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"The current stock market valuation tells us that the stock market will hit another correction. Short of incomes going sky high or earnings doubling each subsequent quarter, at a certain point valuations need to come back down to Earth. Ironically the low reached in March of 2009 actually reflected a more sensible valuation of the economy. Right now the S&P 500 is betting that things are back to the good old days but clearly this is not the case. We should now be absolutely cautious when people try to value stocks or assets on potential values and not what reality is currently reflecting." From the link.
I have been talking about raising the minimum wage A LOT I have gotten a lot of grief for this. In order for us to get out of this mess quickly we need incomes to go sky high. In the face of outsourcing the way to get this done is to up minimum wage a lot 4X would be a good start.
The market is hard to predict. I pulled my money out about a year ago (I missed from 10,000-11,500) after riding it up from the lows.
I too think that the market is set for a fall and have been right on the three previous crashes, but may be dead wrong here. No one knows for sure. I can say for sure that highs are not the time to buy and I would certainly not be putting any new money in the market now, as the relative risk for loss exceeds that for gains in the short term.
Time will tell and if I had a crystal ball I would be a billionaire and not just a petty millionaire.
If I liquidated my 401k I would lose most of the profit to taxes. I am only in the stock market because normal savings accounts pay less than actual inflation. I would like to have an account where I made a guarenteed 3-5% over inflation. I am not a gambler and cannot afford to lose my money. Where do I put my savings?
You've got it backwards. The market is the disease, the money supply is the antigen by the Fed. The problem is, the regulators or immune system is not responding as it's been corrupted by the disease.
Wow there is absolutely no thought behind that at all.
People freely trading goods and services with eachother is the disease that corrupts the people who forcibly restrict or alter those free exchanges so they can't cure the same free exchanges by counterfeiting??? You are so smart
Originally Posted by marcopolo;17402873But thanks for spreading the doom and gloom. You are letting me buy more shares more cheaply. The ignorant crowd will want back in when the Dow crosses 14,000.[/quote
Well lets look at the record of the doom and gloomers known as Austrian economist against the happy talkers the Keynesian. Lets start with which group was predicting the housing crash all the way back in 2005? It sure wasn't the Keynesian's who's godfather Barnanke said the crash hit him like a freight train.
Lets see which group was preaching that the housing tax credits would spark the market and stop the decline in home equity? How did that Keynesian idea work out? just like the Austrians said it would once the props were removed sales would drop and value would continue to decline.
Which economist told Obama that if they passed the stimulus that unemployment would not go lower then 8% ? The happy talkers sure do have a good record so far they have not been right on anything. And now we have the happy talkers telling us that the market is going up and happy days are here again.
And some are predicting a crash or lets say a huge correction and they have been right up to this point why would they be wrong this time?
If I liquidated my 401k I would lose most of the profit to taxes. I am only in the stock market because normal savings accounts pay less than actual inflation. I would like to have an account where I made a guarenteed 3-5% over inflation. I am not a gambler and cannot afford to lose my money. Where do I put my savings?
Gold? About 10% in the actual metal. There is give or take a bit a 7X rise headed our way in gold. It should peak at about $7k/oz so at $1400/oz there is a 5X left on the up side.
Quote:
Originally Posted by reid_g
Well lets look at the record of the doom and gloomers known as Austrian economist against the happy talkers the Keynesian. Lets start with which group was predicting the housing crash all the way back in 2005? It sure wasn't the Keynesian's who's godfather Barnanke said the crash hit him like a freight train.
Lets see which group was preaching that the housing tax credits would spark the market and stop the decline in home equity? How did that Keynesian idea work out? just like the Austrians said it would once the props were removed sales would drop and value would continue to decline.
Which economist told Obama that if they passed the stimulus that unemployment would not go lower then 8% ? The happy talkers sure do have a good record so far they have not been right on anything. And now we have the happy talkers telling us that the market is going up and happy days are here again.
And some are predicting a crash or lets say a huge correction and they have been right up to this point why would they be wrong this time?
If you want housing prices to go up then you need to push the median household income up far enough to support the higher prices. Historically the ratio is 2.9 to 3.0 at the peak of the still popping bubble it was 4.5. So if you want prices to go up then you need to push the average household income up by 50%. In the face of outsourcing and downsizing the only way to get that average up is with the minimum wage law. If we don’t do this or something that accomplishes the same thing then we will have hard economic times for a very long time ahead. Japan has been at this game for 20 years. Upping minimum wage will cause some short term disruption to the economy, long term though it will get strong growth long before any other remedy will work.
