Stock Market Crash....NOT!

[masmdu]

I keep reading about the "market is going to crash" and other hogwash.

This kind of blather is such nonsense. Most people get agitated about such things right at the WRONG time. (Bullish at tops and Bearish at bottoms)

If there is a crash about to happen it would be the most widely broadcast/anticipated ever! Crashes like '87's 22% decline don't happen when so many people are looking for it to happen and short the market.

This type of sentiment is a CONTRARY indicator. It tells me we are VERY close to a major bottom (this week or next)

[Duer 157099]

1. I know!

And when everyone was whining about Katrina coming, and what a disaster it was going to be... and .. oh wait...

You know, sometimes it really *is* an imminent disaster.

[lurky]

2. Smile! Go to Wal-Mart!

Our wise masters have everything under control!
:):):):)

[napoleon_in_rags]

3. We are close to a major bottom

Then there will be a short rally leading to a long term decline, just like with oil futures.

The fundamental issue is with energy/resource prices, and its not going away any time soon.

[LSdemocrat]

4. At this point, I'm actually more worried about a crash of the dollar in the currency markets

The combination of drastically cutting interest rates, pouring dollars into the financial markets, and running trade and budget deficits all with a sinking economy (that coincidentally is not bringing down the rest of the world's economy) seem to set up a drastic, if not disastrous, fall for the dollar as a safe currency harbor.

We will be completely screwed if institutional international finance investors start dumping dollars. Stagflation would return with a vengeance.

[spinbaby]

15. Dollar in a tailspin despite Fed action

LONDON (Reuters) - The dollar plumbed fresh depths across the board on Monday as liquidity-boosting measures launched by the Federal Reserve over the weekend failed to quell worry about the health of the U.S. economy and financial sector.

http://news.yahoo.com/s/nm/markets_forex_dc;_ylt=AhGSQEkjpRSIjWBBjtI_MIEDW7oF

[LSdemocrat]

42. The problem is that the dollar is in a tailspin because of the Fed's actions

All their actions are actually causing the dollar to become MORE vulnerable to downward pressure because they are basically flooding the market with US dollars to ease the credit crunch and lowering the federal interest rate. Both actions make the dollar less attractive versus other currencies since the dollar supply is increased and the lower interest rate reduces the cost of obtaining more dollars versus other currencies.

[Birthmark]

5. Going to crash?

It *is* crashing. And there's no particular reason for it to stop crashing anytime soon. Of course, there'll be rallies here and there --but those will be the exception, not the rule. It's going to be a long, slow downward trend for as far as I can see.

Don't know what you're looking at, but would be fascinated to learn.

[fasttense]

6. Hmm, the height of this market was about

14,000 in the DJIA and now it's down to 11,951 so that's about a 14.5% decline. Not bad for a start.

But I find it amazing how many people claim to have known everything was headed south, once everything starts to head south. The folks who have suddenly converted to "the economy is in a crisis", were the same people who were saying "real estate always increases in value". So I have trouble believing that because the people who run with the pack have decided to run with the pack in the other direction, makes the pack all wrong. They are just following the lead. Now the question is who is in the lead.

A good estimate of reality is to take the opposite of what the bush says. He says we are in a little rough patch but don't worry be happy. So from listening to him you know that we are barely treading water in this economy and things are going to get a lot worse. Welcome to reality. It doesn't matter how many people say it. Reality is what, reality is.

[girl gone mad]

8. I don't agree.

I've been complaining about the real estate and derivatives bubble for about 4 years now. I've followed blogs such as the housing bubble blog, housing panic, shadow stats, europac, etc.

I don't believe there has been any sudden mass conversion, just a gradual awareness by average people that we are in some serious trouble. The economic cheerleaders are still out talking up the economy, though the MSM has been giving more air time to the contrarians lately.

We are facing a much more uncertain situation than 1987, though a few of the same factors are at work: illiquidity, derivatives decoupling, a weak dollar, and overvaluation (this time in the face of a recession). Worse, we now have bank insolvencies, a negative savings rate, job losses and a loss of manufacturing, out of control national debt, two expensive ongoing wars, eroded international confidence, a credit bubble, and record declines in real estate.

This isn't a matter of psychology. We are looking at some very hard times ahead.

[screembloodymurder]

14. That's a 14.5% decline in deflated dollar terms.

If you figure in the currency losses, the market is already down 30%. It is now apparent that the closed session of Congress had nothing to do with the the phone companies. We are facing the real possibility of a financial collapse. Congress was appraised of the situation during the closed door session. You don't close Congress for the fourth time in history to discuss the phone bill.

WAKE UP PEOPLE!

[lligrd]

7. My Mother Just (today) Came Back From A Trip To Egypt

Went on a donkey ride that was supposed to cost about $3. When the tried to pay the guy wanted Euros. She said she didn't have any and he said anything but U.S. dollars because they are worthless.

Doesn't look so good to me.

