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World Markets Plunge - DJIA Futures Down Nearly 500 Points

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posted on Jan, 22 2008 @ 10:32 PM
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reply to post by Rockpuck
 


I presumed (how wrong of me) that you knew that the POPULATION GOES UP OVER TIME. If you refuse to acknowledge this fact, and refuse to acknowledge TOTAL CONSUMER DEBT goes up over time, then I am at a loss. The fact is that - for the last recession - debt per consumer was the highest ever -up until that time period. And it remains true, for this time period. The facts are that there is nothing different from this recession theoretically than the last one, except the numbers have been inflation adjusted for 2007.

I could spend a time making a graph for you - because this is one of those things that seems to be "obvious" so I'm not sure if I could find one pre-made, but its not worth my time. If you refuse to believe it, I can do nothing else.

You are the one derailing the thread, as you were the one who inserted YOUR opinion about national consumer debt being somehow at its highest now..but not at its highest during the last recession. You then continue to derail it by ignoring the facts. Your arrogant attitude is beginning to get annoying.


...AGAIN, back on topic

People will believe what they want. Everyone loves disasters because they think its going to be exciting. Economic doom and gloom is far more interesting to watch than a stock market boom. Entertainment at its finest.

Oh look, oil prices have dropped. When they were getting close to $100 a barrel, I saw tons of topics proclaiming it to be doom and gloom, etc. Now its at $86, and no topics about this drop - how interesting. And how unsurprising.

Obviously no one is going to change anyones minds on this - one side will proclaim economic depression/disaster/whatever, the other side will proclaim economic recession. We'll see what the reality is soon enough.

[edit on 22-1-2008 by LightinDarkness]




posted on Jan, 22 2008 @ 10:34 PM
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Originally posted by Rockpuck

I don't know about that, it is kind of odd Europe did so well when America was expected to tank.. though I cannot answer as to why that is, I am sure someone here has a logical explanation for exactly why that is.


Rockpuck I can answer that it is called a "Deadcat bounce" in the financial world.

en.wikipedia.org...

We are going to see many of them in the next 6 to 8 months until the market has fully corrected itself.

I have gotten completely out of the stock market in the past 3 years, because of all the lies and corruption, when I find out who the BS'ers and liars are after the cleansing I may get back it, but probably not.

The only one I trust with my money now is myself, because I have full control and can invest in foreclosed properties for 10 to 20 cents on the dollar of their original assessed values.

As long as investors always keep this one thing in mind:

"Something is only worth what people are going to pay for it."



posted on Jan, 22 2008 @ 10:43 PM
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Welcome to the 2008 Meltdown

Thanks to the proliferation of derivatives and other financially engineered nonsense, we live in an era when everybody in the financial world relies on everybody else. The banking system could be one downgrade away from financial Armageddon, toppling one financial institution after another like dominoes....

The recession, which is likely already happening, will only make all of the above worse. It’s likely to be prolonged and worse than normal, simply because the bubble that sustained the economy over the past several years turned out to be a pyramid scheme that was worse than normal.... Full Text


Excellent report from Eric Sprott today. If we get a relief rally in the broad indices this week...it will be brief. Same with the short-covering rally in the financials today. There's still a-lot of muck to be revealed & flushed. Like Sprott, I believe the downgrading of monolines will be the next shoe to drop.

In terms of crediblity...Sprott Growth Fund was Canada's top performing stock fund for 2007.



posted on Jan, 22 2008 @ 10:45 PM
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reply to post by Realtruth
 


I'm not smart enough or immoral/unethical enough to come up with a scam, and have the government bail me out, but that is exactly what happened during the 1980's S&L crisis. Ask Neil Bush.


I also was taught that if you took a monetary risk, an investment, and it went sour, that was your problem. I would lose money, have no one to blame but myself (assuming that the investment was legitimate and I was not defrauded) and not expect to be "bailed out". While I do have sympathy for a family taking on a mortgage from an unscrupulous broker and losing their house, I see no reason to bail out someone who buys a home solely as an investment. How many of those mortgages were sold as investments only, houses to be turned into a rental or resold without ever living in it?



posted on Jan, 22 2008 @ 10:52 PM
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Rockpuck and Light in darkness

i think LID was saying that this recession is going to be a normal cyclical one and that Rockpuck said well look at consumer debt it is the highest it has ever been

and then from that LID *assumes* Rockpuck was talking about debt as a total amount because LID states that debt will always be the highest it ever has been because total debt is constantly growing or something to that effect and uses this as proof that this recession is nothing special

either LID assumed rockpuck was talking about debt as a total number or he thought that if he spun the meaning the numbers would back up his statement. LID if you think debt as % of GDP or Income is not higher now than in the 80's well than i understood you correctly becaue you were saying it is a normal recession. If this is incorrect let me know?

their is no need to "adjust this number for inflation" because we are comparing two reality's . In reality wages try to keep up with inflation, if they don't or if they outpace this doesn't matter because were not comparing "what if's". We are comparing debt burdens and if they are the same now "or close to be fair" or wether debt burdens on average are higher now. at least that what i thought

This first chart shows "household debt" as a percentage of GDP

This household debt includes mortgage payments and credit card debt that consumers owe

bp2.blogger.com...

note consumer debt has risen as a % of GDP from an aveage of 50% in the 80's to over 90% as of early 07 and getting worse.


