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Its becoming a political thread now, eh? I think it will be an excellent buying opportunity... I missed out on the previous crash cause I didn't have the funds... let's play...
In my view, the vast majority of this week's drop in stock prices is due to bad economic numbers, not debt ceiling drama in Wash DC.
You had some weak earnings, awful durable goods numbers, terrible GDP numbers...combined with debt ceiling uncertainty. Only today did you really see any significant adjustment in short term t-bill yields.
Also the 10-year in Italy/Spain has quietly crept up to the 6% level, higher than it was during the week where Italian stocks sold off very sharply due to a "debt crisis."
The thing is, there is the possibility of a "technical default" (similar to 1979), but the US is perfectly capable of paying its bills which is why the shockwaves aren't larger. A political induced technical default won't cause a 30% selloff, nor should it. An actual, honest to goodness default might...but that's not going to happen.
A U.S. debt default triggered by the failure of politicians to agree to raising the country’s debt ceiling would be an “act of collective insanity” with severe impact on assets prices and the global economy, according Citigroup Inc. (C) economists.
I'm glad Citigroup can at least understand that. Now maybe they'll actually stop bankrolling GOP campaigns and realize that, however tempting the idea of having conservative, l'aissez faire puppets in the Capitol might be, it's in their overall best interests to have rational people in charge.
All of you vultures hoping to see a crash so you can swoop in and buy low and go long are going to be very disappointed. In a worst case scenario, you might see the DJIA settle at around 11.5. To think it's going to plummet to around 5k is just plain dreamy eyed wishful thinking.
Not that I too wouldn't want and like to see it happen, it's just that as long as Uncle Ben "Dover" is around, he will continue to provide his unending "support". The Dow became so disconnected from reality long ago that as a true standlone market/economic indicator, it's basically worthless. If it was truly running on its own free of DC's antics and manipulation and really reflected the state of the economy, I cannot think of one reason why it would be a point above 7000 right now.
But remember. The DJIA is directly tied to the task of perception management and image. It's highly visible and relatively easy for the public as a whole to see and understand. This is why myself and a few others do not believe for a second that last years "Flash Crash" has even a scintilla of "mystery" surrounding it. It was an intentional and deliberate occurrence and the objective was simple: send a message to DC that if Wall Street takes even a small haircut, Main Street will go down in flames and be converted to radioactive rubble. It worked and DC "got the message." Likewise, it was no accident that when TARP v1.0 failed, the Dow had a hissy fit and suddenly that money was found and authorized the very next day.
And here we go with another re-run of this bad drama. I still believe a "just in time" deal will be made on or before Tuesday. In the event one ISN'T, expect to see another "Flash Crash" appear "out of thin air". Suddenly, a no-questions-asked deal will pass. And the Markets will "pare those losses" by the end of the day.
As predictable as it is total BS. I still believe that the Dow will end up at 14k or above by the end of the year, with 15k not being out of the question. If you think I am implying that the average working stiffs are in fact being held for ransom at gunpoint by the Big Banks, let me just tell you that I am not implying it. I'm saying it outright.
It will NEVER be allowed to sink into the four digits range again. Ever.
I've decided that I'm going to do nothing. I'm keeping all of my long positions the way they are, and if the debt default problem tanks the market, I'll add to each stock, lowering my average cost and increasing my dividend yields. Maybe after that I'll throw some money into a new stock (I've got AEA, SAM or XOM on my radar, depending on value at the time of course). That's my plan and I'm sticking to it.
All of you vultures hoping to see a crash so you can swoop in and buy low and go long are going to be very disappointed. In a worst case scenario, you might see the DJIA settle at around 11.5. To think it's going to plummet to around 5k is just plain dreamy eyed wishful thinking.
Not that I too wouldn't want and like to see it happen, it's just that as long as Uncle Ben "Dover" is around, he will continue to provide his unending "support". The Dow became so disconnected from reality long ago that as a true standlone market/economic indicator, it's basically worthless. If it was truly running on its own free of DC's antics and manipulation and really reflected the state of the economy, I cannot think of one reason why it would be a point above 7000 right now.
But remember. The DJIA is directly tied to the task of perception management and image. It's highly visible and relatively easy for the public as a whole to see and understand. This is why myself and a few others do not believe for a second that last years "Flash Crash" has even a scintilla of "mystery" surrounding it. It was an intentional and deliberate occurrence and the objective was simple: send a message to DC that if Wall Street takes even a small haircut, Main Street will go down in flames and be converted to radioactive rubble. It worked and DC "got the message." Likewise, it was no accident that when TARP v1.0 failed, the Dow had a hissy fit and suddenly that money was found and authorized the very next day.
And here we go with another re-run of this bad drama. I still believe a "just in time" deal will be made on or before Tuesday. In the event one ISN'T, expect to see another "Flash Crash" appear "out of thin air". Suddenly, a no-questions-asked deal will pass. And the Markets will "pare those losses" by the end of the day.
As predictable as it is total BS. I still believe that the Dow will end up at 14k or above by the end of the year, with 15k not being out of the question. If you think I am implying that the average working stiffs are in fact being held for ransom at gunpoint by the Big Banks, let me just tell you that I am not implying it. I'm saying it outright.
It will NEVER be allowed to sink into the four digits range again. Ever.
Thanks for using the word NEVER.
It will surely happen now. It will happen when you've bet the wrong way.
Also, did two different people write your post?
On one hand you say it will never hit 4 digits, and on the other you said real DOW value is only 7000?
Man send me some of what your smokin', don't keep it all for yourself.
Jeremy Grantham explained in a 28 minute CNBC video, that the Federal Reserve is inflating stock prices. The market was cut in half in 2000, and again in 2008. And he said it will happen again. Maybe from S&P 1500 or (?). He said fair value for the S&P is 900 so that is about a 40% drop from 1500 if we get that high. So, just drop the Dow by 40% and you should be under 10,000.
Anyone interested in stocks should watch this video. I have watched it 3 times. He is only telling you what will happen, not when. It's 29 minutes, so listen carefully and he tells you what the Fed. is doing and why. Jeremy Grantham Interview - CNBC
On one hand you say it will never hit 4 digits, and on the other you said real DOW value is only 7000?
No contradiction there. I knew what I was writing. Go re-read my post. I said there is no reason it should be over 7k. But at the same time, because of the reasons mentioned, it never WILL get that low.
No contradiction there. I knew what I was writing. Go re-read my post. I said there is no reason it should be over 7k. But at the same time, because of the reasons mentioned, it never WILL get that low.
I read it, i get that you understand it's a rigged game. But to say never in a rigged game is a bit naive.
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