Has the market hit bottom?

jlew24asu · April 2009

Everyone seems very optimistic when Wells Fargo announced a solid profit this quarter. the next hurdle is whether or not GM will survive. if they dont, and personally I dont think they will or should, it will lead to many more job losses. so thats bad. lets say I'm cautiously optimistic. how bout u?

soulsinging · April 2009

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.

jlew24asu · April 2009

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.

well gambling is based on pure guessing, chance, and probability. the person offering the bet(the casino or bookie) ALWAYS has better odds.

investing is based on cold hard facts. at least it should be. too often emotions take over. for example, a publicly traded company is 100% transparent. again, at least is should be according the laws. companies use this money to grow their business, in turn, the stock holder can make some money "owning" the company. people buy stock based on the fact the company will grow and earn a profit. it is be no means fiction.

hoping for (another) stock market crash is rather foolish and only hurts many people.

stickfig13 · April 2009

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.

Hoping the market crashes is certainly not something to hope for....Whether you like the idea of it or not.

Cosmo · April 2009

jlew24asu wrote:

Everyone seems very optimistic when Wells Fargo announced a solid profit this quarter. the next hurdle is whether or not GM will survive. if they dont, and personally I dont think they will or should, it will lead to many more job losses. so thats bad. lets say I'm cautiously optimistic. how bout u?

...
Jlew... First off.. welcome back. Really, i missed your honest, thought out debates.
As for your questions... I don't know. I am more concerned about the Financial sector, than the auto industry. I am hoping that by shoring up the banks and their insurers, we can stablize the global markets. After that... i know the word 'Regulation' is on the Conservative hit-list but, we have seen that a corporation such as AIG cannot grow to the size that makes them a threat to the world economy if they are allowed to consume the competition and make wreckless decisions that endanger us all.
As for General Motors... their leaders have been digging their own grave for decades. It has gotten so wide and deep that is will bury a lot of people. They need to re-organize or file for bankruptcy.
If I were head of GM.. I wouls re-organize and streamline the operation. Chevy as the racing division.. Cadillac as the Luxury division... GMC for trucks... Buick for old people sedans... Pontiac for entry level and younger drivers. No more making crap cars that get rebadged and spread amongst all brands. Each Division focus on their market... for example, have Pontiac focus on making an economical, reliable, fuel efficient commuter/student car... while Chevy focuses on the Corvette, Camaro and NASCAR Racer. Pool the technology and resources so the advances the racing division deveops can be used by the others, along with the advances in alternate fuel sources from the entry level division.
...
And i am with you.. i hope things work out. I think we all need to work on this, setting aside our political difference and realize that we are all in the same boat.

jlew24asu · April 2009

thanks cosmo, not sure if this is a glitch in the system, but I actually miss debating here. this board, more then others, has views from the most extreme of sides. usually makes for interesting discussion.

I think financial industry regulation is inevitable and even necessary. to what extent is the $40 trillion dollar question. I am confident however that much has been very hard lessons learned. we'll see.

the fix for GM is easy, IMO. TEAR UP THE UNION CONTRACTS. problem solved. obviously that wont happen and what appears to also not happen is big concessions from the unions. so I think backruptcy is the only option. GM simply can not afford to pay the unions anymore. its simply not possibly unless the government continues to borrow them money to do so. and even Obama says that wont happen.

callen · April 2009

jlew24asu wrote:

thanks cosmo, not sure if this is a glitch in the system, but I actually miss debating here. this board, more then others, has views from the most extreme of sides. usually makes for interesting discussion.

I think financial industry regulation is inevitable and even necessary. to what extent is the $40 trillion dollar question. I am confident however that much has been very hard lessons learned. we'll see.

the fix for GM is easy, IMO. TEAR UP THE UNION CONTRACTS. problem solved. obviously that wont happen and what appears to also not happen is big concessions from the unions. so I think backruptcy is the only option. GM simply can not afford to pay the unions anymore. its simply not possibly unless the government continues to borrow them money to do so. and even Obama says that wont happen.

Was under the impression that if GM filed bankcrupcy they could tear up existing contracts. Have mixed feelings on this as there were many Americans that worked hard for GM and were promised benefits during their careers. There should be a balance.

Cosmo: .they no longer have a sedan that crosses all they're brands. Still a couple like Chevrolet and GMC trucks but mostly its done. No longer have a Pontiac Firebird and Chevy Camoro or Buick Century, Olds Cutlass, Pontiac Grand Prix and Chevy Monte Carlo.

