Phew! Crisis Over, Back to Work, Everyone. [Archive]

Puppycow

18th March 2009, 04:40 PM

I hope it's the first sign of a recovery and the bottom is behind us, but it seems more likely that it's a dead cat bounce, as The Atheist suggested in another thread.

The Fed is buying $300 billion of long-term debt (http://www.bloomberg.com/apps/news?pid=20601087&sid=aeP8.XnGrN64&refer=home)

With today’s move, the Fed has committed to buy or loan against everything from corporate debt, mortgages and consumer loans to government debt, after cutting its benchmark interest rate to zero failed to end the credit crunch. The unprecedented campaign comes after a worsening recession sent the unemployment rate up to a quarter-century high of 8.1 percent.

“The FOMC may believe the economy is nowhere near a bottom,” William Poole, former president of the St. Louis Fed, said in an interview today with Bloomberg News. “The Fed is engaging in a massive quantitative easing.”

Quantitative easing refers to using injections of funds into the economy as the main policy tool. Poole is now a senior economic adviser to Merk Investments LLC in Palo Alto, California, and a contributor to Bloomberg News.

Yields Plunge

Benchmark 10-year note yields plunged to 2.48 percent at 4:40 p.m. in New York, from 3.01 percent late yesterday, the biggest decline since records dating from 1962. The Standard & Poor’s 500 Stock Index rose 2.1 percent to 794.35 at the close.

“They wanted to shock the market and they succeeded,” said Ajay Rajadhyaksha, the head of fixed-income strategy at Barclays Capital in New York. If the Fed’s action “succeeds in driving primary mortgage rates” to about 4.25 percent to 4.5 percent, that would increase “affordability, which will in turn lead to increased housing demand.”

Central banks around the world are grappling with how to formulate policy with target interest rates near zero. The Bank of England is buying government bonds and corporate debt, the Bank of Japan is snapping up government notes and making subordinated loans to banks, and the Swiss National Bank is intervening to weaken the franc.

Chairman Ben S. Bernanke is employing strategies to stamp out the risk of deflation that he first laid out as a Fed governor in 2002, when he listed purchases of longer-dated Treasuries as an option.

Inflation Subdued

While buying government debt has, in some historical episodes, been associated with causing inflation to soar, Fed officials are confident that consumer prices will remain in check given “weak” demand.

The FOMC said today that inflation could “persist for a time” below their preferred level. A government report today showed that consumer prices, excluding food and energy costs, rose 1.8 percent in February from a year before, compared with an average rate of 2.2 percent over the past decade.

Bernanke is trying to prevent the credit contraction from deepening what already may be the worst recession in 60 years. U.S. employers have eliminated 4.4 million jobs since the start of last year. Industrial production fell 1.4 percent in February, the fourth consecutive decline, while factory capacity in use hit 70.9 percent, matching the lowest level on record.

‘Gradual Resumption’

“Information received since the Federal Open Market Committee met in January indicates that the economy continues to contract,” the FOMC said in the statement. “The committee anticipates that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth.”

The global economy will contract this year for the first time since World War II, the World Bank predicts, forcing central banks to keep pumping money into their economies when conventional interest rates are at, or close to, zero.

The Fed has cut the benchmark rate from 5.25 percent, beginning in September 2007, as credit froze and the economy buckled. Policy makers are now focused on how to further channel money to the economy. The Fed has already committed to buying $600 billion of mortgage-backed securities and bonds sold by government-sponsored housing agencies.

ServiceSoon

18th March 2009, 04:50 PM

It's all about perception. So ya, all is well ;)

JihadJane

18th March 2009, 05:10 PM

US national debt hit $11 trillion on Monday.

hamelekim

19th March 2009, 12:51 AM

The stock market doubled during the great depression. I wouldn't look too positively on an increase in the markets.

The Atheist

19th March 2009, 11:12 AM

There are the odd other, more important, moves happening as well.

The stock market is an indicator, not the be-all. It just happens to be one of the most widely-known indicators, so gets used a lot.

hamelekim

19th March 2009, 06:31 PM

There are the odd other, more important, moves happening as well.

The stock market is an indicator, not the be-all. It just happens to be one of the most widely-known indicators, so gets used a lot.

Considering they switch out companies when they do poorly it isn't a great indicator. They can just throw some good companies in there and take the bad ones out to improve the outlooks, for those who base economic health on the stock market.

As I said, the stock market doubled during the great depression. We won't see the levels of the last 5 years going forward, not for a long time, unless a new bubble is found to prop us up some more. I don't think that the world economy could handle another bubble as big or bigger than this one.

We already had two in a row, I think a third will kill it outright, if it doesn't die now.

Soapy Sam

19th March 2009, 06:46 PM

I fear we ain't seen nothin' yet.

The Atheist

19th March 2009, 07:44 PM

Considering they switch out companies when they do poorly it isn't a great indicator.

They don't "switch" companies at all - the Dow is simply the top 30 companies by formula, so if one drops out, another similar one will replace it. You're trying to make it sound like a selection process, which would be wrong.

As I said, the stock market doubled during the great depression.

Yes, but given that that crash was over 80%, while the current one is just under half that fall, if it doubles now, it would be back to over 14,000, while a doubling at 80% down is still a 60% fall. Your analogies are very weak.

I fear we ain't seen nothin' yet.

I wouldn't deny the possibility, and it'd help my businesses if you're right, but I still hope you're wrong.

Kestrel

19th March 2009, 11:18 PM

They don't "switch" companies at all - the Dow is simply the top 30 companies by formula, so if one drops out, another similar one will replace it. You're trying to make it sound like a selection process, which would be wrong.

A formula is used to select the stocks in the S&P 500.

The DJIA is a set of 30 "blue chip" stocks selected by humans.

timhau

19th March 2009, 11:50 PM

The DJIA is a set of 30 "blue chip" stocks selected by humans.

Exactly. And right now, it includes such small cap companies as GM.

The Atheist

20th March 2009, 12:08 AM

A formula is used to select the stocks in the S&P 500.

The DJIA is a set of 30 "blue chip" stocks selected by humans.

Uh, yeah, by a formula.

Exactly. And right now, it includes such small cap companies as GM.

The trouble is that they use averages over time.

If you have a look, the changes in the Dow, S&P and wider market are all pretty similar.

If I was going to be pedantic in terms of share markets, I'd use the MSCI.

timhau

20th March 2009, 12:33 AM

Uh, yeah, by a formula.

What formula? This is from the press release (http://www.djindexes.com/mdsidx/html/pressrelease/press_hist2008.html#20080211) given in connection with the most recent change in the composition of the DJIA:

John A. Prestbo, editor of Dow Jones Indexes, said, "There are no pre-determined criteria for a stock to be added or deleted, though we intend that all components be established U.S. companies that are leaders in their industries."

The Atheist

20th March 2009, 09:56 AM

What formula? This is from the press release (http://www.djindexes.com/mdsidx/html/pressrelease/press_hist2008.html#20080211) given in connection with the most recent change in the composition of the DJIA:

Yes, and if you'd copied some more of the quote:

"As usual when we make any change we review all the stocks," Mr. Brauchli said. "In doing so, we saw that the financials industry was under-represented – notwithstanding the current turbulence – and that the oil and gas industry’s growing importance to the world economy called for another representative to join ExxonMobil Corp," he said.

...you'd have had no need to bother with the first bit. It isn't a written-down formula, but there are clearly selection criteria, after which the indices are adjusted to reflect parity.

hamelekim

20th March 2009, 11:14 AM

Yes, and if you'd copied some more of the quote:

...you'd have had no need to bother with the first bit. It isn't a written-down formula, but there are clearly selection criteria, after which the indices are adjusted to reflect parity.
Even if it was a formula that they used, how does that make it better than picking the best stocks at whatever point?

Also, please explain how it being a formula somehow makes the Dow a good indicator of how the entire economy is doing.

Thirdly, that quote doesn't mention a formula, and you don't know that they even use a formula at all times.

After all, right now they are not dropping some companies from the Dow even though they should be, based on their pricing.

So that right there shows that they don't always follow their "formula" whatever that is.

In the end you cannot use the Dow as a measure of the overall economy. It may be a small indicator to some degree, but it doesn't tell you anywhere near the entire picture.

The Dry Dock index would be a better measure of economic health.

The Atheist

20th March 2009, 11:20 AM

In the end you cannot use the Dow as a measure of the overall economy.

You really can see why the term "straw man" is bandied about on this forum so much, because I have never, ever suggested that.

In my OP, used the Dow as one of several indicators, then I followed it up by saying this:

The stock market is an indicator, not the be-all. It just happens to be one of the most widely-known indicators, so gets used a lot.

which shows that you're arguing against yourself.

hamelekim

20th March 2009, 01:21 PM

You really can see why the term "straw man" is bandied about on this forum so much, because I have never, ever suggested that.

