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Well why didn't you tell me you were in IT?! Forget everything I've said. If a former IT guy says all is rosy I'm not worried when the Treasury department says something as stupid as "the country is facing a liquidity crisis which threatens to undermine the entire economy." They obviously didn't run it past the former IT guy first.
With that line of thinking, how is anyone to make any honest assement of stock prices? Recent historical evidence would show that we used huge sums of government funding to re-create much of the same artifical values which tanked in the first place - and because of that evidence, I do not believe the current S&P values are a good indicator of the health of this economy.
The companies themselves might be doing "just fine", but the overall industry might be operating in an environment of extreme volatility, largely governed by executive policy - see our finance sector.
We will continue to differ on whether we think the S&P represent real market value, which I just do not see it.
An honest assessment of stock prices is made by looking at the P/E ratio - the SAME way it's ALWAYS been done.
The fact the we don't know what the FUTURE HOLDS is nothing NEW. We NEVER know what the FUTURE HOLDS. So what?
The fact that YOU don't think stock prices are correct doesn't CHANGE either the company's EARNINGS or their PRICES. For current state of earnings, stock prices are correct - right about in the middle of the expected P/E ratio. You folks keep listening to these BS political pundits telling you that the Fed has jacked up stock prices. IF that was REALLY true then the P/E ratio would be way out of whack - and it's NOT. It's exactly where it would be expected to be for companys with earnings as they currently are.
Lord, there's a big difference from today's consumer market verses 1945's manufacturing market.
One example (while it doesn't completely reach 1945)
Sure, the challenges are greater today than in 1945 because today we have wayyyyyy more competition in manufacturing. That just means the challenges are greater and that getting the GDP/Debt ratio back down is going to take longer - which is exactly what we are seeing. Yes, it WILL take longer. That doesn't mean it WON'T HAPPEN.
Whatever that "index" is based on, it is not showing up in the buying power at the local grocery store, Home Despot, or Wally's Martski.
It costs more to buy "stuff" now, than before.
But you keep reading those "indexes" !
Here's one of my supporting facts:
Shopsmith multipurpose wood working tool
1950 - $169.50
1980 - $799.99
2010 - $2999.99
2012 - $3379.00
If losing 95% of its buying power is NOT inflation, gee whiz, what else can you call it?
(2012 price is 19.9 times greater than 1950 price. Or a 95% drop in buying power.)
It's a DOLLAR Index - NOT an INFLATION index.
How is that people can be so "certain" they know what they are talking about when they don't even understand the most basic economic terms?
Geeze - get an education, will ya?
Geeze, you folks are crazy. What will make you happy? Having a republican president in charge to validate your views? That shipped sailed for the time being.
Some of you would truly cut off your nose to spite your face if it came down to it.
Remember back 4 years ago when all those investing geniuses out there were predicting the stock market would tank under Obama?
Funny, that didn't happen - and indeed the markets have rallied under Obama in a HUGE way. The S&P has now regained 91% of what it lost in the onset of the Great Recession and is now less than 100 points away from it's all time high. How soon it will break that old record no one can say, but clearly we've come a longgggggg way in just 5 years.
Well that means that it's about time for another recession then.
5 years before 2007 was 2002, not exactly an economic high point.
5 years before that was 1997 which was just after the "government shutdown."
5 years before that was 1992 which was just after a recession.
5 years before that was 1987 and good ole Black Monday.
5 years before that was 1982 which I don't think anyone needs to be reminded of.
5 years before that was 1977. I don't think anyone wants to go back to the 70's even though some are voting like it was the time of their lives.
Quote:
Peak:
November 1948(IV)
July 1953(II)
August 1957(III)
April 1960(II)
December 1969(IV)
November 1973(IV)
January 1980(I)
July 1981(III)
July 1990(III) March 2001(I) December 2007 (IV)
Trough:
October 1945 (IV)
October 1949 (IV)
May 1954 (II)
April 1958 (II)
February 1961 (I)
November 1970 (IV)
March 1975 (I)
July 1980 (III)
November 1982 (IV) March 1991(I) November 2001 (IV) June 2009 (II)
Anyways, about every 3 - 6 years we go into recession.
I guess it's good you point this out because as taxes were just raised this news came out today:
Quote:
Premiums have increased by an average of $3,065. And they’re about to go up even more, as Obamacare takes effect during the president’s second term.
At the end of 2012, Mark Bertolini, the CEO of Aetna, the third-largest health insurer in the country, warned that many consumers would face “premium rate shock” with the advent of Obamacare’s major insurance regulations in 2014. He predicted that unsubsidized premiums would rise 20 to 50 percent, on average.
For some people, premiums would double. “We’re going to see some markets go up as much as 100 percent,” Bertolini told Bloomberg News.
Aetna isn’t the only company forecasting higher health-insurance premiums. In California, Blue Shield has asked regulators to approve premium increases of up to 20 percent. Obamacare’s new regulations were a factor in the request. A spokesperson for the company said the new law “will bring a lot of volatility” into the market.
Every working person gets a 2% increase in their tax rates via the payroll tax (that should have never occurred).
You're going to see money being sucked out of the economy through multiple venues from capital gains to higher taxes on medical equipment to people paying more for their insurance. That means decreases in disposable income which will hit state revenue hard. Of course states will have to increase tax rates to make up for the short falls.
Quote:
PRINCETON, NJ -- U.S. small-business owners' net capital spending intentions for the next 12 months plunged to -14 in November, the lowest level in more than two years, according to the Wells Fargo/Gallup Small Business Index. This is down from net capital spending intentions of -1 in July and suggests the nation's small-business owners are likely to pull back on their business investments even more, given their negative expectations for the next 12 months.
Obama's second term is going to be a complete disaster and what do you hear from democrats? Tax more and spend more.
And of course you have the debt ceiling debate coming up. That'll be mountains of fun.
And you have SS, particularly OADI and HI about to exhaust its trust fund so that will be even more taxes or less being paid out, which, of course, means even less disposable income. OASI is right behind it all though almost a decade down the line.
And all of that will make things even more problematic.
The government should have let all tax provisions expire and taken the hit for 6 - 12 months and let everyone adjust. Instead, they're simply going to float from one crisis to the next. Which of course always opens up the government up to radicals and radicalization...
IF the market was inflated, the P/E ratio would wayyyyyyy higher.
As mentioned, the P/E ratio is in the "healthy" range - meaning stock prices are appropriate for the health condition of the companies that make up the stock market listings.
Geeze, you folks are crazy. What will make you happy? Having a republican president in charge to validate your views? That shipped sailed for the time being.
Some of you would truly cut off your nose to spite your face if it came down to it.
It's not our fault you plan a day out in advance and we plan years and some people decades. It's called foresight as opposed to nowsight.
Geeze, you folks are crazy. What will make you happy? Having a republican president in charge to validate your views? That shipped sailed for the time being.
Some of you would truly cut off your nose to spite your face if it came down to it.
The problems are bigger than Red or Blue. Well, other than red ink.
You're all so busy trying to prove the Blues right you are ignoring the red ink. They make off with all the green and one day the whole country will wake up with a case of the blues.
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