Stocks and investing thread

[THEWOOD]

It's still in the area of a "correction", if you go from about 13,800 - 1380 (or 10%) you're at 12,420.

 

People are starting to get a little nervous because the Fed keeps dumping funds into the market to make sure there's enough liquidity (read: money to borrow).

Today, they put $7 billion more into the system around lunch time and that's what got the market going down.

 

The inflation reports today should give the Fed a little breather as far as inflation goes, but to me, that's still the higher risk as opposed to the "credit crunch", but not by much.

 

I love when it came across the wire (Bloomberg) that they were not doing any redemptions today that equity futures sky rocketed. Not even 10 minutes later it comes out the reason is a technical difficulty and they are doing them. Pretty s***ty mistake by somebody.

[DBAHO]

Well I suppose it's the "major" correction we had to have, or at least that's what I'm hearing.

 

I suppose it's really a perfect buying oppurtunity, I mean especially down here, because if a stock has gone downhill up here just because some guy in Wyoming can't pay off his mortgage (something like that is the terminology we've been using down here), then it shouldn't affect the outlook of stocks down here, especially considering the boom in China etc. with resources.

[kapkomet]

Well I suppose it's the "major" correction we had to have, or at least that's what I'm hearing.

 

I suppose it's really a perfect buying oppurtunity, I mean especially down here, because if a stock has gone downhill up here just because some guy in Wyoming can't pay off his mortgage (something like that is the terminology we've been using down here), then it shouldn't affect the outlook of stocks down here, especially considering the boom in China etc. with resources.

It's a little more complex then that... but it will correct itself. The market usually does.

 

Have you noticed that all the mergers and acquisitions have all but stopped? Where did these people get their money? Just some things to think about...

[Rex Kickass]

So, the bear market officially starts at 12,700 then roughly?

[DBAHO]

It's a little more complex then that... but it will correct itself. The market usually does.

 

Have you noticed that all the mergers and acquisitions have all but stopped? Where did these people get their money? Just some things to think about...

I sure hope so. Our market's down another 3% at the moment. Some people here are speculating its bordering on a crash. 12 months of gains have basically been wiped out.

[kapkomet]

So, the bear market officially starts at 12,700 then roughly?

For all the doom and gloomers, yes. Realistically, I would say no... but you will see where the floor is once you hit that 10% number.

 

[Balta1701]

For all the doom and gloomers, yes. Realistically, I would say no... but you will see where the floor is once you hit that 10% number.

Well, we're there.

[NorthSideSox72]

Holy Crap. Major indices down about 2.5%, DJIA now 150 points below the 10% loss line. And most of that has come in a little over a week.

 

When was the last time the markets lost this much, even on a relative basis, in a couple weeks? I'm not even sure it was that dramatic in the days after 9/11 (though in that case, the major US markets were closed for a few days).

 

[BigSqwert]

The economy is really strong right now. It should be getting more press.

It's getting plenty of press.

 

http://www.msnbc.msn.com/id/3683270/

 

http://www.msnbc.msn.com/id/20280389/

 

http://money.cnn.com/2007/08/16/markets/ma...dex.htm?cnn=yes

 

http://money.cnn.com/galleries/2007/moneym...ymag/index.html

 

http://news.yahoo.com/s/ap/20070816/ap_on_...meZtY55P39v24cA

 

 

[kapkomet]

It's getting plenty of press.

 

http://www.msnbc.msn.com/id/3683270/

 

http://www.msnbc.msn.com/id/20280389/

 

http://money.cnn.com/2007/08/16/markets/ma...dex.htm?cnn=yes

 

http://money.cnn.com/galleries/2007/moneym...ymag/index.html

 

http://news.yahoo.com/s/ap/20070816/ap_on_...meZtY55P39v24cA

Yes, because the economy is based SOLELY on the DJIA.

 

I really need to go back and find that thread about how GRAND and GREAT those "easy credit" mortgages are for people. You can't get anything for free, people, and this is the best lesson of that.

 

OVERALL, the economy is in decent shape. Let's put it this way - we'd be in a lot more of a world of hurt with this if the economy wasn't in decent shape. We're able to sustain this pretty well BECAUSE the economy isn't bad right now.

 

BTW, the market rocketed back up pretty quickly off of the lows, back nearly to the 10% - so there is some resisitance there.

 

[BigSqwert]

Yes, because the economy is based SOLELY on the DJIA.

 

 

 

WASHINGTON -(Dow Jones)- The number of U.S. workers filing new claims for jobless benefits increased for a third-straight time last week to its highest level in two months, suggesting that labor markets continue to soften after tepid job gains in July.