In my OP, used the Dow as one of several indicators, then I followed it up by saying this:

which shows that you're arguing against yourself.

No, I'm agreeing with myself, and I'm arguing against the general idea of using the Dow as the only indicator, which many people do.

dudalb

20th March 2009, 02:14 PM

I am getting the impression that a few people here WANT a total collapse of the economy and/or the end of modern industrail civilization.

hamelekim

20th March 2009, 05:25 PM

I am getting the impression that a few people here WANT a total collapse of the economy and/or the end of modern industrail civilization.

I think many people are jaded with the current system.

If you look at wealth distribution since 1970 the gap has been growing. We are approaching extreme wealth gaps that lead to revolution.

Wages are actually below, adjusted for inflation, the 1970's wage numbers for men.

If we are supposed to have all this wealth, why is it that we are struggling to make ends meat? Why is it that it takes two people to own a house and car? It used to be that one person could feed and cloth an entire family back in the 50's.

We have lost the industrial base that had the real wealth and replaced it with cheap service jobs which make half the amount of money, or less.

The western world is headed for disaster and many people see and feel it.

The ship is going down due to the greed of those in the banking and corporate world.

mikehh

20th March 2009, 05:50 PM

I think many people are jaded with the current system.

If you look at wealth distribution since 1970 the gap has been growing. We are approaching extreme wealth gaps that lead to revolution.

Wages are actually below, adjusted for inflation, the 1970's wage numbers for men.

If we are supposed to have all this wealth, why is it that we are struggling to make ends meat? Why is it that it takes two people to own a house and car? It used to be that one person could feed and cloth an entire family back in the 50's.

We have lost the industrial base that had the real wealth and replaced it with cheap service jobs which make half the amount of money, or less.

The western world is headed for disaster and many people see and feel it.

The ship is going down due to the greed of those in the banking and corporate world.

why are you struggling to make ends meet?? Im not - i choose to live within my means and study my investments. The only reason the ship would be going down is because people think everything should be handed to them

"the income gap is growing" if thats an issue to you than do whatever it takes to hit the top. What are you doing to change things. There are opportunities right now. If you were in the forex market against the dollar on wed you would have made at the smallest trade level, hundreds of dollars in a few hours.

Im sorry i just hear a bunch of complaining and no solutions being offered except "the ship is sinking"

That is the attitude that will "sink the ship"

The_Animus

20th March 2009, 05:53 PM

I am getting the impression that a few people here WANT a total collapse of the economy and/or the end of modern industrail civilization.

Now the time is near,
Dr. Horrible is here,
To make you quake with fear!

It's not really that I want total collapse, it's that I want our resources, land, and wealth used more wisely and spread more evenly among workers. The entire human population needs to start planning and instituting the technology we have to benefit everyone. Clean, environmentally friendly and efficient housing, food, water, power, and transportation for all! We need to plan for how we want the world to be 50-100 years from now. Not plan to make as much money as possible this year so that we can get a shiny corporate jet and a 3rd summer home.

The Atheist

20th March 2009, 10:31 PM

I am getting the impression that a few people here WANT a total collapse of the economy and/or the end of modern industrail civilization.

I've seen a few people who are indeed hoping it's the end of civilisation.

They are, however, confined almost entirely to survivalist idiots who have 1000 guns and 1,000,000 rounds each who see themselves as the new rulers of a diminished planet.

I suspect that if Armageddon happens, most of those types will end up shooting each other anyway.

a_unique_person

20th March 2009, 11:32 PM

Dow stays well above 7000 with little pressure downwards; S&P 12% edit: make that 17% up and no sign of selling; LIBOR dropping fast from last week's highs; treasuries drop fifty big ones as the world celebrates the biggest yield fall since 1962 and the US dollar crashes spectacularly. The dollar, especially having impeccable timing with OPEC's refusal to cut production further last week.

Maybe the Illuminati do really run it all!

Are we over it?

There will certainly be continuing fallout and further job losses, but I do think we might be past the immediate crisis and it offers a chance that there could be growth in the last 1/4 of 2009 after all. (Especially given how far down it's going to start from, I think that's quite likely if there are no more seismic problems unearthed.)

The Bernanke has just said we only missed a Depression by a whisker, and the IMF is predicting shrinking economies globally. Crises not over, but Share Prices just getting down to an amount that approximates rational.

hamelekim

20th March 2009, 11:34 PM

why are you struggling to make ends meet?? Im not - i choose to live within my means and study my investments. The only reason the ship would be going down is because people think everything should be handed to them

"the income gap is growing" if thats an issue to you than do whatever it takes to hit the top. What are you doing to change things. There are opportunities right now. If you were in the forex market against the dollar on wed you would have made at the smallest trade level, hundreds of dollars in a few hours.

Im sorry i just hear a bunch of complaining and no solutions being offered except "the ship is sinking"

That is the attitude that will "sink the ship"

It seems to me that you fully support this system and have a survival of the fittest mentality which I completely disagree with.

I'm not struggling to make ends meat. I was talking about in general. I don't have a family or a house that I have to put money towards. But fundamentally corporations won out and we are headed back to the pre union era where workers were exploited by the business owners.

If you support this, fine, but I would suggest that you are an immoral human if that is the case.

We should be working towards an egalitarian society, not towards greater inequality.

It also sounds like you think everyone should be involved in the market, including social security perhaps?

As though the masses have the same information that the rich billionaires and hedge funds have?

Consider that these rich men constantly manipulate the markets to make a profit, which includes misdirecting the masses, but I'm sure you think that's the masses fault, right?

hamelekim

20th March 2009, 11:36 PM

I've seen a few people who are indeed hoping it's the end of civilisation.

They are, however, confined almost entirely to survivalist idiots who have 1000 guns and 1,000,000 rounds each who see themselves as the new rulers of a diminished planet.

I suspect that if Armageddon happens, most of those types will end up shooting each other anyway.

You can place most religious fundamentalists in that category as well.

I don't see how they would shoot each other though, why would you argue that?

What is your basis for that argument?

timhau

21st March 2009, 12:05 AM

It isn't a written-down formula, but there are clearly selection criteria, after which the indices are adjusted to reflect parity.

I wasn't saying they had no criteria, but just because they have criteria, doesn't mean they have a formula. There are no numerical goals you have to meet to become eligible for the DJIA (and neither are there numerical goals you have to meet to keep the company there -- if there were, GM and Citibank would be long gone by now).

The Atheist

21st March 2009, 10:07 AM

I don't see how they would shoot each other though, why would you argue that?

What is your basis for that argument?

Because they're all stupid and have guns.

Do you never make light-hearted comments?

I wasn't saying they had no criteria, but just because they have criteria, doesn't mean they have a formula. There are no numerical goals you have to meet to become eligible for the DJIA (and neither are there numerical goals you have to meet to keep the company there -- if there were, GM and Citibank would be long gone by now).

Do you follow golf? It provides a good analogy, because while golf's formula is set in stone, they work on a 2-year average, so a player can be missing cut after cut and still be number one. The Dow also takes a long-term average aspect.

I imagine the reason changes aren't made more frequently is simply the amount of work involved in selecting replacements, but there will be changes within the next year or two to reflect new markets caps. GM might not exist.

hamelekim

21st March 2009, 02:02 PM

Because they're all stupid and have guns.

Do you never make light-hearted comments?

Stupid according to you.

There are problems with all measures of intelligence including the IQ test.

There are also various types of intelligence. You might have a genius in math but they have zero social skills and cannot hold a job. All their "genius" is wasted because no one will deal with them and they are ostracized.

You didn't make it seems like a light hearted comment, I think you really believe it, that anyone who prepares for the worst is somehow less intelligent than people who just go along with society as though nothing will happen that they might need to prepare for.

applecorped

21st March 2009, 02:04 PM

Better safe then sorry.

The Atheist

21st March 2009, 10:37 PM

There are also various types of intelligence. You might have a genius in math but they have zero social skills and cannot hold a job. All their "genius" is wasted because no one will deal with them and they are ostracized.

Quite right, and there are also many types of idiot.

Some post here.

You didn't make it seems like a light hearted comment, I think you really believe it,...

Ah, you're a remote mind-reader. You know Randi has a mio to give away for a successful mind-reading test?

Probably won't help you much, since you're wrong.

...that anyone who prepares for the worst is somehow less intelligent than people who just go along with society as though nothing will happen that they might need to prepare for.

What an awful dichotomy you've proposed.

You're not very good at this, are you? Assumptions followed up by a simple logical fallacy. There are a wide range of options between doing nothing and "preparing for the worst".

