Has the market hit bottom?

2

Comments

  • Lesbelges
    Lesbelges Posts: 434
    jlew24asu wrote:


    regarding sarbanes...before I do what I do now, I worked at a large public corporation. they are in the real estate business and very highly leveraged in debt. I dont know if its the norm, but they were ANAL about sarbanes. crossing every T and dotting every I. maybe as a result of that, they have weathered this crisis extremely well considering the business they are in. so based on my experience, I wouldnt say its far from useless, but rather a very effective deterred to bending the accounting rules.


    Yes I can confirm that SOX is taken very very seriously (and I work at GM). We have a ton of technical accountants that make sure we are SOX compliant and then we have external auditors that audit individual groups periodically. I think this is a good thing even though it is quite a burden on a company. I think going forward a good place to put money in the stock market is in these audit companies that specialize in SOX and other such controls....You just know that the government is going to create some new rules for banks and hedge funds and someone is going to have to oversee them (meaning major bucks for auditing companies).

    I read a comment about GM not rebadging, well most GMCs are rebadged Chevy trucks and our SUVs are all rebadged...Chevy Equinox=Saturn Vue, Chevy Traverse=Buick Enclave=GMC Acadia=Saturn Outlook, Pontiac Solstice = Saturn Sky. We are getting away from this but still has been happening till very recently.
    Cincinnati '03 Flooded venue!
    Bridge School '06 Night 1 & 2
    Venice '07 pummeled by the sleet! 
    Nijmegen '07
    Werchter '07
    April Fools ~ LA1
  • mhterrapin
    mhterrapin Posts: 99
    edited April 2009
    soulsinging- I think you're right about a lot of current banking reform, being that it may be reactionary. While we get the story in the news about banks and TARP funds, these are usually the biggest banks out there. The way things have gone, the big banks got the funds right away while the local banks around the country are often still waiting on their paperwork being processed, months later. They can still reject the money, but even so. They have always done bank stress tests, that is nothing new. But it still remains uncertain how to value many of these assets, mostly real estate. That is hard enough, but then you have the banks/investment firms with additional toxic assets on their books.

    It is hard to say what type of reform they're aiming at, but being that it's so difficult to put a value on all of their toxic assets is a real issue. Not only that, but the added stress on the FDIC is barely manageable. The FDIC has increased coverage costs to some banks to a very high rate, cutting into their profits. Seems like that will cause even more local banks to close. If you run a bank, why risk it and continue to operate when you're only making 2%?

    Goldman Sachs was mentioned a few posts up, while TARP funds is one thing, there is no clear solution to putting a value on derivatives. There are people who are in charge of overseeing derivatives, but even they can't place a value on it. They can only guess how much they "lost". That being said, they will most likely remain on the top of the list of "bailouts" and recipients of funds, it's in the best interest of some members of our government. Henry Paulson made that very obvious.
    Post edited by mhterrapin on
  • Anon
    Anon Posts: 11,175
    soulsinging wrote:
    It's just a really sophisticated casino for rich people

    I disagree. People have made fortunes and come from nothing to achieve their dreams because of investing in the stock market. It is in no way an invite-rich-only-club.
  • jlew24asu
    jlew24asu Posts: 10,118
    JB811 wrote:
    soulsinging wrote:
    It's just a really sophisticated casino for rich people

    I disagree. People have made fortunes and come from nothing to achieve their dreams because of investing in the stock market. It is in no way an invite-rich-only-club.

    and its also not a situation where the house ALWAYS wins like in a casino.
  • soulsinging
    soulsinging Posts: 13,202
    jlew24asu wrote:
    JB811 wrote:
    soulsinging wrote:
    It's just a really sophisticated casino for rich people

    I disagree. People have made fortunes and come from nothing to achieve their dreams because of investing in the stock market. It is in no way an invite-rich-only-club.

    and its also not a situation where the house ALWAYS wins like in a casino.

