Remember Arianna Huffington describing the stock market rally as a dead cat bounce two years ago?

[NNN0LHI]

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=5315041&mesg_id=5315747

NNN0LHI (1000+ posts) Mon Mar-23-09 03:33 PM

Response to Original message

23. I heard economist Arianna Huffington describe the rally as a dead cat bounce the other day


Wait a minute. Arianna Huffington is no economist.

Don

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Boy, she is smart. Wonder what she has to say now?

[Ikonoklast]

1. We have plenty of doom-and-gloomers that have been predicting imminent economic collapse

here, too, for three years now.

[jeff47]

3. The nice thing about predicting economic doom is eventually you will be right. (nt)

[onenote]

4. True. But some folks here were making very specific predictions

or citing specific predictions by others, including predictions of a total collapse around Christmas and, earlier, predictions that the market would settle in for a long run at around 6000.

Which reminds me. Is there anyway to access threads that I bookmarked back in the DU2 days?

[Ikonoklast]

8. I remember one poster predicting the imminent collapse of commercial real estate prices.

And the imminent demise of commercial builders.

Yes, there was a decline in price due to business failures and increased vacancies, but one of the bright spots was the quick recovery and increased demand for new commercial building and renovation of existing stock for re-purposing.

[Ikonoklast]

6. Roubini comes to mind, Dr. Doom himself.

He was eventually proven correct, although a great many of his other predictions both before and after the crash were dead wrong, and are convienently ignored by his devotees.

[boppers]

34. Well, the world will end eventually, as well.

In about 5 billion years it won't be cold enough for cellular life.

[nobodyspecial]

21. Predicting?

You mean cheering it on. Somehow, that is going to usher in some glorious defeat of capitalism to somehow be replaced by a utopian society.

[Cali_Democrat]

23. Capitalism defeated?

I can dig that

[orwell]

2. Arianna is very impressed with herself...

...just ask her.

[still_one]

5. The rally has occurred on light volume, and it has been that way for some time. The rally has been

occurring for several reasons. Historically low interest rates and company profits, but much of those profits were on the backs of many American workers whose jobs have been off-shored to India and China.

There are several things immediate things that can destroy this rally, among them are increasing energy prices and the European financial crisis.

Greece is only the tip of the iceberg, and it will eventually default

[Zalatix]

9. Boomers have also yet to retire en masse, and when they do

where will they turn to for money? Anyone wanna chance a guess?

[jeff47]

12. They'll turn to themselves, as planned

St. Reagan raised Social Security taxes so that the baby boomers pre-paid for their retirement.

[Zalatix]

29. Aren't today's Social Security payouts paid by today's taxes?

The point I was making was that they'll take out a lot of 401k withdrawals. This could have a big effect on the stock market.

[jeff47]

36. That's how the program started, but it was changed in the 80s

Taxes would have to shoot waaaay up to cover baby boomers, since they didn't have as many kids. So Social Security taxes were raised in the 80s to create the trust fund. The plan is for that trust fund to get spent down covering the baby boomers.

"Generation X" and later are expected to go back to the model where current taxes pay their benefits. That should work, but some people are forecasting Social Security will still have a shortfall....it should be noted that the same people have been forecasting a shortfall for a long time now, they just keep moving out the year when it starts.

[boppers]

35. Those SS funds were used to purchase treasury bonds.

The cash is long spent.

[jeff47]

37. And the treasury bonds can be turned back into cash.

It would be monumentally stupid to simply hoard the cash. Inflation would mean the trust fund would gradually be worth less and less money.

Instead, it was invested in bonds that 1) pay interest higher than inflation so the trust fund grows, and 2) from an entity that can't go bankrupt and thus can't default on the bonds.

[boppers]

41. "can't go bankrupt"

LOLOLOLOL.... Right, nations never, ever, default.

Wow, the world truly has gone insane.

[jeff47]

42. No nation that can print it's own money can default.

Because they can print more money to cover the debt. Might cause hyperinflation, but they can avoid default.

The countries that have defaulted or are about to default don't have their own currency, either through being part of the Euro or via having a currency pegged to something else.

[former9thward]

7. A lot of people have made bad predictions.

Many on the left deride gold as an investment -- saying it is some right wing promoted investment. People who have listened to that bad advice have lost money for 11 years now as gold increases in price every year. Why should those on the right get all of that money?

The stock market is moving up on low volume as the 'average' investor has stayed out. I am afraid they will stay out until the stock market is near a top and then they will get in again. Of course there will be a correction and the small investor will bail. Exactly the wrong strategy.

[jeff47]

13. No, gold is not being derided as an investment

What's being derided is the idea that gold is more than an investment. Entities like Goldline market their investments as somehow magical because gold was once a currency. They market based on the false premise that fiat currency will suddenly become worthless and we'll all turn to gold for currency. That isn't going to happen - even if they're right on societal collapse, shiny yellow metal isn't going to be desired in the immediate aftermath.

If you're buying gold because you think the price will go up, and you think of the gold as just a commodity, then you're doing it right.

If you're buying gold because the Mayans used gold and the dollar is going to vanish and you think gold bars will make you rich in the coming dystopian nightmare, you are doing it wrong.

[former9thward]

19. I am buying gold because both the EU and the US are trying to print their way out of debt.

This means the dollar's value will go down and every other commodity, gold included, that is priced in dollars will go up in price.

[jeff47]

22. Matching inflation shouldn't be your goal.

During a normal economy, yes printing money would be inflationary.

But we're not in a normal economy, and haven't been for years. In a depressed economy like ours, printing money doesn't actually cause inflation (and hasn't for the last few years).