But you're right on one thing; just as I told people they were dickheads for stocking up on emergency supplies during the Y2K rubbish and told other people they were idiots for stocking up on Tamiflu in case of H5N1, I'd happily tell anyone working to a survival plan that they are idiots.

And, the silliest part is, I've already noted in several places that if you want to think about surviving the death of civilsation, don't stock up on guns as they can't be replaced, plus they don't react well to life under the stars, which will be a necessity if global armageddon strikes.

hamelekim

21st March 2009, 11:30 PM

Quite right, and there are also many types of idiot.

Some post here.

Ah, you're a remote mind-reader. You know Randi has a mio to give away for a successful mind-reading test?

Probably won't help you much, since you're wrong.

What an awful dichotomy you've proposed.

You're not very good at this, are you? Assumptions followed up by a simple logical fallacy. There are a wide range of options between doing nothing and "preparing for the worst".

But you're right on one thing; just as I told people they were dickheads for stocking up on emergency supplies during the Y2K rubbish and told other people they were idiots for stocking up on Tamiflu in case of H5N1, I'd happily tell anyone working to a survival plan that they are idiots.

And, the silliest part is, I've already noted in several places that if you want to think about surviving the death of civilsation, don't stock up on guns as they can't be replaced, plus they don't react well to life under the stars, which will be a necessity if global armageddon strikes.

So people who live in hurricane prone zones shouldn't be prepared for power outages, lack of drinking water, lack of food, etc...?

As for preparing for economic troubles. You should always be prepared for disasters. Look at Argentina and Iceland for examples where people who weren't prepared had a really hard time surviving.

Grocery stores only have food for 3 days, then it's gone. What happens if the water supply goes bad?

I know that in Vancouver a couple of years back there was a huge turbidity problem and the bottled water sold out of all the stores.

If you had a water filter you would have had clean water without particles in it. Otherwise you had to boil your water.

I'm sorry but I completely disagree with you on being prepared. You should prepare for the worst and hope for the best, always.

I hope you aren't this much of an ******* irl.

The Atheist

22nd March 2009, 12:06 AM

So people who live in hurricane prone zones shouldn't be prepared for power outages, lack of drinking water, lack of food, etc...?

Are you related to CFLarsen?

I ask because you seem to be moving from one strawman to the next. Hey, I don't mind, but I'd prefer to argue things I've said rather than things I haven't.

You're completely incapable of understanding either humour or simple statements, and every word of your post shows that.

I hope you aren't this much of an ******* irl.

Much more so, I can guarantee you. Being humiliated on the internet by making an idiot of yourself anonymously is one thing, but being hung out to dry in public is a different thing entirely. Luckily for you, it's only teh internet.

hamelekim

22nd March 2009, 12:21 AM

Are you related to CFLarsen?

I ask because you seem to be moving from one strawman to the next. Hey, I don't mind, but I'd prefer to argue things I've said rather than things I haven't.

You're completely incapable of understanding either humour or simple statements, and every word of your post shows that.

Much more so, I can guarantee you. Being humiliated on the internet by making an idiot of yourself anonymously is one thing, but being hung out to dry in public is a different thing entirely. Luckily for you, it's only teh internet.

Content in violation of Rule 12 deleted

Attack the argument, not the arguer.

lionking

23rd March 2009, 11:15 PM

The rally strengthens across the world. The climb from the bottom may have just begun.

timhau

23rd March 2009, 11:50 PM

S&P 500 climbs 7%. The good times are here again!

... until about next Monday or so. Maybe. I still have some disposable money to throw into the stock market; buy now, or sit on the cash and hope that the rally stops at the realization that we're all still neck deep in economic poo?

latent aaaack

24th March 2009, 12:29 AM

Aren't there still numerous massive bubbles coming down the pike that are comparable to the housing bubble? Like the credit card bubble?

The Atheist

24th March 2009, 12:33 AM

The rally strengthens across the world. The climb from the bottom may have just begun.

Maybe, with a capital M at this stage.

S&P 500 climbs 7%. The good times are here again!

... until about next Monday or so. Maybe. I still have some disposable money to throw into the stock market; buy now, or sit on the cash and hope that the rally stops at the realization that we're all still neck deep in economic poo?

Jesus, a very tough one. I'm hearing lots of "Suckers' Rally" calls. The underlying problems aren't going away, growth is crocked, house prices are still falling worldwide - with a few notable exceptions.

Even if this is the start of the rally - which along with everyone else, I expect to be slow and painful - the market's moved too far too fast.

I cannot see how the S&P, which was over-valued on PEs last week is suddenly a great buy. It must come back somewhat from today's mark.

What are the volumes like? I haven't taken much notice of anything barring currency movements in the past few days and they've been immense. The Kiwi has appreciated over 15% in a week against the USD. I know some people who have been on the right side of that.

Not me, unfortunately.

The Atheist

24th March 2009, 01:57 AM

Aren't there still numerous massive bubbles coming down the pike that are comparable to the housing bubble? Like the credit card bubble?

Dunno whether it's reasonable to equate credit cards with houses, but there certainly could be some serious losses. I wouldn't lose too much sleep, however; there's no leveraging in credit cards and the usurious interest rates will keep the CEOs warm.

____________________________

Just back to share prices, I see futures for tomorrow have fallen already, so the market will open somewhat down - there just has to be some profit-taking if nothing else.

timhau

24th March 2009, 02:34 AM

Just back to share prices, I see futures for tomorrow have fallen already, so the market will open somewhat down - there just has to be some profit-taking if nothing else.

Yeah, and now that I look at some live quotes from the Helsinki Stock Exchange, I see that the ones I would've bought are actually either not moving much at all or slightly down. So I'll stay the course, wait for Q1/2009 reports, and maybe move in then.

latent aaaack

24th March 2009, 02:46 AM

All I can really muster for this subject is a justified argument from authority. David Smick is author of 'The World is Curved,' read about him here and in reviews of his book linked to on that site: http://www.theworldiscurved.com/TWIC_Author.html . The book was published in September of 2008 and has been called extremely prescient.

He says that he doesn't think this is a typical recession that we will soon recover from because he counts at least 8 bubbles that could explode.

Sub prime mortgage bubble - 1.5 trillion
Emerging market debt bubble - 5 trillion
Outstanding credit card debt - 2.5 trillion
Commercial real estate - 25 trillion
Foreign exchange derivatives - 56 trillion
Credit default swaps - 58 trillion
Commodities derivatives - 9 trillion
Government bond market bubble - the cutting of interest rates worldwide are making investors pour into all these countries bond markets. "What happens when the economy turns and we suddenly get a bout of inflation and you get a blood bath in those bond markets?"

He notes that Europe's exposure to emerging market debt is greater than the US's exposure to sub prime debt.

A worst case scenario would mean about 200 trillion dollars worth of financial exposure. For reference the world's GDP is 50 trillion. If only one or two of these bubbles burst then the global economy is back on its knees.

Gangularis

24th March 2009, 03:06 AM

Maybe the Illuminati do really run it all!

Are we over it?

In "The Obama deception" Alex Jones says they're going to restore a false confidence to the market so the middle class will dump the rest of their money in the market before they completely implode it.

Puppycow

25th March 2009, 07:31 AM

More unexpected good economic news:
An Unexpected Increase in Factory Orders (http://www.nytimes.com/2009/03/26/business/economy/26econ.html?hp)
In a glimmer of surprisingly upbeat economic data, manufacturing orders for goods like metals, machines and defense equipment rose last month for the first time after six months of declines, the government reported on Wednesday.

The Commerce Department reported that orders for durable goods rose 3.4 percent in February following a downwardly revised 7.3 percent drop in January. Orders for machinery, transportation equipment and computers and electronics rose.

The monthly gain was better than economists’ expectations of a 2.5 percent decline, and represented the latest in a series of less-than-terrible reports that have offered a break from months of relentlessly bad economic news.

On Monday, an industry group reported that sales of previously owned homes rose 5 percent in February, and the government reported on Tuesday that its barometer of home prices rose in January after 10 months of declines. Earlier this month, the government reported that consumer prices were stabilizing slightly, cooling fears of deflation, and that retail sales in February had fallen by less than expectations.

Also:
U.S. New-Home Sales Rose 4.7% to a 337,000 Pace in February (http://www.bloomberg.com/apps/news?pid=20601087&sid=aAZ4tL_FZ32w&refer=home)
March 25 (Bloomberg) -- Purchases of new homes in the U.S. unexpectedly rose in February from a record low as plummeting prices and cheaper mortgage rates lured some buyers.