[Greyhound]

9. An Egyptian donkey ride attendant knows what happening, but we can't figure it out.

Just how many kinds of stupid are there?

...and do we deserve what is coming because we have such an abundance of that kind?

[TheWatcher]

10. If you are so certain that everything will be OK, then why not get back to your College Basketball

Brackets.

Simply feel good and ignore everything that is going on outside of Pleasantville, instead of making useless taunting posts like this one.

[masmdu]

18. What?

[shaniqua6392]

11. Sure...That is why the Fed dropped interest rate on a Sunday!!

Add that to the government using our tax dollars to bail out Bear Sterns, the 5th largest investment bank on Sunday. They are trying to get us to look the other way so we don't realize how bad it is and to prevent a run on the banks. This is very bad news. http://www.msnbc.msn.com/id/23662433/

[Kip Humphrey]

13. And where does the FED get $200B?...They print it!...And what happens to the value of a dollar when

the FED prints more dollars? It declines in value!...And what happens when the dollar declines in value?...Everything costs more dollars!...And what happens when everything costs more dollars?...We're SCREWED!

This ain't rocket science. Oh, and BTW, the FED has been printing trillions of extra dollars over the last 7 years. $200B is just another drop in an overflowing FED bucket.

Now, you should be able to figure out why gold is $1024/oz and the euro is worth $1.59.

[Eurobabe]

12. John McLame sez 'Murika will be alright, just buy shit!

[lonestarnot]

21. Then you KNOW it's not so. When those lips move they are just spouting mo bushit!

[marmar]

16. Sorry, I'm on a strict Kool-Aid free diet.....

:eyes:

[Maggie_May]

17. No crash but food and oil are going to cost ya!

[MilesColtrane]

19. I presume that you are buying stocks like crazy then.

I mean we're at or near the bottom and they are just such a bargain.

[masmdu]

22. SP futures YES

Not individual stocks

[MilesColtrane]

24. Let us know how that works out for you.

[masmdu]

26. Will do

[bdamomma]

20. economic shock and awe.

:-(

[ThomWV]

23. Take a look at the indexes, Healt Care stocks are rebounding even as we speak.

[MadHound]

25. You do realize that the DOW has lost aprox 28% in value over the past year

You also realize that with high debt rates, high inflation and a myriad of other factors, the economic backing to keep the current DOW prices(or any other market for that matter) simply aren't there. The DOW, and other markets, have been living on lots of hot air and Fed moves, and this simply can't be sustained indefinitely. The markets are still in correction mode, and we could lose another twenty five percent off the markets, at least. The only question is will it come all at once or will it continue to leak out the hot air like it has over the past year:shrug: Either way, it simply isn't good for us.

[Cruzan]

27. No, the Dow hasn't been down more than 19.4 %

off its Oct 11, 2007 all time intraday high of 14279.96:

(14279.96-11508.74)/14279.96 * 100 = 19.4%


Using closings -- all time high 14164.53 on Oct 9. 2007 -- the greatest drop is even smaller: (14164.53-11740.15)/14164.53 * 100 = 17.1%

Currently: (14279.96-11940)/14279.96 * 100 = 16.3%


Haven't bothered to check the rest of your 'facts.'

[MadHound]

31. You're forgetting to factor in two things

The drop in the value of the dollar over the past year, and the rise in inflation, making the dollar even more worthless. Go crunch those into your calculator and see what you get. Hint, you can look at my previous post.

[Cruzan]

32. Do it yourself

You put up a number. You ought to be able to show how (or where) you got it.

[MadHound]

33. I did do it myself, that's where I got the aprox. 28% figure

It's an easy calculation to do, figure the inflation rate from a year ago, figure the dollar devaluation percentage over the same period, and voila!

Do your own math, or continue to be like many other American suckers, just lap up the "official figures"

[Cruzan]

34. If it's an easy calculation then you can easily write it down

and show how you got your 28%, i.e. show your work.

[MadHound]

36. This isn't math class, and you can easily figure this out for yourself

That way, when you come to the same figure I do, you can't whine about how the math was wrong. Stop being intellectually lazy.

[Cruzan]

38. If it's so easy, then just post it

Geez, what's the big deal? I think we can all handle a little basic arithmetic, math class or no math class.

[high density]

35. Everything is hurting from inflation and the cost of the dollar

So I don't know why you have chosen to single out stock market returns in this regard. The other options are things like currency or commodity speculation and it's way too easy to get burned on those in my opinion. Inflation-indexed bonds have had a great run over the last year, but past returns do not equal future results.

So yeah, there is inflation, but how do you escape that if you live in America and buy things with US dollars? At least the stock market has a possibility of beating inflation, while those money market accounts paying 2-3% APR are going to be eroded by it, especially when you consider income taxes for taxable accounts.

[debbierlus]

28. You are kidding, right? We have 28 days, and then the loans come due

The cash liquidity flush given to major banks last Friday, it comes due in a month.

