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There was a time when stock prices reflected fundementals of a company that could be measured using financial ratios, market analysis, etc. The problem with the market now is that the value placed on companies is based on expectations of government actions, and not one the core worth of the business.
In other words, should I buy a green company with poor fundementals because I believe that the government will throw huge amounts of money at them or should I sell a company with good fundementals and sound management that is in an industry that will be discouraged by government (i.e., nuclear energy).
It's a conundrum of sorts... quasi socialism. Free market controlled by Gov't actions.
If it gets that low there will be riots in the streets. Things are not good out there, but at 5000 there will be further layoffs and mass unemployment. People are still needing goods and services, just cutting out the fringe and extraneous spending (big screens, rims, big house etc).
It's a conundrum of sorts... quasi socialism. Free market controlled by Gov't actions.
And upside down and backwards.
Coal and Nukes operate because of government involvement.
If you do not follow that, let me give an example. Everyone is supposed to be restricted from creating air pollution. Air is part of the commons we all share. When I crap in mine, I crap in yours. Rather than following the law as we all must -- Instead Coal plants go to the government and get an exception or permit to pollute, anyway.
A second example -- Nukes are very bad business investment. Even a typical goofball MBA misguided US Corporation would not build one on their own. The build time and risk are far too great. So instead they get MASSIVE government involvement and welfare to build them -- typically 80% is government funded. And then the waste becomes a long-term government (US) problem.
No government involvement means no Nukes and No Coal. Maybe you are right, it might be a good thing, UPRon, even if it is sort of backwards.
Problem then becomes without nukes and coal there is no electricity. That would cost ore than the intervention. I suggest government ownership of the entire industry and plant sighting and building decisions made by engineers not MBA or polysci majors.
Problem then becomes without nukes and coal there is no electricity. That would cost ore than the intervention. I suggest government ownership of the entire industry and plant sighting and building decisions made by engineers not MBA or polysci majors.
So gov't should control.
Energy
Banking
Insurance
Home Finance
Auto
Timber resources
Fishing
Water
Oh yeh and mandate Digital communication so they can take over the Analog bandwidth for tracking EVERYTHING.
As someone who's in college and still hasn't put together an investment portfolio... I'm hoping the stock market keeps tanking(but not too much) until the summer/fall of next year.
If we hit Dow 2500 in a year, America will go from a superpower to a Third World country. Millions of jobs will be lost, billions in savings will be gone, nobody will have money for retirement, social security will be kaput, municipalities will fail with no funds to run them, unions will not be able to meet pension payments, the lack of health insurance and elderly care will have our increasingly aged and unemployed population living in the streets and eating out of trashcans. The massive reduction in tax revenue will end the entitlements and enraged welfare junkies will cause massive civil unrest. People will hunker down in fear in their foreclosed-upon houses, but violence will be everywhere and nobody will be safe. People who have money stockpiled in foreign currencies will flee and our borders will be invaded, because we will be too wounded to stop our enemies from preying on our weakness. Oh, and we will become China's slum, because we owe them more trillions than we can ever repay with our devalued dollars.
So, call me an optimist, but Dow 2500 will never happen, not because it shouldn't but because it can't. There will be an unprecedented global intervention before the world's largest domino is allowed to fall. Dow 5000-- possibly, in time. Dow 6000-6500-- surely, and soon.
I think it will go up eventually, after a while. Maybe 8,000 possibly even closing in on 9,000. But then it will drop 3 or 4,000 points in a major sell off. The country is in serious trouble and its going to become apparent that nothing the current administration is doing will help it. We'll either have rioting in the streets or we'll do what needs to be done and have a major upheaval and turnover in government. Summer 2010 is the target date. That's the best case scenario anyway. Any type of organized attack against us, domestic disasters, and what happens then is anybodys guess.
^WTH is with this doom and gloom ****. It's going to be rough, but it's not going to be the end of the world.
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