Black Tuesday-Market Slide

F

Forthewall

Long Time Member
Messages
3,327
Is it me or should George be banned from speaking about the economy...ever. Everytime George starts talking the financial markets take a downturn.

While our banks and financial institutions are currently closed for MLK day, today stock markets around the globe suffered historic declines due to Friday's announcements.

I really hope I am wrong, but I think we just might see the market hit the stop trading button at -350 pts tomorrow as foreign investors react to global market conditions.

If the markets tank tomorrow this will spell even worse news for the home building industry as well as those on fixed incomes. The predictable fed reaction will be to lower key interest rates, while the declining market will keep home buyers on the sidelines.
 
The sky is falling the sky is falling.............Good grief



?Justice consists not in being neutral between right and wrong, but in finding out the right and upholding it, wherever found, against the wrong.?
---Theodore Roosevelt,
 
Well here in Ca alot of experts say we could see a double in the population in the next 20-25 years. I think my house will go up in value. Problem is, like others have stated. People have been tapping into there equity and spending money they dont have on stuff they dont need like rhinos and toy haulers and big diesel pick-ups for their wives to run around town in. People living out of their means will never end, people who are smart with their share of beans will be ok.
 
>Well here in Ca alot of
>experts say we could see
>a double in the population
>in the next 20-25 years.
>I think my house will
>go up in value. Problem
>is, like others have stated.
>People have been tapping into
>there equity and spending money
>they dont have on stuff
>they dont need like rhinos
>and toy haulers and big
>diesel pick-ups for their wives
>to run around town in.
>People living out of their
>means will never end, people
>who are smart with their
>share of beans will be
>ok.

GREAT POST!!!!!!!!!!!! That is the most logical post I have seen in a long time!!!! If people would just live inside their means, We would not have to deal with a lot of these issues!!!
 
Hey now... I went "short" on stocks a month ago... keep talking Georgie!!!


-DallanC
 
Americans have over spent no doubt about it , but that's only part of the problem. energy prices, a dollar that's lost so much value against other currency, a massive national debt, a war we don't know when we'll be able to shut the cash flow down on, and a world economy we're just a player in not the only player. times could get tough for some people and it could be tough for a while. some of it we brought on ourselves and some of it was poor and short sighted leadership.
 
I dont blame my checkbook either way on leadership. Conditions change, always have always will. When have peaks and valleys not existed in this country. Quit making excuses for peoples in-ability to save and spend wisley. I agree polotics have an effect on a guys pocket book.....You can either adapt or cry yor eyes out waiting for help to arrive.
 
LAST EDITED ON Jan-21-08 AT 04:03PM (MST)[p]There are only 1 million sub-prime loans in the market today. People have always lived beyond their means, so this is nothing new and certainly not why our economy is lagging.

Ditto Dude,

To think an individual(s) could sway our country's economy is utter nonsense. What we have is an economic clusterbomb due to a weak monetary policy, low key interest rates, lowest individual savings rate ever, loss of high-paying jobs, unfair trade policy, a rise in the cost of consumer staples, sharp rises in medical care, and a weak trade/energy policy.

Any one or two of these factors could not disrupt our economy, but the culmination of all means we are going to be in rough ride for awhile. Stagflation is the word that keeps popping into my mind.

I hope I am wrong, I hope I am a million miles off the mark. I guess we will see what happens tomorrow at the opening bell and more importantly at the closing bell.

If the bulls to do not come to the table quickly, the bears will have a feast tomorrow.

Hardway, I commend you for conducting your personal finances in conservative manner. Unfortunately no matter how responsible you are financially, your dollar is buying you less daily. Your 401K or other retirement investment vehicle may lose substancial value. Our Golden State is already broke and soon we will see the effects of impending budget cuts. If you own on a home in California and like most do not have earthquake coverage everyday is gamble.
 
It's going to be ugly. our weak dollar has prompted lots of buying in the US by foreigners but at what point do these investors go somewhere else? our economy and Bush's plan is based on selling out the store and massive borrowing, if outside money slows we could be in for a real kick in the butt.
 
Why does everyone think if you live in Ca the earthquakes are gonna getcha? I've lived here in the central valley for 30yrs, my grandparents for over 80. Not a problem so-far. But thanks for thinkin of us. I'll forward your warnings to the Bay Area.
 