LINK

 

Although the U.S. economy has slowed, the International Monetary Fund recently projected that the world economy will grow at a better than 5% clip this year and next after three years of unusually strong growth.

LINK

 

The outlook for the US housing sector worsened yesterday as an index of sentiment among housebuilders fell to its lowest level in more than 16 years and real estate agents reported prices falling in a third of US cities.

LINK

[NorthSideSox72]

Just something to consider here... for those who have good credit and at least a little bit of equity (or cash) available, this credit crunch is not a bad thing at all. In fact, it will create lower rates for those with good credit. Plus with values having gone down or leveled, people are staying in their homes longer in response (and developers are slowing down dramatically), so values should stabilize and even increase soon.

 

This credit crunch issue is really only directly effecting those with bad credit, those who were over-leveraged, and the mortgage industry.

 

Patience.

 

[Cknolls]

It's getting plenty of press.

 

http://www.msnbc.msn.com/id/3683270/

 

http://www.msnbc.msn.com/id/20280389/

 

http://money.cnn.com/2007/08/16/markets/ma...dex.htm?cnn=yes

 

http://money.cnn.com/galleries/2007/moneym...ymag/index.html

 

http://news.yahoo.com/s/ap/20070816/ap_on_...meZtY55P39v24cA

 

LOL.

 

[Balta1701]

Just something to consider here... for those who have good credit and at least a little bit of equity (or cash) available, this credit crunch is not a bad thing at all. In fact, it will create lower rates for those with good credit. Plus with values having gone down or leveled, people are staying in their homes longer in response (and developers are slowing down dramatically), so values should stabilize and even increase soon.

 

This credit crunch issue is really only directly effecting those with bad credit, those who were over-leveraged, and the mortgage industry.

 

Patience.

I hate to say it, but I'm probably about 3-4 years away from actually being able to purchase a home because I'll finally be done with the Ph.D. and looking for something tenure track...and I couldn't be happier about the timing of this. Home price shifts usually take years to work their way entirely through the market and to hit everywhere, and this one will probably be no different, so with a little bit of luck, I'll be able to hop in at the bottom.

 

Also, I will note one other thing...while the credit crunch is only directly hitting those groups you mention, the real risk has always been in the indirect results of it. An awful lot of the recent economic expansion has been done on the expansion of credit; real wages have barely changed in the last 6 years or so since the dot com bubble burst, but consumer spending has kept going up and up and up, and so much of that has been done because of the easy access to low interest credit. Something like 10-12% of the economy I believe directly deals with home sales, construction, etc., and then beyond that, you have the people taking out equity to purchase new items, new appliances, new things for the home, etc., and if this crunch really winds up finally contracting the credit market a bit, it might well finally be the thing that slows down the consumer spending binge.

Edited August 16, 2007 by Balta1701

[kapkomet]

LINK

 

LINK

 

LINK

OMG! THE WORLD IS FALLING! OMG!

 

You're something else. Everything has to be negative spew. The constant focus - the laser like intensity for negative news must leave you in such a bright, cheery mood every day. We really need to become a socialist nation and have our government give us EVERYTHING so there's no incentive to grow ourselves. We need to insulate ourselves from all other nations. NO FREE TRADE! NO CHEAP GOODS FROM CHINA! NO CARS! (I know you don't have one - which is kind of cool actually, but back to my hyperbolic post). I want to be a mindless drone so I don't have to worry about how BAD things are every day. WHAT AM I GOING TO DO?!?

 

So it's slowing. So what? It's still a pretty good economy all things considered. The housing market is "dragging" the economy... WOOOOOOO, IT's HORRIBLE! IT'S THE END OF THE WORLD! OMG!!!

 

*sigh*

 

[kapkomet]

I hate to say it, but I'm probably about 3-4 years away from actually being able to purchase a home because I'll finally be done with the Ph.D. and looking for something tenure track...and I couldn't be happier about the timing of this. Home price shifts usually take years to work their way entirely through the market and to hit everywhere, and this one will probably be no different, so with a little bit of luck, I'll be able to hop in at the bottom.

 

Also, I will note one other thing...while the credit crunch is only directly hitting those groups you mention, the real risk has always been in the indirect results of it. An awful lot of the recent economic expansion has been done on the expansion of credit; real wages have barely changed in the last 6 years or so since the dot com bubble burst, but consumer spending has kept going up and up and up, and so much of that has been done because of the easy access to low interest credit. Something like 10-12% of the economy I believe directly deals with home sales, construction, etc., and then beyond that, you have the people taking out equity to purchase new items, new appliances, new things for the home, etc., and if this crunch really winds up finally contracting the credit market a bit, it might well finally be the thing that slows down the consumer spending binge.