I should note that credit card debt as percentage of Income is also much higher in the last 10 years than in the 80's as you can see

look at chart 2

www.americanprogress.org...

i would wager to guess the reason chart number one continues growing upward where as chart number two levels off around 96' is the giant rise in mortgage debt that kept the economic numbers growing and is starting to weigh on homeowners as house value's fall. Also the chart only goes to December of 06, my guess is that since credit card defaults were rising in the second half of 07 that the second chart would also show a little rise at the end, but regardless the picture there is clear becaue this percentage is 4 times higher, but in fairness more people own credit cards now, so chart one is a more accurate represetation.

House hold debt as & of total disposable income has also increased as can be seen here

www.ftc.gov...


the PDF file shows two charts w/ the second one being a bit easier to see the details of, the percentage change is from about 10.75% to about 14.25% shows about a .....30% increase with the word's "don't do this" next to it.

I should also note that costs of living have also been rising faster than income. Which may actually make the figure's in the last chart, a bit less representative of how much more of income is going toward paying debt. There is no co-incidence that the net saving rate has gone negative to help make up this difference.

So in conclusion the debt this go around with a very likely recessioin is much deeper as a % of GDP and Income and clearly so.


[edit on 22-1-2008 by cpdaman]



posted on Jan, 22 2008 @ 11:10 PM
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Originally posted by Realtruth
...
I have gotten completely out of the stock market in the past 3 years, because of all the lies and corruption, when I find out who the BS'ers and liars are after the cleansing I may get back it, but probably not.

...
As long as investors always keep this one thing in mind:

"Something is only worth what people are going to pay for it."


Enjoy your investments, Real, you've earned them well!

My $.02 re stock market
Asking people to invest in the stock market as part of their Social Security was another scam to get more money into it, to be taken from it by the liars and crooks. The line about the Brooklyn Bridge was so passe and overused


What next to get little old ladies to give up their money and at the same time get money from the government? Let's see...oh, wait, that's just been done by the pharmaceuticals.

You know, one of the definitions of an American Middle Class was those who could save money. That one sure flew out the window!
Perhaps that, more than other things that have happened, is the real downfall of the Middle Class. The scam to divest the Middle Class of their savings, to take everything from them, tell them they are still Middle Class, that is the ultimate scam.



posted on Jan, 22 2008 @ 11:13 PM
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reply to post by cpdaman
 


I did no *assuming* - Rock said consumer debt was the highest ever - I know of no way to measure consumer debt except debt per consumer. I showed a chart of total CONSUMER DEBT going up, and we *also* know that the POPULATION (the consumers) is ALWAYS going up, I didn't see the need to provide a chart for it - it is obvious, but I can provide one. While the ratio of increases in consumer debt and total population change over time, they always go up. For any time period, the debt per consumer is always at an "historical high."

There is no spinning to do, except what your spinning. You need to adjust debt for inflation, obviously, because $1 in debt in 1987 is not the same as $1 in debt in 2007. Not adjusting for inflation is spinning. Look at your charts. Pick the past 3 depressions. Notice each time, there is a large jump in debt as % of GDP. As there is this time - completely normal. It goes up every time. Chart 2 is a classical example of spinning data: the actual nominal percentage change is only around 5%, and adjusted for inflation it would be much lower.

This is incredibly simple, but I give up. People will sit around and proclaim economic armageddon - you enjoy it. I'll be sure to bump this thread in a year and ask why we had a normal economic recession and not a financial disaster.



posted on Jan, 22 2008 @ 11:14 PM
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dp



[edit on 23-1-2008 by cpdaman]



posted on Jan, 22 2008 @ 11:14 PM
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There was talk that getting people to invest social security in the stock market is a potential way for the government to wipe certain entitlement liabilities of their balance sheet by allowing the stocks to inflate initially as more and more money enter and then let them collapse.



posted on Jan, 22 2008 @ 11:16 PM
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Ah yes the Monolines, when was the last time one of those went Bankrupt? They've already pretty much imploded price wise and one of them ABK I believe reported a loss per share larger than it's share price recently. That's a biggie what was so bad about this one that it took 75bp. It only took a surprise Discount Rate cut in August to rally like mad. And a sorta surprise 50bp cut in September to hold things steady. Fed is having to intervene bigger and more often. Conventional wisdom says another 50bp at least next week. Recession is a given, but there is a potential there for something bigger something BAD.

