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Unspeaked
Feb 23, 2009, 04:21 PM
LINK (http://finance.yahoo.com/news/Major-stock-market-indexes-apf-14444249.html)

Major stock market indexes fall to 1997 levels

Dow, S&P 500 fall to 1997 levels as sagging confidence pulls stocks lower; Dow falls 251

Tim Paradis, AP Business Writer

NEW YORK (AP) -- Wall Street has turned the clock back to 1997. Investors unable to extinguish their worries about a recession that has no end in sight dumped stocks again Monday. The Dow Jones industrial average tumbled 251 points to its lowest close since Oct. 28, 1997, while the Standard & Poor's 500 index logged its lowest finish since April 11, 1997.

All the major indexes slid more than 3 percent. The Dow is just over 100 points from 7,000.

"People left and right are throwing in the towel," said Keith Springer, president of Capital Financial Advisory Services...

FF_productions
Feb 23, 2009, 07:32 PM
When does a recession turn into a depression? This is bad.

Spizzo
Feb 23, 2009, 07:57 PM
Don't think the bloodshed is over yet, but there's lots of good deals to be had.

Metatron
Feb 23, 2009, 08:01 PM
When does a recession turn into a depression? This is bad.

Seeing as we still have a 14 trillion GDP and unemployment only at 8%...we are a long, long, long way from a depression, technically speaking. As for the mindset, many people feel we are there.

One has to wonder if the market would be so low if people would look at the facts. The Dow Jones being down 50% from the all time high is just crazy. Either the market was in a bubble and is finding a new balance or people need to stop trading on emotion.

aethelbert
Feb 23, 2009, 09:15 PM
people need to stop trading on emotion.
That's the ticket. Although there's always a prelude to the problem, once that happens, the situation tends to get worse as people tend to hoard their money out of the market/overall economy. If people want to act and spend like we're in a depression, we'll be in one in no time.

Unspeaked
Feb 24, 2009, 12:02 AM
That's the ticket. Although there's always a prelude to the problem, once that happens, the situation tends to get worse as people tend to hoard their money out of the market/overall economy. If people want to act and spend like we're in a depression, we'll be in one in no time.

The media certainly isn't helping matters...

oscillatewildly
Feb 24, 2009, 04:26 AM
Media - Didn't hear too many complaints when they were helping to push prices up.

For all the analysts, experts and professors, it still comes down to human nature.

DZ/015
Feb 25, 2009, 12:47 AM
Now is the time to invest. There are too many undervalued stocks to be ignored. The bloodletting will not continue forever. Fortunes will be made off this downturn, for the bold.

maestrokev
Feb 25, 2009, 01:53 AM
Now is the time to invest. There are too many undervalued stocks to be ignored. The bloodletting will not continue forever. Fortunes will be made off this downturn, for the bold.

You ever heard the quote "never try to catch a falling knife"

maestrokev
Feb 25, 2009, 01:55 AM
That's the ticket. Although there's always a prelude to the problem, once that happens, the situation tends to get worse as people tend to hoard their money out of the market/overall economy. If people want to act and spend like we're in a depression, we'll be in one in no time.

Yes, you're describing the paradox of thrift. This is why measures of consumer confidence are so important - the more people think the economy will tank, the less likely they will spend so personal tax cuts prove ineffective as it is not spent back on the economy.

DZ/015
Feb 25, 2009, 03:27 AM
You ever heard the quote "never try to catch a falling knife"

Just don't grab the blade. Do your research. With all the fear in the market, now is the time to buy. I have.

MacBoobsPro
Feb 25, 2009, 03:31 AM
I think we all kind of knew all this was going to get worse before it got better. For weeks I have been saying depression.

arkitect
Feb 25, 2009, 03:35 AM
For weeks I have been saying depression.

And Gordon Brown agrees… ;)
"We should agree as a world on a monetary and fiscal stimulus that will take the world out of r... depression."
Link… (http://news.bbc.co.uk/1/hi/uk_politics/7869748.stm)

You know how it goes:
If it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck.

Rodimus Prime
Feb 25, 2009, 07:24 AM
And Gordon Brown agrees… ;)

Link… (http://news.bbc.co.uk/1/hi/uk_politics/7869748.stm)

You know how it goes:
If it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck.


Gordon Brown is a politician so his opinion on the matter is rather worthless. He will saw things like this to get votes even no matter if it is true or not.

I will believe it when I read the true expects are saying that it is that way and right now I read it time and time again they just say it is a rough down turn but still not anywhere near as a depression.

Rodimus Prime
Feb 25, 2009, 07:27 AM
Now is the time to invest. There are too many undervalued stocks to be ignored. The bloodletting will not continue forever. Fortunes will be made off this downturn, for the bold.

You ever heard the quote "never try to catch a falling knife"

No DZ is right. The market WILL bounce back. Now is the time to invest because long term the market still will hold it 9-10% growth a year. It will jump up quicker this time to keep on that pass.

While short term you may and will lose money on paper long term it going to go up. If I had the spare funds with out dipping into my emergency fund I would put money into the market right now for long term investments but I will NOT dip into my emergency fund to do so.

arkitect
Feb 25, 2009, 07:29 AM
Gordon Brown is a politician so his opinion on the matter is rather worthless. He will saw things like this to get votes even no matter if it is true or not.

Oh fer goodness sakes…
I think you didn't understand it quite correctly.
The UK Prime minister (former Chancellor of the Exchequer) slips up and calls it a depression… do you really think he intended to? Hardly a vote winner. It was a cock-up.
:rolleyes:

…right now I read it time and time again they just say it is a rough down turn but still not anywhere near as a depression.
How's the weather in Denial?
;)

heehee
Feb 25, 2009, 08:00 AM
We are about half way to the depression according to this chart.

pilotError
Feb 25, 2009, 08:04 AM
When does a recession turn into a depression? This is bad.

You know the difference between recession and depression right?

It's Having a job...

173080
Feb 25, 2009, 08:05 AM
Just don't grab the blade. Do your research. With all the fear in the market, now is the time to buy. I have.

Why buy now when you can short sell?

It is always better to go with the tendency, and now is a great time to go against the market. I fail to see the point in buying something that you know will go down in value when you could be making money from that loss in value. The bottom isn't anywhere near so while you're buying, I'm selling, that is until there is any indication that it is reasonable to buy.

sushi
Feb 25, 2009, 08:14 AM
Now is the time to invest.
True.

That is why good investors always keep some cash around to take advantage of the sales.

No DZ is right. The market WILL bounce back. Now is the time to invest because long term the market still will hold it 9-10% growth a year. It will jump up quicker this time to keep on that pass.
Yep.

While short term you may and will lose money on paper long term it going to go up.
Agree.

Stocks have routinely gone up around 8-9% per year over the long term. Stocks do not always go up. They fluctuate in value. As long as your investment horizon is 10 plus years, you should be okay. If however, your investment horizon is less, then your funds should have been diversified into other more secure investment vehicles. The recent market movement is the reason why.

