will in turn lead to....
* The unemployed will have 5-10 million in direct layoffs added within the next 12 months. Collateral damage (suppliers, customers, etc) will add at least another 5-10 million workers to that, perhaps double that many. U-3 (official unemployment rate) will go beyond 15%, U-6 (broad form) will reach 30%.
* Civil unrest will break out before the end of the year. The Military and Guard will be called up to try to stop it. They won't be able to. Big cities are at risk of becoming a free-fire death zone. If you live in one, figure out how you can get out and live somewhere else if you detect signs that yours is starting to go "feral"; witness New Orleans after Katrina for how fast, and how bad, it can get.
The good news is that this process will clear The Bezzle out of the system.
The bad news is that you won't have a job, pension, annuity, Social Security, Medicare, Medicaid and, quite possibly, your life.
It really is that bleak folks, and it all goes back to Washington DC being unwilling to lock up the crooks, putting the market in the role it has always played - that of truth-finder, no matter how destructive that process is.
Only immediate action from Washington DC, taking the market's place, can stop this, and as I get ready to hit "send" I see the market rolling over again, now down more than 3% and flashing "crash imminent" warnings. You may be reading this too late for it to matter.
http://market-ticker.denninger.net/archives/852-Whats-Dead-Short-Answer-All-Of-It.html
Thursday, March 5. 2009
Posted by Karl Denninger in Editorial at 09:57
What's Dead (Short Answer: All Of It)
Just so you have a short list of what's at stake if Washington DC doesn't change policy here and now (which means before the collapse in equities comes, which could start as soon as today, if the indicators I watch have any validity at all. For what its worth, those indicators are painting a picture of the Apocalypse that I simply can't believe, and they're showing it as an imminent event - like perhaps today imminent.)
* All pension funds, private and public, are done. If you are receiving one, you won't be. If you think you will in the future, you won't be. PBGC will fail as well. Pension funds will be forced to start eating their "seed corn" within the next 12 months and once that begins there is no way to recover.
* All annuities will be defaulted to the state insurance protection (if any) on them. The state insurance funds will be bankrupted and unable to be replenished. Essentially, all annuities are toast. Expect zero, be ecstatic if you do better. All insurance companies with material exposure to these obligations will go bankrupt, without exception. Some of these firms are dangerously close to this happening right here and now; the rest will die within the next 6-12 months. If you have other insured interests with these firms, be prepared to pay a LOT more with a new company that can't earn anything off investments, and if you have a claim in process at the time it happens, it won't get paid. The probability of you getting "boned" on any transaction with an insurance company is extremely high - I rate this risk in excess of 90%.
* The FDIC will be unable to cover bank failure obligations. They will attempt to do more of what they're doing now (raising insurance rates and doing special assessments) but will fail; the current path has no chance of success. Congress will backstop them (because they must lest shotguns come out) with disastrous results. In short, FDIC backstops will take precedence even over Social Security and Medicare.
* Government debt costs will ramp. This warning has already been issued and is being ignored by President Obama. When (not if) it happens debt-based Federal Funding will disappear. This leads to....
* Tax receipts are cratering and will continue to. I expect total tax receipts to fall to under $1 trillion within the next 12 months. Combined with the impossibility of continued debt issue (rollover will only remain possible at the short duration Treasury has committed to over the last ten years if they cease new issue) a 66% cut in the Federal Budget will become necessary. This will require a complete repudiation of Social Security, Medicare and Medicaid, a 50% cut in the military budget and a 50% across-the-board cut in all other federal programs. That will likely get close.
* Tax-deferred accounts will be seized to fund rollovers of Treasury debt at essentially zero coupon (interest). If you have a 401k, or what's left of it, or an IRA, consider it locked up in Treasuries; it's not yours any more. Count on this happening - it is essentially a certainty.
* Any firm with debt outstanding is currently presumed dead as the street presumption is that they have lied in some way. Expect at least 20% of the S&P 500 to fail within 12 months as a consequence of the complete and total lockup of all credit markets which The Fed will be unable to unlock or backstop. This will in turn lead to....
