Dow +146.24,Nasdaq +34.04. Anyone feel like commenting about this today?

[Coronita]

Dead cat bounce?

I think I can hear the grasshoppers again in the woods…at least until another volatile day tomorrow 🙂

NEW YORK (AP) — Wall Street finished a back-and-forth session sharply higher Wednesday as investors sought bargains while also contending with concerns about the strength of the economy and upcoming corporate results.

The Nasdaq composite index showed its first gain in nine sessions and the Dow Jones industrial average gained more 200 points in the final 90 minutes of the session to finish nearly 150 points higher.

The gains at the end of a fractious session came ahead of a fourth-quarter report from Alcoa Inc., which marked the unofficial start of earnings season.

Wednesday's session was as choppy as Tuesday's, when stocks tumbled amid concerns about the economy. Unease about the economy has caused intense market volatility since the start of the year, with stocks rising on hopes for more interest rate cuts, and plunging as investors doubt that will be enough. The market is also worried about how fallout from the mortgage and credit crisis has affected corporate earnings.

A prediction of a recession in 2008 by Wall Street's biggest investment bank at times appeared to weigh on investors. Goldman Sachs said it expects fallout from the housing slump and recent tightness in the credit markets will spread to the broader economy this year.

Countrywide Financial Corp. may have added to the seesaw trading, saying Wednesday that the delinquency and foreclosure rate of home loans in its portfolio surged in December. The stock in the nation's largest mortgage lender had fallen sharply Tuesday amid bankruptcy rumors that the company said were baseless. Countrywide fell 35 cents, or 6.4 percent, to $5.12.

Wednesday brought little in the way of economic news and investors instead awaited a speech by Federal Reserve Chairman Ben Bernanke set for Thursday that could give clues about the central bank's stance on the weakening economy.

The up-and-down days on Wall Street are likely to continue as investors grapple with their concerns about the economy, according to Thomas Nyheim, vice president and portfolio manager at Christiana Bank & Trust Co.

"Things are definitely slowing. The problem is, the more and more economists and strategists come out and say things are slowing, you could get a real downturn," he said. He said the market's pullback, however, has left stock prices at more appropriate levels.

According to preliminary calculations, the Dow rose 146.24, or 1.16 percent, to 12,735.31.

Broader stock indicators also rebounded. The Standard & Poor's 500 index rose 18.94, or 1.36 percent, to 1,409.13, and the Nasdaq composite index, which had been down more than 1 percent during the session, finished up 34.04, or 1.39 percent, at 2,474.55.

Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 2.06 billion shares compared with 1.84 billion shares traded Tuesday.

The rebound Wednesday wasn't large enough to pull the Dow from the realm of a correction, which is a 10 percent drop from a recent high. The blue chip index is still off 10.1 percent from its Oct. 9 high. The S&P 500 is now down 9.97 percent from its high.

Bond prices rose Wednesday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.82 percent from 3.84 percent late Tuesday. The dollar was mixed against other major currencies, while gold prices fell.

Light, sweet crude fell 72 cents to $95.61 a barrel on the New York Mercantile Exchange after a government report showed domestic inventories declined last week.

Alcoa reported after the closing bell that its fourth-quarter profit rose to $632 million, or 75 cents per share, from $359 million, or 41 cents a share, a year earlier. Wall Street had been hoping the results would help indicate how well the economy was holding up. Alcoa, one of the 30 stocks that comprise the Dow industrials, finished up 25 cents to $31.25 and rose to $31.94 in after-hours trading.

Troubled discount brokerage E-Trade Financial Corp., which Tuesday saw shares dip to an all-time low on growing mortgage segment losses, said it sold about $3 billion of mortgage-backed securities and municipal bonds on top of the November sale of its $3 billion asset-backed portfolio. E-Trade rose 15 cents, or 6.7 percent, to $2.40.

Chemical maker DuPont Co. rose $2.03, or 4.8 percent, to $44.78 after raising its fiscal 2007 profit forecast, citing better-than-expected fourth-quarter sales. The company, which makes a wide range of products including automotive coatings and genetically modified seeds, also lifted its forecast for 2008.

James Cayne stepped down as chief executive of Bear Stearns Cos. He was replaced by Bear Stearns President Alan Schwartz, a 57-year-old investment banker respected for his dealmaking savvy. Bear Stearns rose $3.65, or 5.1 percent, to $74.82.

The Russell 2000 index of smaller companies rose 7.26, or 1.03 percent, to 712.12.

Overseas, Japan's Nikkei stock average closed up 0.49 percent. Britain's FTSE 100 fell 1.32 percent, Germany's DAX index dropped 0.86 percent, and France's CAC-40 fell 1.10 percent.

Alcoa profit surges after sale of business units

SAN FRANCISCO (MarketWatch) — Alcoa Inc., the first of the Dow industrials to report this earnings season, posted Wednesday a 76% surge in fourth-quarter profit, benefiting from the aluminum giant's move to sell off its packaging and consumer businesses in December.

The New York-based companyAA 31.25, +0.25, +0.8%) reported a profit of $632 million, or 75 cents a share, up from $359 million or 41 cents a share a year ago.

Total revenue fell to $7.39 billion from $7.84 billion due to lower aluminum prices and the exclusion of its soft alloy extrusion segment that is now part of a joint venture.

Excluding a favorable restructuring adjustment and a tax benefit stemming from the business sales, earnings would have come in at 36 cents a share.

Analysts polled by Thomson Financial had expected a profit, on average, of 33 cents a share on revenue of $6.92 billion.

"We battled substantially higher material-input and energy costs and currency impacts, while simultaneously continuing to execute on the largest capital-investment program in our history," Chairman and Chief Executive Alain Belda said in a statement.

Alcoa's year-over-year improvement comes at a time when average aluminum prices have fallen 4% from the previous quarter and 8% from a year earlier in the face of declining demand for U.S. construction. See full story.

"Certainly, the weakness in North America has been well-documented, and we estimate that 2007 consumption decreased by almost 10% driven by weakness in the transportation and distribution markets," Alcoa CFO Charles McLane said in a conference call.

Last month, Alcoa agreed to sell the Closure Systems International, Consumer Products, Flexible Packaging and Reynolds Food Packaging units to New Zealand-based Rank Group Ltd. for $2.7 billion.

Ahead of the results, Alcoa shares edged up almost 1% to close at $31.25.

 

 

 

 

[davelj]

There were rumors late in the day of a “surprise” rate cut from the Fed coming imminently. It’s so completely idiotic that it must be true. That’ll get the market all lathered up until it realizes that it won’t help.

