The Market is Up Again!

The Coffee Shop
21

Unemployment in the US will soon be above 10%, equity markets are down over 50%

See, this is exactly what I mean about the doom and gloom. The unemployment rate in America is 8.1% (most countries would kill for that) so it is not 10% and you have no way of knowing that it will soon be above 10%. Also, to put it in perspective, in 1933 the unemployment rate in America hit 24.9%.

As for the equity markets, so what? If you are not invested in the markets that has no impact on you and since so many have no money (as you are suggesting), it has no bearing on their lives. If you do have money, invest it in those equity markets and 5 years from now you will be grateful.

and the housing market has fallen

Just like it does in about 3 years out of 10. It’s actually more realistic now as it was over inflated. It’s also a great time to buy a house if you are in the market and if you own your home, who cares.

Some of you have obviously been very fortunate but you only need to read a paper on turn on the television

That’s your mistake. I am working in a country with probably a 20% unemployment rate and most could never dream of a home so I suggest that if you want to read a paper, but one from India, Bangladesh, Nepal or all the countries in Africa. That will do more to fill you with optimism and a dose of reality than anything you will hear on CNN.

**It’s frankly a bit offensive to just dismiss that. **

No one is dismissing it, just trying to put things in perspective.

I know plenty of people who have been fired and desperately want to work but can’t.

Do you know anyone working? I keep hearing how we have lost 2.6M jobs but they never report how many jobs have been created. That simply does not sell newspapers. An 8.1% unemployment rate is not THAT bad.

Are you guys even aware that your government just announced it is printing $1 trillion.

Yes, it’s pretty hard not to know that. I am against any government intervention in the economy but that’s the way it is. I don’t look to government to help me and I don’t look at them as the ones to destroy my life.

What do you think this is going to do to your currency (and your savings)?

If you live in America and save in America and earn American dollars, how does the fact that government prints more money impact my savings?

**It’s mind blowing to me that anyone would think this is the end of the problems or the worst it’s going to get. **

Who thinks that? I think it’s a great wake up call to America that money isn’t everything and life can still be good without saving millions, having 2 cars and the latest gadgets. You can get by on far less than people realize so as long as you don’t let the economic news run your life, it’s just another cycle we are going through. It has happened a few times in my life and will happen again.

22

What do you think this is going to do to your currency (and your savings)?

If you live in America and save in America and earn American dollars, how does the fact that government prints more money impact my savings?

perhaps you should watch uncle scrooge give his nephews a lesson on inflation. incidentally, the original cartoon was created in the late 80s: http://www.youtube.com/watch?v=tE8loc0z9uU&feature=PlayList&p=881C7E6C56CCD262&playnext=1&playnext_from=PL&index=101

23

this is typical americana, and it’s practiced regardless of political leaning: I want what I want NOW! I shouldn’t have to be inconvenienced. we’re in the middle of the biggest economic downturn in decades and people are indignant that they actually have to wait for it to turn around. As you’ve mentioned Casey, if only we could experience how people in other parts of the world live.

24

I want what I want NOW!

I really notice the impatience. The economy goes bad and the markets go down and it’s like the world is ending and it is the worst thing to happen to anyone in history. People are wallowing in self pity and waiting for the government to help them out.

As noted, we have 8.1% unemployment, that’s it ??? That’s the major disaster ???

People are committing suicide and the members of Congress can’t jump in front of a camera fast enough to loudly proclaim those responsible will go to jail, with one saying the executives of AIG should commit suicide. He got his few moments of fame but you have to ask, where was he and the others during the markets strong days? Why didn’t they point fingers when executives were paid more a few years ago? No one bothers getting indignant as long as those with decisions to make are taking their share.

The negativity in the media is hard to believe and you can really get sucked into it unless you realize it happened before and will happen again. 3 years from now there will be millions saying how much money they made in late 2008/early 2009 because the markets were so low and by then, those jumping in will have missed out most of the gain, again. Then they will sell when the next wave of fear hits and then will continue to tread water.

People have to relax a bit more. If you own a home and the value went down, there is a simple solution, don’t sell it. If your investments are down, you only realize the loss if you get rid of them. Then, shut off the t.v and instead of buying your kids the latest computer, go outside and kick a ball around or help them with their homework. Not everything costs money.