* The unemployed will have 5-10 million in direct layoffs added within the next 12 months. Collateral damage (suppliers, customers, etc) will add at least another 5-10 million workers to that, perhaps double that many. U-3 (official unemployment rate) will go beyond 15%, U-6 (broad form) will reach 30%.
* Civil unrest will break out before the end of the year. The Military and Guard will be called up to try to stop it. They won't be able to. Big cities are at risk of becoming a free-fire death zone. If you live in one, figure out how you can get out and live somewhere else if you detect signs that yours is starting to go "feral"; witness New Orleans after Katrina for how fast, and how bad, it can get.
The good news is that this process will clear The Bezzle out of the system.
The bad news is that you won't have a job, pension, annuity, Social Security, Medicare, Medicaid and, quite possibly, your life.
It really is that bleak folks, and it all goes back to Washington DC being unwilling to lock up the crooks, putting the market in the role it has always played - that of truth-finder, no matter how destructive that process is.
Only immediate action from Washington DC, taking the market's place, can stop this, and as I get ready to hit "send" I see the market rolling over again, now down more than 3% and flashing "crash imminent" warnings. You may be reading this too late for it to matter.
BillyBob29
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LOL.....who let that ray of sunshine in here?
fatherofcaitlyn
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Yeah, I read this yesterday on the "crazy" forum I only read at work.
I think MSIMagus was upset about all of the imminent doom talk over the past year.
The truth is: Nobody really knows how deep this rabbit hole goes.
Nobody really knows how Joe Sixpack is going to act when he becomes Joe Nopack.
...
The past January, we were burying our matriarch at the age of 85.
A few people (myself included) mentioned something about her living through the Great Depression.
My father, the Eternal Cynic, smiled and replied, "She would have been five years old in 1929 and lived on a dirt poor farm. She had parents taking care of her. How much do you think she noticed?"
In 80 or so years, I hope my grandson says the same thing about my daughter.
...
A few points of advice: Find your weak points and protect or eliminate them.
Renting an apartment like me? Get a house on the cheap with some extra bedrooms at a low interest rate. If a coworker or friend loses his or her home, that extra room can help pay the mortgage and utilities.
Got storage space? Keep it full with food you like to eat, can buy in bulk and is on sale. If government thugs or gang members kick down your doors, they'll probably take things like jewelry, cash, guns and precious metals. Sirloin Burger with Vegetables Soup or Canned Carrots? Not so much.
Mad as hell and can't take it anymore? Keep your mouth shut, your head down and find out where the most pissed people live. When said people get in the faces of riot police and test the hypothesis that causing hearing loss in somebody wearing body armor and wielding a shotgun is going to improve their circumstances, nobody is going to notice their empty cupboards or your full cupboards.
Last but not least, people don't put on seat belts because they want to be in an accident. Ergo, people preparing for the worst don't want it to happen.
I think MSIMagus was upset about all of the imminent doom talk over the past year.
The truth is: Nobody really knows how deep this rabbit hole goes.
Nobody really knows how Joe Sixpack is going to act when he becomes Joe Nopack.
...
The past January, we were burying our matriarch at the age of 85.
A few people (myself included) mentioned something about her living through the Great Depression.
My father, the Eternal Cynic, smiled and replied, "She would have been five years old in 1929 and lived on a dirt poor farm. She had parents taking care of her. How much do you think she noticed?"
In 80 or so years, I hope my grandson says the same thing about my daughter.
...
A few points of advice: Find your weak points and protect or eliminate them.
Renting an apartment like me? Get a house on the cheap with some extra bedrooms at a low interest rate. If a coworker or friend loses his or her home, that extra room can help pay the mortgage and utilities.
Got storage space? Keep it full with food you like to eat, can buy in bulk and is on sale. If government thugs or gang members kick down your doors, they'll probably take things like jewelry, cash, guns and precious metals. Sirloin Burger with Vegetables Soup or Canned Carrots? Not so much.