[davelj]

There were rumors late in the day of a “surprise” rate cut from the Fed coming imminently. It’s so completely idiotic that it must be true. That’ll get the market all lathered up until it realizes that it won’t help.

[davelj]

There were rumors late in the day of a “surprise” rate cut from the Fed coming imminently. It’s so completely idiotic that it must be true. That’ll get the market all lathered up until it realizes that it won’t help.

[davelj]

There were rumors late in the day of a “surprise” rate cut from the Fed coming imminently. It’s so completely idiotic that it must be true. That’ll get the market all lathered up until it realizes that it won’t help.

[davelj]

There were rumors late in the day of a “surprise” rate cut from the Fed coming imminently. It’s so completely idiotic that it must be true. That’ll get the market all lathered up until it realizes that it won’t help.

[drunkle]

range bound. i had a feeling we’d get a pop today.

[HereWeGo]

Retailers reporting tomorrow, Citigroup on the 15th. Oh boy.

[HereWeGo]

Retailers reporting tomorrow, Citigroup on the 15th. Oh boy.

[HereWeGo]

Retailers reporting tomorrow, Citigroup on the 15th. Oh boy.

[HereWeGo]

Retailers reporting tomorrow, Citigroup on the 15th. Oh boy.

[HereWeGo]

Retailers reporting tomorrow, Citigroup on the 15th. Oh boy.

[drunkle]

range bound. i had a feeling we’d get a pop today.

[drunkle]

range bound. i had a feeling we’d get a pop today.

[drunkle]

range bound. i had a feeling we’d get a pop today.

[drunkle]

range bound. i had a feeling we’d get a pop today.

[asragov]

“The message from today’s trading is this: nobody knows anything”

http://blogs.wsj.com/marketbeat/2008/01/09/four-at-four-never-mind/

[(former)FormerSanDiegan]

Stocks Fluctuate.

[sd_bear]

About a month ago I wagered a friend that the DOW would hit 12500 before it hit 14000 again (it was at 13200 at the time).

It was very sad to see it bottom at 12501 this afternoon before skyrocketing back up several hundred points. Though I still think I’m going to win that free lunch. I can’t think of any economic news that could propel the market back up against all this downward momentum.

[sd_bear]

About a month ago I wagered a friend that the DOW would hit 12500 before it hit 14000 again (it was at 13200 at the time).

It was very sad to see it bottom at 12501 this afternoon before skyrocketing back up several hundred points. Though I still think I’m going to win that free lunch. I can’t think of any economic news that could propel the market back up against all this downward momentum.

[sd_bear]

About a month ago I wagered a friend that the DOW would hit 12500 before it hit 14000 again (it was at 13200 at the time).

It was very sad to see it bottom at 12501 this afternoon before skyrocketing back up several hundred points. Though I still think I’m going to win that free lunch. I can’t think of any economic news that could propel the market back up against all this downward momentum.

[sd_bear]

About a month ago I wagered a friend that the DOW would hit 12500 before it hit 14000 again (it was at 13200 at the time).

It was very sad to see it bottom at 12501 this afternoon before skyrocketing back up several hundred points. Though I still think I’m going to win that free lunch. I can’t think of any economic news that could propel the market back up against all this downward momentum.

[sd_bear]

About a month ago I wagered a friend that the DOW would hit 12500 before it hit 14000 again (it was at 13200 at the time).

It was very sad to see it bottom at 12501 this afternoon before skyrocketing back up several hundred points. Though I still think I’m going to win that free lunch. I can’t think of any economic news that could propel the market back up against all this downward momentum.

[LA_Renter]

I have a feeling we are going into a recession induced bear market, which is the worst kind. They are longer in average duration, represent some of the deepest declines, and are indifferent to starting P/E multiples which for the S&P 500 shows a current trailing P/E ratio of 15.6 which is really not all that bad especially compared to 2000 when it was approaching 30. If we are heading in such a direction then the first half of 2008 will not be pleasant due to the majority of the stock market losses occurring early in these types of markets. We are in a dense economic fog right now and the markets don’t like fog.

Here is a little history of recession induced bear markets for the S&P 500 with their starting P/E and percentage drop in value

1973 starting P/E 18, -45%

1978 starting P/E 9, -16%

1981 starting P/E 8, -24%

1990 starting P/E 13, -21%

2000 starting P/E 31, -48%

2008 starting P/E 15.6, ??

1981 stands out because of its low p/e at 8 yet the S&P 500 lost 24% of its value. That was a bad recession. If we enter a recession of that scale which some economist are making strong cases for (i.e. Roubini) and we are starting at a p/e nearly double that of 1981 then……in THEORY…..we could be looking at a substantial decline in the stock market. A 40% decline would put the S&P 500 at about 954 from the top this last October.

SDS anyone?

[barnaby33]

Grasshoppers, nope! I liquidated a lot of stuff into yesterdays down leg. I’m hoping for a pop and re-loading up on puts! Yee-haaaaw.

I even made more money unloading into today’s temporary dip, while I was at jury duty. This was all luck of course. Bulls are permanently in the right and bears, we’ll we get lucky once in a while.

Josh

[NeetaT]

“I have a feeling we are going into a recession induced bear market, which is the worst kind.”

Does this mean I am safer being in an Overseas fund or will this affect all markets?

[davelj]

In the average post-war recession, earnings on the S&P have declined by 15%-20%. It’s only got a low P/E until the “E” goes away…

[davelj]

In the average post-war recession, earnings on the S&P have declined by 15%-20%. It’s only got a low P/E until the “E” goes away…

[davelj]

In the average post-war recession, earnings on the S&P have declined by 15%-20%. It’s only got a low P/E until the “E” goes away…

[davelj]

In the average post-war recession, earnings on the S&P have declined by 15%-20%. It’s only got a low P/E until the “E” goes away…

[davelj]

In the average post-war recession, earnings on the S&P have declined by 15%-20%. It’s only got a low P/E until the “E” goes away…

[LA_Renter]

“Does this mean I am safer being in an Overseas fund or will this affect all markets?”

I am asking that same question myself and people much much smarter than me are also asking that question. Is the world decoupled from the US Consumer?? Peter Schiff seems to think so, I’m not so sure. Here are some quotes from an Australian article

“You’ve got weakening US jobs numbers keeping the US dollar well under pressure,” RBC Capital Markets senior currency strategist Sue Trinh said. “But the Aussie dollar is not able to derive the full benefit of that with the market also equally concerned about global growth implication from the US economy slowing.”

