US Stocks To Fall 60%!!!

Well, you make a lot of weapons. Those are good for export. You could sell Iran a few hundred nukes then go back in a few years to accuse them of possessing wmd's .

EVERY ONE needs to calm down. The market is nopt going down 60%. Even if we had multiple terrorist attacks here in this country, the market is not going down 60%. We have a global market and our companies buy and sell goods all around the world. THe weak dollar help some and the weak dollar hurts some.

On the dollar. It begins to flatten out at the end of the year and some time during the January we begin to see the rebound in the all mighty dollar. With the rise in the dollar, we see the decline in the price of oil, based on the dollar currency. Stocks are not getting walloped, no way, no how. The credit thing, just like all other crisis will pass.

Please see my thread I started last week.

www.abovetopsecret.com...'

Although I think its a bit too early to call a reversal in the US$ (target is January), strength today has caused a $30 drop in the price of gold. Buying the gold was the play to hedge against the US$. The dollar is soo over shorted and soo over sold that any bounce could lead to a bit of a short squeeze and a nice pop for anyone who went long on Friday.

The shorting crowd will be back, as the market is not turning yet, but this is a great sign for the next month and a half. Any sharp bounce indicates weakness on the sellers part here.

My predictions are coming true even earlier than thought, although I still believe only buy the US$ with mad money. You might not be able to handle the shake outs. Wait til there is strength in the buy, not just the buy.

reply to post by traderonwallst


You seem pretty knowledgeable about the market , I on the other hand not so savvy.

I was reading this article from Bloomberg, discussing the Central Banks efforts to stop the falling dollar, from what I get from the article, it looks like the overseas banks are very concerned with the current US dollar situation.

If you could give it a read and maybe give a layman's assessment of the news from your perspective it would be appreciated.

Currency Controls Return as Central Banks Fight Gains

Nov. 12 (Bloomberg) -- Central banks from Bogota to Mumbai are imposing foreign-exchange curbs to take control of their soaring currencies from traders dumping the dollar.

In Colombia, international investors buying stocks and bonds must leave a 40 percent deposit at Banco de la Republica for six months. The Reserve Bank of India created a bureaucratic thicket to curb speculation by foreign money managers. The Bank of Korea is investigating trading of currency forward contracts to limit gains in the won, now at a 10-year high.

Thanks for your consideration.

reply to post by marg6043


I guess I have to ask what we call a third world country these days
and no I am not being a wise guy just that everyone seems to have a different definition of these things and I would like to know what countries in particular you consider third world..

Respectfully
GEO

Also don't forget that the market has curbs now that kick in as soon as the market goes 2% up or down kind of like a circuit breaker but there are varying degrees of curbs.. Curbs are designed to reduce volatility rather than to exacerbate it.. as the losses mount more of these breakers are kicked in and if it goes to far the market will close for the day so 60% is improbable however not necessarily impossible..


Respectfully,
GEO

reply to post by JacKatMtn


JackKat:

Thats a pretty strange article considering its from Bloomberg. I have a bloomberg terminal here at work, and read and re-read it. TO me it sounds like a Financial war is being waged across the globe. The problem is a lot of the emerging markets are in capable of fighting this war and are not sure how to react. The US has let its dollar float and decline as a defensive mechanism. The US has the power to defend the dollar and has chosen not to, not yet at least. A few countries have begun to take actions, but have not had success. It will take a co-ordinted effort by foreign countries to boost the dollar, one with the backing of the US government. I am not a currency trader, but have used currency brokers to hedge risk on international investments. I am no long an equity trader now either. I am a risk manager, mostly credit risk for an international, Japanese company, working out of their American Subsidiary. Our risk department has managed this whole credit crisis rather well and have had almost all our transactions hedged perfect against the dollar.