Mad as hell and can't take it anymore? Keep your mouth shut, your head down and find out where the most pissed people live. When said people get in the faces of riot police and test the hypothesis that causing hearing loss in somebody wearing body armor and wielding a shotgun is going to improve their circumstances, nobody is going to notice their empty cupboards or your full cupboards.
Last but not least, people don't put on seat belts because they want to be in an accident. Ergo, people preparing for the worst don't want it to happen.
fatherofcaitlyn
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[quote name='BillyBob29']LOL.....who let that ray of sunshine in here?[/quote]
Not saying even 1% of the article will happen, but big government actually fix the size of the mess we collectively are in?
Not saying even 1% of the article will happen, but big government actually fix the size of the mess we collectively are in?
perdition(troy
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I'm not really seeing how big government can fix this. It's not as bad as the 80s yet, and how was that fixed? Tax cuts.
BillyBob29
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The tax hikes are coming, we are already seeing that. While they may be just for the "rich" at this point, everyone is going to see their total taxes paid increase in the years to come.
perdition(troy
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[quote name='Msut77']Reagan raised taxes.[/quote]
:lol::lol::lol:
I really hope you are kidding.
:lol::lol::lol:
I really hope you are kidding.
thrustbucket
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[quote name='BillyBob29']The tax hikes are coming, we are already seeing that. While they may be just for the "rich" at this point, everyone is going to see their total taxes paid increase in the years to come.[/QUOTE]
Very true. No economist can make the numbers work without a good increase in EVERYONE'S taxes down the road in order to pay off what our government has just done/is doing.
At what point will the middle class say is enough is enough though? 40% taxes? 50%? 60%? How much will we tolerate?
Very true. No economist can make the numbers work without a good increase in EVERYONE'S taxes down the road in order to pay off what our government has just done/is doing.
At what point will the middle class say is enough is enough though? 40% taxes? 50%? 60%? How much will we tolerate?
I don't think that it's absolutely inevitable to see tax increases across the board--at least not below the upper middle class brackets.
A lot can be done in terms of closing loopholes (especially for the upper class and corporations), cutting money else where (getting out of Iraq etc.), finding more efficient ways to run existing programs and scrapping ones that don't work etc. But of course who knows how much of that will actually happen.
A lot can be done in terms of closing loopholes (especially for the upper class and corporations), cutting money else where (getting out of Iraq etc.), finding more efficient ways to run existing programs and scrapping ones that don't work etc. But of course who knows how much of that will actually happen.
BillyBob29
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My bet is we see small tax increases here and there. More tolls on roads and highways, increases to vehicle registration fees, higher gasoline taxes, higher firearms purchase taxes etc.
While the base income tax rate for the lower and middle class is likely to be the last to see an increase, they will still feel tax increases on other items that purchase or use.
Here in Colorado they have already announced an increase on your yearly auto registration fees that amounts to roughly $40 per car, if I remember correctly.
While the base income tax rate for the lower and middle class is likely to be the last to see an increase, they will still feel tax increases on other items that purchase or use.
Here in Colorado they have already announced an increase on your yearly auto registration fees that amounts to roughly $40 per car, if I remember correctly.
speedracer
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[quote name='thrustbucket']At what point will the middle class say is enough is enough though? 40% taxes? 50%? 60%? How much will we tolerate?[/QUOTE]
Slow down chicken little. What's the bracket for middle class (say $75k) right now?
[quote name='Msut77']I think perds tiny mind was blown.[/QUOTE]
Reagan was responsible for a ginormous tax increase that largely offset his tax cuts? Unpossible! It was so "bad" it ended up ending his vice president's presidency as well? Unpossible!
Not Saint Ron!
Slow down chicken little. What's the bracket for middle class (say $75k) right now?
[quote name='Msut77']I think perds tiny mind was blown.[/QUOTE]
Reagan was responsible for a ginormous tax increase that largely offset his tax cuts? Unpossible! It was so "bad" it ended up ending his vice president's presidency as well? Unpossible!