Ms Trinh said the dollar was still beholden to the view that a slowdown in US growth would have a significant impact on global growth, despite the tightening biases of both the Australian and European central banks.

“At the moment there is a camp that is of the belief that the global economy can decouple from the US slowing,” she said.

“Certainly that’s the rhetoric that we’ve seen from the ECB and to a degree the RBA have maintained a reasonably cautious outlook on that.”

But ANZ senior interest rate strategist Sally Auld said the Australian dollar’s failure to push back above US90c was indicative of a much broader weakening in the global economy.

The unit hit a 23-year high of US94c in November, following a recovery from its sharp descent during the breakout of the August US sub-prime mortgage crisis.

However, Ms Auld doesn’t believe the currency is likely to break above US90c in the near term.

“It’s been a slow grind lower for the last six weeks or so,” she said. “The Aussie dollar is renowned in a big-picture way for being one of the better global leading indicators, so it could be telling us quite a powerful story about how this is all going to play out.”

Personally I am making my way to the deflation camp. I don’t think the world is that decoupled from the US and I do think this is going to be a significant recession.

[Anonymous]

I’ve been following this site for a bit now. I purchased my home in Jan 03 for $350K, sold it in June 05 for $495K, and have been renting it back since in anticipation of the RE market doing what it is now doing.

I track the stock market closely as well. I subscribe to Bob Brinkers newsletter. Brinker recommended exiting the market in January 2000 and in March 2003 recommended full invesment in the market. The following is an excerpt from the 1/4/08 newsletter:

“Marketimer continues to estimate real GDP growth within a range of 1.7% to 2.7% for 2008. Our estimate is close to the revised Federal Reserve forecast of 1.8% to 2.5%. Although 2007 real GDP averaged %3.1 for the first three quarters, we expect fourth quarter growth to be slow. If this proves correct, the die will be cast for slow growth in 2008.

The new jobs figures are key to 2008 growth. Consumer spending accounts for close to 70% of total goods and services. The paychecks generated from new jobs provide the cash-flow necessary to promote economic growth. The monthly average of new jobs created over the past three months is slightly above 100,000. The key to 2008 economic growth will be the rate at which new jobs expand. U.S. exports increased 19.1% in the third quarter, and remain a key factor in the new jobs equation. The weak dollar has made U.S. exports more attrative and U.S. multinational companies are benefiting.

A 21.4% year-over-year increase in energy prices contributed to the 4.3% headline inflation rate for the year ended November 30. Core inflation is tame, with the core index up 2.3% year-over-year. These rates are remarkably low in the face of a 37% annual increase in the cost of gasoline and during a period of time when the U.S. has abosrbed a huge quantity of imported goods and the U.S. dollar has been weak. So far, higher oil prices have had very little effect on core inflation

Although consumers continue to battle the headwinds of higher energy prices and the housing recession, they have shown a great deal of resilience in dealing with these challenges. U.S. retail sales rose sharply during November with an increase of 1.2%. Excluding autos, auto parts and gasoline stations, retail sales rose 1.1% in November. On a year-over-year basis, November retail sales increased 6.9%. So far, consumers are learning to deal with the taxing effect of high energy prices.

[LA_Renter]

“On a year-over-year basis, November retail sales increased 6.9%. So far, consumers are learning to deal with the taxing effect of high energy prices.”

Consumers are learning to deal with higher energy and a housing depression?? I aint buying into that. Here is a look at Dec retail numbers.

“Retailers Report Weak Results for December As Gas Prices, Slumping Housing Market Take Toll

NEW YORK (AP) — An already weak holiday shopping season turned out to be even worse than expected for many of the nation’s retailers, who reported Thursday they had disappointing sales results for December. The poor performance raised more concerns about consumer spending, and in turn, the health of the economy.

The weak results came from across all retail categories, and prompted many stores to lower their fourth-quarter earnings forecasts. Particularly hard hit were apparel sellers including Limited Brands Inc. and AnnTaylor Stores Corp., as well as department stores including Macy’s Inc. Among the few bright spots was Wal-Mart Stores Inc., which posted results that exceeded Wall Street expectations, as it benefited from shoppers trading down to cheaper stores amid higher gas prices and a slumping housing market.”

I do think that exports are the bright spot in this whole picture. And that is a wild card on how much it impacts job growth. Again the debate seems to be surrounding this decoupling from the US thing. To me decoupling is sounding more and more like rhetoric and not fact. The US economy is still large enough to trigger a global recession. If that happens it will throw water on our exports. It is the extent of the housing slump and resulting credit crunch and its true impact on the consumer that is being underestimated here IMHO. Lets be honest this is not an easy year figuring out where to put your money.

[cr]

Headlines today: “Bernanke: Fed ready to cut interest rates again”

Quote:“We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” said Federal Reserve Board Chairman Ben Bernanke.

All this to prevent a recession. A recession that we are already in the midst of, that quite frankly needs to happen to deleverage the foolish investors in Helicopter Boy’s pocket.

Forget about saving money, inflation, purchasing power, or long term stability let’s keep weakening an already pathetic dollar.

Another band-aid on a broken pair of legs.

Way to go chief.

[(former)FormerSanDiegan]

What did you expect from “Helicopter Ben” ?

[(former)FormerSanDiegan]

What did you expect from “Helicopter Ben” ?

[(former)FormerSanDiegan]

What did you expect from “Helicopter Ben” ?

[(former)FormerSanDiegan]

What did you expect from “Helicopter Ben” ?

[(former)FormerSanDiegan]

What did you expect from “Helicopter Ben” ?

[cr]

Headlines today: “Bernanke: Fed ready to cut interest rates again”

Quote:“We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” said Federal Reserve Board Chairman Ben Bernanke.

All this to prevent a recession. A recession that we are already in the midst of, that quite frankly needs to happen to deleverage the foolish investors in Helicopter Boy’s pocket.

Forget about saving money, inflation, purchasing power, or long term stability let’s keep weakening an already pathetic dollar.

Another band-aid on a broken pair of legs.

Way to go chief.

[cr]

Headlines today: “Bernanke: Fed ready to cut interest rates again”

Quote:“We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” said Federal Reserve Board Chairman Ben Bernanke.

All this to prevent a recession. A recession that we are already in the midst of, that quite frankly needs to happen to deleverage the foolish investors in Helicopter Boy’s pocket.

Forget about saving money, inflation, purchasing power, or long term stability let’s keep weakening an already pathetic dollar.

Another band-aid on a broken pair of legs.