Another point concerning investing in stocks is that you may not pick winners each time. Take Microsoft. If you got in early, you now have 512 shares for each original share that you purchased. If memory serves, an original share was around $27. Today a share is about $17. That means for each $27 someone invested, they now have $8,704. Not bad at all. However, if someone invested in Microsoft a few years ago, they would now have about 25% of their original investment.

Companies go through cycles. One definitely needs to do their research first before investing.

CalPoly10
Feb 25, 2009, 10:07 AM
I think the time to invest is within the next 8 months.

I read the market a lot (as much as a 20 year old Engineering student can), and I have some solid picks for the ensuing years. Take my advice, or leave it.

(T) - AT&T is one of the strongest companies on discount at the momeny. They pay an amazing dividend, aren't hurting badly due to the recession, are continuing with growth, and are financially sound.

(VZ) - Same story as AT&T. These will be the two big players in the mobile market within the next 5 years.

INTC - Intel makes the chips for just about everything, and will continue to do so.

I think if you purchased these 3 companies at the moment, you can expect some big gains in the next 5 years.

Plutonius
Feb 25, 2009, 11:37 AM
The media certainly isn't helping matters...

Or the government....

When the media or government continues to say how bad things are, people stop spending money and things do get bad.

Trying to get a spending package through by scaring people may help the spending package go through but will tank the economy.

Plutonius
Feb 25, 2009, 11:52 AM
Now is the time to invest. There are too many undervalued stocks to be ignored. The bloodletting will not continue forever. Fortunes will be made off this downturn, for the bold.

I agree that you should invest but I think it's very doubtful that you will make a fortune investing long (The market will go up in the long run but will be very flat). The size of the deficit, the rate they are printing out money, and the large budgets (new social reforms) means to me that there will be a considerable tax hike in the future along with very high inflation. Both of these factors directly influence your equity returns (if a company is earning less money, your rate of return will be lower).

Unspeaked
Feb 25, 2009, 12:00 PM
Both of these factors directly influence your equity returns (if a company is earning less money, your rate of return will be lower).

That line of thinking is way too rational for the markets...

maestrokev
Feb 25, 2009, 02:39 PM
Just don't grab the blade. Do your research. With all the fear in the market, now is the time to buy. I have.

I'm not putting in another cent until Bernie Madoff tells me it's ok :D

trule
Feb 25, 2009, 04:21 PM
Agree.

Stocks have routinely gone up around 8-9% per year over the long term. Stocks do not always go up. They fluctuate in value. As long as your investment horizon is 10 plus years, you should be okay. If however, your investment horizon is less, then your funds should have been diversified into other more secure investment vehicles. The recent market movement is the reason why.


Lets see, I invest in 1997 and now, 12 years later, I show no gain. If that's not good enough for you then look over at Japan. 8-9%, over the long term, sure :rolleyes:

This buy and hold is Wall Street talk designed to keep the greater public (you) in the market while big money (them) take profits.


Here is a quiz, if you invest in a stock (or market) and it falls in value by 50%, how much does it have to perform before you recover your losses? And again if it falls in value by 75% or even 90%, how much does it have to perform before you recover your losses?

And based on your 8-9%, how long will it take you to recover those losses?

CalPoly10
Feb 25, 2009, 04:53 PM
Lets see, I invest in 1997 and now, 12 years later, I show no gain. If that's not good enough for you then look over at Japan. 8-9%, over the long term, sure :rolleyes:

This buy and hold is Wall Street talk designed to keep the greater public (you) in the market while big money (them) take profits.


Here is a quiz, if you invest in a stock (or market) and it falls in value by 50%, how much does it have to perform before you recover your losses? And again if it falls in value by 75% or even 90%, how much does it have to perform before you recover your losses?

And based on your 8-9%, how long will it take you to recover those losses?


Good luck making money my friend. It sounds like you are scared to play the stock market.

Do you realize that just about every rich person in the world plays the market?

It's really not difficult.

For example, AT&T pays roughly 8%/year dividend right now. So, let's say you invest $10000. You get roughly 400 shares, and you're getting an additional $800/year just to "own" the stock.

Now, let's say you reinvest your dividends every year, and pick up, say, an additional 20 shares of stock.

5 years later, you have 500 shares, and AT&T is up just 5 points. You've turned your intial $10k into $15k.

50% in 5 years. Wow.

And if the stock goes down? Hold it, keep the dividends. In those 5 years, you'd have made nearly half of your original investment back

trule
Feb 25, 2009, 05:17 PM
For example, AT&T pays roughly 8%/year dividend right now

Thanks for the lesson on dividends, I really had no idea about that :rolleyes: Lets see how AT&T dividend holds up, so far the stock is showing a 50% loss from its 12 month peak. Currently (last quarter) their expenses are increasing faster then their revenue and their EPS fell 20%.

Looks like a great investment :eek:


Really rich people know how hard it is to recover from a 50% loss so they keep out of the market most of the time. Actually, they make their money IPO'ing private companies to people like you and me. Otherwise they stick to treasury bonds because they know how hard it is to recover from a capital loss. They understand risk and they don't need to invest to get rich...they already are rich!

They also have a much greater appreciation of market history, i.e. before 1980...

CalPoly10
Feb 25, 2009, 05:23 PM
Thanks for the lesson on dividends, I really had no idea about that :rolleyes: Lets see how AT&T dividend holds up, so far the stock is showing a 50% loss from its 12 month peak. Currently (last quarter) their expenses are increasing faster then their revenue and their EPS fell 20%.

Looks like a great investment :eek:


Really rich people know how hard it is to recover from a 50% loss so they keep out of the market most of the time. Actually, they make their money IPO'ing private companies to people like you and me. Otherwise they stick to treasury bonds because they know how hard it is to recover from a capital loss. They understand risk and they don't need to invest to get rich...they already are rich!

They also have a much greater appreciation of market history, i.e. before 1980...

You sure do see the small picture. EVERYTHING has contracted in the past 12 months. Many of the big companies have lost 50% of the share's value.

They've got largest national wireless network (the future), iPhone hundreds of thousands (millions?) of new iPhone subscribers on board, a great executive board, practically zero debt, etc.

Maybe you should look at a chart of the DOW over the past 30 years. There are peaks, and there are valleys (where we are headed, but not quite there). The general consensus is up.

You know what? I suggest you just put your money in a Bank Account, where you can get 2% interest on it every year. Then, when hyperinflation sparks (thanks to our pal Obama signing away trillions of dollars in "stimulus" and "nationalized healthcare"), your money will be worth even less.

maestrokev
Feb 25, 2009, 05:46 PM
Really rich people know how hard it is to recover from a 50% loss so they keep out of the market most of the time. Actually, they make their money IPO'ing private companies to people like you and me. Otherwise they stick to treasury bonds because they know how hard it is to recover from a capital loss. They understand risk and they don't need to invest to get rich...they already are rich!

They also have a much greater appreciation of market history, i.e. before 1980...

Exactly, really rich people don't make money just from buying and selling stocks, they make money from starting companies and running them. They find out before we do when a company is going to perform poorly and sell accordingly. By the time we see their SEC filings, they've got cash in hand.

