Joined: Mar 25, 2008 Posts: 691 Location: Alif Lam Mim
Posted: Sat Mar 29, 2008 5:44 am Post subject: Re: Stock Market crash?
Not exactly a crash. Whether that will happen in the future, we don't know and I doubt. The Fed is far too willing to get involved in the markets to allow a crash to occur.
A nice decrease, but it's hardly a crash. It even appears that we're leveling out right now for the past couple of months due to the involvement of the Fed. A pretty big sell-off in past 6 months but no crash.
Posted: Sat Mar 29, 2008 8:51 am Post subject: Re: Stock Market crash?
Lets take a trip down memory lane. Notice how I like to talk about it like I was actually there!
It took the Dow 3 years to hit rock bottom.
Maybe I should pull this thread out from the archives every 4 months to gauge public opinion.
Joined: Sep 29, 2004 Posts: 2330 Location: Pennsylvania, USA
Posted: Sat Mar 29, 2008 9:08 am Post subject: Re: Stock Market crash?
We've gotten very good at "recovering" from stock market dilemas. Data from the '29 crash really doesn't apply anymore because we have a fiat currency and have all sorts of schemes to pump "money" into areas that are drooping.
The real question is: how much is the money worth that is used to assign values to stocks? I could see a future where the Dow is 30,000 and it costs $100 for a carton of eggs. _________________ "That's the problem with mercy, kid... It just ain't professional" - Fast Eddie, The Color of Money
Posted: Sat Mar 29, 2008 9:32 am Post subject: Re: Stock Market crash?
this is a different sort of crash.
Dow 12,000 in the year 2002 is not the same as Dow 12,000 in the year 2008, since the US dollar has devalued about 40% in the mean-time, and the Dow index is US-dollar-denominated.
i am holding a devaluating currency. at a US bank, the interest rate i get is less than inflation. (= panicky feeling). so, i'm looking around for alternatives.
besides metals, i'm looking at stocks. Adobe, as one example, Intel as another. this is not money i can afford to risk. adobe has a market valuation of about $20 billion, and is the leader in providing tools for Internet content creation (Flash CS3, for example.)
Microsoft is putting a lot of effort into their "Silverlight" product, which is a clunky alternative to Flash (requires more programming expertise).
that MS could easily buy Adobe, and that Adobe has low costs of production (they sell a box of DVD's & instruction manuals for $700, talk about printing money) for a product that is sold worldwide, and can lay off half their staff is sales contract in a worldwide depression ... lead me to wonder if Adobe stock might be a better place to park dollars than a bank.
i could make similar calculations about Intel. another example of printing money, perhaps. their lower-power-consumption 45 nM generation of products yield computers that use less electricity. given that the present base of computers in industry has a lot of 2005-vintage CPU's (also known as "heat ware"), the ROI for any business replacing a 3 year old computer with a new one is pretty damn good (unless they get sucked into an expensive Dell, HP, or IBM service contract) .
in other words, i think Intel will continue selling chips (printing money) to worldwide markets in the midst of this mess.
anyway, just ruminations on a Saturday morning.
Kingcoal wrote:
The real question is: how much is the money worth that is used to assign values to stocks? I could see a future where the Dow is 30,000 and it costs $100 for a carton of eggs.
just saw that part of the thread. "what KingCoal said".
reminds me of an article about 10 years ago in Wired magazine, entitled "Dow 40,000".
i wonder what the stock market index is in Zimbabwe ? (i also wonder if there is a hint of racism in using Zimbabwe as an example of hyper-inflation.)
Posted: Sat Mar 29, 2008 9:40 am Post subject: Re: Stock Market crash?
pedalling_faster wrote:
this is a different sort of crash.
i am holding a devaluating currency. at a US bank, the interest rate i get is less than inflation. (= panicky feeling). so, i'm looking around for alternatives.
Lots of inflation and deflation coming, batter the hatches!
Euros, swiss franks, ag futures and double short index funds are a good bet (FXE, FXF, DBA, SMN, QID), also get margin on your account so you can move the money around quick without waiting for 3 days to clear. You may want to move that money into defense stocks, gold, or any number of other things when the circumstances change (and oh boy will they!)