Way to go chief.

[cr]

Headlines today: “Bernanke: Fed ready to cut interest rates again”

Quote:“We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” said Federal Reserve Board Chairman Ben Bernanke.

All this to prevent a recession. A recession that we are already in the midst of, that quite frankly needs to happen to deleverage the foolish investors in Helicopter Boy’s pocket.

Forget about saving money, inflation, purchasing power, or long term stability let’s keep weakening an already pathetic dollar.

Another band-aid on a broken pair of legs.

Way to go chief.

[cr]

Headlines today: “Bernanke: Fed ready to cut interest rates again”

Quote:“We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks,” said Federal Reserve Board Chairman Ben Bernanke.

All this to prevent a recession. A recession that we are already in the midst of, that quite frankly needs to happen to deleverage the foolish investors in Helicopter Boy’s pocket.

Forget about saving money, inflation, purchasing power, or long term stability let’s keep weakening an already pathetic dollar.

Another band-aid on a broken pair of legs.

Way to go chief.

[stockstradr]

I took profits this morning when the market opened down over 100 pts. I sold my SDS (ProShares Ultrashort S&P500), which was 70% of portfolio.

I made 17% net on that SDS in three months, which I can’t complain about. I figure it is better to take some profits and not be too greedy.

I’ll be watching the market to take those short positions again when I think this short term “bounce” runs out of steam. I would guess we could see this “bounce” raises the indexes 5%, and we are already up half that percentage on the S&P 500.

[drunkle]

inflation and $1000 gold, here we… keep coming. the good news is, i just saved a bunch of money on my… wait, no i didn’t.

[drunkle]

inflation and $1000 gold, here we… keep coming. the good news is, i just saved a bunch of money on my… wait, no i didn’t.

[drunkle]

inflation and $1000 gold, here we… keep coming. the good news is, i just saved a bunch of money on my… wait, no i didn’t.

[drunkle]

inflation and $1000 gold, here we… keep coming. the good news is, i just saved a bunch of money on my… wait, no i didn’t.

[drunkle]

inflation and $1000 gold, here we… keep coming. the good news is, i just saved a bunch of money on my… wait, no i didn’t.

[stockstradr]

I took profits this morning when the market opened down over 100 pts. I sold my SDS (ProShares Ultrashort S&P500), which was 70% of portfolio.

I made 17% net on that SDS in three months, which I can’t complain about. I figure it is better to take some profits and not be too greedy.

I’ll be watching the market to take those short positions again when I think this short term “bounce” runs out of steam. I would guess we could see this “bounce” raises the indexes 5%, and we are already up half that percentage on the S&P 500.

[stockstradr]

I took profits this morning when the market opened down over 100 pts. I sold my SDS (ProShares Ultrashort S&P500), which was 70% of portfolio.

I made 17% net on that SDS in three months, which I can’t complain about. I figure it is better to take some profits and not be too greedy.

I’ll be watching the market to take those short positions again when I think this short term “bounce” runs out of steam. I would guess we could see this “bounce” raises the indexes 5%, and we are already up half that percentage on the S&P 500.

[stockstradr]

I took profits this morning when the market opened down over 100 pts. I sold my SDS (ProShares Ultrashort S&P500), which was 70% of portfolio.

I made 17% net on that SDS in three months, which I can’t complain about. I figure it is better to take some profits and not be too greedy.

I’ll be watching the market to take those short positions again when I think this short term “bounce” runs out of steam. I would guess we could see this “bounce” raises the indexes 5%, and we are already up half that percentage on the S&P 500.

[stockstradr]

I took profits this morning when the market opened down over 100 pts. I sold my SDS (ProShares Ultrashort S&P500), which was 70% of portfolio.

I made 17% net on that SDS in three months, which I can’t complain about. I figure it is better to take some profits and not be too greedy.

I’ll be watching the market to take those short positions again when I think this short term “bounce” runs out of steam. I would guess we could see this “bounce” raises the indexes 5%, and we are already up half that percentage on the S&P 500.

[LA_Renter]

“On a year-over-year basis, November retail sales increased 6.9%. So far, consumers are learning to deal with the taxing effect of high energy prices.”

Consumers are learning to deal with higher energy and a housing depression?? I aint buying into that. Here is a look at Dec retail numbers.

“Retailers Report Weak Results for December As Gas Prices, Slumping Housing Market Take Toll

NEW YORK (AP) — An already weak holiday shopping season turned out to be even worse than expected for many of the nation’s retailers, who reported Thursday they had disappointing sales results for December. The poor performance raised more concerns about consumer spending, and in turn, the health of the economy.

The weak results came from across all retail categories, and prompted many stores to lower their fourth-quarter earnings forecasts. Particularly hard hit were apparel sellers including Limited Brands Inc. and AnnTaylor Stores Corp., as well as department stores including Macy’s Inc. Among the few bright spots was Wal-Mart Stores Inc., which posted results that exceeded Wall Street expectations, as it benefited from shoppers trading down to cheaper stores amid higher gas prices and a slumping housing market.”

I do think that exports are the bright spot in this whole picture. And that is a wild card on how much it impacts job growth. Again the debate seems to be surrounding this decoupling from the US thing. To me decoupling is sounding more and more like rhetoric and not fact. The US economy is still large enough to trigger a global recession. If that happens it will throw water on our exports. It is the extent of the housing slump and resulting credit crunch and its true impact on the consumer that is being underestimated here IMHO. Lets be honest this is not an easy year figuring out where to put your money.

[LA_Renter]

“On a year-over-year basis, November retail sales increased 6.9%. So far, consumers are learning to deal with the taxing effect of high energy prices.”

Consumers are learning to deal with higher energy and a housing depression?? I aint buying into that. Here is a look at Dec retail numbers.

“Retailers Report Weak Results for December As Gas Prices, Slumping Housing Market Take Toll

NEW YORK (AP) — An already weak holiday shopping season turned out to be even worse than expected for many of the nation’s retailers, who reported Thursday they had disappointing sales results for December. The poor performance raised more concerns about consumer spending, and in turn, the health of the economy.

The weak results came from across all retail categories, and prompted many stores to lower their fourth-quarter earnings forecasts. Particularly hard hit were apparel sellers including Limited Brands Inc. and AnnTaylor Stores Corp., as well as department stores including Macy’s Inc. Among the few bright spots was Wal-Mart Stores Inc., which posted results that exceeded Wall Street expectations, as it benefited from shoppers trading down to cheaper stores amid higher gas prices and a slumping housing market.”