    Oh come on. How many people go from living on the street to millionaires via stock market? It's not like that movie trading places. People that "come from nothing" don't have capital to invest in the stock market to begin with.
  • jlew24asu
    jlew24asu Posts: 10,118
    soulsinging wrote:
    Oh come on. How many people go from living on the street to millionaires via stock market? It's not like that movie trading places. People that "come from nothing" don't have capital to invest in the stock market to begin with.

    I'll agree with you here...that was a bit of a stretch...
  • soulsinging
    soulsinging Posts: 13,202
    jlew24asu wrote:
    soulsinging wrote:
    Oh come on. How many people go from living on the street to millionaires via stock market? It's not like that movie trading places. People that "come from nothing" don't have capital to invest in the stock market to begin with.

    I'll agree with you here...that was a bit of a stretch...

    You do have a point about the house not always winning though, as the last few months have proven. But surely you can thus understand my sadistic pleasure in some of it. After you've been getting screwed by the house for years, it's kinda nice to see them taking it in the ass for once ;)
  • FiveB247x
    FiveB247x Posts: 2,330
    The stock market isn't a clear indication of the US economy, rather it merely represents big business, day traders and the like going about their business as usual. Things like real unemployment, gdp and consumer spending are better reflections of our overall economic standing, and by those measures, we've got a long way to go.
    CONservative governMENt

    Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the government becomes a law-breaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. - Louis Brandeis
  • thebetterman
    thebetterman Posts: 657
    soulsinging wrote:
    I'm still the guy hoping for a huge market crash. I think the whole concept of the stock market is a total work of fiction. What do those points even mean? It's just a really sophisticated casino for rich people, no different from betting on sports really. I still don't see why one is legal and the other is not.


    "sophisticated casino for rich people?" "What do those points even mean?"

    my question is, "seriously?" Thats just conspiracy/fool talk.
    -one thing to remember, always have a good time, all the time
  • DriftingByTheStorm
    DriftingByTheStorm Posts: 8,684
    Welcome back Jlew.

    We will drift sideways for the next 6 to 12 months, baring anymore unpredictable catastrophic events at the large scale institutions.

    The central banks have flooded the markets with enough liquidity to fend off anymore significant downside.
    A range of 7000-9000 sounds about right for the DOW for the near future.

    Expect things get ugly again when the real money supply starts an inflation snowball.
    There are several things that can happen if things "get better". Because of all the government intervention and manipulation, there are a series of events that are likely to transpire juts when people think we are "out of the woods".

    Among the most potentially destructive of these are
    1. A bond market crash
    the PRECEIVED turnaround in global markets will likely lead to a mass sell off of US Treasury securities which in turn will prompt hikes in nominal interest rates, which means loan (and particularly home loan) rates will start to soar.

    2. massive inflation
    once bank reserves (which have been stuffed full by the Fed) start actually CIRCULATING in the system ... meaning, once lending resumes and all this issued (but UNcirculated) credit actually finds its way in to the market place, the value of the USD will have hell to pay.

    Thats my quick take.
    I'm with out a steady net connection for the next week or so, if anyone is wondering.

    Again, welcome back Jlew.
    :D
    If I was to smile and I held out my hand
    If I opened it now would you not understand?
  • Wilds
    Wilds Posts: 4,329
    jlew24asu wrote:
    Wilds wrote:
    "you aint seen nothin yet".


    It is going to get a lot uglier. Sadly hitting rock bottom is the solution, and only then can we rebuild.

    We need to pay the piper and he hasn't even taken his interest yet, let alone the principle.

    care to expand on this? what do you base this on? what will the low in the S&P be?

    Well for starters I think we are going to be in for another round of foreclosures. We got nailed by the sub-prime borrowers already. But the real problem will be when all that commercial real estate that was bought and built and financed, that no longer has tenants goes kaput.

    Starbucks is a perfect example. They have pulled out of 100's of places. They grew too big too quick and took advantage of the inflated buying/spending bubble.

    Now I don't think they will be in trouble. But 1000's of businesses all over the country who are unable to make ends meet in this economy will be.

