Glad I didn't have any money in the market

Crashby · Feb 20, 2009

I do a bit of financial writing... my thoughts from today:

A possible bottom in the market

Today marked the perfect intersection between the trend line formed between 1990 and 1994 and the market close today. Why is this important?

All we have heard about for the past decade or so was bubble this and bubble that. Bubbles refer to artificially inflated stuff- be it tulips in the Dutch Golden Age (1630s), dot com/techs, or housing/credit/financials this most recent, I dub the living beyond our means bubble. The last time we had a sustained, fairly valuated, consistent and normal equity growth ended in 1994. So, extended to today, we are back to our more natural trend line after 14 years of remarkable volatility.

I'm not saying by any means that this will be the absolute bottom, but Washington is beholden to do the right thing next week. If Geithner ponys up and comes up with a sane and logical approach to attack the banking crisis with a focus on segmenting toxic assets, stays away from nationalization, and if further clarity is offered for the mortgage rescue plan, it could mark a point where we see some support here and lays a decent foundation for a move higher. If the DC area fails us, lower we fall. In short, I see at least a bear market rally starting here in the few days, but watch your positions closely and be prepared to exit quickly on a break lower.

????? · Feb 20, 2009

Jeremy R said:
Does your tits hang low.....
when the market drops so low.....
Are they really sagging down......
when your funds are not sound......
Do they lay down in your lap.....
when the Dow takes a crap.....

Does your tits haanng looooow?!

Oh man... that takes it.

Ciaran · Feb 20, 2009

stinkyboy said:
Even her bra collapsed.

OK, that was funny. :clap:

crono35 · Feb 21, 2009

Interesting observation. I always wondered if we're actually in a depression as opposed to simply coming down from an outlying period of unregulated growth.

Crashby said:
I do a bit of financial writing... my thoughts from today:

A possible bottom in the market

Today marked the perfect intersection between the trend line formed between 1990 and 1994 and the market close today. Why is this important?

All we have heard about for the past decade or so was bubble this and bubble that. Bubbles refer to artificially inflated stuff- be it tulips in the Dutch Golden Age (1630s), dot com/techs, or housing/credit/financials this most recent, I dub the living beyond our means bubble. The last time we had a sustained, fairly valuated, consistent and normal equity growth ended in 1994. So, extended to today, we are back to our more natural trend line after 14 years of remarkable volatility.

I'm not saying by any means that this will be the absolute bottom, but Washington is beholden to do the right thing next week. If Geithner ponys up and comes up with a sane and logical approach to attack the banking crisis with a focus on segmenting toxic assets, stays away from nationalization, and if further clarity is offered for the mortgage rescue plan, it could mark a point where we see some support here and lays a decent foundation for a move higher. If the DC area fails us, lower we fall. In short, I see at least a bear market rally starting here in the few days, but watch your positions closely and be prepared to exit quickly on a break lower.

Sherpa · Feb 21, 2009

Crashby said:
Ohhhh so close...

I am actually seeing some positives after today that might signal some significant bottoming in here...
next week should be the tell... I exited my primary short positions today that I have held over the past couple months.

Hope everyone made it to this point ok...

I'll still send you $20, but I've become more bearish on the situation. I think well see the S&P 500 in the 600's and Dow in the low 6000's, even not lower. The government is NOT helping, and to quote one of my professors, "The best and the brightest are NOT in the government."

Crashby · Feb 21, 2009

Sherpa said:
I'll still send you $20, but I've become more bearish on the situation. I think well see the S&P 500 in the 600's and Dow in the low 6000's, even not lower. The government is NOT helping, and to quote one of my professors, "The best and the brightest are NOT in the government."

If we do get that low my friend, promise me you'll keep the $20, and take someone special out for dessert or a couple drinks - spend some time enjoying the simpler things in life - it may be a concept we might all have to get used to again...

Best,

Crashby

Toshi · Feb 21, 2009

Crashby said:
If Geithner ponys up and comes up with a sane and logical approach to attack the banking crisis with a focus on segmenting toxic assets, stays away from nationalization

if banks are insolvent then they should be nationalized and forged anew. having taxpayers assume all of the liability on their (horrible) balance sheets in order for them to limp along is absolutely insane.