25

Like you said, it doesn’t sell newspapers. I personally don’t know anyone who has lost their job. I know a few have, but 92% are working. I’ve been buying stock like a demon. Can’t believe you can get GE below $10 and BOA for under $5. BBT at $12?

Man if you have cash and don’t buy you’re an idiot. Don’t knock negativity Casey, it will make you a wealthier man. Remember what Buffet said, “wasting away in margaritaville.”

Wait wrong one. You know the one about brave when others are fearful.

26

You should cancel your internet account :slight_smile:
.

27

“If you live in America and save in America and earn American dollars, how does the fact that government prints more money impact my savings?”

I’m not sure whether you’re joking, or whether you’re trying to confuse us with your mixed-up pronouns.

28

Heck, if an illegal alien can make a living in America, I am going to guess that can too.

So are you saying we should all quite paying taxes?

Certainly all of us could take jobs working for significantly less if our tax burden was near zero.

~Matt

29

“I know plenty of people who have been fired and desperately want to work but can’t.”

Yes, I have a friend who’s been in that same situation for quite a few months now. It’s particularly painful for him because prior to the layoff, he took great pride in his job, making it the center of his life. He’s 61 now, so I expect he’s going to have to go into early retirement–something that will definitely not be good for his mental health.

No doubt, people with certain skill sets in certain places can still find a job. But the circumstances we are facing right now are pretty bad for those whose skills are more marginal. It’s true, as Casey says, that the unemployment rate rose higher in the 1930s, but that was in a less technologically advanced age, when information flowed more slowly through the economy and as a consequence a much higher rate of frictional unemployment was inevitable. In the Information Age, economies generally run much more efficiently, promptly reallocating resources in response to conditions–unless that process is impeded by bad political policy. Given better policy, there’s no reason why we should resign ourselves to the conditions of three generations ago. There’s also no reason why we should be satisfied merely to fare better than third-world countries.

“Are you guys even aware that your government just announced it is printing $1 trillion. What do you think this is going to do to your currency (and your savings)?”

Not only will it ultimately erode the purchasing power of our savings, but perhaps more importantly, it will perpetuate the same business cycle that got us in this mess in the first place.

30

For the most part I agree with your “Lack of optimism” mentality in the US. I believe this stems from the underlying belief that “Someone needs to take care of me” and “I’m owed”.

You see this from the low end to the high end and in many cases this mentality is part, if not a major part, of the reason we are in this mess in the first place.

OTOH I’m actually quite pessimistic about the idea that we are moving all of society toward a condition that lessens the ability and infringes upon the rights of the individual to take care of themselves.

**If you live in America and save in America and earn American dollars, how does the fact that government prints more money impact my savings? **

This is a good example. I’m not sure exactly what you you meant by the above, but I’m sure you’ve heard of inflation and understand how that will effect your savings.

We are pretty much trading off our future for an “immediate fix”. In the age of Microwaves, cell phones and “Twitter” we simply have lost the patience to “Wait”. Instead we go to the doctor for a pill and the government to “Fix the economy”. Neither fix the problem only mask the symptoms which will pop up later at a larger cost.

~Matt

31

Here is the deal though. Not everyone is you. Not everyone lives where you live. Not everyone has you education. Not everyone has your experience. In January I waited in line for 3 hours to apply for a cashier job at a new grocery store with people in expensive suits and nice shoes talking on their iPhones to other fancy business folk about how the job market died.

I am all for optimism but reality needs to be addressed too.
What is stopping anyone from gaining an education? Anyone that wants an education in this country and is willing to work hard for it usually gets it. We have a GI bill, we have govt. grants, we do everything but take the tests for you. It’s a country of 300+ million and the opportunities are so freaking great here it kills me when people complain about what they can’t do.

32

of course the market is up. Obama, took a few days off of spending trillions and is instead focusing full time on his brackets and prepping for Leno.

33

It’s a country of 300+ million and the opportunities are so freaking great here it kills me when people complain about what they can’t do.

Apparently you can’t get a bonus if you work for AIG :slight_smile:

~Matt

34

It’s a country of 300+ million and the opportunities are so freaking great here it kills me when people complain about what they can’t do.

