dow closes below 8k

sweet adeline

okay thats it, this is the bottom.

QuestionAuthority

Damm.. if I had money in there I guess it would be a real bummer day..

mammasan

My friend who worked for Bear Stearns has been saying that the bottom would be between high 7900 to maybe 7500 but if we go below 7500 he said it would keep going down significantly.

Lizard

sweet adeline wrote:

okay thats it, this is the bottom.

are you worried at all? You seem like the voice of reason that is why I ask!!!

inmytree

I called 6900 a couple of weeks ago...

2009 is going to be a lean year...

saveuplife

I think it's just testing the bottom and the bottom has already been reached. The only thing that will bust through the floor is if this bailout package for the Big 3 is not reached, but even then I think it'll be up-up-and away afterwards.

During every recession, the S&P and Down lead peaks and troughs in the business cycle by 6 to 9 months. Most economists are predicting a 14 month recession, which started in April 08. That means, we will see a business cycle recovery in the third quarter.... Hence, get your money ready.

Buffet was a leader in stuff like this. People panic, but should actually be excited (as an investor) in times like this. It's his "cheap hamburger" analogy.

sweet adeline

Lizard wrote:

are you worried at all? You seem like the voice of reason that is why I ask!!!

i'm hardly a voice of reason, you of all people should know this

i'm not worried though, however, i'd be a little nervous if i was about to retire and had to pull money out now for income purposes. always good to have a bond portfolio for times like these.

Lizard

sweet adeline wrote:

i'm hardly a voice of reason, you of all people should know this

i'm not worried though, however, i'd be a little nervous if i was about to retire and had to pull money out now for income purposes. always good to have a bond portfolio for times like these.

I should have changed that post after reading your sig!!!

Well, I am not near retiring but will have 2 kids in college next year. Sucky timing on that!

DriftingByTheStorm

mammasan wrote:

My friend who worked for Bear Stearns has been saying that the bottom would be between high 7900 to maybe 7500 but if we go below 7500 he said it would keep going down significantly.

Yup.
The funny thing is, my mom was in town for lunch,
and i JUST finished telling her that everything i was seeing in the price movement for the DOW was indicating a sharp loss of 1000 points.
I said, "I'm not trying to be negative, but i wouldn't be suprised if we go to 7500 by the end of the week."

I knew the market was down 200 when i left, but actually thought it would close nearer to the zero mark than farther.

Can't believe i come home to a 400 point drop.

6500 by Februrary.

This thing still has some ugly legs to run away.

This could be a new round of panic.
Especially with not only the automakers on the brink, but also CITIBANK is around $7 a share!

mammasan

DriftingByTheStorm wrote:

Yup.
The funny thing is, my mom was in town for lunch,
and i JUST finished telling her that everything i was seeing in the price movement for the DOW was indicating a sharp loss of 1000 points.
I said, "I'm not trying to be negative, but i wouldn't be suprised if we go to 7500 by the end of the week."

I knew the market was down 200 when i left, but actually thought it would close nearer to the zero mark than farther.

Can't believe i come home to a 400 point drop.

6500 by Februrary.

This thing still has some ugly legs to run away.

This could be a new round of panic.
Especially with not only the automakers on the brink, but also CITIBANK is around $7 a share!

I hope you are wrong but I can definitely see it dropping below 7000 especially if GM has to go into bankruptcy. My buddy keeps saying that a drop below 7500 could be really bad because then there is no telling where the bottom lies.

DriftingByTheStorm

mammasan wrote:

I hope you are wrong but I can definitely see it dropping below 7000 especially if GM has to go into bankruptcy. My buddy keeps saying that a drop below 7500 could be really bad because then there is no telling where the bottom lies.

The biggest problem we have right now isn't even the DOW.
The HUGE red flag that just got hung in front of the globe is that CPI here just went DOWN.
Largest drop on record, in fact.

That means DEFLATION, and that is NOT what you want to be hearing about.

As bad as inflation is,
the fact that we are in such a severe slump that prices across the board are dropping like flies is a HUGELY NEGATIVE OMEN.

This is endgame scenario type stuff.

Turn on Fast Money right now if you want to hear some doom&gloom.

Big big problems.

mammasan

DriftingByTheStorm wrote:

The biggest problem we have right now isn't even the DOW.
The HUGE red flag that just got hung in front of the globe is that CPI here just went DOWN.
Largest drop on record, in fact.

That means DEFLATION, and that is NOT what you want to be hearing about.

As bad as inflation is,
the fact that we are in such a severe slump that prices across the board are dropping like flies is a HUGELY NEGATIVE OMEN.

This is endgame scenario type stuff.

Turn on Fast Money right now if you want to hear some doom&gloom.

Big big problems.

I have to admit that my knowledge in this area is limited so how is deflation bad.

sweet adeline

mammasan wrote:

I have to admit that my knowledge in this area is limited so how is deflation bad.

http://www.google.com/hostednews/ap/article/ALeqM5iYwB5yO5SxYP2KXGaD8TzRYofP8wD94HHQI00

DriftingByTheStorm

sweet adeline wrote:

http://www.google.com/hostednews/ap/article/ALeqM5iYwB5yO5SxYP2KXGaD8TzRYofP8wD94HHQI00

I like how the article neatly skirts the issue of "when have we seen deflation" by simply saying "The U.S. hasn't seen year-over-year declines in the Consumer Price Index for almost six decades" ...