Quote:
Originally Posted by hawkeye2009
The market is hard to predict. I pulled my money out about a year ago (I missed from 10,000-11,500) after riding it up from the lows.
I too think that the market is set for a fall and have been right on the three previous crashes, but may be dead wrong here. No one knows for sure. I can say for sure that highs are not the time to buy and I would certainly not be putting any new money in the market now, as the relative risk for loss exceeds that for gains in the short term.
Time will tell and if I had a crystal ball I would be a billionaire and not just a petty millionaire.
In order to predict where the market is going you have to answer the question where is the money the fed is printing going? Follow the money and you will see where the market is going in the short term. Look at the fundamentals and you will see where the market is going in the long term, finding the dividing line between short term and long term that is the trick.
Quote:
Originally Posted by reid_g
This sums up the stock market :
Awhile back it was reported that stocks were held onto for a whopping average of 11 seconds, Happy Texan described it perfectly they are just picking each others pockets. What I find amusing is people claiming that all there 401K investment has recovered. If that is really the case I wonder why they did not pull their money out when they had the chance ? Looking at history what took place in the market during the depression era? First a big drop followed by a rally and then the crash. Funny how history repeats itself and lemmings ignore all the signs.file:///C:/DOCUME%7E1/gp051324/LOCALS%7E1/Temp/msohtmlclip1/01/clip_image001.gif (broken link)
Well said but this time around there are players that remember what happened last time and so it will play out somewhat differently. Our macro picture is far different this time around. We are in Briton’s position this time and China is in ours as opposed to the Great Depression.
Quote:
Originally Posted by marcopolo
The article cited in the original post uses the right jargon and has a lot of pretty charts, but it is hokum. Retail sales are at all-time record levels; sales and industrial production have been trending up for a year and a half. Banks are lending, the economy is growing, and the stock market is poised to rise over the next few years as the rate of economic growth increases.
My accounts are at all-time highs, and many people I know have done very well in the markets, with balances now above the 2007 highs. Anybody with a few bucks can invest very easily--it is not restricted to "the elite investors."
But thanks for spreading the doom and gloom. You are letting me buy more shares more cheaply. The ignorant crowd will want back in when the Dow crosses 14,000.
http://online.wsj.com/article/SB1000...googlenews_wsj
“The government's numbers echo what retailers reported last week in their monthly sales update. For several store chains, the holiday shopping season finished weaker than it started because of frugal customers and severe weather in different parts of the country.” Hmm. I really don’t think that consumer spending is at an all time high.
Hmm. I really don’t think that consumer spending is at an all time high.
Here's a little bit of arithmetic you might not be up on. When you get an increase in sales, that means that the total went up--even if the increase is smaller than you first hoped. Retail sales are at an all-time high, above the 2007 peak.
You've got it backwards. The market is the disease, the money supply is the antigen by the Fed. The problem is, the regulators or immune system is not responding as it's been corrupted by the disease.
A collapse is the result. The money supply is the antigen by the Fed. The problem is, the regulators (immune system) are not responding, as they also have been corrupted by the Fed.
Much better than an insulin-sugar-pancreas analogy.
Though, it IS easy to visualize the country as an advanced stage diabetic.
Here's a little bit of arithmetic you might not be up on. When you get an increase in sales, that means that the total went up--even if the increase is smaller than you first hoped. Retail sales are at an all-time high, above the 2007 peak.
When you start from an all time low going up 10% is still next to an all time low. With the unemployment rate at 22%, that is what shadow stats has it at, I don't see how that 22% is contributing to the figures you are quoting. There was a contraction in employment in November. There is a macro piture of deflation from the collapsing Real Estate bubble.
6.6% sales growth in 2010 fastest since 1999 | StarTribune.com 6.6% up from an a really bad year is still a really bad year. Having said that we are just having another bubble. This is debt driven and we don't have the economic foundation to support long term growth. If you want higher housing prices we need more demand. If you want more demand when the market id already overbuilt you need to push more people into a position where they can afford to buy a home. To do the we need to raise minimum wage by about a factor of 4X.
Here is a question for you. The official unemployment rate and the one given by shadow stats differ widely in there stated amounts. The department of labor has the number at 9.4%. shadow states has it over 20%. The question I have is this how accurate are the government supplied figures for retail sales?
A collapse is the result. The money supply is the antigen by the Fed. The problem is, the regulators (immune system) are not responding, as they also have been corrupted by the Fed.
Much better than an insulin-sugar-pancreas analogy.
Though, it IS easy to visualize the country as an advanced stage diabetic.
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