The 'collateral' accepted by the US government, it is worthless junk that never would have been accepted in the history of our country. The bad mortgages that are going belly up - that is what is backing the financing.

This is death by a thousand cuts. Read Rawstory today, FOREIGN INVESTORS are talking about pulling out of the dollar & not buying our debt anymore. We are in MAJOR trouble.

http://rawstory.com/news/2008/Treasury_Secretary_refuses_actions_to_strengthen_0316.html

Read this article.

You have a month. Buy now. Turn it into usable goods or gold. The writing is on the wall.

[El Pinko]

29. Good for you! Go and buy some stock!

To me it looks like we have been in a slow-motion crash for agaes now, and the larger economy is much worse than the stock market.

But if you're feeling bullish, more power to you!

[selador]

30. bingo

i made this point several times last night

dow futes made a great gapfill (i trade futures primarily) this morning.

easy 250+ pts on the gapfill

retail, as you correctly state is almost always wrong in trying to time the market. that's why they should INVEST not trade.

if you are not watching TRIN, TICK, VIX, AD, Putcall, Bonds, and institutional action (capping, etc.) you don't have an edge in shorter term movements. and as you say retail is always most bullish near tops and most bearish near bottoms (whether shortterm or longterm). in the long run NOTHING in the history of mankind has been a better tool for longterm wealth accumulation than the stock market - for the common man, it's unbeatable as an investment.

going nuts every time the dow tick 300 pts either way is only going to shake out weak hands, and whipsaw the retail trader.

nobody liked gold at 400. they love it now

nobody was screaming buy oil at 60. now they are screaming OIL OIL @ 105+

it NEVER fails.

real estate, stocks, tulips, whatever. the same story.

[high density]

37. I'd like to know why everybody is so darn caught up by daily volatility in the stock market.

Is this forum filled with daytraders or something? From the whining last night you'd think everybody had their entire savings in BSC or the financial sector.

[Dreamer Tatum]

39. It's because people are pulling for the Dow to tank

We are entering a recession, plain and simple, but people here let politics cloud their judgement and common sense. The dollar is weak, but it was similarly weak in the early 70's. Unemployment is currently about half of what it was in the most recent serious recession (1982). In this instance, the weak dollar probably is inflationary because of foreign demand for wheat, soybeans, and corn, and of course the price of oil will probably cause mild stagflation.

The point at which the dollar needs to be propped up to avoid a "collapse" is when real interest rates fail to attract the $1B per day or so that we need to sustain the budget deficit. Since about 80-90% of activity on the FOREX involves the dollar, there are a lot of people who are interested in its viability. Contrary to popular opinion, China (a) doesn't hold most of our outstanding debt, (b) can't "call" the debt that it currently owns, and (c) would cause the event they're trying to avoid if they sell out of the dollar altogether. Insert the country of your choice for China.

I chuckle when I see the retort "well, if you're so confident, then go buy stock!" Know what? That's a great idea. I'd stay away from financials, but tech stocks, textiles, manufacturing, and anything else that can be put on a boat and sent elsewhere is looking pretty good right now. I also submit that people who are buying calls on the Dow and ETFs are getting in pretty cheap. People magnify bad news: the housing marlet is in a down cycle, but it isn't crashing, and the people who are losing the most money are the idiots who designed sophisticated mortgage-linked derivatives that no one knew how to price correctly.

I know that people are struggling like they haven't in a long while, but we are a LONG way off from the state of affairs we experienced in 1982. This will, however, be worse than 2001, without question.

[OilemFirchen]

40. Interesting choice for an avatar.

Mine sez that the Pinks deserve a spanking for deregulating everything, pumping taxpayer dollars into a faltering market, giving out tax breaks to the wealthy during a massively expensive, and elective, war, foisting bullshit economic statistics on an anxious public (bolstered by a corporatist media), and turning a blind eye to phenomenal financial fraud.

Of course, your avatar may have seen the light, whilst mine is dwelling in the past. Strange times, indeed.

[high density]

43. The issue is the people here on DU that think they can predict the markets

If that's the case, these people should be out making oodles of cash instead of talking about buying guns and ammo on DU. Bad stuff is happening, yes, but that doesn't mean America is going to cease to exist next week because of a bad day/week/month/year.

[high density]

41. Well said

I'm amazed by the number of people on here that seriously think another Great Depression is literally on our doorstep.

[RevolutionStartsNow]

44. This board has always had its share of alarmists...

Really, if we're not just seconds away from WWIII or martial law, then we're plummeting into the Great Depression.

I don't think things are at all rosy, in fact it's been more of a slow decline than a rapid dramatic one, but I also don't think that the sky is falling.

Some people just love drama. Whatever.

[Ikonoklast]

45. Time frame not right....yet

There has to be the final shakeout on the pricing of derivatives. Until that happens, the Fed will still pump dollars, causing instability and fear. The market will reflect that.

Sixty days...maybe. Sooner, I hope.

[nashville_brook]

46. the "crash" happened a long time ago -- what we're seeing now is the fallout