Sales increased 4.7 percent to an annual pace of 337,000 after a 322,000 rate in January, the Commerce Department said today in Washington.
. . .
Economists forecast new home sales would drop to a 300,000 annual pace from an originally reported 309,000 rate in January, according to the median estimate in a Bloomberg survey of 65 economists.

And the Dow is up by 150 on the day so far. :D

timhau

25th March 2009, 10:34 AM

More unexpected good economic news:

...from the NWO! Resist! Resist!

And the Dow is up by 150 on the day so far. :D

See? It's a conspiracy! Improvements are never real -- only collapses are, especially the ones you never hear about.

:tinfoil

The Atheist

25th March 2009, 11:14 AM

And the Dow is up by 150 on the day so far. :D

Not now, though.

timhau

25th March 2009, 11:19 AM

Yeah, the volatility is just crazy again. I bought GE too early, probably missed Harley-Davidson (this year's low is 7.99, it's now trading at over 13), but Dow Chemicals isn't that far from very attractive levels. So... Go! Sell! Sell! Capitulation just around the corner!

Just thinking

26th March 2009, 01:13 PM

Has anyone kept an eye on the stock volume numbers (http://finance.yahoo.com/q/bc?s=%5EDJI&t=5d&l=off&z=m&q=l&c=) regarding this surge from 6500? It's quite low, indicating a very weak and/or fragile market economy.

timhau

26th March 2009, 02:01 PM

Is it? Am I reading this all wrong, because when I look at the 2-year chart, it seems like the volumes are higher now than they were in, say, the fall of 2007.

Just thinking

27th March 2009, 04:15 AM

timhau

27th March 2009, 05:57 AM

Same page, just go to the 2-year chart.

The Atheist

27th March 2009, 06:01 AM

The chart I linked to shows the scale numbers just barely above the base line across the week. Can you please link to where your numbers are from, as I can't seem to find an easy access to them besides the graph I just mentioned.

Yeah, I got that - it just looks like they've drawn the bottom line a little thicker than normal.

Very low volumes.

Just thinking

27th March 2009, 09:19 AM

Same page, just go to the 2-year chart.

Funny .... the two year chart won't load. The 5 year did, however, but the scale at the end seems too small to estimate. Is there a place where actual numbers are displayed?

The Atheist

30th March 2009, 11:14 AM

Looks like gravity found that dead cat after all.

Jesus, there are some ugly numbers around this morning.

timhau

30th March 2009, 10:58 PM

On the other hand, Monday's selling frenzy did not extend to today in Asian Markets -- the Hang Seng ended just barely higher than Monday's close, the Nikkei index was up by more than 1.5%. With about 7.5 hours to go until opening, US futures don't indicate panic either.

Edit: Whee. The Nikkei 225 was over +1.5% two hours before closing bell, but then plummeted and ended up almost as far in red. Interesting. US futures don't seem affected by this.

timhau

1st April 2009, 07:48 AM

This rally has some power. US futures were deep in the red all day, but now the three big Wall Street indexes are all green.

Curious observation: During the stock market slump of late February - early March, the Baltic Dry Index rose almost daily. I think it put together two rallies that lasted for 10+ days each, separated by a day or two of mild decline. Now, during the rally that looks like it just keeps on going, the BDI has slumped by about 25%; today was the 16th day in a row that it showed a decline.

Conclusions: None, really. The BDI is not the economic index to end all economic indexes, but neither is it meaningless.

The Atheist

1st April 2009, 10:59 AM

That would tend to indicate that small numbers of speculators are driving the sharemarket higher while actual trade is still very low, and declining.

Not good.

timhau

1st April 2009, 11:15 AM

Yeah, it does make this look like a bear market rally. But it's a remarkably resilient one -- Friday I could see as a profit-taking day, but Monday looked like the start of yet another panic, but now we're looking at two consecutive days of solid gains.

BTW, over here trading volumes are up. Not dramatically, but they're up from January and February.

The Atheist

1st April 2009, 11:23 AM

Still appears to be out of touch with reality:

The ISM’s manufacturing index climbed to 36.3 in March, a third consecutive gain that brought it closer to the reading of 50 that differentiates between contraction and grown. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aFkXaP6TXoow&refer=home)

Ok, so manufacturing has improved from horrendous lows, but is still well short of growth numbers. Not usually the type of numbers you'd associate with a 10% increase in sharemarkets, so it looks like a lot of sentiment and hope driving the rally.

Maybe the market had been oversold, but right now, it's looking over-bought.

timhau

1st April 2009, 11:30 AM

Stock prices are also well short of "growth numbers". People always say that the recovery of the stock market predates the recovery of the real-world economy by months. It could be real. It can also come crashing down tomorrow.

I suppose the real test comes later this month when companies start releasing their Q1 numbers.

oggiesnr

1st April 2009, 01:48 PM

If the signs on inflation are anything to go by then both the USA and UK will have to raise interest rates in the medium term future (probably the UK first). Will the nascent revival survive that event?

Steve

Puppycow

1st April 2009, 07:37 PM

U.S. Economy: Manufacturing Shrinks at Slower Pace (Update1) (http://www.bloomberg.com/apps/news?pid=20601087&sid=aN9FT4N6E0.w&refer=home)

April 1 (Bloomberg) -- The recession racking the U.S. may be turning less severe as reports today showed improvements in manufacturing and housing, the areas in steepest decline.

The Institute for Supply Management’s factory index climbed to 36.3 in March, a third consecutive increase that brought it closer to the breakeven point of 50. The number of contracts to buy existing homes in February rose 2.1 percent, according to the National Association of Realtors.

The smallest drop in orders in seven months propelled the advance in manufacturing, even as the industry now faces the specter of the bankruptcy of General Motors Corp. Stocks reversed earlier losses after the reports as speculation grew that the worst of the economic slump may have passed.

“It does look like this very savage pace of contraction will start to ease in the months ahead,” said Julia Coronado, a senior economist at Barclays Capital Inc. in New York. “It won’t be a massive turnaround, but there are some early, positive signals of stabilization.”

The Standard & Poor’s 500 stock index rose 1.7 percent to close at 811.08, and 12 of the 13 stocks in the S&P homebuilder index were up. Treasury securities were little changed.

Job Cuts

Other reports today showed the job market continued to deteriorate last month. Companies in the U.S. cut an estimated 742,000 workers in March, the most since records began in 2001, according to ADP Employer Services. Challenger, Gray & Christmas Inc., a Chicago-based placement firm, said job-cut announcements almost tripled last month from a year earlier, led by planned cutbacks at government agencies, pharmaceutical and aerospace and defense firms.

Economists had forecast the factory supply managers’ index would increase to 36, according to the median of 74 projections. Estimates ranged from 30 to 39.

The group’s gauge of new orders jumped to 41.2 from 33.1 the prior month and its measure of export orders rose to 39 from 37.5 in February. Employment climbed from a record low.

“The pace of decline is slowing down, that’s important,” David Wyss, chief economist with Standard & Poor’s in New York, said in a Bloomberg Television interview. “It is too early to look for a turnaround, but maybe it is time to start saying that things are not getting as bad as quickly as they were earlier.”

mikehh

1st April 2009, 07:52 PM

anyone getting in on Jan 2011 leaps??

I like MSFT,USO, GE and DOW.

Puppycow

1st April 2009, 09:50 PM

Global Economic Slide May Be Easing as G-20 Gathers (http://www.bloomberg.com/apps/news?pid=20601087&sid=aNz_BL.tu7yw&refer=home)
Asian Stocks Surge on Growth Optimism (http://www.bloomberg.com/apps/news?pid=20601087&sid=ayqpUbb8FLy8&refer=home)

Puppycow

1st April 2009, 09:51 PM

Jan 2011 leaps:confused:

Puppycow

1st April 2009, 11:39 PM

U.K. House Prices Unexpectedly Rose in March, Nationwide Says (http://www.bloomberg.com/apps/news?pid=20601087&sid=arqfmCwmUIA8&refer=home)

April 2 (Bloomberg) -- U.K. house prices unexpectedly rose for the first time since October 2007 after the Bank of England’s interest-rate cuts attracted buyers to the property market, Nationwide Building Society said.

The average cost of a home jumped 0.9 percent in March from the previous month to 150,946 pounds ($218,000), the mortgage lender said in a statement today. All 13 economists in a Bloomberg News survey predicted a drop.

timhau

1st April 2009, 11:49 PM

OK. Bull market! Perpetual growth! DOW to 30,000!

timhau

2nd April 2009, 03:18 AM

Gosh, the rally just seems to feed itself over here. The OMXH index from the Helsinki Stock Exchange is up 3,71%, and it's by no means the big gainer in Europe.