    Who is going to pay the mortgages on these empty buildings, strip malls, etc.
  • FiveB247x
    FiveB247x Posts: 2,330
    Inflation is definitely gonna come. Unemployment hasn't come nearly close to the bottom as many companies are trying to prolong the layoffs; that may sound crazy now, but it's very possibly/likely that we'll see double digit unemployment rates in the next 4-8 months. Also, as backwards as it seems, the worse our economy gets and larger our debt grows (within reason) through bailouts and large budgets, the more stable the US dollar becomes in the global market because most of the world economy is predicated on our economy in some fashion as well as well invested in US debt and bonds (basically creditors making sure their debt lending investments will be secure and paid back over time). Anyways, like I said previously, the average US citizen is only dependent on Wall Street and the Dow because we've willingly placed our long term financial security (retirement funds), healthcare and stability into the hands of greed through privitization. So as we see GM go bankrupt or all of these banks and insurance companies being bailouted rather than nationalized or let to go under, please recognize it is not in the US citizens welfare for their survival, but instead the welfare of privitized wealth and business. Most of America aren't investors and have no primary stake in Wall Street, but because the government has now handed out taxpayer funds for their self-created issues, we are on the hook to lose out with nothing to significantly gain.

    Also, forgot to mention, housing prices and lending rates will level out if left alone without tinkering. Obama's current plan for housing doesn't address the problem so it will not go away.
    CONservative governMENt

    Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the government becomes a law-breaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. - Louis Brandeis
  • jlew24asu
    jlew24asu Posts: 10,118
    DriftingByTheStorm wrote:
    Welcome back Jlew.

    We will drift sideways for the next 6 to 12 months, baring anymore unpredictable catastrophic events at the large scale institutions.

    The central banks have flooded the markets with enough liquidity to fend off anymore significant downside.
    A range of 7000-9000 sounds about right for the DOW for the near future.

    Expect things get ugly again when the real money supply starts an inflation snowball.
    There are several things that can happen if things "get better". Because of all the government intervention and manipulation, there are a series of events that are likely to transpire juts when people think we are "out of the woods".

    Among the most potentially destructive of these are
    1. A bond market crash
    the PRECEIVED turnaround in global markets will likely lead to a mass sell off of US Treasury securities which in turn will prompt hikes in nominal interest rates, which means loan (and particularly home loan) rates will start to soar.

    2. massive inflation
    once bank reserves (which have been stuffed full by the Fed) start actually CIRCULATING in the system ... meaning, once lending resumes and all this issued (but UNcirculated) credit actually finds its way in to the market place, the value of the USD will have hell to pay.

    Thats my quick take.
    I'm with out a steady net connection for the next week or so, if anyone is wondering.

    Again, welcome back Jlew.
    :D

    wad up driftin. I tend to agree with you here. bonds are bound to crash at some point and inflation is on the horizon. my hope is the fed will set their policies accordingly to keep this in check (avoiding "massive" inflation). but after this long period of deflation, inflation might not be so bad.
  • jlew24asu
    jlew24asu Posts: 10,118
    Wilds wrote:
    jlew24asu wrote:
    Wilds wrote:
    "you aint seen nothin yet".


    It is going to get a lot uglier. Sadly hitting rock bottom is the solution, and only then can we rebuild.

    We need to pay the piper and he hasn't even taken his interest yet, let alone the principle.

    care to expand on this? what do you base this on? what will the low in the S&P be?

    Well for starters I think we are going to be in for another round of foreclosures. We got nailed by the sub-prime borrowers already. But the real problem will be when all that commercial real estate that was bought and built and financed, that no longer has tenants goes kaput.

    Starbucks is a perfect example. They have pulled out of 100's of places. They grew too big too quick and took advantage of the inflated buying/spending bubble.

    Now I don't think they will be in trouble. But 1000's of businesses all over the country who are unable to make ends meet in this economy will be.