That's true. I also don't think that's a bad thing - if the overall health of the economic picture trues itself up into more of a more traditional model, if you will. Everyone will be better off.

 

[NorthSideSox72]

I hate to say it, but I'm probably about 3-4 years away from actually being able to purchase a home because I'll finally be done with the Ph.D. and looking for something tenure track...and I couldn't be happier about the timing of this. Home price shifts usually take years to work their way entirely through the market and to hit everywhere, and this one will probably be no different, so with a little bit of luck, I'll be able to hop in at the bottom.

 

Also, I will note one other thing...while the credit crunch is only directly hitting those groups you mention, the real risk has always been in the indirect results of it. An awful lot of the recent economic expansion has been done on the expansion of credit; real wages have barely changed in the last 6 years or so since the dot com bubble burst, but consumer spending has kept going up and up and up, and so much of that has been done because of the easy access to low interest credit. Something like 10-12% of the economy I believe directly deals with home sales, construction, etc., and then beyond that, you have the people taking out equity to purchase new items, new appliances, new things for the home, etc., and if this crunch really winds up finally contracting the credit market a bit, it might well finally be the thing that slows down the consumer spending binge.

Oh I agree about the artificially strong recovery from the 02-03 recession being fueled by equity cash - I've even said that in here multiple times before, as I am sure you know (though some disagree). And you are right, a big chunk of the economy is housing related.

 

I'm just pointing out that if you have been smart with your money, and as long as you aren't employed in the housing industry, you might actually make out pretty well the next few years. I mean, as far as I can see, we appear to be looking at a trend of housing prices bottoming before a recovery of some degree (as you mention), and after this major correction in the markets, we'll probably see stability at least for a while, before an eventual increase (just a question of when). So for those of us thinking long term, this is a buying opportunity.

 

By the way, be careful of that California real estate. That market was (and in some places still is) absurdly overinflated, and I'd be very, very cautious about how and where you invest your real estate dollars.

 

[mr_genius]

I hate to say it, but I'm probably about 3-4 years away from actually being able to purchase a home because I'll finally be done with the Ph.D. and looking for something tenure track...and I couldn't be happier about the timing of this. Home price shifts usually take years to work their way entirely through the market and to hit everywhere, and this one will probably be no different, so with a little bit of luck, I'll be able to hop in at the bottom.

 

 

There needed to be a correction, housing prices were way too high. And you are correct, there are going to be a lot of good deals out there due to foreclosures and such.

Edited August 16, 2007 by mr_genius

[NorthSideSox72]

Wow. Major indices have now regained all their day's losses, and are now up around a half percent on the day (after being down as much as 2.5%).

 

People running the VIX desks must be having a field day. Same for the CDS markets lately.

 

[southsider2k5]

12600 is the 10% official Bear market. We have to get down there and test that area first before you can really tell if this selloff has legs, or is just looking for the technical correction to get it out of the way.

 

Well you guys should have just jumped back here for the Bear numbers. We hit 12600 hard twice today. The first time it ran about 100 points in a heartbeat. The second time it didn't really have legs like the first time. From a technical standpoint boucing off of offical correction territory twice establishes a nice resistance point, and it also is a good mental victory to rally that hard off of the lows, and basically close at the highs. I think we might have already seen the bottom.

[THEWOOD]

Well you guys should have just jumped back here for the Bear numbers. We hit 12600 hard twice today. The first time it ran about 100 points in a heartbeat. The second time it didn't really have legs like the first time. From a technical standpoint boucing off of offical correction territory twice establishes a nice resistance point, and it also is a good mental victory to rally that hard off of the lows, and basically close at the highs. I think we might have already seen the bottom.

 

Nikkei down 874 points overnight. Biggest one day loss since 2000. Should be an interesting day for US markets. Futures are getting smacked hard right now.

[kapkomet]

The volitility is the price you pay for easy money - I can't stress that enough.

 

If you look at the amount of $$ pumped into the financial system, it's hardcore going to effect the value of the dollar, which is what the foreign markets are responding to. The dollar was already low going into this, now it has the potential to be even lower.

[kapkomet]

The Fed cut the discount rate (not the federal funds rate) this morning by a half point... everyone's starting to really panic.

[NorthSideSox72]

The Fed cut the discount rate (not the federal funds rate) this morning by a half point... everyone's starting to really panic.

And now that everyone is panicking, the markets are rallying. S&P up over 2% so far.

 

[kapkomet]

And now that everyone is panicking, the markets are rallying. S&P up over 2% so far.

 

The cut to the discount rate obviously is what Wall Street wanted.