I do think that exports are the bright spot in this whole picture. And that is a wild card on how much it impacts job growth. Again the debate seems to be surrounding this decoupling from the US thing. To me decoupling is sounding more and more like rhetoric and not fact. The US economy is still large enough to trigger a global recession. If that happens it will throw water on our exports. It is the extent of the housing slump and resulting credit crunch and its true impact on the consumer that is being underestimated here IMHO. Lets be honest this is not an easy year figuring out where to put your money.

[LA_Renter]

“On a year-over-year basis, November retail sales increased 6.9%. So far, consumers are learning to deal with the taxing effect of high energy prices.”

Consumers are learning to deal with higher energy and a housing depression?? I aint buying into that. Here is a look at Dec retail numbers.

“Retailers Report Weak Results for December As Gas Prices, Slumping Housing Market Take Toll

NEW YORK (AP) — An already weak holiday shopping season turned out to be even worse than expected for many of the nation’s retailers, who reported Thursday they had disappointing sales results for December. The poor performance raised more concerns about consumer spending, and in turn, the health of the economy.

The weak results came from across all retail categories, and prompted many stores to lower their fourth-quarter earnings forecasts. Particularly hard hit were apparel sellers including Limited Brands Inc. and AnnTaylor Stores Corp., as well as department stores including Macy’s Inc. Among the few bright spots was Wal-Mart Stores Inc., which posted results that exceeded Wall Street expectations, as it benefited from shoppers trading down to cheaper stores amid higher gas prices and a slumping housing market.”

I do think that exports are the bright spot in this whole picture. And that is a wild card on how much it impacts job growth. Again the debate seems to be surrounding this decoupling from the US thing. To me decoupling is sounding more and more like rhetoric and not fact. The US economy is still large enough to trigger a global recession. If that happens it will throw water on our exports. It is the extent of the housing slump and resulting credit crunch and its true impact on the consumer that is being underestimated here IMHO. Lets be honest this is not an easy year figuring out where to put your money.

[LA_Renter]

“On a year-over-year basis, November retail sales increased 6.9%. So far, consumers are learning to deal with the taxing effect of high energy prices.”

Consumers are learning to deal with higher energy and a housing depression?? I aint buying into that. Here is a look at Dec retail numbers.

“Retailers Report Weak Results for December As Gas Prices, Slumping Housing Market Take Toll

NEW YORK (AP) — An already weak holiday shopping season turned out to be even worse than expected for many of the nation’s retailers, who reported Thursday they had disappointing sales results for December. The poor performance raised more concerns about consumer spending, and in turn, the health of the economy.

The weak results came from across all retail categories, and prompted many stores to lower their fourth-quarter earnings forecasts. Particularly hard hit were apparel sellers including Limited Brands Inc. and AnnTaylor Stores Corp., as well as department stores including Macy’s Inc. Among the few bright spots was Wal-Mart Stores Inc., which posted results that exceeded Wall Street expectations, as it benefited from shoppers trading down to cheaper stores amid higher gas prices and a slumping housing market.”

I do think that exports are the bright spot in this whole picture. And that is a wild card on how much it impacts job growth. Again the debate seems to be surrounding this decoupling from the US thing. To me decoupling is sounding more and more like rhetoric and not fact. The US economy is still large enough to trigger a global recession. If that happens it will throw water on our exports. It is the extent of the housing slump and resulting credit crunch and its true impact on the consumer that is being underestimated here IMHO. Lets be honest this is not an easy year figuring out where to put your money.

[Anonymous]

I’ve been following this site for a bit now. I purchased my home in Jan 03 for $350K, sold it in June 05 for $495K, and have been renting it back since in anticipation of the RE market doing what it is now doing.

I track the stock market closely as well. I subscribe to Bob Brinkers newsletter. Brinker recommended exiting the market in January 2000 and in March 2003 recommended full invesment in the market. The following is an excerpt from the 1/4/08 newsletter:

“Marketimer continues to estimate real GDP growth within a range of 1.7% to 2.7% for 2008. Our estimate is close to the revised Federal Reserve forecast of 1.8% to 2.5%. Although 2007 real GDP averaged %3.1 for the first three quarters, we expect fourth quarter growth to be slow. If this proves correct, the die will be cast for slow growth in 2008.

The new jobs figures are key to 2008 growth. Consumer spending accounts for close to 70% of total goods and services. The paychecks generated from new jobs provide the cash-flow necessary to promote economic growth. The monthly average of new jobs created over the past three months is slightly above 100,000. The key to 2008 economic growth will be the rate at which new jobs expand. U.S. exports increased 19.1% in the third quarter, and remain a key factor in the new jobs equation. The weak dollar has made U.S. exports more attrative and U.S. multinational companies are benefiting.

A 21.4% year-over-year increase in energy prices contributed to the 4.3% headline inflation rate for the year ended November 30. Core inflation is tame, with the core index up 2.3% year-over-year. These rates are remarkably low in the face of a 37% annual increase in the cost of gasoline and during a period of time when the U.S. has abosrbed a huge quantity of imported goods and the U.S. dollar has been weak. So far, higher oil prices have had very little effect on core inflation

Although consumers continue to battle the headwinds of higher energy prices and the housing recession, they have shown a great deal of resilience in dealing with these challenges. U.S. retail sales rose sharply during November with an increase of 1.2%. Excluding autos, auto parts and gasoline stations, retail sales rose 1.1% in November. On a year-over-year basis, November retail sales increased 6.9%. So far, consumers are learning to deal with the taxing effect of high energy prices.

[Anonymous]

I’ve been following this site for a bit now. I purchased my home in Jan 03 for $350K, sold it in June 05 for $495K, and have been renting it back since in anticipation of the RE market doing what it is now doing.

I track the stock market closely as well. I subscribe to Bob Brinkers newsletter. Brinker recommended exiting the market in January 2000 and in March 2003 recommended full invesment in the market. The following is an excerpt from the 1/4/08 newsletter:

“Marketimer continues to estimate real GDP growth within a range of 1.7% to 2.7% for 2008. Our estimate is close to the revised Federal Reserve forecast of 1.8% to 2.5%. Although 2007 real GDP averaged %3.1 for the first three quarters, we expect fourth quarter growth to be slow. If this proves correct, the die will be cast for slow growth in 2008.

