Author Topic: Hang on guys...tomorrows ride might be staggering  (Read 10563 times)

0 Members and 1 Guest are viewing this topic.

Offline glenn kangiser

  • The Troglodyte
  • Administrator
  • Journeyman
  • *****
  • Posts: 24,926
  • Central California Sierras- Home of Yosemite NP
    • Underground Cabin
Re: Hang on guys...tomorrows ride might be staggering
« Reply #25 on: September 17, 2008, 06:13:53 AM »
I suggest digging your own gold.  Cut out the middle man.  I'm working at it...and I don't mind digging. [crz]
"Always work from the general to the specific." J. Raabe

Glenn's Underground Cabin  http://countryplans.com/smf/index.php?topic=151.0

Please put your area in your sig line so we can assist with location specific answers.

Offline John Raabe

  • Administrator
  • Journeyman
  • *****
  • Posts: 5,548
  • Whidbey Island, WA
    • CountryPlans - About Us
Re: Hang on guys...tomorrows ride might be staggering
« Reply #26 on: September 17, 2008, 07:47:34 AM »
Just to keep the longer term in perspective:

http://www.marketwatch.com/news/story/gurus-corner-how-bad-its/story.aspx?guid={1B147F0F-2256-4CB4-A1BA-9136F4112570}&dist=hpts

We will likely muddle through on this one... again. But that's difficult to remember in the heat of all the yelling and hand wringing.
None of us are as smart as all of us.

Offline peternap

  • Journeyman
  • *****
  • Posts: 4,078
Re: Hang on guys...tomorrows ride might be staggering
« Reply #27 on: September 17, 2008, 07:55:00 AM »
Just to keep the longer term in perspective:

http://www.marketwatch.com/news/story/gurus-corner-how-bad-its/story.aspx?guid={1B147F0F-2256-4CB4-A1BA-9136F4112570}&dist=hpts

We will likely muddle through on this one... again. But that's difficult to remember in the heat of all the yelling and hand wringing.

I agree John and I suppose I shouldn't sound so negative. My contention is not that we can't muddle through, rather....every time we muddle through under the circumstances we have had for the last several years, weakens us further. I firmly believe that the slow meltdown is nearly complete.

As an example, when I started saving cash many years ago, I'd go to the bank every paycheck and get two packs of 50-one dollar bills. I'd take them home and stack them in a safe I had made (I was too cheap to buy one).

After a few years it looked impressive. Imagine several thousand dollars in one dollar bills. I had added a section for gold and silver I bought every month. Things were filling up so I switched to getting packs og five dollar bills.

Then ten dollar bills, then twenties, fifties and now hundreds.
In other words, every time I filled it, I'd start replacing the older stuff with higher denominations.

Our government does the same thing in reverse. Each time there is a reason to rearrange the box, they do it with the next lower denomination.

I'm afraid we may have to go to rolled quarters soon.
« Last Edit: September 17, 2008, 08:07:45 AM by peternap »
These here is God's finest scupturings! And there ain't no laws for the brave ones! And there ain't no asylums for the crazy ones! And there ain't no churches, except for this right here!

Offline muldoon

  • Journeyman
  • *****
  • Posts: 1,619
  • Muldoon, TX
Re: Hang on guys...tomorrows ride might be staggering
« Reply #28 on: September 17, 2008, 09:44:02 AM »
John,

I understand where your coming from in terms of muddle through.  I'm not saying this is the end of the world today.  But to discount whats going on as a short term thing or that it wont find its way to real people in the real world is ludicrous.  The 3 month treasury is trading at 7 bips yield.  0.07% , it got down to 0.03% this morning. 
http://www.bloomberg.com/apps/news?pid=20601087&sid=aDuzxeT3TsnM&refer=home

here is the chart for the IRX or 13week T:
http://ichart.finance.yahoo.com/b?s=%5EIRX

seriously, this is a broken credit market.  we blew through how bad it was in 1987, then 54, and now were looking at the conditions from the 1939.  Gold has had its largest move up in history today.  12% up and close to 80 bucks in a day.  This is not abject negativity, it is an outright disaster. 
http://research.stlouisfed.org/fred2/data/TB3MS.txt

This will reach the "real economy" but people wont associate it with the events of today.  They certainly will not associate it with the bailouts.   Maybe some will, maybe some will read http://www.reuters.com/article/idUKN1752966920080917 and realize what its saying.  Continue that line of thought forward and you tell me what happens when the USA is no longer able to borrow the 2billion every day just to keep afloat?  What about when the 9trillion they already owe needs to be rolled over and the only thing available is a 30% interest rate to do so?   