I only have one thing to say about this topic. "GET YOUR ASS OUTTA DEBT" if you do all these ups & downs really don't matter. That's one thing my dad drilled into me and I finally made it. I'll be damned if I'll take on a $400,000.00 mortgage or a 60 month truck payment just because everyone else is doing it.

Having said all that ... I'm sure I'll puke my guts out tomorrow at 3:00pm eastern when my 401K tank's AGAIN!

RUS
 
Boy you got that right Rus! I got rid of all my cards except a Visa back in 99. I dust it off once a year and make sizable purchase, then pay it off before the bill arrives.

As for new car payments, well we all learn our lessons about those in our younger days. My oldest is just finding out after buying a Tundra a year ago. He pulled me aside and said, "Now I know why you keep that 95 4-Runner around...no payments." See kids can learn if you give them a chance.

Hardway I don't have the time to give you a full lesson on macro-economics. When you say, "Well here in Ca alot of experts say we could see a double in the population in the next 20-25 years. I think my house will go up in value."

Are these the same experts that said investing in real estate is a no-brainer? Are these the same experts that said we could solve the state's financial problems by issuing bonds? You speak of people tapping their equity, but to do that you need equity. Something that homeowners in the valley either never had or are watching vanish on a daily basis.

When you pay your property taxes take a close look at all the bond measures for new schools, new hospitals, road improvements, police and fire protection. Now take a look at a city like Stockton where 70% of all home sales are foreclosures. When housing crashes there is no money for bonds or improvements.

The Sac/San Juaquin valley or "Foreclosure Valley" was one the most impacted by predatory lending practices. Call your local realtor and ask them how much an REO ppsf price-per-sq ft comp in your area goes for or what the days on market are. A lot of hard-working, good but naive people were convinced into buying homes without a lot of knowledge of how mortgages work.

If you bought in the valley within the last 5 years on a conventional loan, you couldn't re-fi and pull out money if you wanted to. Nor can you even re-fi a first without taking money because the homes simply don't meet valuation. Soon you'll look across the street at an identical home, except you could buy that one for 100K less than yours. That is...if you can ever sell yours within the next 5 years. This isn't peaks and valleys, this is valleys and sink holes.

I type too much...and I just hi-jacked my own post!
 
My best friend has been a Loan officer for 20 years. I looked into buying a house and how mortgages worked for about five years before I bought.I bought my house on a 30yr fixed loan. Saved for about ten years and was able to put down 10%. Sure I've lost some mkt value, but I can afford my payment.So whats your point? People who got into sucker ARM's and Adjustable rates screwed themselves? I agree. Since they have been keeping track property value has always gone up in time. I dont care how low it goes, I dont plan on selling for atleast 15years. My grandpa always told me " Buy property kid, they aint makin any more of it." Kind of like that "No Cooling Off Period Law" when you buy a car, The people who got themselves in this situation took a risk, a gamble. Or they were mis-informed. When I decided that I was going to sign my life away for $270,000 I made damn sure I knew as much as I possibly could. Ignorance is not an excuse!
 
RUS


Your "GET YOUR ASS OUTTA DEBT" could not be better advice. Makes a family far more immune to the ups and downs of the economy.
Your 401K should be fine as the market rebounded. Remember if someone is selling someone is buying, that was me today.
479685792be3da40.jpg
 
Ransom, I was ready to jump this morning! Glad I held off!:)

I made the last payment on our house 11 years ago. It's been "free and clear" ever since. I go to sleep at night knowing that no matter what happens, I got a place to camp. Unless of course, as FTW was so kind to remind me, the "BIG" earthquake hits!

Dang you FTW!!!!!:)

Eel
 
You and me both Eel, good old uncle Ben to the rescue! I can't prove it but I almost think he planned it that way. Foreign markets lost 5 trillion "poof" gone. The dollar came up a little in value, and we were able to eak through the day with a minimal loss keeping our markets attractive. Not bad for a days work for Uncle Ben. I don't understand why he didn't make it a full point, why wait a week or two?

It's global so it is still going to be bad for the next couple of months. It would not shock me to see bottom around 10-10.5.

As for that damned Earthquake I'm about a par 7 from the Hayward Fault buddy.
 
>
>As for that damned Earthquake I'm
>about a par 7 from
>the Hayward Fault buddy.