The new jobs figures are key to 2008 growth. Consumer spending accounts for close to 70% of total goods and services. The paychecks generated from new jobs provide the cash-flow necessary to promote economic growth. The monthly average of new jobs created over the past three months is slightly above 100,000. The key to 2008 economic growth will be the rate at which new jobs expand. U.S. exports increased 19.1% in the third quarter, and remain a key factor in the new jobs equation. The weak dollar has made U.S. exports more attrative and U.S. multinational companies are benefiting.

A 21.4% year-over-year increase in energy prices contributed to the 4.3% headline inflation rate for the year ended November 30. Core inflation is tame, with the core index up 2.3% year-over-year. These rates are remarkably low in the face of a 37% annual increase in the cost of gasoline and during a period of time when the U.S. has abosrbed a huge quantity of imported goods and the U.S. dollar has been weak. So far, higher oil prices have had very little effect on core inflation

Although consumers continue to battle the headwinds of higher energy prices and the housing recession, they have shown a great deal of resilience in dealing with these challenges. U.S. retail sales rose sharply during November with an increase of 1.2%. Excluding autos, auto parts and gasoline stations, retail sales rose 1.1% in November. On a year-over-year basis, November retail sales increased 6.9%. So far, consumers are learning to deal with the taxing effect of high energy prices.

[Anonymous]

I’ve been following this site for a bit now. I purchased my home in Jan 03 for $350K, sold it in June 05 for $495K, and have been renting it back since in anticipation of the RE market doing what it is now doing.

I track the stock market closely as well. I subscribe to Bob Brinkers newsletter. Brinker recommended exiting the market in January 2000 and in March 2003 recommended full invesment in the market. The following is an excerpt from the 1/4/08 newsletter:

“Marketimer continues to estimate real GDP growth within a range of 1.7% to 2.7% for 2008. Our estimate is close to the revised Federal Reserve forecast of 1.8% to 2.5%. Although 2007 real GDP averaged %3.1 for the first three quarters, we expect fourth quarter growth to be slow. If this proves correct, the die will be cast for slow growth in 2008.

The new jobs figures are key to 2008 growth. Consumer spending accounts for close to 70% of total goods and services. The paychecks generated from new jobs provide the cash-flow necessary to promote economic growth. The monthly average of new jobs created over the past three months is slightly above 100,000. The key to 2008 economic growth will be the rate at which new jobs expand. U.S. exports increased 19.1% in the third quarter, and remain a key factor in the new jobs equation. The weak dollar has made U.S. exports more attrative and U.S. multinational companies are benefiting.

A 21.4% year-over-year increase in energy prices contributed to the 4.3% headline inflation rate for the year ended November 30. Core inflation is tame, with the core index up 2.3% year-over-year. These rates are remarkably low in the face of a 37% annual increase in the cost of gasoline and during a period of time when the U.S. has abosrbed a huge quantity of imported goods and the U.S. dollar has been weak. So far, higher oil prices have had very little effect on core inflation

Although consumers continue to battle the headwinds of higher energy prices and the housing recession, they have shown a great deal of resilience in dealing with these challenges. U.S. retail sales rose sharply during November with an increase of 1.2%. Excluding autos, auto parts and gasoline stations, retail sales rose 1.1% in November. On a year-over-year basis, November retail sales increased 6.9%. So far, consumers are learning to deal with the taxing effect of high energy prices.

[Anonymous]

I’ve been following this site for a bit now. I purchased my home in Jan 03 for $350K, sold it in June 05 for $495K, and have been renting it back since in anticipation of the RE market doing what it is now doing.

I track the stock market closely as well. I subscribe to Bob Brinkers newsletter. Brinker recommended exiting the market in January 2000 and in March 2003 recommended full invesment in the market. The following is an excerpt from the 1/4/08 newsletter:

“Marketimer continues to estimate real GDP growth within a range of 1.7% to 2.7% for 2008. Our estimate is close to the revised Federal Reserve forecast of 1.8% to 2.5%. Although 2007 real GDP averaged %3.1 for the first three quarters, we expect fourth quarter growth to be slow. If this proves correct, the die will be cast for slow growth in 2008.

The new jobs figures are key to 2008 growth. Consumer spending accounts for close to 70% of total goods and services. The paychecks generated from new jobs provide the cash-flow necessary to promote economic growth. The monthly average of new jobs created over the past three months is slightly above 100,000. The key to 2008 economic growth will be the rate at which new jobs expand. U.S. exports increased 19.1% in the third quarter, and remain a key factor in the new jobs equation. The weak dollar has made U.S. exports more attrative and U.S. multinational companies are benefiting.

A 21.4% year-over-year increase in energy prices contributed to the 4.3% headline inflation rate for the year ended November 30. Core inflation is tame, with the core index up 2.3% year-over-year. These rates are remarkably low in the face of a 37% annual increase in the cost of gasoline and during a period of time when the U.S. has abosrbed a huge quantity of imported goods and the U.S. dollar has been weak. So far, higher oil prices have had very little effect on core inflation

Although consumers continue to battle the headwinds of higher energy prices and the housing recession, they have shown a great deal of resilience in dealing with these challenges. U.S. retail sales rose sharply during November with an increase of 1.2%. Excluding autos, auto parts and gasoline stations, retail sales rose 1.1% in November. On a year-over-year basis, November retail sales increased 6.9%. So far, consumers are learning to deal with the taxing effect of high energy prices.

[LA_Renter]

“Does this mean I am safer being in an Overseas fund or will this affect all markets?”

I am asking that same question myself and people much much smarter than me are also asking that question. Is the world decoupled from the US Consumer?? Peter Schiff seems to think so, I’m not so sure. Here are some quotes from an Australian article

“You’ve got weakening US jobs numbers keeping the US dollar well under pressure,” RBC Capital Markets senior currency strategist Sue Trinh said. “But the Aussie dollar is not able to derive the full benefit of that with the market also equally concerned about global growth implication from the US economy slowing.”

Ms Trinh said the dollar was still beholden to the view that a slowdown in US growth would have a significant impact on global growth, despite the tightening biases of both the Australian and European central banks.

“At the moment there is a camp that is of the belief that the global economy can decouple from the US slowing,” she said.

“Certainly that’s the rhetoric that we’ve seen from the ECB and to a degree the RBA have maintained a reasonably cautious outlook on that.”

But ANZ senior interest rate strategist Sally Auld said the Australian dollar’s failure to push back above US90c was indicative of a much broader weakening in the global economy.

The unit hit a 23-year high of US94c in November, following a recovery from its sharp descent during the breakout of the August US sub-prime mortgage crisis.

However, Ms Auld doesn’t believe the currency is likely to break above US90c in the near term.