Regular people make money from buying stocks in companies that rich people own and hope in god's name that they're not lying to us.

maestrokev
Feb 25, 2009, 05:49 PM
You sure do see the small picture. EVERYTHING has contracted in the past 12 months. Many of the big companies have lost 50% of the share's value.

They've got largest national wireless network (the future), iPhone hundreds of thousands (millions?) of new iPhone subscribers on board, a great executive board, practically zero debt, etc.

Maybe you should look at a chart of the DOW over the past 30 years. There are peaks, and there are valleys (where we are headed, but not quite there). The general consensus is up.

You know what? I suggest you just put your money in a Bank Account, where you can get 2% interest on it every year. Then, when hyperinflation sparks (thanks to our pal Obama signing away trillions of dollars in "stimulus" and "nationalized healthcare"), your money will be worth even less.

That's not seeing the small picture, that's being a careful investor rather than a follow the herd or contrarian mentality.

Largest national wireless network, iPhone ... wow, sounds like you haven't invested long enough to see a big company go bust. Ever read about Ford, GM, Chrysler? Sounds like big companies to me.

iJohnHenry
Feb 25, 2009, 05:54 PM
wow, sounds like you haven't invested long enough to see a big company go bust. Ever read about Ford, GM, Chrysler? Sounds like big companies to me.

Yes, companies still stuck back in the 60's.

Good luck with that.

Adapt, or die.

maestrokev
Feb 25, 2009, 05:59 PM
I think the time to invest is within the next 8 months.

I read the market a lot (as much as a 20 year old Engineering student can), and I have some solid picks for the ensuing years. Take my advice, or leave it.

I think if you purchased these 3 companies at the moment, you can expect some big gains in the next 5 years.

Any truthful economist will tell you that any forecast past one year is like throwing darts at a board. Have you noticed how forecasts have been revised every month since the Bear Stearns debacle? Thinking ANY company can guarantee solid returns in the next 5 years is called blind faith or gambling.

Forget about the past, you don't drive looking through the rearview mirror do you?

Rodimus Prime
Feb 25, 2009, 11:03 PM
Lets see, I invest in 1997 and now, 12 years later, I show no gain. If that's not good enough for you then look over at Japan. 8-9%, over the long term, sure :rolleyes:

This buy and hold is Wall Street talk designed to keep the greater public (you) in the market while big money (them) take profits.


Here is a quiz, if you invest in a stock (or market) and it falls in value by 50%, how much does it have to perform before you recover your losses? And again if it falls in value by 75% or even 90%, how much does it have to perform before you recover your losses?

And based on your 8-9%, how long will it take you to recover those losses?

Try expanding that view a little. I read something recently that showed took everything over the past 4 or 5 presidents and it showed when Bush left office even with the huge drop in the market.

It still worked out to be 10% a year on average. Now mind you that you where pushing 30 years of time. Over 30 years it worked out to still hold a 10% average after a near 40-50% drop in 12 months.

That should tell you something.

Long term the market still holds 10% a year. You are looking at it short term and yes in a single year it can be very bad. Black tuesday in the 80%where the market dropped 22% in a single day was bad and it took 5 years to recover back where it was in the long run it still averages out to 10% a year.

I am still putting 10% of my pay check into my 401k I am not going to stop doing that since that is for the long haul and in 30 years I will avearage a 10% return on it.

Now to us young people we are going to take real adavatage of this down turn. We do not have as much to loses but we stand to gain on it being low and going up.

sushi
Feb 26, 2009, 06:12 AM
This buy and hold is Wall Street talk designed to keep the greater public (you) in the market while big money (them) take profits
I don't know.

Let's just say that I purchased a 1,000 shares of Microsoft when they went public for about $27 per share, and then held them for all these years through thick and thin.

I would have 512,000 shares at around $17 per share, or 8.7 million in stock value, from that one investment. All capital gains are sheltered from the capital gains tax until I sell.

That's not to say that shorting, or holding stocks for shorter periods isn't beneficial as well.

I hope that you realize that market averages and individual stocks are completely different beasts. Anyhow, never put all your eggs into one basket. Diversify your investments and monitor them.

IJ Reilly
Feb 26, 2009, 10:26 AM
No DZ is right. The market WILL bounce back. Now is the time to invest because long term the market still will hold it 9-10% growth a year. It will jump up quicker this time to keep on that pass.


Does this advice come with your money-back guarantee?

Most investors find that their investments are now worth less than they were ten years ago, including any additional money they invested in the markets over that period of time. Tell them how they can expect 9-10% growth a year, especially since this is the second Wall Street panic of major proportions they've experienced within the last eight years, and every penny they've invested over a ten year period is now gone, plus a whole lot more.

Your advice is a very, very tough sell for anyone over the age of about 50. Someone who might have considered themselves within striking distance of retirement is very unlikely to see even their invested equity return, let alone a return on their equity, within their lifetime.

sushi
Feb 26, 2009, 10:59 AM
Your advice is a very, very tough sell for anyone over the age of about 50. Someone who might have considered themselves within striking distance of retirement is very unlikely to see even their invested equity return, let alone a return on their equity, within their lifetime.
If you are nearing age 50, then you should not be 100% invested in the stock market. Your portfolio should be diversified with other investment vehicles.

Never put all your eggs in one basket.

IJ Reilly
Feb 26, 2009, 12:25 PM
If you are nearing age 50, then you should not be 100% invested in the stock market. Your portfolio should be diversified with other investment vehicles.

Never put all your eggs in one basket.

The consistent advice provided by investment experts is that individuals should be equity heavy until they're about ten years from planned retirement -- which for most, is into their mid-50s, and that they should be diversified. I sure was -- large cap, small cap, REITs, foreign stocks, bond funds, cash. But it made little difference. What was the hedge against this market plummet? Nothing but cash was immune.

Virtually anyone who remained invested, in even a prudent, age-adjusted, diversified portfolio, over the last ten years has lost all of their returns and all of the equity they added to their investments over that time period. They have lost ten years of their savings, or more, which means unless they get very lucky with their investments going forward, they are not going to be retiring at age 65, or maybe ever.

To make matters worse, someone now in their mid-50s who has been investing appropriately over the past decade and was planning on continuing to make age-appropriate investments from now until retirement is virtually assured to not see their equity return unless they decide to take more risk over the next ten years than they should. This is a dilemma that has body-slammed millions of people in this age group who have been doing exactly what they were told was the right way to plan for their retirement for decades. They are now screwed.

Probably most younger people don't fully appreciate just how screwed.

Unspeaked
Feb 26, 2009, 12:43 PM
The consistent advice provided by investment experts is that individuals should be equity heavy until they're about ten years from planned retirement -- which for most, is into their mid-50s, and that they should be diversified. I sure was -- large cap, small cap, REITs, foreign stocks, bond funds, cash. But it made little difference. What was the hedge against this market plummet? Nothing but cash was immune.

Very true.