What would help American corporations would be universal health care...that would unload a huge burden and allow them to become more competetive with other world players.

soulsinging · April 2009

jlew24asu wrote:

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.

well gambling is based on pure guessing, chance, and probability. the person offering the bet(the casino or bookie) ALWAYS has better odds.

investing is based on cold hard facts. at least it should be. too often emotions take over. for example, a publicly traded company is 100% transparent. again, at least is should be according the laws. companies use this money to grow their business, in turn, the stock holder can make some money "owning" the company. people buy stock based on the fact the company will grow and earn a profit. it is be no means fiction.

hoping for (another) stock market crash is rather foolish and only hurts many people.

It is fiction. They all cook their books. And pressure to inflate stock prices is the reason for this. It's a slash and burn economy because of the stock market. There's no transparency. How else could the entire financial industry have been blindsided by the collapse of a dozen major companies in just ONE year?

Say you run a successful company that turns a huge profit one year, then turns a good profit the next. Your company is now a failure. Why? Stockholders don't see profit, they see "oh my god, my dividends went down, the company is not doing well!" Enter sell off. Enter firing the good CEO with a solid, if not dazzling growth plan. Enter new CEO, a head hunter who axes jobs, ships them overseas, cuts quality, and provides record profits. Enter stock holders happy as pigs in shit. Then the bottom falls out on this unsustainable plan, the company folds, everyone loses their jobs, the shareholders lose their money (aside from the insiders that got tipped off to sell before the bottom fell out), but that CEO walks home with billions in compensation and benefits for destroying the company, while the previous guy can't find a job because he was a "failure."

It's bullshit.

Also, stocks are as much speculation as sports. You look at who's got what and what they're doing with it, and make guesses and projections based on how you think it will pay off come "game time." You can get facts on baseball players and how they play, just like you can get facts on companies and how they've done in the past. You do that to guess if they'll be up or down in the next go round. And just as bookies have the upper hand in sports, so do the insiders have the upper hand on the market.

You think it's all based on fact? There was some study a few years back (I wish like hell I could find it), where a monkey threw darts at a random listing of stocks. He did just as well as the average Wall Street broker did that year. And you're telling me there's no chance or guessing and it's all very predictable fact?

jlew24asu · April 2009

callen wrote:

Was under the impression that if GM filed bankcrupcy they could tear up existing contracts. Have mixed feelings on this as there were many Americans that worked hard for GM and were promised benefits during their careers. There should be a balance.

right, under bankruptcy they could tear up the contracts. but I'd rather they re-negotiate them instead of filing for bankruptcy. and that option looks to be off the table.

jlew24asu · April 2009

soul, lets just agree to disagree. I do this type of stuff for a living. they are many honorable companies out there that dont lie. there are many proven mathematical strategies for trading stock based on company earnings. its not all one big guessing game. all too often greed and emotion take the consistency out of stock trading....like we saw in 1929, late 80s, 2000, and now. but over the long term, consistency is there.

but I agree with your sports analogy. when I said gambling, I was more referring to blackjack, craps, slot machines, etc..

JOEJOEJOE · April 2009

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.

Aren't you the fella who called someone "self-centered" when they complained about the EV ticket sale procedure?

Hoping for a huge market crash is 100x more self-centered, ain't it?

soulsinging · April 2009

stickfig13 wrote:

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.

Hoping the market crashes is certainly not something to hope for....Whether you like the idea of it or not.

Sure it is. Time to reboot. It takes a catastrophe to cause the paradigm shift we need.

soulsinging · April 2009

JOEJOEJOE wrote:

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.

Aren't you the fella who called someone "self-centered" when they complained about the EV ticket sale procedure?

Hoping for a huge market crash is 100x more self-centered, ain't it?

How is it self-centered? I think it'd be better for everyone in the long run.

soulsinging · April 2009

jlew24asu wrote:

soul, lets just agree to disagree. I do this type of stuff for a living. they are many honorable companies out there that dont lie. there are many proven mathematical strategies for trading stock based on company earnings. its not all one big guessing game. all too often greed and emotion take the consistency out of stock trading....like we saw in 1929, late 80s, 2000, and now. but over the long term, consistency is there.

but I agree with your sports analogy. when I said gambling, I was more referring to blackjack, craps, slot machines, etc..

Yeah, I was referring to sports betting. Like I said, not sure why one is ok and the other isn't.

In any event, I've no doubt there are honest companies and honest people. I think the problem is that the stock market sets up a means for incentives the inevitable result of which is to encourage and reward greed and dishonesty.