Things I consider undisputable


  1. A Bear Market is in effect
  2. The writedowns in the IB's aren't over
  3. The more the Fed cuts the less tools they have to impact the economy.
  4. Inflation is real and biting into the consumer's discretionary spending.
  5. Decoupling right now appears to be a myth.
  6. Housing mess isn't over

I've been thinking about what will finally break this market into a major move down. When not if one of the monolines colapses you will see HELL in the market. There is already talk of a govt bailout (pirvatize profit socialize loss).Anyone wanting to call a bottom right now put your money where your mouth is. I'll wait in cash and treasuries till I feel comfortable. There will be an excellent buying opportunity sometime in the not to distant future, but i'm not willing to hop back in fully yet. I thinke there is still better opportunity on the short side for the time. Lots of bad news still to come i think, but hey i could be wrong.



posted on Jan, 23 2008 @ 12:49 AM
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The US is ALREADY in a recession. That's clear. In the ``booming`` since 2000, the average person lost 1000$ PER YEAR of income. That's quite big for a ``booming``.

And the stock market holds what? PENSION FUNDS. And you know what? The baby boomers are starting to use their pension funds. Now the only for them to keep a fair salary is to continue working or to move to their family. If they don't have family and they can't work they are going to be HOMELESS. Homeless when you're 65 years old and you worked all your life for your country is a SHAME.

And still the scum in both parties, especially democratic, are talking about HEALTH CARE FOR EVERYONE... SURE.


Also there's the factor of the runs on the banks... my brother in Canada works in one of the biggest bank and he said that he received hundreds of phone calls in the last 2 days because the people were asking to remove all their money, well his boss told him to refuse because it could lead to the bankruptcy of the bank and the world economy. If there's a run on the banks in the US, it's over, the house of cards will fall to the ground and the US dollar will be worth 5% what it is worth now. Old people with pension funds will be homeless and there will be blood in the streets.

[edit on 23-1-2008 by Vitchilo]



posted on Jan, 23 2008 @ 01:14 AM
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Originally posted by Realtruth
Very good post and analysis. The only problem is that the Federal Government cannot bail itself out now because they are broke.

Ask yourself who is the federal government?

How much do they owe?

How much do they continue to spend?

Where does the money come from that the federal government use?

Answer those questions and your will see why the Federal government can do almost nothing and the everyone in the financial world knows this deep down.



Originally posted by cpdaman

The Federal Gov't needs to step in and Bailout or takeover and cover the policy's written by the mortgage insurance company's MBIA and AMBAC . This will provide some certainty to the investors that they will be reimburesed somewhat for losses.



Actually no gov't has EVER actually paid their debt back in full
and i was not suggesting they bail themselve's out , i was suggesting they bailout and takeover two mortgage insurance company's MBIA and AMBAC
And they gov't would get the money from The FED lending it to them
banker's love lending country's more money than they could ever pay
back. Look at the IMF and World bank, they lend huge chunks of paper or
a few punches on a computer screen out because they know that
when the country defaults on the payment (which they hope) they get the
country's natural resources as collateral. you can find details on this
from the controversial book "confessions of an economic hit man"
When the gov't can't pay the intrest on the national debt then they would
Default or perhaps there would be some leniency since if the U.S gov't
defaults then the Fed is in trouble as well. I mean sure they would collect collateral, but also their game would be up. They want debt slaves.

BTW futures point toward a moderately lower open appox down 65-70

and Asian markets have bounced back between 2 and 5 percent generally with the exception of the hang seng index up over 8 percent today. wow but these people are taking their cue from the u.s markets which had a good day, and generally they were over-sold

let us hope the u.s markets don't do anything drastic tommorrow.



[edit on 23-1-2008 by cpdaman]



posted on Jan, 23 2008 @ 01:23 AM
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LID you don't really undestand things that fast , but luckily for you i teach a kids class so i am very patient

look at the 6'th and 7'th charts down which are adjusted for inflation, just to make you happy....actually almost all are adjust for inflation and compard with a time when debt high due to war costs.

mwhodges.home.att.net...

looks like the you were.......mistaken nah couldn't be you've shown so much proof and logic and you surely aren't a disinfo agent...perhaps just not that quick on the uptake.....in this case

anyhow i will resume my focus on this thread's topic and not be distracted

[edit on 23-1-2008 by cpdaman]



posted on Jan, 23 2008 @ 07:31 AM
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Excellent report from Eric Sprott today. If we get a relief rally in the broad indices this week...it will be brief. Same with the short-covering rally in the financials today. There's still a-lot of muck to be revealed & flushed. Like Sprott, I believe the downgrading of monolines will be the next shoe to drop.


