Dow Jones is about to hit 13000

It's simple, the market is correcting itself. It has been overvalued for some time now. The Fed pumping money into the economy is not helping either; it's just an artificial crutch. Investors now are begging and pleading for more rate cuts, yet this will do nothing to help the situation. By cutting rates further, we artificially inflate the stock prices/market, what have you. The thing that needs to happen, and won't happen, is that the Fed needs to let these companies(Citi, Merrill Lynch, JP Morgan, ect.) take their losses in one "lump sum" and then move on with it. The consumer isn't going to be helped by these rate cuts, they won't be helped by the action the government is taking to help these companies; only the companies are benefiting from these cuts, as well as investors. I believe Merrill is going to announce earnings tomorrow, not a good thing----considering I read an article on Yahoo on how they've managed to destroy nearly half the companies value.

Now, on to the stocks themselves. If you have stocks now, don't sell, it's as simple as that. What do you have to gain if you sell your stocks low? Nothing. You can't write them off as a loss, and more likely than not they will return to the price they where at or close to it. If you have a dividend stock why sell at all; you'd still be making money off of it and if you reinvest it, you'll be able to get more stock cheaper. All of my stocks are losing, for the first time ever I'm getting a negative return on my investments. I don't like it, but I realize its all part of the game, and I hope others do as well. When you sell, you create panic, and panic is never good.

Right now, I wish I had money to invest; there are so many good "sales" right now its unbelievable. Because of the loan crisis and credit crunch, good companies are very reasonable now. Here's one for someone who wants to invest, Johnson Control (JCI). This company was at $120 something a share before their split, now it trades for $32 or so a share. I've lost money on it because I bought right after the split when it was at $38-40 per share. Am I going to sell it, no. This company has paid a dividend for, if I remember right, 100+ years. That is an impressive feat. I bought a company called US Global Investors (GROW) for $28.45; it now sells for $17. Am I happy? No, but am I going to sell it, no. I've lost 40% of my investment, but, their mutual funds are very highly rated so I expect this company to come back, just like JCI.

I realize because I'm young that I am more willing to take risks. A lot of other people won't or can't, and thats fine. But, still, why not take a gamble on Citi Bank? They're not going to fail, they're cleaning up their mess, and they pay a good dividend. The stock sells for $26 and was trading at $55. They're going to come back, if you buy now, you have the chance to reap a huge windfall on this stock. Same with Bank of America; while it trades for more, $38, it wouldn't be a bad investment. They haven't been effected by the credit crunch at all, yet they're paying for the mistakes of other banks and lenders.

Now is the time to buy. There are so many sales and bargians out there that a savvy investor will make some serious cash. This does not mean however to just rush out and buy these stocks; you've got to do your due dilligence and find the right stock(s) for you. I wish I had the money to pursue these stocks; now is the time to buy.

I'm not sure how low the fed will/ can go?

The U.S dollar as reserve status has been protected before and cutting rates much lower does not seem to be doing anything for anyone, except cutting the buying power of u.s citizens dollars.

If the dollar falls much further, SWF would diversify more out of u.s assets, and OPEC country's would likely follow suit by trading in a basket of currency's.

The fed today also appeared to be looking for a stimulus package to the economy that would help lower and middle income families. I almost fell out of my chair when bernanke admitted "this would give the economy the most bang for the buck".

Now it is nothing new for politicians of bankers to put out misinformation to calm fears, and middle class anger , but i think it would be going against his above advice to cut rates much further , especiallly without the ECB signaling it's moving in the same direction. If ECB cuts then that would take a lot of downward pressure of the dollar and pressing consumer inflation issues in food and energy and insurance.

Raising rates would prove very difficult for the financial economy although it would raise investors confidence in the dollar, and boost confidence for longer term stability in the bond market (which is bigger than STK market)

Now i know the FEd will be looking out for their buddy's at JP morgan and GSachs but that does not necessary mean they will cut much below 3.5% (

It appears a change of banking power is flowing back overseas to the banking centers in london where it once was prior to WWII. The fed sacrificing the dollar would sacrifice some of their own influence and power.

Their is no easy way out of this mess.

If you wanna make money in the markets i would short high end retailers that haven't taken a plunge yet.

If you wanna look for bargains i would wait till spring, you may still dig yourself a hole if you jump in now, and of course do your due dilligence and make sure they are solvent.

political decisions will factor in more so than usual and the markets and economy is reaching uncharted territory, yet no one seems to be aware the basic struture of banking (USURY) is the fundamental problem behind all of this, and debt loads are being stretched to the limits, and the solution wall street begs for is more debt.

Of course one may be wise to wonder if Deflation really couldn't occur. Bernanke has to perpetuate the lie or belief that the fed has "magic power" which = deflation couldn't happen here. This was from a man who was trying to explain the reason the great depression occured, and failed to mention the huge amount of credit creation the fed created in the first place. The reason for this omission is it is the achillies heal of banking. See bankers make money by expanding credit which is paid back as debt. the more they issue the more they get back since they charge interest. And the ineviditable collapse from a credit bubble is either the destruction of the currency or a deflation. This may well be a political decision as economist Michael Hudson has exlained. But remember this in deflation the fed still has more chance of a reserve currency as well as a strong bond market. The FED DID IT before and conditons are extreme enough now that the fed and politco's may again.

edit: the dow has just apparently jumped out of an airplane w/o parachute.

[edit on 17-1-2008 by cpdaman]

The Dow is falling at about 2.5% daily. It should only take about 3 weeks to bankrupt most investors at that rate.

It was fun while it lasted. I wonder if third world countries will send us economic aid.

reply to post by mythatsabigprobe


-300+ ... amazing. When I left work this afternoon it was down I believe 128.. never expected such a sell off. You can see the European markets where waiting to see what was happening across the pond, in the short amount of time left after our sell off they began a decline as well. Worse 3 day decline since 2002.

Getting worried now. AOL usually has a zero delay on their DJIA ticker, but they haven't updated since 16:05. SO I went to the Dow Jones website and they say there's a 20 minute delay on their ticker, but it's also stuck at 16:05. It's now about 16:40 EST.

djindexes.com...

Ok, getting creepy now. They updated at 16:40 (says 16:30 on their website but it changed after 16:40) but the figures are identical to 16:05

Merrill Lynch outcome was as expected very bad today something that was forgotten while Barnanke was in from of congress talking about the economy.

Merrill was considered in the red today in the markets.

Another financial institution that went down.

The outlook by was gloom but he avoided at all cost the to use the word recession.

The interest rates will be cut again maybe earlier than expected.

Stocks punished; Dow off more than 1,000 in '08

www.usatoday.com...

i wonder if the U.S will feel pressure to go to "war" the harder the financial sector is hit?

See u.s bombs iran, oil goes up, themore Saudi arabia charges for oil, the more petro dollars they will get, and the more they will be to help out our financial entity's by buying stakes in them and keeping them w/ enough capital. HMMM?