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World Markets Plunge - DJIA Futures Down Nearly 500 Points

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posted on Jan, 31 2008 @ 10:19 PM
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reply to post by Rockpuck
 


One of the reason to bring all this information is to see the greater overall picture of what is going on with our nation's economy and its impact in the global economy.

This developments in the last 7 years or so will be part of more than one NWO conspiracy to come.

Threads like this one will become a very nice research subject as is many post from people with inside knowledge like yourself to bring up today information on everyday matters affecting everyday investors and real people.




posted on Jan, 31 2008 @ 10:20 PM
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reply to post by Rockpuck
 


Don't you find it interesting we were just in a thread where the masons were forum gangs, and yet here we are agreeing in part and disagreeing in part?


As you know, retirement accounts are for the long term. Balances will go up and down in the short term. You know as well as I that diversifying at fixed intervals is far better for amateur retirement investors than attempting to play games with timing the market.

Anyone at 65 who has a majority (>80%) of their money in anything but bonds is probably beyond any help in terms of financial advice. If they refuse to take it out, let them be punished. They should know better. You can't afford to play the markets when you don't have a long time horizon. Of course, if that 100% is just 20% of his money, I don't see a problem with it.

As you have said, interest rate cuts help consumers who carry debt, while it punishes those of us who like to save. My high yield savings account rates are plummeting, and so are my (already low) credit card interest rates. But I don't care about credit card interest rates, because I don't carry any debt at anything more than 0%. But for Americans who carry debt and don't save, they love rate cuts. Rate cuts reward stupid companies and stupid consumers, and punish everyone else.

Its a cyclical recession, and as you know they must happen. You cannot go through long periods of growth without recession. The economy must adjust for the stupidity that was going on during the growth period. The housing bubble needs to burst, because people should learn that housing IS NOT AN INVESTMENT - ITS A PLACE TO LIVE! IF it makes you money, good for you, but making it your own little investment nest egg based on a housing bubble is gambling with real estate speculation.

In the end, the market rewards those who diversify and invest with long time horizons. It slaps speculators and those who try to time the market, as well as those who are investing when they don't have a long time horizon. And in my opinion, it should.

Also, and this isnt toward you Rocky (can I call you Rocky?
) but just in general...

When we come out of a recession - as we will - this will be a interesting research thread. I wait to see how all the doomsday prophets will try to explain it away, I'm sure when we come out I'll be told that the real financial armageddon is during the NEXT recession.


[edit on 31-1-2008 by LightinDarkness]



posted on Jan, 31 2008 @ 10:24 PM
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reply to post by LightinDarkness
 


The problem with what is going on with the markets right now is affecting more and more the regular people, the regular Joe, the mistakes of the so call experts and leaders in financial matters will be rolling down the ladder to be dumped on us, our children and grandchildren.

While they bail out and live their lives like nothing is wrong.

I for one want accountability and criminal charges if corruption is involved.



posted on Jan, 31 2008 @ 10:28 PM
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reply to post by marg6043
 


Again with the populism. I am not sure how else I can say this: the "average joe" IS AN INVESTOR IN THE MARKET NOW. The "average joe" IS PART OF THE CAUSE of this cyclical recession. He slapped himself. As for people like me, who make less money than "average joe" and didn't do anything to cause this - I'm perfectly fine. As is everyone else who is normally financially prudent.

But didn't you just indicate that the markets mean nothing, and now they do? Which is it?

I'm all for accountability and criminal charges, as long as your also willing to charge the average joe who stupidly bought his house even though he couldn't afford it. Are you even capable of admitting that you can't blame everything on the rich and that yes indeed - the poor and middle class are ALSO partly responsible for this recession?



posted on Jan, 31 2008 @ 10:29 PM
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Originally posted by marg6043
The problem with what is going on with the markets right now is affecting more and more the regular people, the regular Joe, the mistakes of the so call experts and leaders in financial matters will be rolling down the ladder to be dumped on us, our children and grandchildren.


So how is the regular Joe being affective? The regular Joe invests for the long haul and this type of event effects that little. If anything it creates a buyer’s market for those regulars who buy and do not sell for a long time.

Also the regular Joe who bought a house with a normal fixed morage rate at a price within their means and those who keep insurance see little changes for them with the housing market.



posted on Jan, 31 2008 @ 10:46 PM
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reply to post by LightinDarkness
 


Ha, yeah, shows they have the wrong idea of us... entirely.. but me and you, we should be used to being judged in such an unfair manor..



As you know, retirement accounts are for the long term. Balances will go up and down in the short term. You know as well as I that diversifying at fixed intervals is far better for amateur retirement investors than attempting to play games with timing the market.