Anyone telling you its a great time to buy stocks "for the long term" here will also conveniently be selling something. 

Offline apaknad

  • Senior Member
  • ****
  • Posts: 456
Re: Hang on guys...tomorrows ride might be staggering
« Reply #29 on: September 17, 2008, 11:40:09 AM »
pardon me for hijacking this thread(glen put it where it belongs, if i knew how to do it i would). i haven't worked since april and i just got a job about 15 min. ago. hired over the phone. i had to share my good news with everyone. it's a good job and glen you are going to love the irony, i am going to do non destructive testing on various types of heavy duty equipment, ie. boom trucks, aerial ladders, pickers, hi-los, etc. to make sure they are in safety compliance(osha and others). just think glen, i might be inspecting some of your toys(which, i am sure are perfectly in compliance). ;D i'll be traveling around the country for awhile and then be working in michigan because they said that they have no one in MI. and they are turning down business. i sent them a resume about two months ago and never heard a thing. i hope now i can ride out this financial storm that has hit this country due to greed and mismanagement.
unless we recognize who's really in charge, things aren't going to get better.

Offline glenn kangiser

  • The Troglodyte
  • Administrator
  • Journeyman
  • *****
  • Posts: 24,926
  • Central California Sierras- Home of Yosemite NP
    • Underground Cabin
Re: Hang on guys...tomorrows ride might be staggering
« Reply #30 on: September 17, 2008, 06:01:36 PM »
That's great, Dan. 

Not sure if mine are in compliance or not.  I never check them. d*
"Always work from the general to the specific." J. Raabe

Glenn's Underground Cabin  http://countryplans.com/smf/index.php?topic=151.0

Please put your area in your sig line so we can assist with location specific answers.

Offline considerations

  • Journeyman
  • *****
  • Posts: 1,344
  • Joyce, Washington, (sort of)
Re: Hang on guys...tomorrows ride might be staggering
« Reply #31 on: September 17, 2008, 06:46:14 PM »
Wow Muldoon, glad you are back.  I just located all of my Houston grandkids yesterday.  What a ride. 

Speaking of a ride.  What are us little ($'s) folks supposed to do?  We cant have our IRA's without nasty tax implications...do we just sit here and watch it melt?   I hate this, I worked so hard and have to wait so long before I can touch it.

Offline glenn kangiser

  • The Troglodyte
  • Administrator
  • Journeyman
  • *****
  • Posts: 24,926
  • Central California Sierras- Home of Yosemite NP
    • Underground Cabin
Re: Hang on guys...tomorrows ride might be staggering
« Reply #32 on: September 17, 2008, 07:07:02 PM »
That is the plan, Considerations.  You didn't think they would actually let you have it, did you? hmm

“Suppose that some great disaster were to sweep ten million families out to sea and leave ‘em on a desert island to starve and rot. That would be what you might call an act of God, maybe. But suppose a manner of government that humans have set up and directed, drives ten million families into the pit of poverty and starvation? That’s no act of God. That’s our fool selves actin’ like lunatics. What humans have set up they can take down….Whoever says we’ve got to have a capitalist government when we want a workers’ government, is givin’ the lie to the great founders of these United States….”
   

A Stone Came Rolling
Olive Tilford Dargan

Browsing through the Russian news again--- Came upon a topic I was taught in the second grade by Mrs. Tatman, My mean lunch hour boozing teacher who taught me a lot of stuff about how the world runs.  Interesting read


http://english.pravda.ru/opinion/columnists/17-09-2008/106391-proletariat-0
"Always work from the general to the specific." J. Raabe

Glenn's Underground Cabin  http://countryplans.com/smf/index.php?topic=151.0

Please put your area in your sig line so we can assist with location specific answers.

