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I guess you guys must really believe this is going to be a depression because that's the only way the market is going to go down anymore than it already has.
Another 50% haircut from current prices does not mean there will be another depression. Japan gives you on example, of how markets with long term bubbles behave.
Quote:
Originally Posted by sheri257
Bottom line: the bad news is already priced in. Now that gas prices are way down ... we're already in the recovery period.
Current bad news to some degree is priced in, but that says little about what happens in the future.
Gas prices are down so the economy is going to recovery? That has to be one of the oddest things you've said yet. The current crisis isn't about gas prices nor does a drop in gas prices solve any of the current problems. Oil isn't the only commodity that is collapsing either. But this happened before in our history....namely the Great Depression. A collapse in prices isn't a positive thing.... it just fuels debt deflation.
Yeah but, I doubt most people would take financial advice from someone with a credit score of 300 ... at least I wouldn't. That's about as bad as it gets ... paying no bills at all.
I guess you guys must really believe this is going to be a depression because that's the only way the market is going to go down anymore than it already has.
The market has already been down 45 percent ... that's an additional 15 percent from 2002-2003 ... which doesn't sound like much but it's actually 50 percent more than the last bear correction.
Bottom line: the bad news is already priced in. Now that gas prices are way down ... we're already in the recovery period.
Again, look at Japan. I know you are busy bantering with Humanoid but, but Japan has not been in a depression, yet stocks have fallen about 78% from their peak. You don't need a depression for stocks to keep falling. Japan's recent situation is more relevant than the Great Depression which was almost 80 years ago.
Jim Rogers, (who was George Soros' partner in their private hedge fund that made both of them billionaires) believes what is happening in the U.S. mirrors Japan's lost decade of the 1990's:
I am going to assume that Humanoid can qualify for a house and whatever credit problems his wife has from before they were married should largely be mended by the time it is a good time for them to buy. With prices continuing to drop and with an expected spike in foreclosures coming in January, I doubt he wants to buy now anyway.
I also think things will get worse before they get better. I am down nearly $100K on stocks alone the past year and think it will be awhile before we hit bottom and that we are in for a rough ride. I don't think the DOW has bottomed. I agree with Roubini that it will be around 7000 for a bottom, which we haven't gotten to yet. I hope it doesn't get as low as 6000, but who knows. The economy is certainly getting worse by the week, with unemployment forecasts continuing to climb. We might even hit 10% unemployment before this thing is all said and done. Right now, we are calling for 8.5-9%, but this is a figure that is continuously being revised downward.
I still see a real estate price bottom price-wise in May 2010 here in Chicago and late to mid 2010 for the nation as a whole.
Is this "50% haircut" supposed to be for US company stocks, or global? I wonder if investing in overseas companies would be a good idea right now.
Quote:
Originally Posted by Humanoid
Another 50% haircut from current prices does not mean there will be another depression. Japan gives you on example, of how markets with long term bubbles behave.
Current bad news to some degree is priced in, but that says little about what happens in the future.
Gas prices are down so the economy is going to recovery? That has to be one of the oddest things you've said yet. The current crisis isn't about gas prices nor does a drop in gas prices solve any of the current problems. Oil isn't the only commodity that is collapsing either. But this happened before in our history....namely the Great Depression. A collapse in prices isn't a positive thing.... it just fuels debt deflation.
I think overseas would be rougher right now. They usually lag the US markets. I expect there will be more growth in those areas when things turn. For the record I am buying large cap US companies right now.
Another 50% haircut from current prices does not mean there will be another depression. Japan gives you on example, of how markets with long term bubbles behave.
Current bad news to some degree is priced in, but that says little about what happens in the future.
Gas prices are down so the economy is going to recovery? That has to be one of the oddest things you've said yet. The current crisis isn't about gas prices nor does a drop in gas prices solve any of the current problems. Oil isn't the only commodity that is collapsing either. But this happened before in our history....namely the Great Depression. A collapse in prices isn't a positive thing.... it just fuels debt deflation.
There has been a huge collapse in almost all commodities. It is taking down some of the sectors and areas there were doing well up until the last few months. For example, copper hit $4 a pound earlier this year. The mining towns in Arizona were booming, bucking the trend of the rest of the state that was slipping into recession. Now copper is in the $1.60 range. The mines are laying off thousands of workers. South of Houston Dow Chemical is firing thousands of contractors. Many have been there for 25 years. They make products that are used by the auto industry. We all know how that is going. Part of Japan's problem was the depreciating prices. It is a vicious cycle. Prices drop, people are laid off, sales slow down, earning and stock prices decline.
I think overseas would be rougher right now. They usually lag the US markets. I expect there will be more growth in those areas when things turn. For the record I am buying large cap US companies right now.
When the U.S. market is down say 5%, the Asian and European markets follow suit the following day. Usually the same percentage drop. Same thing when the U.S. markets rise. This is historically the case when the markets are volatile. These are news and panic driven markets. I am not sure why you would expect something else.
Is this "50% haircut" supposed to be for US company stocks, or global? I wonder if investing in overseas companies would be a good idea right now.
I'm talking about US equities, but I'm really not predicting this per se. Just noting that its a real possibility.
If you can figure out which country is going to come out of this mess kicking then that would be the place to buy....but I don't know which nation that is going to be. Everyone has problems right now...
Gas prices are down so the economy is going to recovery?
Yeah. I think sky high gas prices played a key role in getting us into recession and making the recession a lot worse. Now that prices are cheap, it's basically the same as a huge stimulus package.
Last edited by sheri257; 12-14-2008 at 08:32 AM..
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Sheri and Humanoid