“It’s been a slow grind lower for the last six weeks or so,” she said. “The Aussie dollar is renowned in a big-picture way for being one of the better global leading indicators, so it could be telling us quite a powerful story about how this is all going to play out.”

Personally I am making my way to the deflation camp. I don’t think the world is that decoupled from the US and I do think this is going to be a significant recession.

[LA_Renter]

“Does this mean I am safer being in an Overseas fund or will this affect all markets?”

I am asking that same question myself and people much much smarter than me are also asking that question. Is the world decoupled from the US Consumer?? Peter Schiff seems to think so, I’m not so sure. Here are some quotes from an Australian article

“You’ve got weakening US jobs numbers keeping the US dollar well under pressure,” RBC Capital Markets senior currency strategist Sue Trinh said. “But the Aussie dollar is not able to derive the full benefit of that with the market also equally concerned about global growth implication from the US economy slowing.”

Ms Trinh said the dollar was still beholden to the view that a slowdown in US growth would have a significant impact on global growth, despite the tightening biases of both the Australian and European central banks.

“At the moment there is a camp that is of the belief that the global economy can decouple from the US slowing,” she said.

“Certainly that’s the rhetoric that we’ve seen from the ECB and to a degree the RBA have maintained a reasonably cautious outlook on that.”

But ANZ senior interest rate strategist Sally Auld said the Australian dollar’s failure to push back above US90c was indicative of a much broader weakening in the global economy.

The unit hit a 23-year high of US94c in November, following a recovery from its sharp descent during the breakout of the August US sub-prime mortgage crisis.

However, Ms Auld doesn’t believe the currency is likely to break above US90c in the near term.

“It’s been a slow grind lower for the last six weeks or so,” she said. “The Aussie dollar is renowned in a big-picture way for being one of the better global leading indicators, so it could be telling us quite a powerful story about how this is all going to play out.”

Personally I am making my way to the deflation camp. I don’t think the world is that decoupled from the US and I do think this is going to be a significant recession.

[LA_Renter]

“Does this mean I am safer being in an Overseas fund or will this affect all markets?”

I am asking that same question myself and people much much smarter than me are also asking that question. Is the world decoupled from the US Consumer?? Peter Schiff seems to think so, I’m not so sure. Here are some quotes from an Australian article

“You’ve got weakening US jobs numbers keeping the US dollar well under pressure,” RBC Capital Markets senior currency strategist Sue Trinh said. “But the Aussie dollar is not able to derive the full benefit of that with the market also equally concerned about global growth implication from the US economy slowing.”

Ms Trinh said the dollar was still beholden to the view that a slowdown in US growth would have a significant impact on global growth, despite the tightening biases of both the Australian and European central banks.

“At the moment there is a camp that is of the belief that the global economy can decouple from the US slowing,” she said.

“Certainly that’s the rhetoric that we’ve seen from the ECB and to a degree the RBA have maintained a reasonably cautious outlook on that.”

But ANZ senior interest rate strategist Sally Auld said the Australian dollar’s failure to push back above US90c was indicative of a much broader weakening in the global economy.

The unit hit a 23-year high of US94c in November, following a recovery from its sharp descent during the breakout of the August US sub-prime mortgage crisis.

However, Ms Auld doesn’t believe the currency is likely to break above US90c in the near term.

“It’s been a slow grind lower for the last six weeks or so,” she said. “The Aussie dollar is renowned in a big-picture way for being one of the better global leading indicators, so it could be telling us quite a powerful story about how this is all going to play out.”

Personally I am making my way to the deflation camp. I don’t think the world is that decoupled from the US and I do think this is going to be a significant recession.

[LA_Renter]

“Does this mean I am safer being in an Overseas fund or will this affect all markets?”

I am asking that same question myself and people much much smarter than me are also asking that question. Is the world decoupled from the US Consumer?? Peter Schiff seems to think so, I’m not so sure. Here are some quotes from an Australian article

“You’ve got weakening US jobs numbers keeping the US dollar well under pressure,” RBC Capital Markets senior currency strategist Sue Trinh said. “But the Aussie dollar is not able to derive the full benefit of that with the market also equally concerned about global growth implication from the US economy slowing.”

Ms Trinh said the dollar was still beholden to the view that a slowdown in US growth would have a significant impact on global growth, despite the tightening biases of both the Australian and European central banks.

“At the moment there is a camp that is of the belief that the global economy can decouple from the US slowing,” she said.

“Certainly that’s the rhetoric that we’ve seen from the ECB and to a degree the RBA have maintained a reasonably cautious outlook on that.”

But ANZ senior interest rate strategist Sally Auld said the Australian dollar’s failure to push back above US90c was indicative of a much broader weakening in the global economy.

The unit hit a 23-year high of US94c in November, following a recovery from its sharp descent during the breakout of the August US sub-prime mortgage crisis.

However, Ms Auld doesn’t believe the currency is likely to break above US90c in the near term.

“It’s been a slow grind lower for the last six weeks or so,” she said. “The Aussie dollar is renowned in a big-picture way for being one of the better global leading indicators, so it could be telling us quite a powerful story about how this is all going to play out.”

Personally I am making my way to the deflation camp. I don’t think the world is that decoupled from the US and I do think this is going to be a significant recession.

[NeetaT]

“I have a feeling we are going into a recession induced bear market, which is the worst kind.”

Does this mean I am safer being in an Overseas fund or will this affect all markets?

[NeetaT]

“I have a feeling we are going into a recession induced bear market, which is the worst kind.”

Does this mean I am safer being in an Overseas fund or will this affect all markets?

[NeetaT]

“I have a feeling we are going into a recession induced bear market, which is the worst kind.”

Does this mean I am safer being in an Overseas fund or will this affect all markets?

[NeetaT]

“I have a feeling we are going into a recession induced bear market, which is the worst kind.”

Does this mean I am safer being in an Overseas fund or will this affect all markets?

[barnaby33]

Grasshoppers, nope! I liquidated a lot of stuff into yesterdays down leg. I’m hoping for a pop and re-loading up on puts! Yee-haaaaw.

I even made more money unloading into today’s temporary dip, while I was at jury duty. This was all luck of course. Bulls are permanently in the right and bears, we’ll we get lucky once in a while.

Josh

[barnaby33]

Grasshoppers, nope! I liquidated a lot of stuff into yesterdays down leg. I’m hoping for a pop and re-loading up on puts! Yee-haaaaw.

I even made more money unloading into today’s temporary dip, while I was at jury duty. This was all luck of course. Bulls are permanently in the right and bears, we’ll we get lucky once in a while.