Offline muldoon

  • Journeyman
  • *****
  • Posts: 1,619
  • Muldoon, TX
Re: Hang on guys...tomorrows ride might be staggering
« Reply #33 on: September 17, 2008, 08:14:16 PM »
Wow Muldoon, glad you are back.  I just located all of my Houston grandkids yesterday.  What a ride. 

Speaking of a ride.  What are us little ($'s) folks supposed to do?  We cant have our IRA's without nasty tax implications...do we just sit here and watch it melt?   I hate this, I worked so hard and have to wait so long before I can touch it.

The same question came up about 4 months ago, and I'll say the same thing.  I am not qualified in any way to tell anyone else what to do with their money.  However, if you read the last few posts of this thread (bottom of page 2) you can read my ideas on how to shore up your exposure to loss and get your money safe.  I think they are still as applicable and relevant today as when I wrote them. 


------------
apak,
congrats - nothing like the feeling of getting a job when you have been out for a spell.  cheers to you.    [cool]

Offline John Raabe

  • Administrator
  • Journeyman
  • *****
  • Posts: 5,548
  • Whidbey Island, WA
    • CountryPlans - About Us
Re: Hang on guys...tomorrows ride might be staggering
« Reply #34 on: September 18, 2008, 07:26:57 AM »
The next few weeks (days?) should be very important in this global struggle for stability. If we do muddle through (which I am hoping and expecting based only on past history) it will likely be because there are so many cohesive economic forces at work in the world that will reroute money around the landslides and boulders that are being flung off the volcano.

Technology, communications and the whole flat world economy is an enormous and powerful river that was only a stream in the 1920's. If we were to be beaten back to economic isolation and victory gardens as we were then it will take the equivalent of an economic nuke. Perhaps the huge explosion (implosion?) of the credit markets will be enough to do this. I don't know.

I do know that I appreciate and respect the analysis and shared experience of all the members of this economic thread - especially peternap and muldoon! I hope my comments about "hand wringing" were not taken personally - they were not meant that way. A lot of people are worried and scared (see above and myself included) - that is totally appropriate. I hope the worst of what can happen does not happen.

Here is a quote from a non-economist (a guerrilla entrepreneur actually) who I've followed for years. He has a good history of economic predictions (but he is also scared).



Here is my prediction - we will see the start of an unprecedented ecomomic boom starting in mid 2009, and lasting for 5 to 7 years.

All the vetting of the bad news nows, is actually good for the economy.

Get all the bad out of the way. Clear out the weak banks, get rid of the bad loans, get rid of the speculators (which has already done wonders for the price of oil), and let the current real estate inventory continue to decline (due to no housing starts for the past 18 months).

All this is going on right now.

Which means in about 5 to 9 months, we will have a pretty good slate.

The remaining banks and lending institutions should be on firm ground, real estate inventories will be lower (which will cause a rise in home resale prices), government bailouts of fannie mae and freddie mac will mean more money in the mortage markets, and the stock market will have vetted out all the bad news.

And we'll have a new president - which gives consumers a psychological boost.

This is pretty much what happened at the end of the terms of the last few 8 year presidents.

Same thing happened with Clinton (although people tend to forget the collapsing stock market, enrom and other financial scandals that appeared at the end of the Clinton era.)

And people forget the financial problems at the end of Bush 1 era. And the deep financial problems at the end of the Carter era.

History doesn't really repeat itself, but there are certainly patterns which repeat.

In this case, financial bad news seems to pile up right before an election, causing the economy to stumble (often aided and abetted by the media).

Then the new person comes in, the economy rebounds, and the new person takes credit - even though the rebound is usually driven by small businesses, innovation and consumers.

Bill Myers - bmyers.com
None of us are as smart as all of us.