My other 'reboot' suggestion was instead of bailing out the banks by giving them huge lumps of money in an effort to get them to loan again (which is the exact thing that got us into this mess), you basically do a jubilee year. Use that money to pay off all the mortgages that are toxic. Yeah, people in over their heads get a huge windfall, but it's either that or we stay fucked. But that frees the banks from dead weight, and instantly helps consumers get out of crushing debt so that can start putting money back into the economy again. I don't get that people bitch about how they were responsible so why should other homeowners be bailed out for recklessness, but I never hear anyone saying that about massive money to banks that were irresponsible. But the way we're doing these bailouts helps nothing in the long term. It's just prolonging the agony. Either we ride it out, or we do something to help the problem. We don't just hand money to poorly run banks to insure their profits.

jlew24asu · April 2009

soulsinging wrote:

Sure it is. Time to reboot. It takes a catastrophe to cause the paradigm shift we need.

we have to a certain degree. stock market has lost HALF its value from the high. the rules of banking are changing as we speak.

Abuskedti · April 2009

I believe the fundamental concept of the stock market are good.

There are 2 things that turn it into the random gambling circus that brings down our economy.

1. there is an enormous amount of discressionary money in the hand of a very few men and women. Their actions sway demand of some stock and the markets as a whole that often defy logic - and there are no mathematical strategies to forcast this

2. Misinformation. Now that every man woman and child can own stocks or mutual funds. They are fed misinformation by the media and those "in the know". this is very calculated misinformation designed to manipulate investing of the pupulace after positioning themselves to profit.

The only regulation we need is to punish misleading statements. We must find a way to motivate our media to be honest.. and expose thier slants. I believe it can be done. The stock markets are only a small example of the mess they make.

Wilds · April 2009

"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.

mhterrapin · April 2009

Regarding the first post, while Wells Fargo is one of the better banks out there (compared to the rest that's not saying a lot), there is the possibility that some of their positive news relates to number crunching the acquisition of Wachovia.

As for GM, I agree that they should have re-negotiated the Union contracts, adjusting salaries while ensuring health benefits. It is not possible for GM to function at this rate, so throwing money at a completely broken problem is a waste. These american car companies had it all early on in the 80's, but have failed to adjust to competition. Add in the Union refusing to budge and there's our problem.

Finally, I do not think the market has hit bottom. A market so volatile is not a completely accurate representation of company finances. We all saw how investor panic helped drive down AIG stock. That touches on the last post about misinformation too.

My question is what happens when the next wave of defaulting on loans comes through? If someone can't make car payments how do they make student loan payments etc? The government is bankrupt already, but I guess they'll have to keep writing off losses.

soulsinging · April 2009

jlew24asu wrote:

soulsinging wrote:

Sure it is. Time to reboot. It takes a catastrophe to cause the paradigm shift we need.

we have to a certain degree. stock market has lost HALF its value from the high. the rules of banking are changing as we speak.

I hope you're right about that, but I can't shake the feeling I get that these bail outs are basically a sign of approval for the practices that got us into this mess. A kind of, it's ok if your practices screwed us all, we'll hand you the money to get through it. There are strings attached to the loans, but I haven't seen any indication that the rules of banking generally are being even considered for reform. And even if they do, they're likely to be as reactionary and misguided and useless as Sarbanes-Oxley.

jlew24asu · April 2009

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?

jlew24asu · April 2009

soulsinging wrote:

jlew24asu wrote:

soulsinging wrote:

Sure it is. Time to reboot. It takes a catastrophe to cause the paradigm shift we need.

we have to a certain degree. stock market has lost HALF its value from the high. the rules of banking are changing as we speak.

I hope you're right about that, but I can't shake the feeling I get that these bail outs are basically a sign of approval for the practices that got us into this mess. A kind of, it's ok if your practices screwed us all, we'll hand you the money to get through it. There are strings attached to the loans, but I haven't seen any indication that the rules of banking generally are being even considered for reform. And even if they do, they're likely to be as reactionary and misguided and useless as Sarbanes-Oxley.

the best thing I have seen happen lately is many huge banks including Northern Trust and Goldman Sachs have already paid back the "bailout" money and refuse to take any more. thats a very very good thing. several other banks have submitted plans to pay the government back as well.

and as much as I usually hate the media, we have them to thank for this. anytime a company that received bailout money farts, we hear about it non stop. I love that.

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.

Has the market hit bottom?

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