Where exactly were people closer to retirement supposed to put their money? Yes, someone in their 50s shouldn't own only stocks, but they'd still be in the mix. And at that age, the rest of their portfolio was probably made up of very "safe" target retirement and bond funds - which have all had a 10%, 20% and even 30% hit. When a 2010 Target Retirement fund is taking a 20%+ hit, where are the safe havens?

I suppose you could have everything in CDs or Treasuries, but you'll barely beat inflation with just those - good luck actually living off them in retirement!

CalPoly10
Feb 26, 2009, 12:49 PM
Where do you put your money when it gets close to retirement?

In the current times, nothing is safe. Bank Accounts might not be paying enough interest to cover inflation in the coming year with the way Obama is planning to print money off the press.

IJ Reilly
Feb 26, 2009, 01:20 PM
As you get closer to retirement, you should be moving a larger percentage of your investment portfolio into fixed-income securities, such as government and corporate bonds, with the objective of protecting your equity not maximizing your return on investment. But in this market, even bonds got slammed. Not that this makes a whole lot of difference to people who were investing as though their retirement was still 10-15 years off. Unless we see a huge rally and very soon, a lot these people are not going to be able to afford retirement at age 65, or maybe ever.

CalPoly10
Feb 26, 2009, 02:32 PM
As you get closer to retirement, you should be moving a larger percentage of your investment portfolio into fixed-income securities, such as government and corporate bonds, with the objective of protecting your equity not maximizing your return on investment. But in this market, even bonds got slammed. Not that this makes a whole lot of difference to people who were investing as though their retirement was still 10-15 years off. Unless we see a huge rally and very soon, a lot these people are not going to be able to afford retirement at age 65, or maybe ever.

You're half way right (in the US atleast).

The people that are close to retirement will be able to receive Social Security. They'll have something to fall back on. It is the people that are 20, 30, and 40 years old that are screwed. They're paying into a black hole of Social Security, being taxed to death, losing jobs...

IJ Reilly
Feb 26, 2009, 02:56 PM
You're half way right (in the US atleast).

The people that are close to retirement will be able to receive Social Security. They'll have something to fall back on. It is the people that are 20, 30, and 40 years old that are screwed. They're paying into a black hole of Social Security, being taxed to death, losing jobs...

You have it completely backwards. Younger people still have plenty of time to save for their retirement, which is what everyone ought to be doing starting in their 20s, not assuming that Social Security will do for them what it was never intended to do. They may even have a golden investment opportunity coming up, one they can risk taking, while people in their 50s and older cannot. Also, those of us who are middle-aged know that the Social Security goalposts are already going to be moved down the field before we're old enough to collect.

CalPoly10
Feb 26, 2009, 03:03 PM
You have it completely backwards. Younger people still have plenty of time to save for their retirement, which is what everyone ought to be doing starting in their 20s, not assuming that Social Security will do for them what it was never intended to do. They may even have a golden investment opportunity coming up, one they can risk taking, while people in their 50s and older cannot. Also, those of us who are middle-aged know that the Social Security goalposts are already going to be moved down the field before we're old enough to collect.

The problem is that we're still paying money out of out income to a system that will not benefit us. If the money I put in to Social Security were put into a savings account, I'd be happy. But it's not. It's taken, and most likely I will never see it again.

I invest, I save, and at 20 years old, I have roughly 25-30,000 saved. I will take risks with this money once I am finished with school. While I'm still young, I plan on taking many ventures. If they fail, I have time to rebuild. If they succeed, I will live a happy life.

I see this golden opportunity in front of me, and to tell you the truth, I think I will come out of it on top of 99.9% of people. When the housing market hits bottom, I will be emerging from school with a great engineering degree and enough capital to make something happen. Buy a piece of land, and a house, and get my personal real estate profiting on the road.

IJ Reilly
Feb 26, 2009, 03:19 PM
I'm not going to debate Social Security. This isn't a political thread and there's no reason for it to become one. Suffice to say, Social Security is not a retirement fund or a bank account. It was never meant to be either.

But on the topic, younger people are not going to be screwed by this stock and housing market panic. They may even benefit in the long run for the reasons both you and I have mentioned. It's older people who have lost half of their planned retirement funds along with much of the equity in their homes, and don't have the years left to recover it, who are screwed. They may have planned well, but they are still screwed.

Rodimus Prime
Feb 26, 2009, 06:21 PM
As you get closer to retirement, you should be moving a larger percentage of your investment portfolio into fixed-income securities, such as government and corporate bonds, with the objective of protecting your equity not maximizing your return on investment. But in this market, even bonds got slammed. Not that this makes a whole lot of difference to people who were investing as though their retirement was still 10-15 years off. Unless we see a huge rally and very soon, a lot these people are not going to be able to afford retirement at age 65, or maybe ever.

true but as it been pointed out the market follows trends.

The long term growth of the market will hold true. Just sucks if you where with in 10 years of retirement. Other wise chances are you will be fine and still come out on top with the same net return of 10% a year.

IJ Reilly
Feb 26, 2009, 06:58 PM
true but as it been pointed out the market follows trends.

The long term growth of the market will hold true. Just sucks if you where with in 10 years of retirement. Other wise chances are you will be fine and still come out on top with the same net return of 10% a year.

But it hasn't held true. I would suggest that you look at a chart of a broad market index such as the S&P 500 over the last ten years or so, compared to history. A dollar invested in 1997 is now worth less than a dollar today. A dollar invested only a year ago is worth about fifty cents today. This is the worst performance for equities since the Great Depression, and it has gone on nearly as long -- so far.

It sucks for more than people who are ten years away from retirement. It could easily take 20 years to make up these losses, and that's assuming the market doesn't tank every 8-10 years, which it's done not once but twice during that time period. What are we to make of this trend?

Put it this way: A lot of us followed the expert's advice to buy equities throughout our most productive working years. If we followed that advice for 20-30 years, were we not totally screwed? Were the experts right or were they wrong? What makes you think the future will be any different?

itcheroni
Feb 26, 2009, 07:10 PM
I have a feeling we're going below 5000. If you look at the DOW priced in gold instead of dollars, the bottoms are usually when the DOW is worth just 1 ounce of gold. In 83, it was 1 ounce of gold and in 2000 it was 43 ounces. Now, in 2009, we're at about 7-8 ounces. We've got a bit to go.

Since the crash, I've actually been getting the steadiest returns I've ever had, but it's because I'm into inflation hedges. I don't see the economy improving until the next administration.

Someone mentioned the GDP at 14 trill and the unemployment only at about 8%. Whoever that is should keep in mind that the government has revised what the inflation and unemployment numbers mean. If we knew the real numbers and adjust for inflation, I think we're awfully close and will reach 1930's levels. I think a dollar today is about 3 or 4 cents in 1900. And the very composite of the GDP is suspect because it accounts consumption, which is the largest part of the GDP.

Rodimus Prime
Feb 26, 2009, 07:14 PM
But it hasn't held true. I would suggest that you look at a chart of a broad market index such as the S&P 500 over the last ten years or so, compared to history. A dollar invested in 1997 is now worth less than a dollar today. A dollar invested only a year ago is worth about fifty cents today. This is the worst performance for equities since the Great Depression, and it has gone on nearly as long -- so far.