However, while it's up by about 15% from its early March lows, it's still down over 14% from January 1st. (The OMXH index doesn't always give an accurate representation of the Helsinki Exchange in general, because a 600-pound gorilla called Nokia is responsible for roughly half of all transactions in there; however, the OMXHCap, where the input of one company is capped at 10%, gives roughly similar numbers.)

ServiceSoon

2nd April 2009, 02:26 PM

New signs emerge that means recession might be near bottom. (http://news.yahoo.com/s/ap/20090402/ap_on_bi_go_ec_fi/economy) I wanted to join in the fun and post some happy thoughts :)

The Atheist

2nd April 2009, 05:16 PM

Yeah, good on you - I saw those numbers.

Still an awful lot of sucker rally data evident, but manufacturing data is good and the inventory drops doubleplusgood.

oggiesnr

3rd April 2009, 07:13 AM

U.K. House Prices Unexpectedly Rose in March, Nationwide Says (http://www.bloomberg.com/apps/news?pid=20601087&sid=arqfmCwmUIA8&refer=home)

Hm.... The Halifax reckons they fell 1.9%.

Steve

a_unique_person

3rd April 2009, 07:29 AM

US unemployment jumps again. 650,000 lost jobs in one month.

http://news.theage.com.au/breaking-news-world/us-unemployment-jumps-to-85-20090404-9s2d.html

bobrayner

6th April 2009, 12:30 PM

Hm.... The Halifax reckons they fell 1.9%.

Steve
Specifically:
"The average UK house price declined by 1.9% in March. House prices in the first quarter of 2009 were 2.7% lower than in the previous quarter, which was smaller than the 5-6% falls recorded in each of the three previous quarters .... very tentative signs that activity may be beginning to stabilise. The latest industry-wide figures show that the number of mortgages approved to finance house purchase in February – a leading indicator of completed house sales - were the highest since May 2008."
From here: http://www.lloydsbankinggroup.com/media1/research/halifax_hpi.asp

Alternatively, there's the land registry:
http://www1.landregistry.gov.uk/houseprices/
They should have accurate stats from practically every house sale. However, they're a little slower to report on trends.

Puppycow

6th April 2009, 11:12 PM

Now for some pessimistic views:

Soros: US Recovery is a long way off, China will lead recovery (http://www.cnbc.com/id/30024970)
I have to say, when I hear Soros, he strikes me as a person who really knows what he's talking about. And, BTW, he is one of the few billionaires who saw this crisis coming and positioned himself to actually increase his wealth in the last year.
"I don't expect the U.S. economy to recover in the third or fourth quarter so I think we are in for a pretty lasting slowdown," Soros said, adding that in 2010 there might be "something" in terms of U.S. growth.
Soros' view contrasts with the majority of economists, who expect the U.S. economy to stop contracting in the third quarter and resume growing in the fourth quarter, according to the latest monthly poll of forecasts conducted by Reuters.
. . .
The healing of the banking system and housing markets is crucial to recovery. "The banking system, as a whole, is basically insolvent," Soros said.
. . .
Dollar is Vulnerable
Soros, whose latest book, "The Crash of 2008 and What it Means," has made prescient calls during the current credit crisis.
Exactly one year ago, he told Reuters that global losses are likely to top $1 trillion from the credit crisis. To date, U.S. and European banks have recorded more than $700 billion in losses and write-downs, as of Feb. 5. 2009, according to Reuters data.
Soros also said the U.S. dollar is under selling pressure and may eventually be replaced as a world reserve currency, possibly by the IMF's Special Drawing Rights, a synthetic currency basket comprised of dollars, euros, yen and sterling.
"I think the dollar is now under question and I think the system will need to be reformed, so that the United States will be subject to the same discipline as is imposed on other countries," said Soros, whose famous bet against the British pound earned his Quantum Fund $1 billion in 1992. "Being the main issuer of international currency, we have been exempt and we have abused that because we have effectively consumed 6.5 percent more than we have produced. That is now coming to an end."
China recently proposed greater use of Special Drawing Rights, possibly as an eventual global reserve currency. "In the long run, having an international accounting unit rather than the dollar may, in fact, be to our advantage so we can't splurge—you know, it felt very good for 25 years but now we are paying a very heavy price," Soros said.
China will be the first country to emerge from recession, probably this year, and will spearhead global growth in 2010, Soros said. He said world policymakers are "actually beginning to catch up" with the crisis and efforts to fix structural problems in the financial system.
The system was "fundamentally flawed, and there is no returning to where we came from," he said.
. . .
Euro Zone Not in Danger
In Europe, he said the crisis provides an incentive for countries that use the euro to remain inside the monetary union, though countries on the periphery still face serious problems.
The euro has been "a tremendous advantage" to countries that use it, adding there's "no question of a weaker country dropping out," Soros said.
While additional resources for the International Monetary Fund will help it stabilize struggling Eastern Europe, he said the Baltic states still face "serious problems" and Ukraine is not far from default.
. . .

Then there's this:
The Economy’s ‘Green Shoots,’ Real or Imagined? (http://roomfordebate.blogs.nytimes.com/2009/04/06/the-economys-green-shoots-real-or-imagined/#more-3609)
Several economists give their views on the recent "green shoots" and most are pretty pessimistic.

And if you really want a pessimistic view:
"A Tale of Two Depressions" (http://economistsview.typepad.com/economistsview/2009/04/a-tale-of-two-depressions.html)
It’s a Depression alright

To sum up, globally we are tracking or doing even worse than the Great Depression, whether the metric is industrial production, exports or equity valuations. Focusing on the US causes one to minimize this alarming fact. The “Great Recession” label may turn out to be too optimistic. This is a Depression-sized event.

The Atheist

7th April 2009, 12:40 AM

I have to say, when I hear Soros, he strikes me as a person who really knows what he's talking about. And, BTW, he is one of the few billionaires who saw this crisis coming and positioned himself to actually increase his wealth in the last year.

Yes - he is to be ignored at everyone's peril. Very astute bloke.

a_unique_person

7th April 2009, 06:52 AM

Synthetic currency. I like it.

timhau

7th April 2009, 08:09 AM

Yes - he is to be ignored at everyone's peril. Very astute bloke.

Yup -- especially since he freely admits he's been wrong before, and he reserves the right to be wrong again (http://online.wsj.com/article/SB121400427331093457.html?mod=hps_us_at_glance_mar kets).

The Atheist

7th April 2009, 11:54 AM

Yup -- especially since he freely admits he's been wrong before, and he reserves the right to be wrong again.

Lucky really, otherwise he'd be Jesus.

ServiceSoon

7th April 2009, 06:40 PM

...Soros: US Recovery is a long way off, China will lead recovery (http://www.cnbc.com/id/30024970)
I have to say, when I hear Soros, he strikes me as a person who really knows what he's talking about. And, BTW, he is one of the few billionaires who saw this crisis coming and positioned himself to actually increase his wealth in the last year....Your telling me that you are impressed with one of the richest and most powerful men in the world-A man who people would have listened to if he spoke-Who decided to increase his personal wealth so he can continue to promote his personal agenda, rather than prevent this travesty? Sounds like a criminal to me ;)

Puppycow

7th April 2009, 09:23 PM

Another interview with Soros from Bloomberg (http://www.bloomberg.com/apps/news?pid=20601213&sid=aNR3f9WE2L9s&refer=home)

“It’s a bear-market rally because we have not yet turned the economy around,” Soros, 78, said in an interview yesterday with Bloomberg Television, referring to the recent rebound in stock prices. “This isn’t a financial crisis like all the other financial crises that we have experienced in our lifetime.”

timhau

7th April 2009, 11:22 PM

Lucky really, otherwise he'd be Jesus.

No, otherwise he'd be more like a famous and immensely rich version of your standard doom peddler.

As for Jesus, Soros beats J.C. hands down. He made his fortune from nothing; Jesus had just about the best family connections you can imagine, but how many billions has he got? What was the average return of his fund during the 1980s?

timhau

7th April 2009, 11:29 PM

Your telling me that you are impressed with one of the richest and most powerful men in the world-A man who people would have listened to if he spoke-Who decided to increase his personal wealth so he can continue to promote his personal agenda, rather than prevent this travesty? Sounds like a criminal to me ;)

This is the thing that bugs me about Soros -- he's supposedly a critic of finance-based capitalism, yet he's the one who made a killing trading currencies in the 1990s, damaging the economy of not only some industrial but also some 3rd-world countries. And it's not like he needed the money.

The Atheist

8th April 2009, 01:17 AM

As for Jesus, Soros beats J.C. hands down. He made his fortune from nothing; Jesus had just about the best family connections you can imagine, but how many billions has he got? What was the average return of his fund during the 1980s?