If the company your investing in becomes insolvent (cannot back its claims) ... you loose that money. Gone. No more... you will never see it again, it will be like it never existed. Those who invested their pensions in Enron for example, try telling them, stick with it... it will come back. Don't think so.

I know people who lost THOUSANDS upon thousands after 2000 .. Dot Coms, mutual funds torn to shreds and after 9/11 I know people who had their pensions raped and pillaged, and never saw a dime come back.

They stick with it, after loosing in some cases half their retirement accounts, they think it will go up.. eventually.



Anyone at 65 who has a majority (>80%) of their money in anything but bonds is probably beyond any help in terms of financial advice. If they refuse to take it out, let them be punished. They should know better. You can't afford to play the markets when you don't have a long time horizon. Of course, if that 100% is just 20% of his money, I don't see a problem with it.


Well over conservative saving can be just as bad as loosing it all, true.. but you can go to bed at night knowing its there at least. 20% is the MAX any one even ABOUT to retire should have in a variable product, let alone trading themselves on gimmicks like Scottrade. Anyone 5-8 years in advance to retirement should pull most money out of the market, leave a little to play with.. but people should be responsible with their lives, not overly risky.



As you have said, interest rate cuts help consumers who carry debt, while it punishes those of us who like to save.


Who does it help? Refinancers? No. If it would help them, they sure as hell would have done it when the interest rates where 1%! .. Credit cards will remain at 20+% .. whats worse, is because so many houses are defaulting RENTING is shooting through the roof... and no lowering interest rates will help those who rent apartments and the like..



When we come out of a recession - as we will - this will be a interesting research thread. I wait to see how all the doomsday prophets will try to explain it away, I'm sure when we come out I'll be told that the real financial armageddon is during the NEXT recession.


Sure, call me rocky lol. Wha eva.

If we come out of this all shiny and pretty like Light, I will eat my own words and video tape my self calling you, light, the master of all marketing speculation.
Of course... if the economy gets worse....

Actually..

People like me, marge, CP, Udio, many, many others.. have all been saying since July we are heading for trouble... go back and research some of those threads, should be a good read. And in November, many including my self, forsaw a slower Christmas season.. and coming out of the season, when numbers where revealed, the true problems slammed Wall Street.

Should check em out some time.



posted on Jan, 31 2008 @ 11:08 PM
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ah yes it is the fundamentals that are so freakin ugly , that you will not hear anyone dare speak their mind on tv (as to how bad it will get) except Soros.

Why? perhaps it is a concerted effort to maintain as much of an upbeat expectation of the future that one can? why? so as to influence consumer spending and keep investors thinking another bull market is around the corner.

the only way the market rises substantiallly is if the currency is devestated. adjusted for inflation the market will decline, and that is if the gov't orchestrates endless stimulus plans as well as fed's getting very creative bailing out wall street.

I hear people who have been in "the markets" comment on how this is the worst, most delicate and potential destructive situation the markets have entered in their life time. not joe 6 pack's but people respected like Jim Sinclair and Jim willie, also Doug Noland.

People who's profits depend on success are much more biased in my opinion (and that helps them see things in the best spun context possible, and to gloss over the reality's of a system that is in desperation)

The unshakeable belief for some that the market will right it self because "that's what it has done in the last 50 years" is no such guarantee, this helps ease fears and gives enough peace of mind to those who know they lack a better "feel good" option IMO. Take a look at the history of recent civilization. All society's fall. One must come up with better reasoning that this must just be another cyclical recession based on the fact that this is how it has been for the last 60 years or so.

Perhaps this will be remembered as "the great stagflation". where the giant effort by the fed's to bailout the well-connected banks winds up destroying the saver's incentive while at the same time drowning other's in debt, causing mass suffering and tremendous reaction for a solution. Perhaps the end of the lavish living of the drown in debt american consumer has a domino effect with the end of the petro dollar and world reserve currency and the endless ability the american consumer had to go into debt financed by recycled petro dollars and brainwashed into spending by american media. perhaps what rises from this mess has been planned.

perhaps some people think in absolutes or think that an ordinary trusting american citizen is EQUALLY responsible for the state of this nation compared with greedy lenders and financial engineer's who thought they could forget about tommorrow and deregulate the system for their pot of gold today.

the american who tried to "flip his house" does not have EQual responsibility in this mess, the guardians and experts of this financial system ...the regulator's (who have the authority and thus the greater responsibility) have failed us. But what was their other option?