Recently have unwound our trades as we have noticed the Japanese leading bank and their finance ministry have begun talks about dumping the yen, to boost their exports. The Japanese government is not concerned about the bottom line of any of their major corporations, but more concerned about the economy in general. They are a NET EXPORTING company, so they need a low YEN to better compete. They want happy consumers, not happy companies. It makes their goods cheaper for importing comuntries like the US. Although sales of Toyota and Honda and Nissan have steadily increased int he US this year, the return home for these companies have declined. Their major export/import companies have seem a slowdown in trading and have actually seen losses in the American operations.

Many exporting countries have seen this over the past 4 years as the US$ has slowly eroded. It has made many countries almost slaves to pricing in the US. They have to keep lowering prices to continue to sell, Wal-Mart can be thanked for this. They are extremely aggressive deal makers and force foreign companies to sell at reduced prices to gain access to their stores. This has a trickle effect through out the economy.

Japan is not in crisis mode or anything, but they do want to see the US$ get support here and would fully follow any attemp by the US to boost the US$. I firmly believe that we are in a bottoming period right now. I believe that the weakening economy has been detrimental to the declining US$ and hence the rise in oil prices. The recent actions of the FED have not helped measures either. With their lowering of the FED FUNDS rate, the DISCOUNT rate and the injection of over $100 billion over 4 weeks through Repo's they have increased the supply of money. This is the most basic of all laws of economics. SUPPLY AND DEMAND. Increased supply yield decreased demand. Decerased demand yields lower value. decrease the supply and you increase the demand. increas the demand and you increase the value. Japan would in effect be doing just the opposite, by increasing the Yen on the market, it would people's demand to decrease, so the thought is those wanting to invest in the YEN would look other places for value. The weakend US$ would be perfect for appreciation. Once this began you could see Autralia do it, or Canada or even some of the Euorpean central banks. They might not actually dump their currency, they could begin lowering the interest rates at their home banks too. Once the shift began, i believe you would see drastic responses by the US central banks.......Massive purchasing of the US$ would lead to a pianful squeeze in the currency. Not hat it will happne, but it could happen. Add a rate hike by the FED and things could really get moving.

I am against any further rate cuts, and was against the last one we got. It was nothing more than bailing out Wall Street. Doing what they were told by the big banks. Stupid does what stupid is told to do.......Bernanke was stupid.

I am sorry, I hav eto get back to work. I know I went a bit out there in the response, but if you have questions, post them or send me a U2U. Again, it will be more my opinion than anything, as I was never a currency trader.

The worry grew in Japan as the dollar fell to an 18 month low versus the Japanese Yen.

www.livemint.com

Tokyo: The dollar briefly tumbled below the 110-yen level for the first time in about 18 months on 12 November 2007, as jitters over the US subprime mortgage crisis led investors to search for safe havens, dealers said.

Here is the other side of the falling dollar crisis:

Strong Exports Compress Trade Deficit

The September U.S. trade deficit narrowed slightly from the month before, as the U.S. dollar continued its slump and continued global growth continued to boost demand for lower-priced U.S. goods.

The trade gap shrank 0.6% to $56.5 billion from a revised $56.8 billion in August, according to Friday’s report from the U.S. Commerce Department. Through September, the trade deficit is running at an annual rate of $703.4 billion, down 7.4% from last year’s $758.5 billion.

I am guessing the differing views on the dollar's fall is what makes it all a bit confusing to me.

The falling dollar hurts the banks, but actually helps the manufacturers of US goods. The falling dollar helps with trade deficits according to some articles, at the same time worries the foreign market.

While Sec Treasury Paulson (banker) strives for a strong dollar you have others who say a strong dollar hurts the economy.

Who's Afraid of a Falling Dollar?

What do policy-makers in China, Japan, Argentina, Malaysia, Indonesia, the European Union and many other countries understand that ours don't? It seems they know that if the value of their currencies rises too much, it can hurt their economy. But for a number of reasons it hasn't quite sunk in here.