Apparently you can’t get a bonus if you work for AIG :slight_smile:

~Matt

 Let's take that bonus money and divide it among those that fought in Iraq and Afghanistan. I'd like to see anyone oppose that. ;)
35

"you live in America and save in America and earn American dollars, how does the fact that government prints more money impact my savings? "

How did the fact that Germany debased its currency by inflation affect their money?
http://img.tfd.com/wiki/c/ca/Inflation-1923.jpg

You will still have the USD savings but the question is what you can buy with them. With a complete collapse of the USD currency we could have major chaos. Right now the government can simply go to the Federal Reserve that creates more money when they overspend, and when the Fed feels like interfering in the markets, they again just create more money. More money here, more money there, more money anywhere. The only reason didn’t experience the serious consequences (yet) is because of the USD status in the world as the World’s Reserve Currency. But countries won’t take this forever, did you see how China is worried about the debasing of the USD? Sure the Reserves of other Nations depreciate and they dont’ want that. But that’s only part of the equation. What happens when those countries stop acquiring more USD? That’s when the shit will really hit the fan. Right now inflation is still relatively low to what we can expect in the future. Inflation will go much higher when all that created money will finally be dumped by other Nations and it will hit our system.

http://www.youtube.com/watch?v=t_LWQQrpSc4

36

Not my account.

38

“If you live in America and save in America and earn American dollars, how does the fact that government prints more money impact my savings?”

I’m not sure whether you’re joking, or whether you’re trying to confuse us with your mixed-up pronouns.

Ha ha, man, that line of my post didn’t come out at all as I intended. I am aware of inflation but instead of trying to explain what I meant, suffice it to say I think the economic doom and gloom is overrated.

I will agree that this does bode well for those who are ready to pounce on the market.

39

“What is stopping anyone from gaining an education?”

Food and time. I am moving mountains right now to get to school but taxes, 50% child support and $6.45 an hour don’t add up in the end. There is plenty of work out there but not a lot that gets you above $300 a week. Good vibes and positivity doesn’t make up for the fact I am going up against MBAs for a fork lift job.

40

Huh? Tibbs is always in dire straights, no matter what the macro economy is doing. He only has pesos, and that’s not even real money.

41

It is good news that the market has bounced up from the 6500 levels. Actually it is to be expected.

Markets don’t just free fall into the abyss of depression levels of 1929 and get bogged down there with no end in sight; despite what the doom and gloomers like to say. USA economy today is a far cry from the Great Depression days and has little in common with the Japanese Economy which experienced peak and then no overall growth in economy or population. This little bounce is just another proof of that.

Put in context, since the major blow out in 1st week Oct '08, the market support has been at around 7500 and the resistance 9500 or to make it tighter 8000 to 9000. In that technical context nothing amazing is happening right now. It just indicates that for present situation 6500 is much on the too low end of the scale.

But if on this Friday or / and Monday if it can break 7500 with the right volume patterns there is good technical impetus for a strong rebound rally. A lower close today with a little less volume traded will actually be a good sign overall for a longer lasting rally. This is also supported by the fact that this drop was led down by much fewer stocks than previous recent lows. Also in timing considerations this down cycle is well due for the first significant rebound cycle which has always happened and will happen again. Looking to levels above 10,000.

Whether this rally is the major rebound cycle or whether it’s going to settle into a 1000+ ranging again makes no difference to the overall economy for now. It will make a difference to people like Matt and myself who bought into this dip. The markets are so low with so little downside potential, buying into significant dips followed by a change of tone in the news from bad to worse practically ensures some quickie free money.

Whether any individual person is actually doing better or worse is not as much directly related to the fortunes of the economy as so many like to make out. 10% of the time are things that we can’t control. 90% of the time the things that happen to us are the result of how we react to that 10%.

That said … this ‘bad market’ literally presents an unprecedented amount of palpable “tremendous opportunity” for the taking to make free money from now to the next 4 years or so ahead. You can join the ranks and just bitch about the bad situation or you can start getting rich. The human being has a tremendous amount of latent ability. Just choose your poison. All the bitching in the world doesn’t make a bit of real difference except maybe to self-inflict higher stress levels.

Yes agree with YaHey. No matter what the Macro Economics is in the USA all able bodied, sound of mind individuals have options.

BTW YaHey, buying houses now generally may not be such a good move since after this huge American Housing Finance debacle, it’s going to be sometime before demand can catch up with the huge over supply of houses in the USA.

warning - do not take seriously anything YaHey has to say about investing.