Perhaps they had no better choice, i.e come up with some financial shenanigans or (the growth of the last 5 years would have never happened!) i.e no low rates= no booming house values No growing consumer spending or GDP. No back bone to the economy = the end occurs sooner, however the middle class would have had less debt.

Perhaps this is a culmination of a system rotten from it's inception, perhaps it was a poor system as history will show, where the idea of a gov't having to borrow money at intrest always will catch up to you at some point, as well as lead you into destructive policy's in order to prolong and/or improve your position in the world via deregulation of the financial system ( to add another 10 years to it's life) or (play war games) to boost the strength and income of the military industrial complex
l

[edit on 31-1-2008 by cpdaman]



posted on Jan, 31 2008 @ 11:30 PM
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reply to post by Rockpuck
 


Rockpuck, anyone using your plan is bound to run out of money.

First off 90% of retirees do not have the money they need to live on. Thus they are going to run out of money or suffer a declining lifestyle as they age. That is a given with their level of savings.

Let's say someone needs $30,000 per year out of their retirement savings. Let's say they follow your plan and invest it 80% in long term goverment bonds and let's say they get 5% interest. Let's also assume they can 5% interest forever (though they can't now). Now let's also assume they put the 20% in basket of safer stocks yielding let's say 4%. Figure another 4% annually in capital appreciation for 8% total return. This this person would need to have balance of $625,000 upon retirement in order to earn his first years target income. $500,000 bonds ($25,000 annual interest),;$125,000 stocks (1st year dividend ($5,000).

Now lets move to year 2. The bonds pay the same $25,000, but the stock is now worth $130,000 so the dividend becomes $5200, for a total income of $30,200. All looks good, right? Wrong. At 3% inflation, they now need $30,900 to maintain the same standard of living.

After 10 years, to maintain the same standard of living they will need about $42,000. Their portfolio will provide the same $25,000 interest from bonds and the equity dividend will have grown to about $7400 for a total of income of $32,400. So after 10 years you are short 10k per year and it only gets worse every year. Most folks these days can look forward to 25 to 35 year retirements and under your plan they will once again be reducing their standard of living each year or taking from their principal which results in even less income in each ensuing year. Financial disaster either way.

I reccomend my retired clients have 2 years worth of money in short term liquid cash equivelants or CD's. The other 80% is all in stock mutual funds diversified across large ,mid, and small caps, international and domestic stocks, split evenly between growth and value disciplines. We feel they can take 6% a year from their mutual funds and increase their income every year there after by 3% a year to keep up with inflation. The CD's keep reinvesting to keep that at 2 years of income. When the markets go bad, they take their income from cash/cd's and then replenish that when markets have rebounded. BTW Still pulling from mutual funds at this point.

So a client with $625,000, would invest about $70,000 in cd's, and the $155,000 in the mutual fund portfolio. This would bring him 1st year income of $33,300. By year 10 his income is over $45,000 and at 8% total returns his capital has grown to over $800,000, which could in fact bring a higher income than he is taking.

While this is not a totally riskless way to invest, at least my client actually has the possibility of maintaing his living standard vs. the person who is only 20% in stocks. This strategy has always worked with say the exception of the great depression where even then it could have worked for some, as while stocks fell 90%, dividends only fell 50%, and the dollar actually bought 25% more goods as the US experienced high deflation.

Chances are if you are struggling today your grandfather took the route of bonds and "safe" investments rather than buying a diversified basket of stocks. If your grandfather did indeed invest in stocks and didn't stray, and your parents stuck with it, then most likely you are only working today because you want to, not because you have to. Simple as that. Success usually boils down to whether you become an owner or a loaner when making investments.

Edited for terrible spelling









[edit on 31-1-2008 by disgustedbyhumanity]



posted on Jan, 31 2008 @ 11:58 PM
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Originally posted by HimWhoHathAnEar

Major rating agencies are holding off downgrading bond insurers MBIA and Ambac Financial Group while they attempt to work out a bailout plan, bankers working on the bailout told CNBC.
States and cities that issue municipal bonds, meanwhile, could see their own bonds downgraded because of questions about the insurers' ability to back up those bonds.
Banks could also be hit. According to Meredith Whitney, banking analyst at Oppenheimer, U.S. financial institutions could face fresh write-downs of as much as $70 billion if the bond insurers lose their top rating.
For that reason, the issue of downgrading bond insurers has become politically sensitive.

www.cnbc.com...

These Rating Agencies are putting themselves up for future litigation. When the collapse of these bond insurers happens, they will be held to account. Since it was their job to keep ratings up to date.

As the piece goes on to say, Documentation has been turned over to the SEC claiming that both insurers are grossly understating losses. Which could be as much as 12 Billion each.