Offline ScottA

  • No Edits
  • Journeyman
  • *****
  • Posts: 3,182
Re: Hang on guys...tomorrows ride might be staggering
« Reply #35 on: September 18, 2008, 07:41:25 AM »
I disagree John I don't think we'll see any real growth for the next 5-10 years. I think the purpose of this wealth transfer that's happening now is to bring the US standard of living in line with other nations in this global economy. I expect the standards in other nations like china and india to rise a bit while ours falls back to around 1970's levels. 1 car households, smaller homes, less eating out etc. I don't think this is really a bad thing. I also expect the gap between rich and poor to widen. The middle class is going to be reshaped by all this. Sure there will still be a middle class but it will look much different than it does now. The process of getting there won't be pretty though.

Offline muldoon

  • Journeyman
  • *****
  • Posts: 1,619
  • Muldoon, TX
Re: Hang on guys...tomorrows ride might be staggering
« Reply #36 on: September 18, 2008, 10:14:02 AM »
No worries about the hand wringing comments, were all worked up.  I may say something that rubs someone else the wrong way - and for that I apologize in advance, it's not my intent either.   

I think historically, he is spot on.  In the past it has worked that way, in the past for literally centuries we have seen business cycles of boom and bust.  None of this is new, as irrational exuberance takes over people make poor choices, those fail and the slate is cleaned and bad debt washed away only to start new again.  Traditionally this business cycle is on an 8 year cycle of boom and bust.  There also is another cycle on a 70-90 year frequency known in financial world as a Kondratieff wave cycle .  This cycle is a little larger and paints larger swatches of decades with the same basic principles. 

In the past if you were a buyer during the intermediate downturns it could work out very well for you when the market rebounded the following year.  For the larger wave, it could work out well for you in the following decades. I am not debating the concept of buying low sell high demands you purchase when times look bleak, I am saying I do not believe in any fashion that this is the bottom because the effects have not manifested in the real world yet.  Once reached there is no way to truly determine which companies are going to survice and rebuild?  How many people bought Yahoo or Novell 800 only to see them trading near 40 today.  Holding long term can be very good, IF your exit time is at the end of the ramp up, buying at the peak of the market and holding it into the decline does not help just because you bough and held. 


Quote
Here is my prediction - we will see the start of an unprecedented ecomomic boom starting in mid 2009, and lasting for 5 to 7 years.
I cannot see this occuring.  In order to have growth and boom you must have credit.  Business's borrow to grow and build.  Currently we have a frozen credit market, even with LIBOR shooting (nearly doubling this week), no banks can loan right now to other banks.  They are either insolvent or do not believe the other party will be there to repay.  Lehman bankrupted on Monday and left 650bill in bad debt for other financial instituional bagholders to figure out.  As long as the fraud and lies are still present no one will put new money into this situation.  True wealth is sitting out and will not return until fraud is removed - there is no course for this to occur.  Even if there was a course of action in place today it cannot be completed in just a year. 


Quote
All the vetting of the bad news nows, is actually good for the economy.

Get all the bad out of the way. Clear out the weak banks, get rid of the bad loans, get rid of the speculators (which has already done wonders for the price of oil), and let the current real estate inventory continue to decline (due to no housing starts for the past 18 months).

All this is going on right now.

Which means in about 5 to 9 months, we will have a pretty good slate.


I couldn't agree more that in many ways the downturn is part of the cure.  Remove the bad elements and get a fresh start.  If the weak parts of the system were being forced to correct or shutdown this would be accelerated.  By bailing them out we are prolonging this and making it much more painful.  Another thing to consider is the ramifications in the changes to bankruptcy laws in the last few years.  In times past it was possible to simply walk away from all debt and start over, now many of those loans cannot be walked away from as easily.  It changes the landscape and diminishes the effectiveness of this stage. 

Offline muldoon

  • Journeyman
  • *****
  • Posts: 1,619
  • Muldoon, TX
Re: Hang on guys...tomorrows ride might be staggering
« Reply #37 on: September 18, 2008, 10:14:48 AM »

Quote
The remaining banks and lending institutions should be on firm ground, real estate inventories will be lower (which will cause a rise in home resale prices), government bailouts of fannie mae and freddie mac will mean more money in the mortage markets, and the stock market will have vetted out all the bad news.

