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Great story in today's WaPo about Jim Cramer, et al, who seem to have led us in a race to the bottom. CLICK HERE for story.
Excerpts:
- last March, just days before Bear Stearns stock became worthless, Jim Cramer's head nearly exploded off his shoulders, so intense was his conviction that his viewers should NOT. SELL. BEAR. But what I don't understand is the hundreds of thousands of people who still tune in every night to hear what he has to say.
- It's weird and disconcerting that after all that has happened there are still so many experts out there willing to dispense wisdom with utter assuredness, day after day, despite having been so spectacularly wrong in the past.
Comments from the public, in response to the above piece, are found by CLICKING HERE.
My favorite comment, from someone called "notthatdum" was this one:
If you believed that 14000 on the Dow represented a “true” value:
You might be a moron.
If 800,000 for a 1968 3bedroom 1500 sqft house in the San Fernando valley of Southern California didn’t raise an eyebrow or two:
You might be a moron.
If you believe that any CEO is worth 450 times that of their “average” worker:
You might be a moron.
If you believe that Capitalism is capable of “self-regulation” and we should “just let the market work”:
You might be a moron.
If you believe that the answer to any problem is a Tax Cut or that they actually work:
You might be a moron.
If you believe at this time these financial pundits are good for anything more than their “entertainment” value:
You might be a moron.
EDIT, to ADD:
Additionally, Peter Schiff called it correctly back in 2006 and 2007 in regards to the current horrors. At the time, he was ridiculed by the "experts" on CNBC and Fox, who actually laughed at him on the air. Ben Stein sat there and told us that "sub prime problem is a tiny problem" and "sub prime is a tiny blip" and Stein did all this with a straight face as he told people to buy Merrill Lynch and the financials. Schiff told them the financials were toxic and it turns out he was right.
YouTube clips:
- http://www.youtube.com/watch?v=Aq1N70vym1g
- http://www.youtube.com/watch?v=Z0YTY5TWtmU
Last edited by Mike from back east; 03-01-2009 at 09:53 AM..
<snip>If you believe that Capitalism is capable of “self-regulation” and we should “just let the market work”:
You might be a moron.
If you believe that the answer to any problem is a Tax Cut or that they actually work:
You might be a moron.
<snip>
You might be a moron if you believe capitalism needs a government to monitor and regulate. Capitalism does not cause depressions, recessions or inflation. It's when government injects laws and rules that modify how free markets work that problems are created. The current crisis is a prime example of government meddling in banking/housing issues.
You might be a moron if you think tax increases will increase revenues or jobs. Government does not create jobs, only the environment in which job growth may occur. Unless it nationalizes industries government does not create wealth, it only reallocates wealth achieved by its citizens. Governments use taxes to drive population behaviour. You want to increase the saving rate and reduce dependence on social security, then allow citizens to save money tax free. To encourage job creation, reduce corporate taxes and people will start businesses and create new jobs. Want to kill the boating industry? No problem, implement a luxury tax. Want to increase electricity costs to consumers, implement a carbon cap & trade tax. People will by nature try to avoid paying taxes. So by implementing or retarding taxes, governments can control citizen behaviour. You can't move one end of a stick. Increasing taxes will have a corrsponding impact somewhere. And vice versa.
If Obama wants to create 3 million jobs, simply outlaw diesel engines, bulldozers and roadgraders. Give 3 m people a pick and shovel and have them build a new interstate. Pay them a dollar a day because that is all they are worth because the efficiency is so low.
How about the experts who say "don't touch your 401K's" or other's who say "do nothing right now." This might work for those under 35. Those of us who rememeber the dot com bust and were still trying to recoup ... well you have to be a moron not to move your investments to safer ground.
How about the experts who say "don't touch your 401K's" or other's who say "do nothing right now." This might work for those under 35. Those of us who rememeber the dot com bust and were still trying to recoup ... well you have to be a moron not to move your investments to safer ground.
I'm sorry, but wasn't conventional wisdom that you ALWAYS moved your investments to safer ground as you neared retirement, regardless of the market? I thought that was Investment 101...
I guess the issue here is that all the baby boomers thought the good times would never end, kept their retirement saving 90-100% in equity investments (i.e. stocks) and then got burned when the bottom fell out of the market.
You might be a moron if you believe capitalism needs a government to monitor and regulate.
Some would argue that a lack of regulation (or mis-regulation) gave banks the ability to make those high-risk loans that could not be repaid when the economy went south, bringing the banks down with it...
Some would argue that a lack of regulation (or mis-regulation) gave banks the ability to make those high-risk loans that could not be repaid when the economy went south, bringing the banks down with it...
Good point! If anything, our government has looked the other way for far too long while some corporate thieves robbed people blind. Greed, if left unmonitored, is a bad thing. It drives some people to take advantage of their fellow humans.
Schiff did make some correct calls but he's been 100% wrong about the dollar (to this point). He recommended dumping the dollar and putting heavy emphasis on the Chinese market. Oops.
Most international debt is denominated in debt, and the deleveraging of underwater funds & banks has driven up demand for ol' bucky. Schiff's clients are for the most part down more than the indices.
How about the experts who say "don't touch your 401K's" or other's who say "do nothing right now." This might work for those under 35. Those of us who rememeber the dot com bust and were still trying to recoup ... well you have to be a moron not to move your investments to safer ground.
LOL
My parents are still sore over the stock market crash of 1929.
Some would argue that a lack of regulation (or mis-regulation) gave banks the ability to make those high-risk loans that could not be repaid when the economy went south, bringing the banks down with it...
Look at the people who are telling you this. The government and the media. And those are two sources over the years that I have learned to question what they say. Most people really have no idea what really caused the housing boom and crash. But lax regulation was definatly not one of them. Now you were correct when you said "mis-regulation". We could put all the regulations we wanted in place and the fools we have at the SEC would let everything go right by them.
As far as the high risk loans, not sure what year it was, early 01 or 02 but the SEC changed the rules and allowed the banks to leverage much higher than they use to be allowed to. If they would not have changed those rules our housing crash my never have been so severe.
Now back to the original subject, being a trader I usually do the opposite of what the analysts say. Been working pretty good for years.
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