Just think - if that fool Jesus had just put two shekels in the bank on the year 35, he'd be 10,000 times richer than Bill Gates now.

On the other hand, Jesus is still allegedly alive a couple of thousand years later. How many people do you reckon will ever have heard of George Soros in 4009?

This is the thing that bugs me about Soros -- he's supposedly a critic of finance-based capitalism, yet he's the one who made a killing trading currencies in the 1990s, damaging the economy of not only some industrial but also some 3rd-world countries. And it's not like he needed the money.

Greed is good. He also proved himself right by showing how easily currencies could be exploited. Hell, the bloke who manipulated the Kiwi dollar the most during the 1990s is now our Prime Minister!

timhau

8th April 2009, 02:28 AM

Just think - if that fool Jesus had just put two shekels in the bank on the year 35, he'd be 10,000 times richer than Bill Gates now.

... or in jail for insider trading, if he acted on stock tips from his father.

On the other hand, Jesus is still allegedly alive a couple of thousand years later. How many people do you reckon will ever have heard of George Soros in 4009?

On the other hand, consider this: The evidence for the existence of Jesus of Nazareth is sketchy at best -- despite his alleged family connections. The evidence for the existence of George Soros is very strong, even though his dad is barely famous enough to merit a two-paragraph Wikipedia entry (http://en.wikipedia.org/wiki/Tivadar_Soros).

The Atheist

8th April 2009, 10:33 AM

... or in jail for insider trading, if he acted on stock tips from his father.

That's pretty good!

The Atheist

8th April 2009, 11:53 AM

Some very good news here (http://www.bloomberg.com/apps/news?pid=20601087&sid=ankQ5rmxZVJM&refer=home).

Provided there are no more seismic shocks in the market, I think those numbers equate to the light at the end of the tunnel.

Just thinking

8th April 2009, 12:30 PM

drkitten

8th April 2009, 12:35 PM

The problem is, when one is in a depressed market as much as the one we're now in, statistical noise that would otherwise go unnoticed can look like a strong rebound. A few percents here and there look significant against very low numbers. Let's say that GM stock went from $1 to $1.50 ... WOW, a 50% jump in GM stock! Let's not forget it used to be over $60. It's too easy to get excited right now.

The problem with that "problem" is that the amount of "noise" in stock prices tends to stay constant as a percentage of the price, not in absolute dollar terms. IBM, Apple, or especially Google will routinely change by a dollar or more a day, something that would be unthinkable for Citigroup or GM right now.

A 50% in GM -- even from $1.00 to $1.50 -- would, in fact, be a very significant jump.

Just thinking

8th April 2009, 01:12 PM

The problem with that "problem" is that the amount of "noise" in stock prices tends to stay constant as a percentage of the price, not in absolute dollar terms. IBM, Apple, or especially Google will routinely change by a dollar or more a day, something that would be unthinkable for Citigroup or GM right now.

That's not the whole picture. Take housing starts, for example. With a very depressed market full of foreclosures it only takes a few sales (at very depressed prices) to show a "significant" increase in existing house sales, percentage-wise. It can easily get overblown. The same for car sales ... move a few cars off the lot and then compare that to previous months and it can look like good times are back.

A 50% in GM -- even from $1.00 to $1.50 -- would, in fact, be a very significant jump.

But does it represent a boom for GM? Check out the stock's recent history (http://finance.yahoo.com/echarts?s=GM#chart1:symbol=gm;range=1m;indicator=v olume;charttype=line;crosshair=on;ohlcvalues=0;log scale=on;source=undefined) and you'll see that what I described pretty much did happen a few times.

timhau

9th April 2009, 12:09 AM

The problem with that "problem" is that the amount of "noise" in stock prices tends to stay constant as a percentage of the price, not in absolute dollar terms.

I don't think that's quite true. I think a short-term 20-50% change in GM is much more likely now that it's at roughly $2 a share than when it was at $40. That's mainly because when it looked like things were going well, it was hard to imagine a realistic news item that would make GM's stock suddenly 50% more valuable. Right now, any news that guarantees that they won't go to Chapter 11 this year would do that, and perhaps more -- if for no other reason that it gives speculators more time to look for a greater fool sell their GM stock to.

JihadJane

9th April 2009, 04:14 AM

timhau

9th April 2009, 06:36 AM

Just thinking

9th April 2009, 11:57 AM

Wells Fargo records a $3 billion profit for Q1/2009, or 0.55$ per share when predictions ranged under 30 cents/share.

Bull Market! The boom is on! DOW to 30 000! Buy! Buy!

Edit: And speaking of rapid stock movement: Wells Fargo stock ended yesterday at 14.89. Now, 10 minutes after Wall Street opened, it's trading above 19, up almost 30%.

I rest my case. (http://finance.yahoo.com/echarts?s=WFC#chart2:symbol=wfc;range=1y;indicator =volume;charttype=line;crosshair=on;ohlcvalues=0;l ogscale=off;source=undefined)

The Atheist

9th April 2009, 02:04 PM

For an atheist you sure have a lot of faith in straws.

Nope.

There is still a huge problem to be addressed in terms of the decline in world trade, but the number of straws right now are almost enough to stay afloat.

JihadJane

10th April 2009, 01:16 PM

Nope.

There is still a huge problem to be addressed in terms of the decline in world trade, but the number of straws right now are almost enough to stay afloat.

Would you put to sea in an almost floating boat?

The Atheist

10th April 2009, 01:47 PM

Would you put to sea in an almost floating boat?

Are you deliberately missing the point? I cannot make it any plainer and actually said that it isn't seaworthy yet.

Let me turn it around - the boat has sunk in the dead centre of the Pacific Ocean. One bit is still afloat, enough to let you hang on and stay afloat yourself.

Are you going to hang about there or swim for Guam?

Puppycow

14th April 2009, 11:16 PM

Libor Falling Fastest Since January on Credit Revival (http://www.bloomberg.com/apps/news?pid=20601109&sid=a52Kn9AjaszU&refer=home)

So I guess that Wall Street's problems are over, and it's just Main Street that still has a hangover?

Goldman Sachs sure made out (http://www.smartmoney.com/Investing/Short-Term-Investing/5-Lessons-From-Goldmans-Earnings-Surprise/).
Hmmm. Lucky for them that AIG was able to make good on its credit default swaps.

The Atheist

15th April 2009, 01:17 AM

Libor Falling Fastest Since January on Credit Revival (http://www.bloomberg.com/apps/news?pid=20601109&sid=a52Kn9AjaszU&refer=home)

So I guess that Wall Street's problems are over, and it's just Main Street that still has a hangover?

That's good news for Main St, not bad. It says that banks now have confidence in the system and other banks.

Richard Masters

15th April 2009, 01:59 AM

No, otherwise he'd be more like a famous and immensely rich version of your standard doom peddler.

As for Jesus, Soros beats J.C. hands down. He made his fortune from nothing; Jesus had just about the best family connections you can imagine, but how many billions has he got? What was the average return of his fund during the 1980s?

~10%

JihadJane

15th April 2009, 04:13 AM

Are you deliberately missing the point? I cannot make it any plainer and actually said that it isn't seaworthy yet.

Let me turn it around - the boat has sunk in the dead centre of the Pacific Ocean. One bit is still afloat, enough to let you hang on and stay afloat yourself.

Are you going to hang about there or swim for Guam?

If I was afloat on a piece of driftwood in the middle of the Pacific Ocean I'd accept that I was probably going to die.

The Atheist

15th April 2009, 11:21 AM

If I was afloat on a piece of driftwood in the middle of the Pacific Ocean I'd accept that I was probably going to die.

Hey, if you're determined to be a pessimist, you may as well not bother.

charles brough

15th April 2009, 11:30 AM

Dow stays well above 7000 with little pressure downwards; S&P 12% edit: make that 17% up and no sign of selling; LIBOR dropping fast from last week's highs; treasuries drop fifty big ones as the world celebrates the biggest yield fall since 1962 and the US dollar crashes spectacularly. The dollar, especially having impeccable timing with OPEC's refusal to cut production further last week.

There will certainly be continuing fallout and further job losses, but I do think we might be past the immediate crisis and it offers a chance that there could be growth in the last 1/4 of 2009 after all. (Especially given how far down it's going to start from, I think that's quite likely if there are no more seismic problems unearthed.)

Agreed! Perhaps you have noticed the extreme pessimism I have noticed in the forums about the economy. Most believe we are going to collapse into a depression and are out stocking up on food and buying guns! They think it will deteriorate into rioting and possibly revolution!

Just wait until the stock market gets a little higher . . . Then, people will be dragging all that "government money infused into the system" that they have been tucking away into Treasury bonds and start using it to buy stocks!