And we'll have a new president - which gives consumers a psychological boost.

Housing downturns on average last 10-18 years from peak to trough, I do not see any reason to believe that prices will go up in 5-9 months.  In fact, with rising interest rates and reluctance to lend - prices may indeed come way down to be a price that can be afforded by others.  A 100k house with a 6% mortgage looks better than a 50k house with a 15% mortgage. As rates increase prices will continue to fall as the "whats my monthly payment" crowd shops.   

The new president could be good or bad, we'll have to wait and see. 

Quote
This is pretty much what happened at the end of the terms of the last few 8 year presidents.

Same thing happened with Clinton (although people tend to forget the collapsing stock market, enrom and other financial scandals that appeared at the end of the Clinton era.)

And people forget the financial problems at the end of Bush 1 era. And the deep financial problems at the end of the Carter era.

History doesn't really repeat itself, but there are certainly patterns which repeat.

I agree with that, but the problems were seeing now are not the same as then, we need to move the clock back some more to see a larger picture of time to get adequate analogies. 

Quote
In this case, financial bad news seems to pile up right before an election, causing the economy to stumble (often aided and abetted by the media).

Then the new person comes in, the economy rebounds, and the new person takes credit - even though the rebound is usually driven by small businesses, innovation and consumers.

Bill Myers - bmyers.com


So, there is a scenario where we may see an increase of monetary base and credit to offset this.  If the Federal reserve in conjunction with the Treasury were to "fire up the printing presses" and create dollars out of thin air without anything behind them.  This has not occurred in the US since the civil war with the greenback and 5 dollar us notes.  Since then all frn notes have been born from debt sales or direct taxation conversion.  If they were to persue such a path they literally could open up the clogged pipes and get money moving again.  However the result is hyperinflation, and it has destroyed every single country that has ever attempted this course. (Zimbabwe, Weimer Germany, Argentina). 

This is not a desirable course of action in any way to me, and to be honest I dont see this as a realistic option open to them currently.  Many believe this is the course and the plan, I simply just do not want to believe it and to date it has not occurred. 

Offline glenn kangiser

  • The Troglodyte
  • Administrator
  • Journeyman
  • *****
  • Posts: 24,926
  • Central California Sierras- Home of Yosemite NP
    • Underground Cabin
Re: Hang on guys...tomorrows ride might be staggering
« Reply #38 on: September 18, 2008, 10:37:26 AM »
I agree with you, muldoon...no fast fix available.

One thing I am not as sure about "The new president could be good or bad, we'll have to wait and see."

I see that one only as bad or worse.

There is also the slight chance that Bush will not relinquish power, but as screwed up as it has become under his watch he will probably move to his South American digs.
"Always work from the general to the specific." J. Raabe

Glenn's Underground Cabin  http://countryplans.com/smf/index.php?topic=151.0

Please put your area in your sig line so we can assist with location specific answers.

Offline peternap

  • Journeyman
  • *****
  • Posts: 4,078
Re: Hang on guys...tomorrows ride might be staggering
« Reply #39 on: September 18, 2008, 11:14:24 AM »
I agree too.
The crisis periods are becoming more frequent. It looked today that very trades were on fundamentals. Tomorrow, I expect it to be flat and who knows on Monday.

This week has reminded me more of a trip to Las Vegas than investing.
These here is God's finest scupturings! And there ain't no laws for the brave ones! And there ain't no asylums for the crazy ones! And there ain't no churches, except for this right here!

 

Templates: 5: index (default), Ads (default), Portal (default), Display (default), GenericControls (default).
Sub templates: 12: init, html_above, adsheaders_above, body_above, adsindex_above, portal_above, main, portal_below, adsindex_below, body_below, adsheaders_below, html_below.
Language files: 3: SPortal.english (default), index+Modifications.english (default), Ads.english (default).
Style sheets: 1: portal (default).
Files included: 38 - 1132KB. (show)
Cache hits: 15: 0.00157s for 40,961 bytes (show)
Queries used: 29.

[Show Queries]