But back to your post: You say you're buying gold because inflation will make it worth more....that's not actually true. Because you're relying on inflation to increase the value of gold, the value of everything else also went up the same amount. You've done better than stuffing dollars into your mattress, but that's about it. (Assuming you're basing the investment decision only on your expectations of inflation.)

You should really aim for investments that return better than the rate of inflation - then you'd actually be making money instead of not losing money.

[former9thward]

24. I have made a 400% return on Gold in the last 10 years.

Far higher than inflation. I took a buy out of my pension from a state agency in Illinois and have increased it 12 times in the stock market over the last 8 years.

I don't know if you have noticed but the world's central banks who are printing this money have become large buyers of gold. The 1% know what they are doing to the 99%.

[JNelson6563]

20. They are late to the dance.

Yes, many a right winger really started pushing gold as it neared peak. Those are the type who just exploit situations. Some on the other hand, saw the economy going down the shitter early on in the Bush years and went long on gold when it was under $400 an oz.

So yeah, if gold's at 1800 an oz and you've got someone telling you to buy and you'll make a bunch of money, tell them you watched that boat sail from the pier and to go find another sucker.

Julie--currently long on Detroit

[former9thward]

25. If I believed you I would sell. I'm not.

Gold has much higher to go. At every hundred level people have been saying gold was at a top. It wasn't. It still isn't. If you don't want to participate, fine, it is your lost money.

BTW I heard gold being touted by Air America hosts so to say this is right wing is a slander.

[JNelson6563]

27. I wouldn't get out now

But now ain't the time to get in.

I'd like to touch base with a you a year from now and see what gold's at.

Julie

[MineralMan]

10. Arianna is a Republican.

She wants economic problems to help defeat President Obama. That's been clear for a very long time.

[Honeycombe8]

14. She used to be. She changed to be a Democrat years ago, as I recall.

She has been a moderate liberal for many years, now.

[MineralMan]

16. Yes. Quite.

She did say she was a Democrat, didn't she? I remember her very well, since she was married to a man who represented my district in California. He was a republican. On a few occasions, I met them...fundraising events for charities, mainly. Arianna is a person I would not trust under any circumstances, to be quite frank.

She does say she's a Democrat. That's easy to say, really. After her divorce, she found a way to make a very nice living. Being a Democrat was very useful to her. But, when I look at the work product of those who posted articles on her website, I saw just what I expected to see.

You may believe whatever you can about her. My belief is different.

[Honeycombe8]

31. Oh, yegads...her marriage to that Republican was eons ago.

As for making $$$, that's a good thing, right? You want to make $, I want to make $, we all want to make $.

People who post or have had columns on her site: Alec Baldwin, Alan Alda, and other progressives.

Don't forget...she SOLD Huffpost. She is no longer the owner.

[killbotfactory]

11. She makes money by telling people what they want to hear.

As do a lot of people in the punditdome.

Who needs reasonable analysis when you can use kneejerk cynicism instead?

[JI7]

30. it's getting embarrassing , she was on some show, ed, lawrencec or something

a few days ago and they were discussing some stupid attacks on Obama. and she kept saying how the republicans should go after Obama on the economy, jobs etc because he is weak in those areas and things aren't really getting better.

lets say we weren't getting the good news recently with the economy. if you claim to be a liberal how can you say republicans would be able to go after Obama on that area considering the things republicans support/oppose.

i really can't stand her, and yeah, she is about the money. if it was anyone else who made the aol deal she would have been going on about how bad it was. huffington post is mostly tabloid crap now, not that it was much better before .

[Honeycombe8]

32. You know she no longer owns Huffpost, right? She's left leaning in her beliefs, as far as I cantell

I've been watching her on interview shows for maybe 20 years or so. She may not be far left, but that's okay. Most people aren't, just like most people aren't far right.

She was a Republican when she was young decades ago, married to a rich Republican.

Sounds like some people are jealous of her money, maybe?

[Honeycombe8]

15. Well, she was right, wasn't she? The market had ups and downs in 2009, then hit skid row

last year. It started getting better end of 2011, long enough now that it looks like the rally will stick this year.

[frylock]

18. you're ruining a perfectly good opportunity to shit all over huffpost

stop it.

[Honeycombe8]

33. The financial guy on a radio show I listen to said that in 2009, too. He said...

well, he had told his listeners in 2008 or maybe 2007 to get out of the market. He said during the years until this year that things are looking up, but all the indicators aren't right for it to be a solid market and not to get back in yet. He finally said in Jan. 2012 to get back in, that the stock market rise seemed solid and it'd be a good year.

[JNelson6563]

17. No Republican has given Obama any credit no matter what.

Including the DU Rethug/Anti-Dem cadre.

Julie

[spanone]

26. nbc said last time the market was this high Obama was a jr senator

they give him no credit whatsoever

[Bonobo]

28. A company's stocks go up when they fire 20,000 workers too.

So what really is being cheered here?

Gamblers and professional investors who create nothing but arguably do harm in some cases are making money by inflating a bubble.

is this REALLY a good thing for everyone? A sign of a strong economy in some healthy way?

I doubt it.

More like kids laying in the sandbox.

[just1voice]

38. The S&P 500 is at the same level it was in 1999

http://www.google.com/finance?q=INDEXSP:.INX

Criminal speculators control the markets regardless of useless predictions.

[name not needed]

39. She's not a journalist either. Doesn't stop her from acting like one.

[JoePhilly]

40. We've had regular screams of "Double-Dip" for most of Obama's first 3 years ...

the doom and gloom folks are now struggling to figure out what to scream about next.

And of course Arianna has moved on.