Crashby · Feb 21, 2009

Toshi said:
if banks are insolvent then they should be nationalized and forged anew. having taxpayers assume all of the liability on their (horrible) balance sheets in order for them to limp along is absolutely insane.

I can see arguments from both sides, but my main stance is against socialism. They should be allowed to fail like any other business that cannot manage it's assets properly. Don't even get me started on the bailout of the automakers... really really think about it... the GOVERNMENT is bailing out a company that makes CARS!! :bonk:

Yes, yes, I understand that if major banks go down and the 1 or 2 car companies die, unemployment will spike and the dep... errr recession will last a couple years longer, but I promise you that the founding fathers of our country are rolling over in their graves over what is happening to our 'free' country...

Sherpa · Feb 21, 2009

Crashby said:
I can see arguments from both sides, but my main stance is against socialism. They should be allowed to fail like any other business that cannot manage it's assets properly. Don't even get me started on the bailout of the automakers... really really think about it... the GOVERNMENT is bailing out a company that makes CARS!!

Yes, yes, I understand that if major banks go down and the 1 or 2 car companies die, unemployment will spike and the dep... errr recession will last a couple years longer, but I promise you that the founding fathers of our country are rolling over in their graves over what is happening to our 'free' country...

I really can only see one side, and that is to let the banks fail.

dante · Feb 21, 2009

Crashby said:
I can see arguments from both sides, but my main stance is against socialism. They should be allowed to fail like any other business that cannot manage it's assets properly.

Is a short-term nationalization (think Sweden/Norway) that much different than bankruptcy, other than the fact that there's a little more left standing at the end? Wholesale bank failures don't work (see the market during the Lehman Brother's collapse), and healthy banks buying unhealthy banks doesn't seem to work either (see how poisonous Merrill and WaMu were)... Currently I'm not convinced that ANY of our banks are that healthy, and I am reasonably confident that the majority of them are simply dead-men walking right now. Unless the government is prepared to step up with direct loans to people and businesses to make up for the lost revenue, or to "over-capitalize" smaller, healthy regional banks in order to get them to offer additional lending, I see a massive number of bank failures as potentially devastating to the economy right now. Fighting against socialism is commendable, but at what expense?

Austin Bike · Feb 21, 2009

As much as I am not a fan of socialism and nationalizing things, a bigger crime is bailing out these guys and NOT nationalizing them.

Essentially what you are saying is "nationalizing banks is wrong. I'd rather give my money to the people who brought it down and then not have a say in the matter."

Nationalizing is wrong when the government just steps in and takes things, but it is worse if they take our money, bail out private industry and then don't give the people a say in things.

After all, the banks didn't have to take the money, they could have turned it down.

Crashby · Feb 21, 2009

We really are at a precipice here... I think that next week will be the days in which Obama instills his true legacy. If he truly lives up to his message of "CHANGE", he must act and show this nation that he is up for the task.

Sherpa · Feb 21, 2009

dante said:
Fighting against socialism is commendable, but at what expense?

Capitalism and the end of moral hazard

Austin Bike · Feb 21, 2009

Wife was freaking out this morning that our portfolio is down 6.75% for the year already. Until I reminded her that the Dow and the S&P are down 17-18% for the year.

DirtyMike · Feb 21, 2009

Couple thoughts I have..... And I am no money market expert, but these are things that make sense for me.

First, lets be down right brutal, For someone to make money, Someone else will be losing money.

Second, If your not retiring in the next ten years....... stop looking at how much monetary value your 401 is worth. Its a long term investment, and if your well diversified, some will lose, some will hit, but the overall is when you retire, so stop looking at total value, look to what your buying up now, and look to see what its going to be worth in 25 years.

Third, the more people that panic, and pull there money out of the market, the lower its going to get. If there is no money, there is no market.

fourth..... BAILOUTS ARE BULL****.....people over financed, over pushed, and lived for the moment, not looking out for what was to come. I mean seriously.... a Stated income<No proof needed> Home loan???? WTF were banks thinking. How could they not see that ending badly.

Fourth, I am taking advantage.... I bought a home while the market is down. I make enough to be able to afford the home for the price I bought it for, and I am not going anywhere at my place of employment.

The country has been through worse, we will get through this as well.

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Glad I didn't have any money in the market

Crashby

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?????

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