Kinda like the people that live at the base of a volcano, or in a flood zone. You chose to live there not me.
 
Blame Bush when the economy is good, and really blame Bush when the ecomomy is bleak.

Hardway, have you heard of the San Andreas Fault? Stanislaus Co. is not that safe.

Eel
 
LAST EDITED ON Jan-23-08 AT 10:59PM (MST)[p]>You and me both Eel, good
>old uncle Ben to the
>rescue! I can't prove it
>but I almost think he
>planned it that way. Foreign
>markets lost 5 trillion "poof"
>gone. The dollar came up
>a little in value, and
>we were able to eak
>through the day with a
>minimal loss keeping our markets
>attractive. Not bad for a
>days work for Uncle Ben.
>I don't understand why he
>didn't make it a full
>point, why wait a week
>or two?
>
>It's global so it is still
>going to be bad for
>the next couple of months.
>It would not shock me
>to see bottom around 10-10.5.
>
>
>As for that damned Earthquake I'm
>about a par 7 from
>the Hayward Fault buddy.



FTW


"Poof gone". You think the money doesn't exist anymore? Do you happen to know how long it will remain out of the market before it's reinvested? Why in the hell were people buying the stocks that the sellers were selling? There is some bargins to be had in the market. The battered ones will soon look good if the P/E's come back in line.
Not really sure what your trying to tell us but will listen if you are serious.
One thing in todays market that scares me almost as much as the economic climate is the new computer programs that issue buying and selling orders that were programed into them. Who in the hell programed them? What fundamentals were used? The gains today could have been because of these programs or maybe not. Who knows?


Ransom
 
Yep, I uncovered it with a dozer a couple years ago when I was working on the 5 canyons project in castro valley/ hayward area. It was petty solid rock all day and then I hit about 4ft of pure blow sand, then more rock. All the geoligist's and soils techs were checkin it out. I remember the Loma prieta, it shook a few things but no falling bridges or fisher's down the middle of the street. Unless its the quake of the century (9.0) or higher, I doubt it will have little affect (structurally) on the central valley.
 
Let's say you run the Ransom Stock Exchange and have 10 clients with share values at $10.00 per share, and a volume of 10 shares. So your exchange market value is currently $100.00.

Bad economic news arrives which triggers investors to place sell orders. Of course, once a sell order is placed the price is set at whatever the market determines. That is to say that the $10.00 share on a sell order maybe purchased above, at, or below the $10.00 share price.

A buy order is placed on that particular company at $8.00 per share. The share is then purchased for $8.00 per share resetting the prior $10.00 per share value. Fellow shareholders see a 20% drop in share value, they place sell orders and a downward market cycle continues.

Concurrently the other 9 companies go through the same process and at the end of the day all 10 companies now have a per share value of $5.00 each. At the end of the day the Ransom Stock Exchange in now valued at $50.00. "Poof" the 50 dollars if not reinvested into the market is gone regardless of profit or loss.

In a healthy market maybe half the companies go down and half the companies go up in share value as shares are bought and sold but the money or value itself remains in the Ransom Exchange.

Let's say an investor purchases a share at $2.00, it hits a high at $10.00, a sell order was placed and it sold for $8.00. That investor made a profit of $6.00, but didn't reinvest that money into any market especially one of the other 9 companies at the Ransom exchange.

Whoever bought it at $8.00 speculating it as a good buy sees the next buy order come in at $6.00. Freaked out they short the stock and by the time they get out it sold for $5.00. For this investor there is only a $3.00 loss.

The share value loss then affects the company which once had a stock valued $10.00. That company utilizes credit lines based on the stock value. After a 50% drop in value, the company will have a harder time securing credit lines at an optimal interest rate making operations more difficult. A result of this may come in the form of layoffs, hiring freezes, cost-cutting etc. as the company must now rely on their cash reserves until the stock value rises again.

The longer investors remain on the sidelines the more prolonged the bear market will be until market forces drive the share price back up.

Overton, I know you made me go through all of this when you know exactly how this all works. Didn't ya? So I'm not going to go into "puts" or "hedging" or "P/E ratios". I can't believe you made me type all of this I hope you are having a good laugh.
 
FTW

Sent you a PM. Read it and may be you will understand what I was after. My questions do seem to ramble lately.


Ransom
 

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