That is why I have been short MCO and MHP since the mid $60's.
The rating agencies are headed for major litigation.



posted on Feb, 1 2008 @ 12:01 AM
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Originally posted by HimWhoHathAnEar
reply to post by LightinDarkness
 


It's the fundamentals! They haven't changed. I wouldn't depend on Wall Street to see what's coming. Their Bipolar behaviour of late says it all. They don't know what the hell is going on. I mean, what was it, a 600 point wild swing the other day and something akin to it today.

The Economic news is plain to see. Housing, unemployment, etc. The market is a poor indicator of what's really going on. After all, it's what they do! Of course they're gonna look for reasons to invest in something, anything. It's really all they have. It's Denial.

Wild swings speak to me of uncertainty. That and the mistrust and opacity in the Banks says it all. The Sheep won't know till they've run off the cliff. The Street is just a side show IMO.


A quick tip on what predicts what. The market is always slow to predict a down turn. The economy faulters before the market goes down. Investors and traders alike always push for more upside, so the economy always goes negative before the market. BUT, on the other hand, the market always lead the economy outof a recession. The market trend will change for the better before the economy actually changes. It has been this way for ever and those who know trends, can trade those trends.



posted on Feb, 1 2008 @ 12:03 AM
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I hope this fits in here but it is significant.
My Brother is closing on his house today and just recently went through the sale of his last. The Title company from the first sale a few weeks ago has closed their doors forever. Now the one that he went through today also closed forever this afternoon. He has also heard of one other in his area in the past week.



posted on Feb, 1 2008 @ 08:47 AM
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reply to post by traderonwallst
 


Thanks for the link Traderonwallst, I was looking yesterday for that bit of information but eluded me in my search.

This is very important as all eyes are on them, but it seems that somebody will bail them out and the AAA rate will stay the same.

This is very important.

My father right now is one of those retirees in his 70s that had to go back to work after 10 years retirement due to his live savings been depleted faster than he foreseen.

He own his house (pay in full) he pays no property taxes, owns a brand new car (paid in full) but my mother recent health problems (hart conditions she already had hart surgery ) is draining his account.

The thing is that he retired with a very substantial amount of saving from a long hard working life, never owned a credit card and he paid everything in full.

One of the thing that he didn't look into is that while he enjoy a very active healthy life at his age after a fight with prostate cancer, my mother 10 years younger than him is the one suffering all the expensive health problems.

People like my mother and Father that planned for their old age sometimes forget that health related issues will eat a saving account in no time.

Thankfully he is strong enough to still work in his field, in which knowledge and experiences makes him an expert, but for how long.

At least is four of us siblings to keep an eye on things.

In contrast to my husband's parent that retired early in their forties after my father in law accident and they already depleted their funds, at least they paid for their home also in full and but both depend on social security and Medicaid for health related issues.

BTWToday the job report will be up also






[edit on 1-2-2008 by marg6043]



posted on Feb, 1 2008 @ 09:37 AM
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Originally posted by cpdaman


Perhaps this is a culmination of a system rotten from it's inception, perhaps it was a poor system as history will show, w

[edit on 31-1-2008 by cpdaman]



or perhaps history will show that Fed Chaiman Greenspan convinced congress to repeal the Glass-Steagel act...
which actually corrected the flaws in the system
(flaws, which allowed banks to create their own investment instruments)

and President Clinton in 1999 signed into law the repeal of the Glass-Steagel Act...

it was all downhill after the banks, investment houses, lenders etc
could invent, grade, & market, toxic paper with no defined/regulated/guaranteed base value.... those chimera known as CDOs, SIVs, Credit Swaps, hedges and the like.


edit; excuse typos, misspellings etc

[edit on 1-2-2008 by St Udio]



posted on Feb, 1 2008 @ 09:56 AM
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Most of the experts don't even understand how the market works anymore due to something that we all see but will not address. I'm totally shocked that the stock market is even operating at this point. I found this article in the boston globe.

www.boston.com...
This is just another example of us not wanting to face or even try to understand what is truly happening.

QUOTE:
"That something is the immense shadow economy of novel and poorly understood financial instruments created by hedge funds and investment banks over the past decade - a web of extraordinarily complex securities and wagers that has made the world's financial system so opaque and entangled that even many experts confess that they no longer understand how it works."



posted on Feb, 1 2008 @ 09:59 AM
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There you have it, the Jan, job reports.


US economy loses jobs for first time since 2003, The US economy lost 17,000 jobs in January in a surprise drop in employment for the first time in over four years, government data showed Friday in a fresh sign of brewing economic trouble.


afp.google.com...