A more honest and telling answer might have been, "the worst deflation on record was experienced during The Great Depression when the money supply shrank by over 25%".

The article otherwise if rather acurate, save for the fact that it actually tries to ignore the money supply as a factor.

Sure prices fall because producers slash them to attract penny pinched buyers ... but lets not also forget that those penny pinched buyers are in fact pinched because the entire money supply has shrunk.

If more dollars chasing the same amount of goods creates higher prices;
fewer dollars chasing the same creats lower prices.

And what we are going through would be fewer dollars chasing more goods, since less demand equals more supply on the S\D curve ...

so its doubly bad.

A deflation spiral is the death knell of a deflationary depression.

I once again ask those interested to listen to this guy, who calls himself Mr. Fed.

His end game scenario involving a deflationary, interest rate skyrocketing doomsday sounded totally out of step with where the market was only a month ago ... and these videos are from like March ...

When i saw them, i though, "Holy shit. This is actually dead on." ... because no one on the street was forcasting a scenario as glum as this guy was ... YET ... now WE ARE THERE ...

consumer demand plumeting, and equity bubbles across the board, and of course massive deleveraging in the financial markets lead to prices falling everywhere ... in spite of the fact that the Fed was "easing" its ass off ... dropping money from helicopters at the speed of light ...

The Fed has shot most of its guns now ... the rate is nearly at the floor ... and we are experiencing DEflation ???

Folks, you need to look at this as a VERY glum sign.


A deflationary sprial, followed by treasury fall out and the ensuant raise in interest rates could cause unending and totally unmanageable deflation and depression.

you would be looking at a government insolvency \ global depression \ currency revaluation \ martial law Alex Jones Wet Dream End Game scenario.

Not fearmongering.
Truth.
:eek:

bootlegger10

saveuplife wrote:

I think it's just testing the bottom and the bottom has already been reached. The only thing that will bust through the floor is if this bailout package for the Big 3 is not reached, but even then I think it'll be up-up-and away afterwards.

During every recession, the S&P and Down lead peaks and troughs in the business cycle by 6 to 9 months. Most economists are predicting a 14 month recession, which started in April 08. That means, we will see a business cycle recovery in the third quarter.... Hence, get your money ready.

Buffet was a leader in stuff like this. People panic, but should actually be excited (as an investor) in times like this. It's his "cheap hamburger" analogy.

Or, check this out. We'll have a boom, and then be back here in 5 more years, like we are at 2003 levels right now.

DriftingByTheStorm

bootlegger10 wrote:

Or, check this out. We'll have a boom, and then be back here in 5 more years, like we are at 2003 levels right now.

Except the chart looks more like a "double top" at this point, and if you zoom out for a 100 year chart of the Dow, it SURE LOOKS LIKE WE HAVE A LONG WAY TO FALL!

I'm not being alarmist with that.
I don't mean we ARE going to drop all the way to 100 or 200 on the DOW.
I'm just saying that the overall graph of the DOW very neatly mimicks a similar graph of inflation ... save for the 2 peaks at the top, which (at least, to me) are indicative of a fundamental limit of the inflationary system. We have now tried TWICE to break through that ceiling (14,000) ... and the laws of growth are catching up with us ...

i found this article and charts to be VERY informative and telling. Note the chart with the arrows pointing down to the curve?

I think the guy has a valid case ... especially in this brave new deflationary world.

RolandTD20Kdrummer

When do the bank runs start?

mammasan

RolandTD20Kdrummer wrote:

When do the bank runs start?

Those passed already and they took down a few banks in the process, i.e. Washington Mutual.

DriftingByTheStorm

RolandTD20Kdrummer wrote:

When do the bank runs start?

That Gerald Celente guy (hour interview here) says they will start in earnest by February.

He says this is still the disbelief period, where everyone is banking on Christmas, and to a lesser extent Obama's "Change" ... but that by February the situation will have deteriorated, and with christmas and the swearing-in ceremony out of the way, sentiments and the market will plunge.

Of course, this interview was BEFORE this afternoon, the FOMC announcement of serious DEFLATION concerns, and a big drop on Wall Street.

Maybe it's moved up a month?

sponger

DriftingByTheStorm wrote:

The biggest problem we have right now isn't even the DOW.
The HUGE red flag that just got hung in front of the globe is that CPI here just went DOWN.
Largest drop on record, in fact.

That means DEFLATION, and that is NOT what you want to be hearing about.

As bad as inflation is,
the fact that we are in such a severe slump that prices across the board are dropping like flies is a HUGELY NEGATIVE OMEN.

This is endgame scenario type stuff.

Turn on Fast Money right now if you want to hear some doom&gloom.

Big big problems.

That's only true if there wasn't massive inflation which the deflation offsets.

What you have to keep in mind is that since 2001, salaries did a very poor job of keeping up with inflation.

This means that if deflation doesn't happen, the middle class will become very, very small.

So, within the current context, deflation = good.

dmitry

Deflation can be good especially if you're not in debt.