The Atheist

15th April 2009, 01:11 PM

Agreed! Perhaps you have noticed the extreme pessimism I have noticed in the forums about the economy. Most believe we are going to collapse into a depression and are out stocking up on food and buying guns! They think it will deteriorate into rioting and possibly revolution!

I think in most cases, it's a desire rather than a belief. Some people want to stand atop the ashes.

Just wait until the stock market gets a little higher . . . Then, people will be dragging all that "government money infused into the system" that they have been tucking away into Treasury bonds and start using it to buy stocks!

And it looks as though the bottom has been reached (http://www.bloomberg.com/apps/news?pid=20601068&sid=ataCusiQuH9U&refer=home)in at least some parts of USA.

charles brough

16th April 2009, 09:42 AM

I think in most cases, it's a desire rather than a belief. Some people want to stand atop the ashes.

That probably does explain part of it! The decline of the civilization and society is putting a lot of pressure on the people. It exists as stress and hostility, and helps explain why men are pickup a gun here and there and going out and shooting people.

mhaze

17th April 2009, 08:40 AM

mhaze

17th April 2009, 08:44 AM

Agreed! Perhaps you have noticed the extreme pessimism I have noticed in the forums about the economy. Most believe we are going to collapse into a depression and are out stocking up on food and buying guns! They think it will deteriorate into rioting and possibly revolution!

Just wait until the stock market gets a little higher . . . Then, people will be dragging all that "government money infused into the system" that they have been tucking away into Treasury bonds and start using it to buy stocks!Ok, I guess you can now go sell short on commodity food, guns and ammo.

Here's your chance to prove your optimism right, and make money while doing it!

No? Not that certain? Awww....

charles brough

18th April 2009, 05:03 AM

Ok, I guess you can now go sell short on commodity food, guns and ammo.

Here's your chance to prove your optimism right, and make money while doing it!

No? Not that certain? Awww....

You seem to me to be the only one who would claim anyone else could think it is that simple or certain. . .

JihadJane

20th April 2009, 01:59 AM

Agreed! Perhaps you have noticed the extreme pessimism I have noticed in the forums about the economy. Most believe we are going to collapse into a depression and are out stocking up on food and buying guns! They think it will deteriorate into rioting and possibly revolution!

Just wait until the stock market gets a little higher . . . Then, people will be dragging all that "government money infused into the system" that they have been tucking away into Treasury bonds and start using it to buy stocks!

The Stock Market has become detached from the underlying economic reality. Let's all believe the magic, though, so that we can return to normality and all go shopping in the bankrupt malls. The Happy Days are back!! Oil is forever!!

mhaze

20th April 2009, 07:46 AM

You seem to me to be the only one who would claim anyone else could think it is that simple or certain. . .

This statement you made is naive and false:

Just wait until the stock market gets a little higher . . . Then, people will be dragging all that "government money infused into the system" that they have been tucking away into Treasury bonds and start using it to buy stocks!

Take two schoolteachers gross $120k, who in 07-2008 had a house worth $300k/loan $220k, $200k in 401k , car loan $20k, $20k other debt and $20k cash.

They now have house a/d = 200/220, and 401k= 100k.

Totals for them are now A=$320K, D=360k.

They are broke.

Now go forward 4 years after inflation hits due to printing money by drunken whores recently voted into office.

Their $120k becomes $300k, they lose all their charity, home interest, IRA deductions, and their income tax rate has gone from something like 25% to 40%. Effective tax rate some 45%.

They start out 2009 broke, and earn less each year, and in 2012 have purchasing power about 20% less.

Got it now?

drkitten

20th April 2009, 10:24 AM

Now go forward 4 years after inflation hits due to printing money by drunken whores recently voted into office.

Ah, yes. Another of your Narnian economic projections, of interest to everyone except for the reality-influenced part of the world.

Got it now?

I do. You make up monsters under the bed, scare yourself, and then expect me to kiss it better.

cheat3

20th April 2009, 02:05 PM

Yes!!! if the stock market rallies then the national debt will probably go away...

mhaze

20th April 2009, 02:20 PM

The Stock Market has become detached from the underlying economic reality. Let's all believe the magic, though, so that we can return to normality and all go shopping in the bankrupt malls. The Happy Days are back!! Oil is forever!!Wheee!!!!

Ah, yes. Another of your Narnian economic projections, of interest to everyone except for the reality-influenced part of the world......Poor attempts at ridicule are a fail, please go reread Saul Alinky's pertinent rules. No, wait, I'll repeat them for you:

Rule 5: Ridicule is man’s most potent weapon. It’s hard to counterattack ridicule, and it infuriates the opposition, which then reacts to your advantage.

Rule 7: A tactic that drags on for too long becomes a drag. Commitment may become ritualistic as people turn to other issues.

Rule 8: Keep the pressure on.

Rule 10: The price of a successful attack is a constructive alternative.

Rule 11: Pick the target, freeze it, personalize it, polarize it.

.... You make up monsters under the bed, scare yourself, and then expect me to kiss it better..Nervous jitters show, dear. Want some warm milk and your favorite blankie?

Tsukasa Buddha

20th April 2009, 04:56 PM

This statement you made is naive and false:

Just wait until the stock market gets a little higher . . . Then, people will be dragging all that "government money infused into the system" that they have been tucking away into Treasury bonds and start using it to buy stocks!

Take two schoolteachers gross $120k, who in 07-2008 had a house worth $300k/loan $220k, $200k in 401k , car loan $20k, $20k other debt and $20k cash.

They now have house a/d = 200/220, and 401k= 100k.

Totals for them are now A=$320K, D=360k.

They are broke.

Now go forward 4 years after inflation hits due to printing money by drunken whores recently voted into office.

Their $120k becomes $300k, they lose all their charity, home interest, IRA deductions, and their income tax rate has gone from something like 25% to 40%. Effective tax rate some 45%.

They start out 2009 broke, and earn less each year, and in 2012 have purchasing power about 20% less.

Got it now?

Does the tooth fairy exist there too?

balrog666

20th April 2009, 04:57 PM

Ah, yes. Another of your Narnian economic projections, of interest to everyone except for the reality-influenced part of the world.

I do. You make up monsters under the bed, scare yourself, and then expect me to kiss it better.

Do you think that when China and Japan stop buying T-bills it will all be sweetness and light?

Are you sure that you understand anything at all about economics?

charles brough

21st April 2009, 09:30 AM

mhaze

21st April 2009, 09:49 AM

Here we go . . . "God" speaking to us again! It's nice to always have here "the certain Truth." LOLYou are welcome to form a rebuttal. You said:

Just wait until the stock market gets a little higher . . . Then, people will be dragging all that "government money infused into the system" that they have been tucking away into Treasury bonds and start using it to buy stocks!

And I've shown that will not happen. Alinsky Rule #5 is a tactic used when you have no rebuttal. (eg = you are a loser in the argument).

GO!

mhaze

22nd April 2009, 03:23 PM

Do you think that when China and Japan stop buying T-bills it will all be sweetness and light?

Are you sure that you understand anything at all about economics?Actually, they have already started reducing their holdings and the FED has already stepped in to buy Tbills. This is a gradual process. But the total holdings for China and Japan, one estimate is some $850B.

Using M1 of $6T dilute by 850B from China and Japan, a dollar is then 6000/6,850 of current or about 13% less in value. This is insignificant compared to effect of current administration-by-drunken-whores-spending all they can. 5.1T negative next four years and 12.8 already spent or allocated.

Well, add to that dilution what happens as we lose reserve currency status, and those dollars come back home to roost. Again, a gradual process - give it 24 months or even 36.

NOTE: I notice that this copy vBulletin hotlinks my use of the phrases "Rule 5", "Rule 6", etc in above post 115 to the JREF rules. Not my intention to link them to JREF rules, since JREF rules are not Saul Alinsky's. Right?

balrog666

22nd April 2009, 06:41 PM

Actually, they have already started reducing their holdings and the FED has already stepped in to buy Tbills. This is a gradual process. But the total holdings for China and Japan, one estimate is some $850B.

Using M1 of $6T dilute by 850B from China and Japan, a dollar is then 6000/6,850 of current or about 13% less in value. This is insignificant compared to effect of current administration-by-drunken-whores-spending all they can. 5.1T negative next four years and 12.8 already spent or allocated.

Well, add to that dilution what happens as we lose reserve currency status, and those dollars come back home to roost. Again, a gradual process - give it 24 months or even 36.

NOTE: I notice that this copy vBulletin hotlinks my use of the phrases "Rule 5", "Rule 6", etc in above post 115 to the JREF rules. Not my intention to link them to JREF rules, since JREF rules are not Saul Alinsky's. Right?

Yes, they are doing everything possible to convert them into hard assets as fast as possible.

