Stock market today

[spdrun]

^^^

News at 11 — Main Street has been in a recession (or at least a stagnation) since 2008, whether or not Wall Street chooses to recognise it.

[an]

[quote=livinincali][quote=AN]People don’t sell unless they can buy another. People can’t buy if they don’t have a job. People don’t sell if they’re underwater. They won’t sell if they have no equity to help them buy their next house. So, you’ll never have # of sellers > # of buyers, if you have people able to stay in their houses for free. We’ve seen that happen recently.[/quote]

What about the real estate investors/speculators that bought with all cash. Can they sell?[/quote]Sure they can. The question is, would they? All cash investors are the strongest hand you have. People who have hundreds of thousands to $ are not the weak hands who would sell at the bottom of a crash. They’re the one who bought in 2008-2011. They’re also the one who bought the last time the DOW hit 6k-ish.

[an]

[quote=CA renter]IMHO, we are going to be in a deep recession by 2016/2017.[/quote]I don’t believe we are, but if we do, I say, bring it. I’m fully prepared to take advantage of it this time. I was kicking myself for not being more aggressive in the last crash. I can only wish I have another opportunity like it in my life time. I wouldn’t expect it to come this quickly.

[spdrun]

^^^

Exactly right. Not really surprising to have another opportunity — dot.bomb to 2008 was about seven years, 2008 to 2015 is another seven.

[an]

[quote=spdrun]^^^

Exactly right. Not really surprising to have another opportunity — dot.bomb to 2008 was about seven years, 2008 to 2015 is another seven.[/quote]Bring it. Who’s loving this last week’s dump? How much are you up?

[spdrun]

I’m not loving it, but it was expected. Few things go on forever in one direction.

[The-Shoveler]

I will still put it out there,

Its not about Stocks and its not about housing.

Its about pensions and State and local gov budgets.

The Fed will stomp on the Gas fairly soon IMO.

[spdrun]

5% (what we have now), 10%, or even 20% correction is routine when coming off an overheated market. This correction has been engineered by the Fed in the first place, make no mistake. Asset values were getting out of whack with the real economy, and the higher they went, the worse the damage a future correction would do.

Let some water out now, or let half the county be flooded when the dam breaks in a month. If you’re talking about property tax revenues, they’re not a problem nationally, since most states don’t have Prop 13 and taxes are quite often not based on last sale price.

[The-Shoveler]

Maybe but like it or not the fastest way to gun the economy is stocks and housing, likewise the fastest way to put it in the tank is stocks and housing,

(say the same thing only put pensions in place of economy).

[spdrun]

Exactly — and they’d rather have a 20% correction this year than 50% in 2017. 20% down from the Dow peak of 16,650 would take us to 13,320. NASDAQ would take us from 4,250 to 3,400.

Still very nicely high by historical standards — 13,320 is only 1,000 points off the 2007 peak. 3,400 on NASDAQ is higher than 2007, higher than any time from the dot.bomb crash till May 2013, in fact!

[The-Shoveler]

Actually I would not mind seeing the Stock market take a hit, the state (California) maybe able to take a small hit right now, but (California) is still very vulnerable, a year slow down and it will start to look very shaky again.

Most of the other states just follow what happens in Cal, it’s the 800 pound gorilla.

I just don’t see them letting it get that far,

Maybe 10% then I think you will see some frantic panic button pushing IMO.

[spdrun]

10% from peak brings us back to September 2013 on the Dow and October 2013 on the NASDAQ. Basically, a non-event that pension funds should be able to weather.

Remember that the last Dow correction in 2011 was down a bit over 20% before anything happened.

[CA renter]

[quote=livinincali][quote=CA renter][quote=AN]DOW to 5K will mean recession worse than what we saw recently. Which means we’ll see housing price < than what we saw this last bottom and unemployment >10%. Yeah, that’ll be fun.[/quote]

Not fun, but entirely possible, IMHO. This is why the reflation of the credit bubble was such a bad idea. They encouraged even more speculation, which was the problem in the first place.

Should have let things settle back to normal after 2008, save for some real jobs programs, infrastructure, and energy-related spending. We were almost there, but then they goosed everything back to bubble levels again. Now, we have even more debt than we would have if they had let things fall, and we are in an even weaker position because people have been dealing with declining wages and using up their savings for so many years. Best to get bad things over with quickly instead of prolonging them for years or decades.

IMHO, we are going to be in a deep recession by 2016/2017.[/quote]

I tend to agree but I personally think the main street sector of the economy won’t be much worse off than if currently is if the stock market bubble pops. This time around the bubble isn’t employing many people (i.e. why the recovery has been so weak so far).[/quote]

I understand where you’re coming from, but the credit bubble is what triggered the crisis in 2007, and it’s still the main problem (basically, too much unproductive, speculative money sloshing around the globe looking for yield). IMO, that is the trigger, and while Joe Sixpack has been dealing with a recession since 2007, I think it could get much worse…for everybody.

Some would argue it’s been decades of recession for J6 as wages and/or purchasing power have been declining for vast swaths of the U.S. population since the 80s. It’s only credit, not wages, that has enabled many to sustain their standard of living, and it’s created the facade that all is well in our economy.

[The-Shoveler]

There has not been a real economy since we stopped being hunter gatherers.

It’s always been a facade since the first sea shell was traded for some salt.

[scaredyclassic]

All I can say is that optimism about a downturn as a buying opportunity means there’s an underlying certainty things are always going to rebound higher still which may not be the way the whole thing goes down.

[Author]

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