I guess it all depends on where these people have their investments.

All I know is that the average Joe, just trying to make ends meet, has taken the brunt of this financial crisis. All the increases in oil costs are being passed on to the consumers, $3+ gallon gasoline and $4.45 gallon milk, beef prices through the roof.

Oh and on top of these pressures, Congress is entertaining the implementation of carbon taxing?

Go right ahead, what's that saying?

You can't make chicken salad........

reply to post by JacKatMtn


Mil prices are regulated. I think if you take the regulation off, after an initial spike, the prices would probably come down due to competition.

The rising beef costs.....due to tarrifs and not being allowed to accept meat from countries that had the mad cow scare.

The US$, just like everything else involved with the economy gfoes through cycles. Deep troughs are often followed by equally as high peaks. Who knows 6 years from know, we could once again be on top of the world complaining about the strength of the US$ and how things are sooo damn expensive here in the states, not through inflation, but through appreciation. Inflation usually indicates the end of a cycle, but sometimes the cycle it introducers can be just as bad, but for different reasons.

While a strong dollar would be good for our pockets, it will make goods (imported) more expensive. This would not be an inflationary result as our dollar is rising with increase, but mentally people don;t like paying more for goods, regardless of what the value of the US$ is.

reply to post by traderonwallst


Thank you for your take on the article,

I was leaning towards the foreign banks thinking this was a crisis since I heard so much of the business shows over the weekend talking about moving investments out of the dollar and into foreign currencies,

It appears that the foreign banks are trying to make it tougher to do that now, all in an effort to slow the decline of the dollar.

reply to post by geocom


Perhaps you have merit on how we view third world countries.

What is a third world country

the term third world refered to those countries that were unaligned with either the Soviet Union or the United States. These third world countries were often the less-developed countries of the world.

Today, these "worlds" are obsolete so most refer to two groups of countries as being either "developed" versus "less-developed" or "developing."

geography.about.com...

Perhaps I should say Why corporate American like developing countries to outsource.

First outsourcing help with corporate tax evaders,

www.businessweek.com...

Second developing countries may have a work force that have a gap between education and skills, they may be less skilled and less educated but they can be pay lowet wages that in America is considered unlawful.

Our skilled and educate workers in America with civil and constitutional rights can not compete with workers in oppressive countries like Communist China.

Free trade creates a wage-cutting, race-to-the-bottom competition between workers for jobs - a competition that American workers cannot win, and shouldn't even be forced to try and win.

www.commondreams.org...

This is just one of many reasons Corporate American is moving to developing countries that can offer cheap labor less restrictions and high profits.

Now thinking about companies coming back to America again? Not in a million years life is too good oversea.

Solutions to America's Economic Problems

www.economyincrisis.org...

The Harsh Truth About Outsourcing

The U.S. loses jobs and also the capital and technology that move offshore to employ the cheaper foreign labor.

While Globalization is helping developing countries to become productive is also killing middle income Americans.

loss of jobs leaves people with less income but the same mortgages and debts, upward mobility collapses.
Income distribution becomes more polarized, the tax base is lost, and the ability to maintain infrastructure, entitlements, and public commitments is reduced. Nor is this adjustment just short-run.

The huge excess supplies of labor in India and China mean that American wages will fall a lot faster than Asian wages will rise for a long time.

www.economyincrisis.org...

Does corporate America cares? No they don’t because is about abusing capitalism and profits.




[edit on 12-11-2007 by marg6043]

reply to post by marg6043


You have missed the boat completely.

Why is corporate America outsourcing jobs? Regulations! When you are told how you can build things, where you can build things, why you can;t build things, for whom you can build, who you have to hire, who you can not fire..........It makes it impossible to work efficiently and effectively.

Don't blame anyone for sending the jobs over seas!
More profits are always a good thing for investors.

yes, and remove the regulations, and what do you get???

toy's laced with date rape drugs....

or lead..
whatever.