No a good way to start the new year, I guess after the holidays were over so the temporary jobs also, the jobs lost on the financial sector played a big role on this also.

Jobless claims surge in latest week
First-time claims jump back to 375,000, the loftiest level since October



Initial claims for state unemployment benefits rose 69,000 in the week ended Jan. 26, reaching 375,000, the Labor Department reported Thursday. It marked the highest level since early October -- and the biggest weekly jump since September 2005 in the wake of Hurricane Katrina. Read government release.


www.marketwatch.com... stRead

The deceiving numbers of the claimed unemployment, they only apply to people that actually claim unemployment for the hundreds of thousands that do not qualified their unemployment numbers are never part of the statistics.


Super Tuesday: 'It's the economy, stupid'
Primary states lost 1.5 million manufacturing jobs under Bush



The 24 states holding primaries in next week's Super Tuesday have lost 1,568,600 manufacturing jobs in the seven years since President Bush took office, according to statistics provided WND by the Alliance for American Manufacturing, or AAM


www.wnd.com...

The truly signs of an economy in crisis.


[edit on 1-2-2008 by marg6043]



posted on Feb, 1 2008 @ 10:04 AM
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reply to post by mek12
 


Is a lot of deals done behind closes doors that do need to be for the consumption of the regular people.

This deals are often done with nations that are not necessarily view in the best interest of the nations involved as nations like our figting terrorism.

Many of this nations are the ones bailing out our markets right now specially the big financial institutions that has fallen in recent times link to the mortgage crash.



posted on Feb, 1 2008 @ 10:32 AM
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reply to post by disgustedbyhumanity
 


If someone only has 100k to retire on.. and they invest 80% of that and loose 13% because markets went down, and may never recover... you just #'d someones life.

People with little enough money to retire as it is do not belong in the market.

Someone with a few hundred K sure.. you can afford to loose some.

I have clients who lost upwards to 60k from the Dot Com bubble. Companies that disapeared.. it happens. Will the money last forever? No.. it wont.. not even in stocks.

Which is why we have Walmart.

80% of all your money in variables with no assurance it will be there tomorrow.
K.

Some people do like risk, nothing wrong with that.. for the most part my clients are middle income, and just want the money to be there secure for as long as possible. (The average life of a 60k account taking 500+ a month to suppliment other sources of income is 25+ years.) I don't generally deal with all retirement funds, people are usually well diversed.



posted on Feb, 1 2008 @ 12:55 PM
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Originally posted by antar
I hope this fits in here but it is significant.
My Brother is closing on his house today and just recently went through the sale of his last. The Title company from the first sale a few weeks ago has closed their doors forever. Now the one that he went through today also closed forever this afternoon. He has also heard of one other in his area in the past week.


Here's a link pertaining to exactly that. ml-implode.com...



posted on Feb, 1 2008 @ 05:21 PM
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reply to post by Rockpuck
 



I understand your fear, but if someone lost 60% in the dot com crash they were not allocated very well. My allocation fell only about 25% at the worst point, provided the neccassary income, and at this point folks have much more than they started with. Companies do go broke, but when it is one of 1000 companies in your portfolio, it doesn't mean much on the whole. I personally think the biggest risk these people take is not owning stocks. I really believe that dollars in the bank have a much greater chance of going to zero than stocks. I already proved that a conservative investor by rule has a declining standard off living throughout his retirement as long as inflation still exist. Go ahead and loan your worthless dollars to the banks in return for more worthless dollars in the future(hyperbole). Be an owner and not a loaner.

Optimism has always been the only true reality and the facts prove that out.

I will try to dig up a hypothetical to illustrate my points.



posted on Feb, 1 2008 @ 06:21 PM
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Over-the-counter (OTC) derivatives are contracts that are traded (and privately negotiated) directly between two parties, without going through an exchange or other intermediary. Products such as swaps, forward rate agreements, and exotic options are almost always traded in this way. The OTC derivatives market is huge. According to the Bank for International Settlements, the total outstanding notional amount is USD 516 trillion (as of June 2007)[1].

en.wikipedia.org...(finance)

Note the word Notional. When these Gambling Packages as I would call them, fail to perform as promised, they become quite real to someone. And failing they are, do to the housing 'problem' in the US. Needless to say 516 Trillion is 10 times the GDP of this little planet of ours.


Massachusetts Secretary William Galvin said he is seeking to take away Merrill's profits from a transaction in which it sold collateralized debt obligations to Springfield, Mass.

www.cnbc.com...

Oops, some of those pesky CDO's. Hand over the profits and pay the lawyers please.




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