    Who is going to pay the mortgages on these empty buildings, strip malls, etc.

    yea, all possible. anyone know where do gather some vacancy data?
  • jlew24asu
    jlew24asu Posts: 10,118
    Wilds wrote:
    jlew24asu wrote:
    Wilds wrote:
    "you aint seen nothin yet".


    It is going to get a lot uglier. Sadly hitting rock bottom is the solution, and only then can we rebuild.

    We need to pay the piper and he hasn't even taken his interest yet, let alone the principle.

    care to expand on this? what do you base this on? what will the low in the S&P be?

    Well for starters I think we are going to be in for another round of foreclosures. We got nailed by the sub-prime borrowers already. But the real problem will be when all that commercial real estate that was bought and built and financed, that no longer has tenants goes kaput.

    Starbucks is a perfect example. They have pulled out of 100's of places. They grew too big too quick and took advantage of the inflated buying/spending bubble.

    Now I don't think they will be in trouble. But 1000's of businesses all over the country who are unable to make ends meet in this economy will be.

    Who is going to pay the mortgages on these empty buildings, strip malls, etc.

    here is a good article in the matter

    http://money.cnn.com/2009/04/16/markets ... 2009041614
  • Jimmydean55
    Jimmydean55 Posts: 1,572
    Hey Jlew, welcome back!

    Can you take a look at this video and give me your opinion? It's about 5 minutes. I watched the entire interview and she has a lot of interesting things to say. The point that stuck with me is when she was talking about regulations. Which way do you think we'll go?

    http://www.thedailyshow.com/video/index ... rren-Pt.-2
  • jlew24asu
    jlew24asu Posts: 10,118
    Jimmydean55 wrote:
    Hey Jlew, welcome back!

    Can you take a look at this video and give me your opinion? It's about 5 minutes. I watched the entire interview and she has a lot of interesting things to say. The point that stuck with me is when she was talking about regulations. Which way do you think we'll go?

    http://www.thedailyshow.com/video/index ... rren-Pt.-2

    thanks jimmydean, who were u in a previous life? (the old board).

    Elizabeth Warren is a very smart lady. I think we are going to over regulate and pull out the strings again down the road like she mentioned. but I think that will be a good thing. the financial world (hopefully) has learned some very important lessons. one major regulation that I think will happen is in the lending industry. and rightfully so. banks are going to be smarter about who they lend money too. where this regulation will end up hurting is with businesses. they might find it harder to get much needed money. but that might be some of the strings we pull down the road....
  • Jimmydean55
    Jimmydean55 Posts: 1,572
    jlew24asu wrote:
    Jimmydean55 wrote:
    Hey Jlew, welcome back!

    Can you take a look at this video and give me your opinion? It's about 5 minutes. I watched the entire interview and she has a lot of interesting things to say. The point that stuck with me is when she was talking about regulations. Which way do you think we'll go?

    http://www.thedailyshow.com/video/index ... rren-Pt.-2

    thanks jimmydean, who were u in a previous life? (the old board).

    Elizabeth Warren is a very smart lady. I think we are going to over regulate and pull out the strings again down the road like she mentioned. but I think that will be a good thing. the financial world (hopefully) has learned some very important lessons. one major regulation that I think will happen is in the lending industry. and rightfully so. banks are going to be smarter about who they lend money too. where this regulation will end up hurting is with businesses. they might find it harder to get much needed money. but that might be some of the strings we pull down the road....

    I was the same name, haha. I didn't post too much (still don't), but I remember being impressed with your arguments and taking time to explain some financial/market things that some of us didn't quite grasp.

    Thanks for taking the time to watch the video. I remember seeing Elizabeth Warren in a documentary about credit cards. It was pretty interesting. She seems pretty sharp.
  • jlew24asu
    jlew24asu Posts: 10,118
    ha ok cool. GO HAWKS!
  • Jimmydean55
    Jimmydean55 Posts: 1,572
    jlew24asu wrote:
    ha ok cool. GO HAWKS!

    Hell Yeah! It's so nice to hear the roar again. Well, except tonight...
    Fuckin flames...

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