Originally posted by traderonwallst
reply to post by marg6043

 

You have missed the boat completely.

No I have not, you are forgetting the bread and butter that makes this great nation, American work force.

Don't blame anyone for sending the jobs over seas!
More profits are always a good thing for investors.

No, I am just blaming greed and corruption, that seems to be screaming, screw Americans and laughing to the American workers.

But the American worker is also the buying power of this nation, let see how much they can be pushed until the braking point.

No work or low pay jobs, high prices not income to match inflation and there goes the buying power.

A nation can not survive on imports alone.

The smart investors that happen to be the weathy ones are getting rid of the dollar.

Wise heads desert falling US dollar

www.smh.com.au...

Nobody here can say that outsourcing is helping the American hard working sector a bid.


[edit on 12-11-2007 by marg6043]

reply to post by dawnstar


Oh, you forgot to add immigrants to do the slave work here in our own home land, it can not be done to an American citizen but it will be paradise for corporate America that support immigration with not restrictions.

So the investors can make handsome profits.

reply to post by Hot_Wings


Might as well just pick red or black and get free drinks at the same time. Markets are impossible to time in my opinion and I have been attempting to doso for at least 20 years. 95% of investors would get better returns by just buying index funds whenever they have the cash. Optimism is the only true reality.

And Trader comes along to support me on this. 60% is a lot for our market to go down, it's not that bad. Why not correlate this to the Dot Com bust and call this the Credit Crunch or something like that? Sure stocks are going down right now, but if I had the cash, I'd be buying. I see so many sales right now that if I didn't want to pay interest rates, I'd get a loan and invest some more.

As for outsourcing, I'm for it. As Trader mentioned, there are a lot of regulations that are effecting companies. That said, if everything was manufactured in the USA, or where ever you buy it, you'd be paying a premium and complaining that your cost of living was even higher than it is now. If we use the USA as an example, well, no one would be able to afford much if everything was produced here. The Chinese and Indians can do this fairly cheaply and are decent at it, with a few exceptions. Singapore is a good example of using Industrial Parks to its advantage. If we didn't outsource, things would simply be outragous. If we could drill and produce our own gas here it wouldn't cost so damn much. In the Middle East, some of those countries are paying less than $1 for their gas. Outsourcing, I'm all for it even if it means it could take a job away from me or someone I know. Hell, I'll even go to another country to get medical procedures done if I have too. I believe theres a nice one in India that wants our business pretty bad; has about 8-10 RN's per floor compared to 1 RN in the US. Outsourcing is good, and the people who don't like it or aren't for it should reevaluate how they think of it to see just how much it really does help.

For those that complain about the Dollar, well right now that is going to create jobs here and thats good. Maybe we can sell enough to other countries to reduce our national debt; yet, somehow I doubt that.

Originally posted by traderonwallst

While a strong dollar would be good for our pockets, it will make goods (imported) more expensive.

Actually, it's the reverse Trader. A strong Dollar against other currencies makes our imports less expensive. A weak Dollar makes our imports more expensive.

Similar dynamic for any country with a Dollar-peg

reply to post by OBE1


More expensive goods to add to a on going recession, I forgot about that one OBE1, Good Catch,

Funny inflation will put a burden on the hard working American because is not only goods what it will cost more.

$100 Oil May Mean Recession as U.S. Economy Hits `Danger Zone'

www.bloomberg.com...

But is good for investors right? or that is what . . . the hopefuls will like to believe.

Originally posted by ChrisJr03
I don't think 60% will happen. I think a 15-20% drop would be more correct; however, it wouldn't be that much now as the market has already started to correct itself.

Yeah that sounds more like it. Plus the Dow is only a small part of the Stock Market as a whole. That's just what is mostly covered by news and a 300 drop today is nowhere near the same drop say 6 years ago! It can recover much easier than back then.

This forum gets me. It's rumar central bigtime!