Not Saint Ron!
fatherofcaitlyn
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OMG! The DOW IS UP ALMOST 6%!!!!
We're all going to be O AAARRRGGHHH!!!!
We're all going to be O AAARRRGGHHH!!!!
Dow up 497 points today closing at 7,775 after the announcement of Geithner's plan to buy up bad assets from banks etc.
http://money.cnn.com/2009/03/23/markets/markets_newyork/index.htm?postversion=2009032312
http://money.cnn.com/2009/03/23/markets/markets_newyork/index.htm?postversion=2009032312
fatherofcaitlyn
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[quote name='dmaul1114']Dow up 497 points today closing at 7,775 after the announcement of Geithner's plan to buy up bad assets from banks etc.
http://money.cnn.com/2009/03/23/markets/markets_newyork/index.htm?postversion=2009032312[/quote]
Yep, we're damn near back to 8,000.
I don't want to say sucker's rally. Really, I don't. I want things to get better.
However, what happens when the 2 or 4 trillion dollars pumped into the economy have their effect? 200% inflation? 0% inflation? 20% Deflation?
Given that China will keep buying our debt, I guess the music will never stop.
Good thing Asians aren't known for their mathematical skills.
...
On personal note, I actually got approved for a $100K conventional home loan IF I can find $5K for a downpayment.
So, I can start home shopping again. I can't wait until I'm out of our crap shack apartment and I can buy Dogmeat.
If only I could get my first house rented or sold...
http://money.cnn.com/2009/03/23/markets/markets_newyork/index.htm?postversion=2009032312[/quote]
Yep, we're damn near back to 8,000.
I don't want to say sucker's rally. Really, I don't. I want things to get better.
However, what happens when the 2 or 4 trillion dollars pumped into the economy have their effect? 200% inflation? 0% inflation? 20% Deflation?
Given that China will keep buying our debt, I guess the music will never stop.
Good thing Asians aren't known for their mathematical skills.
...
On personal note, I actually got approved for a $100K conventional home loan IF I can find $5K for a downpayment.
So, I can start home shopping again. I can't wait until I'm out of our crap shack apartment and I can buy Dogmeat.
If only I could get my first house rented or sold...
GuilewasNK
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I wouldn't get too excited about this.
fatherofcaitlyn
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[quote name='GuilewasNK']I wouldn't get too excited about this.[/quote]
I saw a graph of the Zimbabwe stock market.
http://www.mises.org/story/2532
I think the expansion of the US money supply in the last year matches the graph, too.
But...
I'm going to stay optimistic. My house will get sold or rented in the next month. I'll make a huge dent in my CCNA book while I'm off later this week. I'm going to start running during my lunch to drop some weight. The wife will keep dropping weight, too. The boy will potty trained by summer so I can take both kids to the water park on Fridays. Yep, everything is going to work out. Can't everybody just feel how things are getting better without any proof or progress?
I saw a graph of the Zimbabwe stock market.
http://www.mises.org/story/2532
I think the expansion of the US money supply in the last year matches the graph, too.
But...
I'm going to stay optimistic. My house will get sold or rented in the next month. I'll make a huge dent in my CCNA book while I'm off later this week. I'm going to start running during my lunch to drop some weight. The wife will keep dropping weight, too. The boy will potty trained by summer so I can take both kids to the water park on Fridays. Yep, everything is going to work out. Can't everybody just feel how things are getting better without any proof or progress?
Yeah, definitely can't get too excited. I think we'll see a lot big jumps for a few month. By the holiday season I think it will have stabilized and be growing steadily.
Probably just bump around between 7,000-8,500 between now and then if I had to guess and then stabilize around 8,500-9,000 by years end and 2010 will see it gradually start building back up. Know idea when it gets back to pre-recession levels though.
Probably just bump around between 7,000-8,500 between now and then if I had to guess and then stabilize around 8,500-9,000 by years end and 2010 will see it gradually start building back up. Know idea when it gets back to pre-recession levels though.
bread's done