It sucks for more than people who are ten years away from retirement. It could easily take 20 years to make up these losses, and that's assuming the market doesn't tank every 8-10 years, which it's done not once but twice during that time period. What are we to make of this trend?

Put it this way: A lot of us followed the expert's advice to buy equities throughout our most productive working years. If we followed that advice for 20-30 years, were we not totally screwed? Were the experts right or were they wrong? What makes you think the future will be any different?

expanded it back 20-30 years and you get by to 10% a year. Keep pushing it back to even pre great depression and guess what STILL works out to be 10% a year.

you are taking a snap shot of a picture of 1 year. It just one year it has had a huge down turn but over the long haul in 10 years time I bet it will be back on track for the 10% average over the long term.

IJ Reilly
Feb 26, 2009, 07:33 PM
expanded it back 20-30 years and you get by to 10% a year. Keep pushing it back to even pre great depression and guess what STILL works out to be 10% a year.

you are taking a snap shot of a picture of 1 year. It just one year it has had a huge down turn but over the long haul in 10 years time I bet it will be back on track for the 10% average over the long term.

Not necessarily, and I'm not snap-shotting one year, but looking at the last 12 years. Historically, we've experienced long periods of good returns and long periods of bad returns. We are approaching negative rates of return very close to levels experienced during the Great Depression and lasting well into the post-war era. It's a bit Pollyanna to think of this as merely a "trend" when the magnitude of the event is historical, and it's entirely possible that many millions of people will not live to see their equity return. You may be willing (and young enough) to bet that market performance will regress to the mean, but that's not something everyone can afford to do.

SactoGuy18
Feb 26, 2009, 08:04 PM
I think this stock market crash could lead the return of the following:

1) Currencies valued based on real tangible assets such as a mix of gold, silver and platinum, the three primary metals historically used in monetary transactions.

2) The separation of banks and other financial companies along the lines of the Glass-Steagall Act.

3) Much tighter minimum margin requirements to trade in commodities and stock futures. This will dramatically slow down the out of control speculation of commodities and stock futures, since if you have to put up 15-20% of the cost of the item to trade the item that cuts out most of the "make a fast buck speculators."

I would suggest possibly doing some drastic changes in national taxation systems to better favor savings and investments, but that's a more long-term prospect.

Rodimus Prime
Feb 26, 2009, 08:07 PM
Not necessarily, and I'm not snap-shotting one year, but looking at the last 12 years. Historically, we've experienced long periods of good returns and long periods of bad returns. We are approaching negative rates of return very close to levels experienced during the Great Depression and lasting well into the post-war era. It's a bit Pollyanna to think of this as merely a "trend" when the magnitude of the event is historical, and it's entirely possible that many millions of people will not live to see their equity return. You may be willing (and young enough) to bet that market performance will regress to the mean, but that's not something everyone can afford to do.


And yet you STILL are taking a snap shot of one bad year that had a HUGE drop.

The long term rate of return is still pushing 10%.

maestrokev
Feb 26, 2009, 09:10 PM
It's a bit Pollyanna to think of this as merely a "trend" when the magnitude of the event is historical, and it's entirely possible that many millions of people will not live to see their equity return. You may be willing (and young enough) to bet that market performance will regress to the mean, but that's not something everyone can afford to do.

You can't argue with the naivete of youth, people who've never been through a Savings Loan crisis, Asian meltdown, tech crash etc. They've been drinking the Kool-Aid - "over the long term everyone makes 10% annually!"

Like I said, you don't drive looking through the rearview mirror, so why do people think that history is such a good predictor of the future?

As you've pointed out, young people are bitter because they feel Social Security is an investment they've made rather than an option of last resort safety net. I do feel sorry for all those in their 50's that have had their retirement plans thrown into chaos - especially if they have children in their 20's who they are still supporting.

Rodimus Prime
Feb 26, 2009, 09:58 PM
You can't argue with the naivete of youth, people who've never been through a Savings Loan crisis, Asian meltdown, tech crash etc. They've been drinking the Kool-Aid - "over the long term everyone makes 10% annually!"

Like I said, you don't drive looking through the rearview mirror, so why do people think that history is such a good predictor of the future?

As you've pointed out, young people are bitter because they feel Social Security is an investment they've made rather than an option of last resort safety net. I do feel sorry for all those in their 50's that have had their retirement plans thrown into chaos - especially if they have children in their 20's who they are still supporting.

Well in some say IJ is right. I am young. I turn 26 in a few months so I am young enough to bet on the market going back to is 100+ year trend of 10% a year. I can afford time wise to eat these years losses. Heck considering my 401k did not start until May 08 I really had very little to lose.

I know my parents are going to be dealing with a huge lose of there retirement on paper and hopefully things will turn around for them before they retire.

I feel sorry for the older people who do have to struggle with retirement now.

As for SS I never planned on betting on it. I always saw it as a system to help out the poor which I do not intend to be under. My plan is anything I get from SS to be gravy money.

IJ Reilly
Feb 26, 2009, 11:34 PM
The analytic mistake you're making here is treating an average as if it is a trend. They are quite different things. Bear markets can last for a long, long time. The most recent lengthy bear market lasted for most of the 1970s. The market didn't fall like a rock, as it is doing now, but it went sideways for nearly ten years. Some are predicting that over the next ten years, the markets could behave in much the same way.

Rodimus Prime
Feb 26, 2009, 11:46 PM
The analytic mistake you're making here is treating an average as if it is a trend. They are quite different things. Bear markets can last for a long, long time. The most recent lengthy bear market lasted for most of the 1970s. The market didn't fall like a rock, as it is doing now, but it went sideways for nearly ten years. Some are predicting that over the next ten years, the markets could behave in much the same way.

maybe but I am also thinking in 30+ year terms. Not in 10 year terms.

Even if you take the past 30 years it still works out to be between 7 and 8%. That is factoring in the huge drop the 60% drop in a matter of months. That should tell you something.

10 years of this I still come out on top because I 30-40 years away from retiring.

Unspeaked
Feb 27, 2009, 01:13 AM
maybe but I am also thinking in 30+ year terms. Not in 10 year terms.

Even if you take the past 30 years it still works out to be between 7 and 8%. That is factoring in the huge drop the 60% drop in a matter of months. That should tell you something.

10 years of this I still come out on top because I 30-40 years away from retiring.

I'm really with IJ Reilly on this one.

I'm not saying it won't be possible to make a great return in 10+ years time, but I think the days of buy and hold 10% annualized gains are over. Even when thing were going well, several financial advisors (the ones without their heads in the cloud) were saying this, and it holds doubly true today.

The numbers you keep quoting - going back to the last turn of the century - include periods of tremendous growth and a world that for the most part arguably only had two "super powers." The conditions were ripe for huge gains. Also, up until 60s and the advent of mutual funds, the market was a rich man's game. You could even argue that this help true all the way to the 80s (or even the 90s and the popularity of online discount brokers and sub $100 commissions).