It's the same thing I would do.

mhaze

23rd April 2009, 08:19 AM

Yes, they are doing everything possible to convert them into hard assets as fast as possible.

It's the same thing I would do.

In my opinion the issue that directly should be confronted is that which I earlier stated of an average couple in the USA today:

Take two schoolteachers gross $120k, who in 07-2008 had a house worth $300k/loan $220k, $200k in 401k , car loan $20k, $20k other debt and $20k cash.

They now have house a/d = 200/220, and 401k= 100k.

Totals for them are now A=$320K, D=360k.

They are broke.

Now go forward 4 years after inflation hits due to printing money by drunken whores recently voted into office.

Their $120k becomes $300k, they lose all their charity, home interest, IRA deductions, and their income tax rate has gone from something like 25% to 40%. Effective tax rate some 45%.

They start out 2009 broke, and earn less each year, and in 2012 have purchasing power about 20% less.
The economy will not "turn around" until this average couple ramps up their spending patterns again. It would appear that they cannot, thus we are in a structural change in the economy and are not going back to the likes of 2007. The sooner this is recognized, the sooner people can begin to cope with reality.

Ultimately, one eventuality is going to be demanding - and getting - quite large cutbacks in government spending. The other part that should be realized is that it isn't government that will get people out of this problem - they need to dig themselves out, bit by bit, of their own will and with their own capabilities.

Puppycow

30th April 2009, 12:36 AM

Fidelity Says ‘All Things in Place’ for Bull Market (http://www.bloomberg.com/apps/news?pid=20601087&sid=aLukS.URK55A&refer=home)

April 30 (Bloomberg) -- Anthony Bolton, president of investments at Fidelity International, said a bull market in equities has already begun and financial shares are poised to drive recent gains higher.

Low valuations indicate advances that began in March are the start of a bull market, Bolton said. He favors financials, consumer cyclical, technology, and “value stocks,” such as retailers, automakers and construction-related shares.

“All the things are in place for the bear market to have ended,” Bolton said in an interview with Bloomberg Television in Hong Kong. “When there’s a strong consensus, a very negative one, and cash positions are very high, as they are at the moment, I’d like to bet against that.”

timhau

30th April 2009, 03:23 AM

charles brough

30th April 2009, 05:58 AM

Hmm...

There's a chance of a swine flu pandemia? BUY! BUY!

Rumors that hedge funds are driving Chrysler into bankruptcy (http://finance.yahoo.com/news/AP-Source-Chrysler-lender-apf-15079877.html?sec=topStories&pos=main&asset=&ccode=), with untold consequences for not only Chrysler's workers but those of its subcontractors? BUY! BUY!

Maybe it's just me, but this doesn't sound like the start of a bull market. One of the characteristics for the top of a bull market is that good news pushes the market higher, bad news are ignored.

From my perspective, we are well into a bull market. My gold stocks went up, then I switched to oil and financials, then lightened up on all of them and moved into growth stocks. By the time people realize we are in a bull market, prices will be so high they will be afraid to buy!:jaw-dropp

JihadJane

30th April 2009, 06:50 AM

'United States Empire Built on False Prosperity Collapsing'

http://www.marketoracle.co.uk/Article10256.html

The Atheist

30th April 2009, 11:30 AM

Puppycow

7th May 2009, 01:54 AM

Recession in U.S. May End in June, Claims Signal: Chart of Day (http://www.bloomberg.com/apps/news?pid=20601109&sid=aaKGhUYh5sZg&refer=home)

May 6 (Bloomberg) -- A peak in the number of jobless claims signals the worst U.S. recession in half a century may end in June, according to Thomas Lam, an economist at United Overseas Bank Ltd. in Singapore.

As the CHART OF THE DAY illustrates, the previous three recessions all ended within weeks after the number of applications for unemployment benefits started to wane. In his calculations, Lam smoothes the weekly claims figures using a proprietary weighted-average formula that more closely correlates with economic turning points.

The graph shows the smoothed figures reached a high of 664,000 in the week ended April 4 (blue circle), indicating the economic slump will probably end by next month (dashed blue vertical line), he said. With 95 percent confidence, the model signals the recession will be over at the latest by the end of September, he said.

One shortcoming is “the pace of recovery, whether it’s mild or vigorous, is not clear from this analysis,” Lam said in an interview. “My best estimate is that it’s going to be a really tepid recovery.” Lam projects the world’s largest economy will expand just 2 percent in 2010, about the same as the 1.6 percent pace of growth in 2002 following the previous recession.

lionking

7th May 2009, 02:10 AM

And some encouraging news from Britain. (http://business.timesonline.co.uk/tol/business/columnists/article6195129.ece)

Locally, there was more encouraging news on two fronts as dairy returns were up, and the best balance of payments figure for 7 years came out from March.

And unemployment down in Australia:

http://www.google.com/hostednews/ap/article/ALeqM5ibQTrZDqwOyyPv90qzLmEFpuEJfAD9817THO0
Australia's jobless rate slipped marginally in April to 5.4 percent, despite widespread predictions of a further rise in unemployment because of the global economic slowdown.

The Australian Bureau of Statistics data released Thursday showed that more than 27,000 new full- and part-time jobs were created in April, backing Prime Minister Kevin Rudd's claim that his massive stimulus packages were protecting workers and the economy from recession.

Possibly a false dawn, but good news nonetheless.

mhaze

7th May 2009, 09:07 AM

Recession in U.S. May End in June, Claims Signal: Chart of Day (http://www.bloomberg.com/apps/news?pid=20601109&sid=aaKGhUYh5sZg&refer=home)Nope, that ain't gonna happen. But expect lots of cheery propaganda.

The Atheist

7th May 2009, 10:29 AM

Nope, that ain't gonna happen.

Well, that settles that then.

timhau

7th May 2009, 10:46 AM

mhaze

8th May 2009, 07:58 AM

Well, a lot of people are certainly afraid of a double bottom in the stock market. People with more experience than me say that it really isn't that common in recessions, but what is common to all recessions is the fear of a double bottom.We are not going back to the world of 2000-2007. The faster the economy segments can realign themselves with actual future demand, the faster money can flow back into stock market segments.

Gov intervention is preventing this realignment. Vast amounts of money have essentially, "Gone Galt".

On projected P/E ratios a double bottom is plausible.

Just thinking

13th May 2009, 06:55 PM

What now gets me is what the market now looks at as being good news ... "Things are getting worse at a slower pace! Let's rally!" I believe it was Churchill that said something along the lines of repeated bombing raids over Germany ... All we're now doing is making the rubble bounce. Meaning that the reason the economy is slowing its decent is because it's been hit so hard, there isn't much lower to go. Look at GM ... what's it now worth? ... less than $1.50?

And of course, there's this news (http://www.washingtonpost.com/wp-dyn/content/article/2009/05/13/AR2009051301279.html).

U.S. stock markets took a dive today as retail sales unexpectedly fell for the month of April and helped fuel a debate among investors over the direction of the economy.

... exuberance appears to be on hold as investors try to gauge whether stocks have shot up too high, too fast.

timhau

14th May 2009, 12:20 AM

What now gets me is what the market now looks at as being good news ... "Things are getting worse at a slower pace! Let's rally!"

True. However, if you look at March, then the general market consensus seemed to be that the World is ending, and sometime next year we'll all be living in caves and 2011 will see the re-introduction of wooden clubs as mankind's weapon of choice, since all arrow manufacturing will cease in Q3/2010. Any economic figures that topped estimates (not that there were many) were ignored.

Then the market went to the other extreme in a hurry; stocks basically made 5 years' worth of gains in two months, and even though age-old wisdom says that the stock market anticipates market turns by 6-12 months, that made no sense. Now we're headed the other way again; let's see how far we get this time.

Just thinking

14th May 2009, 07:50 AM

True. However, if you look at March, then the general market consensus seemed to be that the World is ending, and sometime next year we'll all be living in caves and 2011 will see the re-introduction of wooden clubs as mankind's weapon of choice, since all arrow manufacturing will cease in Q3/2010. Any economic figures that topped estimates (not that there were many) were ignored.

Then the market went to the other extreme in a hurry; stocks basically made 5 years' worth of gains in two months, and even though age-old wisdom says that the stock market anticipates market turns by 6-12 months, that made no sense. Now we're headed the other way again; let's see how far we get this time.

It seems like everything is looked at with a sense of over-reaction, but I myself am surprised that analysts viewed the retail sales decline as unexpected. With unemployment at an all time high (http://www.businessrockford.com/homepage/x1518878943/Jobless-numbers-rise-more-than-expected) (and true unemployment almost double the number we all hear reported) should we really be so surprised to see contractions in retail sales?