Wanna stay away from the FDIC line get a bank account with JPM Chase. _________________ Just look at us. Everything is backwards; everything is upside down. Doctors destory health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the major media destroy information and religions destroy spirituality.
Posted: Sat Mar 29, 2008 12:42 pm Post subject: Re: Stock Market crash?
Kingcoal wrote:
We've gotten very good at "recovering" from stock market dilemas. Data from the '29 crash really doesn't apply anymore because we have a fiat currency and have all sorts of schemes to pump "money" into areas that are drooping.
The real question is: how much is the money worth that is used to assign values to stocks? I could see a future where the Dow is 30,000 and it costs $100 for a carton of eggs.
interesting. do you know of any worthwhile "inflation adjusted" market chart sources?
this is a hard-to-understand-but-maybe-as-simple-as-possible summary of mortgage-backed securities, which are integral to the Fed's recent actions.
it's a 70 page Powerpoint presentation rendered as a *.pdf (you have to give an email address to sign up. they don't use email verification so you could use an alternate address, such as president@whitehouse.gov)
it gets interesting where they look at a particular product named the "Longshore CDO" (credit derivative something ?)
basically, they do the calculations and, i THINK, conclude that the top tranche of the mortgage-backed security is worth 6-9 cents on the dollar.
the other conclusion from looking at charts of loan re-sets etc. - Baby, this 'credit crisis' is, well, a baby - an infant - we are in the early stages (related to impending mortgage re-sets.)
Up till now, the estimates of bank losses & credit contraction has been along the lines of $250 billion/ $2.5 Trillion. serious but not deathly.
looking at analyses such as the Tilson presentation, it seems that the arrows are pointing to losses more in the $500 Billion - $1 Trillion range.
Posted: Sat Mar 29, 2008 4:41 pm Post subject: Re: Stock Market crash?
pedalling_faster wrote:
this is a different sort of crash.
Dow 12,000 in the year 2002 is not the same as Dow 12,000 in the year 2008, since the US dollar has devalued about 40% in the mean-time, and the Dow index is US-dollar-denominated.
i am holding a devaluating currency. at a US bank, the interest rate i get is less than inflation. (= panicky feeling). so, i'm looking around for alternatives.
besides metals, i'm looking at stocks. Adobe, as one example, Intel as another. this is not money i can afford to risk. adobe has a market valuation of about $20 billion, and is the leader in providing tools for Internet content creation (Flash CS3, for example.)
Microsoft is putting a lot of effort into their "Silverlight" product, which is a clunky alternative to Flash (requires more programming expertise).
that MS could easily buy Adobe, and that Adobe has low costs of production (they sell a box of DVD's & instruction manuals for $700, talk about printing money) for a product that is sold worldwide, and can lay off half their staff is sales contract in a worldwide depression ... lead me to wonder if Adobe stock might be a better place to park dollars than a bank.
i could make similar calculations about Intel. another example of printing money, perhaps. their lower-power-consumption 45 nM generation of products yield computers that use less electricity. given that the present base of computers in industry has a lot of 2005-vintage CPU's (also known as "heat ware"), the ROI for any business replacing a 3 year old computer with a new one is pretty damn good (unless they get sucked into an expensive Dell, HP, or IBM service contract) .
in other words, i think Intel will continue selling chips (printing money) to worldwide markets in the midst of this mess.
(...)
What about Apple? They actually make products that have high quality standards... and they're trying to build up the illusion of a "green electronics corporation", even if they "live by the quarter" some more ecological actions are taking place in Apple (deprecating years ago CRT inefficient and Pb intoxicated monitors, going beyond RoHS,...). _________________ anagami.net
Posted: Sat Mar 29, 2008 6:57 pm Post subject: Re: Stock Market crash?
Ferretlover wrote:
I think the market Has crashed, and a new lifeform is emerging under the bandages.
Watch "Invasion of the Body Snatchers" again...
Strangely Ferretgirl, I hadn't read your post but guess what I was doing when you posted it? Watching clips on Youtube from Invasion of the Body Snatchers. Cosmic, or what???
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Cosmic, or what??? 