I just don't think the environment exists any longer - neither domestically nor abroad - to expect long term 10% gains in the stock market. Think about it... this isn't much more than Bernie Madoff was promising his clients and look where that got them.

Again, with the proper research and timing one can still make a decent return - in fact, with those two conditions met one could have probably made a decent return in 2008 - but this is no longer your parents or grandparent's days of buying 100 shares of US Steel, AT&T, IBM or Microsoft, sitting back, and retiring.

IJ Reilly
Feb 27, 2009, 01:39 AM
maybe but I am also thinking in 30+ year terms. Not in 10 year terms.

Even if you take the past 30 years it still works out to be between 7 and 8%. That is factoring in the huge drop the 60% drop in a matter of months. That should tell you something.

10 years of this I still come out on top because I 30-40 years away from retiring.

I've been investing for 30 years. You think maybe I haven't been? I can't say with any assurance that I've managed a 10% annualized return over that time period, at least not on most of my investments. Fortunately I bought AAPL in 1997 and held on. Even with a 50% drop it is still a good investment. Everything else? Not good at all. What I'm saying is it takes more than just buying in, it takes luck. People my age, we're pretty much out of luck. Maybe you'll get lucky, maybe the big crash of 2045 will wipe you out a few years before you're ready to retire. Nobody really knows in advance, that's the point.

sushi
Feb 27, 2009, 07:58 AM
Nobody really knows in advance, that's the point.
That's true.

Yet, in these times there are individuals out there saying that they do.

IJ Reilly
Feb 27, 2009, 10:10 AM
That's true.

Yet, in these times there are individuals out there saying that they do.

You can count on the fingers of one hand the number of people who accurately predicted this situation. Today Berkshire Hathaway releases its quarterly report, and it's expected to be very bad. This is Warren Buffet we're talking about, one of the world's most respected and consistently successful investors. And yet, he invested in banks during 2008. If Warren Buffet didn't see this coming, then what the hell are the rest of us supposed to think, let alone, do?

oscillatewildly
Feb 27, 2009, 11:23 AM
You can count on the fingers of one hand the number of people who accurately predicted this situation. Today Berkshire Hathaway releases its quarterly report, and it's expected to be very bad. This is Warren Buffet we're talking about, one of the world's most respected and consistently successful investors. And yet, he invested in banks during 2008. If Warren Buffet didn't see this coming, then what the hell are the rest of us supposed to think, let alone, do?

Buffett - Didn't a lot of his wealth come from restructuring companies, rather than general stockmarket investing?

A large number of people knew this was coming, it's just the majority of them were in denial.

If anyone in the UK is in any doubt where house prices are going, take a look at a house price chart with an overlay of average earnings for the period 1970 to now. Unemployment has only just begun to gather pace.

IJ Reilly
Feb 27, 2009, 12:56 PM
Buffett - Didn't a lot of his wealth come from restructuring companies, rather than general stockmarket investing?

I was referring to Berkshire Hathaway, his investment fund. Buffett's investment strategies have consistently outperformed -- but even he didn't anticipate the magnitude of this market panic. The point being, if even as someone as savvy as Warren Buffett gets burned, how are the rest of us going to avoid it?

Unspeaked
Feb 27, 2009, 03:11 PM
Dow 7,062.93 -119.15


And we're just one semi-bad trading day away from a sub 7,000 Dow...

maestrokev
Feb 28, 2009, 12:10 AM
There seems to be a general misunderstanding of how the stock markets work among younger investors here. There's a bit too much trust in businesses and capitalism and that long-term all the bumps will even out.

I still believe in investing but I pray that I don't hit a "bump" right before retirement.

Even Alan Greenspan (http://www.nytimes.com/2008/10/24/business/economy/24panel.html?hp) didn't see this coming.

tigres
Feb 28, 2009, 03:00 PM
Not to get OT, but you can add increased costs to the consumer for the next 20 years + as this will only be the beginning of a "trend" for our everyday consumer needs. http://www.engadget.com/2009/02/28/obamas-proposed-2010-budget-juices-carriers-for-more-cash/

Now, as we may be on an investing topic but it is important to throw another mechanic into the engine. We may all find our savings dwindled and hacked enough to hit us in our investment dreams of the future. They may state no new "direct taxes" to those who's gross is <250K, however they will hit us all everyday, and everywhere, for every good from every spectrum.

Hence, it is my consensus that consumer spending that is expected to spark the economy will be heavily burdened by the taxing of goods and services across the spectrum that our nation cannot or refuses to live without.

After the tax, I hope we have the $ to even consider to invest.

the vj
Mar 1, 2009, 08:54 PM
Back in october the euro was $1.6 now is $1.2 ¿? I mean, if the US is in such bad shape how come is getting stronger?

Rodimus Prime
Mar 1, 2009, 10:20 PM
Back in october the euro was $1.6 now is $1.2 ¿? I mean, if the US is in such bad shape how come is getting stronger?

The entire world is in bad shape right now. The dollar and the yen are viewed as safe currencies and when times are bad people tend to park there money in what are considered safe.

It follows that trend when times are booming the dollar and the yen tend to go down. When times are bad they tend to get better.

IJ Reilly
Mar 1, 2009, 10:24 PM
Also, the US economy hit the skids before the EU and the US Federal Reserve started cutting government lending rates before the central bank in Europe.

DZ/015
Mar 2, 2009, 02:37 AM
The US is also spending like a drunken sailor on shore leave to "stimulate" the economy. Look for this to devalue the dollar as the year goes on. Buy Euros and Pounds now.

There is money to be made in this market, both by shorting and going long. I have done both. And not too badly, either. I have covered all of my short positions at this time, for I feel a bounce coming. I'm not saying a permanent recovery, just a bit of a bounce.

For those nearing retirement, I feel your pain. I'm over 40. I have lost approximately 45% of my 401k investments. Mostly because I placed my trust in mutual funds. Those days are over. I now am actively involved in where my money is going. At least now if I lose capital, it is by my own choice. Not some fund manager.

jackson4lee
Mar 2, 2009, 02:43 AM
can anyone predicted when the market will recover?

DZ/015
Mar 2, 2009, 02:59 AM
can anyone predicted when the market will recover?

No. But I will make the bold prediction that the market will recover, eventually.

Metatron
Mar 2, 2009, 03:47 AM
When it comes to investing you can manage it yourself or let a company do it. If you let a company do it, put it in a lifetime fund so that less money is put into stock as you get closer to retirement. If people did this, everyone over 50 would have a maximum loss of only 25-30%. Anyone who has lost more then this is making bad investment choices.

trule
Mar 2, 2009, 08:29 AM
Back in october the euro was $1.6 now is $1.2 ¿? I mean, if the US is in such bad shape how come is getting stronger?

One factor is that US based consumers and companies are selling foreign assets and bringing home foreign profits to pay local US dollar debts, which creates demand for dollars and the price goes up.