Josh

[barnaby33]

Grasshoppers, nope! I liquidated a lot of stuff into yesterdays down leg. I’m hoping for a pop and re-loading up on puts! Yee-haaaaw.

I even made more money unloading into today’s temporary dip, while I was at jury duty. This was all luck of course. Bulls are permanently in the right and bears, we’ll we get lucky once in a while.

Josh

[barnaby33]

Grasshoppers, nope! I liquidated a lot of stuff into yesterdays down leg. I’m hoping for a pop and re-loading up on puts! Yee-haaaaw.

I even made more money unloading into today’s temporary dip, while I was at jury duty. This was all luck of course. Bulls are permanently in the right and bears, we’ll we get lucky once in a while.

Josh

[LA_Renter]

I have a feeling we are going into a recession induced bear market, which is the worst kind. They are longer in average duration, represent some of the deepest declines, and are indifferent to starting P/E multiples which for the S&P 500 shows a current trailing P/E ratio of 15.6 which is really not all that bad especially compared to 2000 when it was approaching 30. If we are heading in such a direction then the first half of 2008 will not be pleasant due to the majority of the stock market losses occurring early in these types of markets. We are in a dense economic fog right now and the markets don’t like fog.

Here is a little history of recession induced bear markets for the S&P 500 with their starting P/E and percentage drop in value

1973 starting P/E 18, -45%

1978 starting P/E 9, -16%

1981 starting P/E 8, -24%

1990 starting P/E 13, -21%

2000 starting P/E 31, -48%

2008 starting P/E 15.6, ??

1981 stands out because of its low p/e at 8 yet the S&P 500 lost 24% of its value. That was a bad recession. If we enter a recession of that scale which some economist are making strong cases for (i.e. Roubini) and we are starting at a p/e nearly double that of 1981 then……in THEORY…..we could be looking at a substantial decline in the stock market. A 40% decline would put the S&P 500 at about 954 from the top this last October.

SDS anyone?

[LA_Renter]

I have a feeling we are going into a recession induced bear market, which is the worst kind. They are longer in average duration, represent some of the deepest declines, and are indifferent to starting P/E multiples which for the S&P 500 shows a current trailing P/E ratio of 15.6 which is really not all that bad especially compared to 2000 when it was approaching 30. If we are heading in such a direction then the first half of 2008 will not be pleasant due to the majority of the stock market losses occurring early in these types of markets. We are in a dense economic fog right now and the markets don’t like fog.

Here is a little history of recession induced bear markets for the S&P 500 with their starting P/E and percentage drop in value

1973 starting P/E 18, -45%

1978 starting P/E 9, -16%

1981 starting P/E 8, -24%

1990 starting P/E 13, -21%

2000 starting P/E 31, -48%

2008 starting P/E 15.6, ??

1981 stands out because of its low p/e at 8 yet the S&P 500 lost 24% of its value. That was a bad recession. If we enter a recession of that scale which some economist are making strong cases for (i.e. Roubini) and we are starting at a p/e nearly double that of 1981 then……in THEORY…..we could be looking at a substantial decline in the stock market. A 40% decline would put the S&P 500 at about 954 from the top this last October.

SDS anyone?

[LA_Renter]

I have a feeling we are going into a recession induced bear market, which is the worst kind. They are longer in average duration, represent some of the deepest declines, and are indifferent to starting P/E multiples which for the S&P 500 shows a current trailing P/E ratio of 15.6 which is really not all that bad especially compared to 2000 when it was approaching 30. If we are heading in such a direction then the first half of 2008 will not be pleasant due to the majority of the stock market losses occurring early in these types of markets. We are in a dense economic fog right now and the markets don’t like fog.

Here is a little history of recession induced bear markets for the S&P 500 with their starting P/E and percentage drop in value

1973 starting P/E 18, -45%

1978 starting P/E 9, -16%

1981 starting P/E 8, -24%

1990 starting P/E 13, -21%

2000 starting P/E 31, -48%

2008 starting P/E 15.6, ??

1981 stands out because of its low p/e at 8 yet the S&P 500 lost 24% of its value. That was a bad recession. If we enter a recession of that scale which some economist are making strong cases for (i.e. Roubini) and we are starting at a p/e nearly double that of 1981 then……in THEORY…..we could be looking at a substantial decline in the stock market. A 40% decline would put the S&P 500 at about 954 from the top this last October.

SDS anyone?

[LA_Renter]

I have a feeling we are going into a recession induced bear market, which is the worst kind. They are longer in average duration, represent some of the deepest declines, and are indifferent to starting P/E multiples which for the S&P 500 shows a current trailing P/E ratio of 15.6 which is really not all that bad especially compared to 2000 when it was approaching 30. If we are heading in such a direction then the first half of 2008 will not be pleasant due to the majority of the stock market losses occurring early in these types of markets. We are in a dense economic fog right now and the markets don’t like fog.

Here is a little history of recession induced bear markets for the S&P 500 with their starting P/E and percentage drop in value

1973 starting P/E 18, -45%

1978 starting P/E 9, -16%

1981 starting P/E 8, -24%

1990 starting P/E 13, -21%

2000 starting P/E 31, -48%

2008 starting P/E 15.6, ??

1981 stands out because of its low p/e at 8 yet the S&P 500 lost 24% of its value. That was a bad recession. If we enter a recession of that scale which some economist are making strong cases for (i.e. Roubini) and we are starting at a p/e nearly double that of 1981 then……in THEORY…..we could be looking at a substantial decline in the stock market. A 40% decline would put the S&P 500 at about 954 from the top this last October.

SDS anyone?

[(former)FormerSanDiegan]

Stocks Fluctuate.

[(former)FormerSanDiegan]

Stocks Fluctuate.

[(former)FormerSanDiegan]

Stocks Fluctuate.

[(former)FormerSanDiegan]

Stocks Fluctuate.

[asragov]

“The message from today’s trading is this: nobody knows anything”

http://blogs.wsj.com/marketbeat/2008/01/09/four-at-four-never-mind/

[asragov]

“The message from today’s trading is this: nobody knows anything”

http://blogs.wsj.com/marketbeat/2008/01/09/four-at-four-never-mind/

[asragov]

“The message from today’s trading is this: nobody knows anything”

http://blogs.wsj.com/marketbeat/2008/01/09/four-at-four-never-mind/

[asragov]

“The message from today’s trading is this: nobody knows anything”

http://blogs.wsj.com/marketbeat/2008/01/09/four-at-four-never-mind/

[Author]

Posts