Beautiful pdf article. I couldn't have expressed the reality of this situation any better myself.



posted on Jan, 23 2008 @ 07:55 AM
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just thought i would mention an oddity i just saw. on the bbc website main news page, there is always a large list on the right of the world stock markets and pointers as to how much they were up or down.

today for some reason, only 3 are listed...
ftse, dow jones & nasdaq. same goes for the markets page when you visit there.

i'm sure there's a good explanation for it but i've never noticed the removal of any before today

update - half an hour later, more markets have now been added onto the market page but not the front page.


[edit on 23-1-2008 by justyc]


JSR

posted on Jan, 23 2008 @ 08:15 AM
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I would like to pose a question to our more market savvy posters. why is gold going down right now? is it just a natural short pull back or what?

I thought gold was were the money went in times of trouble and uncertainty. where is all the smart money moving right now?



posted on Jan, 23 2008 @ 08:45 AM
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Bad start to the day, as of 9:44 AM EST

DJIA 11,759.92 -211.27 -1.76%
NASDAQ 2,240.33 -51.94 -2.27%
S&P 500 1,282.38 -28.12


Is it to be expected for the markets to eventually eclipse the DOW -500 delayed by the fed rate cut?

Is that a reasonable expectation through Friday?



posted on Jan, 23 2008 @ 08:49 AM
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reply to post by cpdaman
 


Excellent link there Cpdaman, was a great read this morning.

JSR:


I would like to pose a question to our more market savvy posters. why is gold going down right now? is it just a natural short pull back or what?

I thought gold was were the money went in times of trouble and uncertainty. where is all the smart money moving right now?


I used to think that to, but it seems like all others in the market it drops as well..

What I have noticed though as a trend especially with older people is here in my office I have been moving money from mutual funds to fixed rate annuities (a form of savings).. Not that I mind, I make good money when I do it, but older people especially when in a mutual fund and the stocks drop, they could loose thousands in a week, or hell, in a day, and it just doesn't make sense to put the pension you live off of in a variable product..

There are other areas people put money away from the market, be it bonds, savings accounts, CD's...



[edit on 1/23/2008 by Rockpuck]



posted on Jan, 23 2008 @ 09:48 AM
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reply to post by cpdaman
 


Lucky for you I teach lots of undergrads and some of them are slow, so I can help. Charts 6 and 7 show consumer AND GOVERNMENT DEBT. I have only commented on consumer debt, not government debt. Nice try to spin the data, though. Wrong as usual though, I'm afraid. You can due all sorts of cute things with inflation adjusted numbers when you start adding in external variables. Consumer private debt =/ government debt + consumer debt.

By the way, I have no problem with a chart from any website, even a conspiracy site, if it comes from a valid source. However these charts don't cite any actual valid source, so I assuming they are correct (they cite politically tainted sources). This is a big assumption, but in any case your still wrong.

Perhaps you didn't notice - but for each year its a historical high up until that time period. Why is that? Could it be that...for every year, we're at historical consumer debt levels until the next year? Indeed it could. Who would have thought?
Not I, certainly.

Looks like you were.....mistaken nah couldn't be you've shown so much proof and logic and you surely aren't a mass media shill...perhaps just not that quick on the uptake.....in this case

Anyhow i will resume my focus on this thread's topic and not be distracted...

Where are the stories about the price of gold and oil dropping? I though these were the safe havens were everyone should be running and placing their money during a depression/economic armageddon/whatever. What gives? Certainly if the "big money" was scared of doom and gloom, they'd be buying so much you'd see the prices go through the roof. And after all, it is the "big money" that usually profits from recessions - so why aren't they running?

[edit on 23-1-2008 by LightinDarkness]



posted on Jan, 23 2008 @ 10:58 AM
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I find it funny that oil futures are going lower in fears of reduced demand caused by an expeceted recession.

Have the greedy finally realized that they pushed the consumers too far?


Oil Falls on Concerns Demand Will Fall

The Federal Reserve's decision Tuesday to slash its benchmark fed funds rates by three-quarters of a percentage point to 3.5 percent appears to have limited the declines in stock and oil prices. But while the Fed is expected to cut rates further next week, many investors remain worried about whether the cuts will stave off recession.

"We shall see how stimulative our current monetary policy is," Rafield said.

Investors are also concerned that high energy prices may be contributing to the economic slowdown. At the pump, gas prices held steady overnight at $3.01 a gallon, according to AAA and the Oil Price Information Service. Prices have mostly fallen lately, but remain more than 85 cents a gallon above year-ago levels.



The prices may lower for awhile, but I would expect the price to go back up when the proposed tax rebate happens, so those oil companies can squeeze us again.

I think it might be time to get that bicycle out of storage



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