You can be sure that no foreign Governments or Wealthy individuals are looking towards the US dollar or anything on Wall Street as being a good investment. They might invest in USD denominated assets but its not to make money, rather its to protect the value of there existing USD denominated assets. Its somewhat absurd, success will be defined as not loosing too much after taking into account the inevitable inflation, failure will mean the US dollar collapses as does the value of their USD denominated assets.

Another factor is the panic to USD treasuries for their perceived safety, which also creates dollar buying, they may be safer than stocks right now, but mid term with all the printing going on its only a matter of time before inflation destroys the US treasury investor.

And that leaves Gold, which is doing remarkably well in all currencies ...

IJ Reilly
Mar 2, 2009, 10:14 AM
When it comes to investing you can manage it yourself or let a company do it. If you let a company do it, put it in a lifetime fund so that less money is put into stock as you get closer to retirement. If people did this, everyone over 50 would have a maximum loss of only 25-30%. Anyone who has lost more then this is making bad investment choices.

That's ridiculous. In order for "maximum" losses in this market to be "only" 25-30%, the investor would need to be very light in equities, and probably be 50-70% in government bonds (because many other types of bonds have also been slammed). Please find me a credible investment advisor who would tell "anyone over 50" to have virtually no equities in their portfolio.

trule
Mar 2, 2009, 10:19 AM
That's ridiculous. In order for "maximum" losses in this market to be "only" 25-30%, the investor would need to be very light in equities, and probably be 50-70% in government bonds (because many other types of bonds have also been slammed). Please find me a credible investment advisor who would tell "anyone over 50" to have virtually no equities in their portfolio.

So long as you loose less than the next guy you come out in front :D In a deflation everyone looses, the differentiating factor is how much. 25% loss sure sounds better than 50%...my mother had a cash option, so she actually made a good 5% this past year, she is now twice as wealthy relative to stock only investors :cool:

IJ Reilly
Mar 2, 2009, 10:52 AM
So long as you loose less than the next guy you come out in front :D In a deflation everyone looses, the differentiating factor is how much. 25% loss sure sounds better than 50%...my mother had a cash option, so she actually made a good 5% this past year, she is now twice as wealthy relative to stock only investors :cool:

The relative measure you suggest is peculiar. I don't measure my well-being compared to anyone but myself. It's not as though we're seeing any general deflation in the economy, just a sharp decrease in wealth. Not a relative thing at all.

This reminds me of the social sciences experiment where people were asked if they'd prefer to take a job that paid $100,000 a year if their colleagues were making $150,000, or $75,000 a year if their colleagues were making $50,000. Most people picked number two. This may go a long way towards explaining why economies behave as they do. Emotions often trump rationality.

EDIT & CORRECTION: The experiment was a study of happiness and relative earnings among neighbors. The experimenters found that people's reported happiness was highly dependent on them doing better than their neighbors.

http://www.nber.org/~luttmer/relative.pdf

trule
Mar 2, 2009, 11:07 AM
The relative measure you suggest is peculiar. I don't measure my well-being compared to anyone but myself. It's not as though we're seeing any general deflation in the economy, just a sharp decrease in wealth. Not a relative thing at all.

Sorry, but wealth is a relative measure. Your well being, I don't know what that has to do with wealth? You either have a dollar or you don't, OTOH your well being is purely subjective.

We currently have asset price deflation, perhaps we get it in the broad economy too ...

IJ Reilly
Mar 2, 2009, 11:42 AM
Sorry, but wealth is a relative measure. Your well being, I don't know what that has to do with wealth? You either have a dollar or you don't, OTOH your well being is purely subjective.

We currently have asset price deflation, perhaps we get it in the broad economy too ...

Broad deflation is very bad news. If we get that, we will be in a depression. You don't want to wish for deflation.

Wealth is only a relative measure in our minds; objectively it is not relative at all. As you said, either you've got a dollar or you don't. How much anyone else may or may not have doesn't effect that dollar. But as the paper I linked concluded, people tended to report more happiness when their neighbors were less well off than themselves compared to when the situation was reversed -- even if in the second case they were objectively more well off.

Objectively we all know that $150,000 is more than $100,000, but if the economists who studied this got it right, people will actually feel better off with an income of $100,000 living in a community where their neighbors make $75,000, than they would making $150,000 in a community where their neighbors make $200,000. That's startling. Consider the implications!

Unspeaked
Mar 2, 2009, 11:48 AM
Wealth is only a relative measure in our minds; objectively it is not relative at all. As you said, either you've got a dollar or you don't. How much anyone else may or may not have doesn't effect that dollar. But as the paper I linked concluded, people tended to report more happiness when their neighbors were less well off than themselves compared to when the situation was reversed -- even if in the second case they were objectively more well off.

Objectively we all know that $150,000 is more than $100,000, but if the economists who studied this got it right, people will actually feel better off with an income of $100,000 living in a community where their neighbors make $75,000, than they would making $150,000 in a community where their neighbors make $200,000. That's startling. Consider the implications!

Personal wealth aside, isn't this fact one of the things that keeps the economy going? People wanting more/better things than their neighbors?

IJ Reilly
Mar 2, 2009, 12:06 PM
Personal wealth aside, isn't this fact one of the things that keeps the economy going? People wanting more/better things than their neighbors?

Yes, but... the results of the study imply that once we're better off than our neighbors, that we don't have as much interest in improving our lot. Maybe this is when people tend to pick up and move. I don't know. Good question.

maestrokev
Mar 2, 2009, 06:05 PM
Personal wealth aside, isn't this fact one of the things that keeps the economy going? People wanting more/better things than their neighbors?

That's called keeping up with the Joneses and is ingrained in American culture.

You could also expand the economy by finding new efficiencies or new customers outside your home market. We have unrealistic expectations for how well the economy should perform - like earning 10% annually. These expectations force companies to think quarterly rather than annually and lead to shorter product cycles and increased marketing convincing us we to need to buy the next new model right now or we're outdated.

Unspeaked
Mar 2, 2009, 06:57 PM
That's called keeping up with the Joneses and is ingrained in American culture.

You could also expand the economy by finding new efficiencies or new customers outside your home market. We have unrealistic expectations for how well the economy should perform - like earning 10% annually. These expectations force companies to think quarterly rather than annually and lead to shorter product cycles and increased marketing convincing us we to need to buy the next new model right now or we're outdated.

Is it just me, or have these corporate practices also seemingly increased with the rise of online discount brokers and more "common folks" buying shares of companies?

It's almost like television shows. 20 - 30 years ago, a network could easily sit on a show like Cheers or MASH after a few rough seasons and reap the rewards. Now, if you're not in the Top 20 your first week or two, you don't even get to finish your first season.

It seems like investors now forget results as recent as one quarter ago, and focus only on the present, sacrificing the future.

maestrokev
Mar 2, 2009, 08:07 PM
Is it just me, or have these corporate practices also seemingly increased with the rise of online discount brokers and more "common folks" buying shares of companies?

It's almost like television shows. 20 - 30 years ago, a network could easily sit on a show like Cheers or MASH after a few rough seasons and reap the rewards. Now, if you're not in the Top 20 your first week or two, you don't even get to finish your first season.

It seems like investors now forget results as recent as one quarter ago, and focus only on the present, sacrificing the future.

I don't believe so, but I don't have evidence to prove otherwise. Common folks don't buy nearly as much as institutional investors or rich folk who are large block shareholders.

We live in an era of instant gratification. You think TV business is tough, read up on speed dating. You have 30 secs to make an impression and if there's no chemistry you're out!

We are knowledge rich and analysis poor. Just look at how many American companies are relying on offshore outsourcing to reduce costs and raise revenues rather than looking for tougher solutions that keep local jobs. Investors are too influenced by the Survivor mentality, fail one task and it's time to conspire to get rid of you at Tribal Council. Take a look at how long the average tenure of a Fortune 500 CEO is.

lpp71
Mar 2, 2009, 08:38 PM
This is just horrible it keeps going down, and worse every time Obama talks.. I've heard him say:

"Thins are bad - But there going to get worse..."

Who the heck says something like that... Nothing hurts things like people think things are going to be WORSE, the want what he claimed to bring "HOPE"

Geez

IJ Reilly
Mar 2, 2009, 09:13 PM
Every time AIG loses $60 billion in one quarter and needs another bailout. Or Obama speaking.

You chose your cause and effect. Please do it carefully.

Mr. Giver '94
Mar 2, 2009, 11:59 PM
6763.29 close today.

Let's see you try to ChAnGe this one Obama..... :p:p:p

Unspeaked
Mar 3, 2009, 12:18 AM
Bet people are already regretting voting for him....

Because things were going so well before February...

:rolleyes:

(But please, let's try to keep politics out of this thread...)

NT1440
Mar 3, 2009, 12:22 AM
This is just horrible it keeps going down, and worse every time Obama talks.. I've heard him say:

"Thins are bad - But there going to get worse..."

Who the heck says something like that... Nothing hurts things like people think things are going to be WORSE, the want what he claimed to bring "HOPE"

Geez

Because being realistic is such a bad thing....
:rolleyes:

Mr. Giver '94
Mar 3, 2009, 12:23 AM
Because things were going so well before February...

:rolleyes:

(But please, let's try to keep politics out of this thread...)

Ok. It just bothers me that so much $$$ is being spent and yet banks are still sucking, auto makers are begging for lifelines, hundreds of thousands more jobs have been lost, and that was just February. ;)

NT1440
Mar 3, 2009, 12:24 AM
Ok. It just bothers me that so much $$$ is being spent and yet banks are still sucking, auto makers are begging for lifelines, hundreds of thousands more jobs have been lost, and that was just February. ;)
Free market is just great without regulations isnt it?;)

Mr. Giver '94
Mar 3, 2009, 12:28 AM
Free market is just great without regulations isnt it?;)

Free markets as a general concept are good; better than a Communist-style market system by a long shot. Clearly the lack of regulations has come back to bite us in the ... but spending prioritizing on the part of the government is more important to me. I don't need to be paying for Nancy Palosi's "special interest" earmarks.

NT1440
Mar 3, 2009, 12:29 AM
Free markets as a general concept are good; better than a Communist-style market system by a long shot. Clearly the lack of regulations has come back to bite us in the ... but spending prioritizing on the part of the government is more important to me. I don't need to be paying for Nancy Palosi's "special interest" earmarks.

Which earmarks are you talking about?

Mr. Giver '94
Mar 3, 2009, 12:31 AM
Which earmarks are you talking about?

Exactly. ;)

NT1440
Mar 3, 2009, 12:32 AM
Exactly. ;)

No, i meant which ones are you specifically talking about. I'd love an answer.

Mr. Giver '94
Mar 3, 2009, 12:32 AM
No, i meant which ones are you specifically talking about. I'd love an answer.

Read this.

http://www.time.com/time/politics/article/0,8599,1881855,00.html?iid=tsmodule

NT1440
Mar 3, 2009, 12:36 AM
Read this.

http://www.time.com/time/politics/article/0,8599,1881855,00.html?iid=tsmodule

Ah, the mythical 9,000 number that the GOP just cannot seem to elaborate on...

Mr. Giver '94
Mar 3, 2009, 12:41 AM
Ah, the mythical 9,000 number that the GOP just cannot seem to elaborate on...

Well they couldn't have completely made it up....

I'm not saying I know the answer though.....


Separate but related, I thought this was pretty funny. We discussed some of these in my history class last year and in my AP environmental science class this year. Some of them are pretty ridiculous.

http://www.time.com/time/specials/2008/top10/article/0,30583,1855948_1863903,00.html

NT1440
Mar 3, 2009, 12:42 AM
Well they couldn't have completely made it up....


Are we talking about the same GOP? Just last week Jindhal is caught in a lie.

maestrokev
Mar 3, 2009, 01:34 AM
Did anyone catch World News with Charles Gibson? Profiling how Dodger Stadium Job Fair (http://www.latimes.com/sports/columnists/la-sp-plaschke-dodgers1-2009mar01,0,242884,full.column) had 4,500 people applying for 500 jobs.

California has 8th largest economy in the world and now has a 10% unemployment rate - 2million out of work and rising. It is being terminated! :mad:

What happened?

Unspeaked
Mar 3, 2009, 02:11 AM
What happened?

You think it's bad now?

Wait until they start rationing the water (http://www.edie.net/news/news_story.asp?id=16078&channel=0&title=Drought+ravaged+California+faces+water+rationing).

trule
Mar 3, 2009, 05:42 AM
Objectively we all know that $150,000 is more than $100,000, but if the economists who studied this got it right, people will actually feel better off with an income of $100,000 living in a community where their neighbors make $75,000, than they would making $150,000 in a community where their neighbors make $200,000. That's startling. Consider the implications!

LOL, do economists get anything right! So far the track record is not so good :D

Most people, obviously not you and quite possibly not me, measure their wealth against those they see each day. The absolute value is not important, the relative value is...I earn more than him therefore I must be better.

trule
Mar 3, 2009, 05:50 AM
Did anyone catch World News with Charles Gibson? Profiling how Dodger Stadium Job Fair (http://www.latimes.com/sports/columnists/la-sp-plaschke-dodgers1-2009mar01,0,242884,full.column) had 4,500 people applying for 500 jobs.

California has 8th largest economy in the world and now has a 10% unemployment rate - 2million out of work and rising. It is being terminated! :mad:

What happened?

too much debt

IJ Reilly
Mar 3, 2009, 10:43 AM
LOL, do economists get anything right! So far the track record is not so good :D

Most people, obviously not you and quite possibly not me, measure their wealth against those they see each day. The absolute value is not important, the relative value is...I earn more than him therefore I must be better.

Well give the economist who authored the study some credit. He tested the theory that what brings people satisfaction wasn't objective wealth so much as doing better relative to someone else. I'm certainly not an expert in economics, but it seems to me that a branch of the "dismal science" is opening up that doesn't assume that people are perfect economic actors, that they don't always pursue their best economic interests. I always thought that was obvious by observing human nature, but up to now, maybe it hasn't been so apparent to economists.