Stocks going up...Calm before the storm or actually getting through this?

Stocks were up this week. Is this just the calm before the storm? What is going on? Not too many posts in this forum after stocks make consecutive gains.

Just trying to get an idea of where we're at. Is it that investors are waiting to see how holiday sells are going, before dumping stocks, or are we actually getting through this..as the MSM says?

I rarely side with MSM, and it's only been a week of gains, after a couple months of declining, but just wondering what other people think.

The average person is saying our economy will rebound by next summer. I'm still thinking the opposite. That we will have some sort of major depression by about the same timeframe (if we're not already there).

What do you guys think?

[edit on 28-11-2008 by unityemissions]

[edit on 28-11-2008 by unityemissions]

No replies? Maybe I need to give some more info. Here's are charts showing the past 5 days & the past 3 months for the S&P 500.


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calm before the historic storm

reply to post by unityemissions


I think a lot of it is due to Obama's financial post selections recently. The market likes it when guys with investor mentalities get access to the President. So yeah, the guys he picked are respected on Wall Street, and that, in my opinion, is 70% of why things are ticking up now. The holiday shopping season is another, as is the possibility that the Fed will cut rates again. There may also be a perception that the markets have hit a floor.

I would watch to see what happens in Jan, when Obama is sworn in, the holiday season is over, and interest rates are at 0%. If things continue to improve then, we're in better shape than we thought.

Potential problems:

1)Massive hedge fund redemptions
2)China starts dumping the dollar
3)The housing crisis feeds into a credit card crisis
4)OPEC cuts production drastically and oil rises above 100 again
5)the Big Three fail, or require hundreds of billions of support
6)Another major company fails, like GE (this would be due to crashing stock values, not its ballance sheet)

Maybe you can think of others

Thanks for the reply. Was interested in what you said here..

3)The housing crisis feeds into a credit card crisis
Maybe you can think of others

How is it that the average consumer is many thousand of dollars in credit cards debt, and yet this isn't a crisis? When would it turn into one? Are you suggesting that the housing crisis could effect the credit card debt? How would this be? I'm really not too knowledgable in these matters, so please excuse my ignorance.

Thanks

B

[edit on 28-11-2008 by unityemissions]

It's a MindFunk. TPTB want Joe-6-pack to spend his worthless fiatscos during the holiday season. If the market can appear that the worse is over, J6P will be less hesitant to spend his $$.

At the same time though - LOTS of people I know are cashing out there 41K's (formerly known as 401K's) saying NO MORE - literally, cause that's what's left in them

reply to post by unityemissions




Ok so many people took tricky adjustable rate mortgages they could not afford in the hope that they could quickly flip the house. Those who did this at the end of the housing bubble got s****d, because the housing market collapsed and they were left holding properties they could only just afford, and would not be able to afford at all once the banks adjusted their rate upwards after a year or two (usually adding 2-5%). Now this is a bad situation in any country but it is especially bad when so much of a country's population lives on credit (including credit cards).

This hit people in their wallets, reducing their ability to make credit card payments.

Then things got worse. The banks got hit when it was discovered that they commercial mortgage backed paper they were holding was "toxic." This led to the current market crash and the collapse of many US banks. The difficulties the banks are having is keeping them from lending to the consumer and to businesses, which is hitting the economy hard and cause unemployment to rise (in addition to all the jobs lost at banks).

So now we have a banks not lending as much as they need to to keep the US consumer economy going, which is forcing companies to lay people off, which is making it hard for them to make their credit card payments.

Anyway...all that to say that a credit card crisi seems likely to me.

But yeah...the US had been in a credit crisis for well over 15 years.





[edit on 28-11-2008 by Silenceisall]

Stocks are just a reflection of money movement. The underlying problem is still there and will eventually bottom out. Right now with the holiday season they always seem to go up because of an increase in shopping. A more accurate depiction will be comparing percentage wise profits from last year as opposed to this year when this year comes to a close.

People will still lose their houses and big businesses will still go under and the unemployment rate will still rise.

Why is this a bad thing?
Let companies fail because they were irresponsible. New ones will replace them.
Nobody is going to change anything unless forced to do so by circumstances. Let oil go to $1,000 a barrel and watch how fast we get alternative fuels.
Stop wanting the status quo to be saved. Lets take it like a man and start new. Screw the feds, and the big three and AIG and allow the big CEO's to jump from windows or be locked in prison. Lesson learned.

Feel the pain, embrace the pain...and we will all be better for it in the long run.

reply to post by Res Ipsa


I wouldn't call it bad, but it effects many people in a negative way. I don't know if you were speaking to someone specifically or just throwing out your opinion.

I agree. Let them fail, but that isn't what our gov't has been doing. It's been said before, but I'll say it again, the situation has turned from bad to horrible with all of the bailouts.

Speculation sucks. I don't understand the stock market. If I am going to invest in a company, I want to know exactly what's going on with them and their industry. Many people today don't invest on real information, they'd rather speculate or take an investers "expert" speculation. It sickens me.

I think of blindly playing the market like trying to win the lottery. The odds are stacked WAY against you.


[edit on 28-11-2008 by unityemissions]

Calm before the storm and you can tell this by looking at one thing. Gold. The fact is generally when there is true calm gold goes down. Gold has been steady to up. In a rallying market that kinda says to me this is a farce and we will be getting a big spanking here soon.

I believe this is just a fluke. I invested heavily in Ford 4 days ago and have made a huge amount of money. I think after the Citi bail out, there is a little more confidence in banks because none of the large banks will fail now as long as the government will buy up their liabilities and shares of stocks.

Also the Big Three will be getting a bail out. I think everyone has accepted this which is why especially Ford has almost increased 100% in the past few days and will probably increase more. The simple fact of the matter is, if the Big Three fail, there will be millions of people who have no jobs (the automakers, suppliers, etc.) and millions more will be upset that Congress bailed out Wall Street but couldn't bail out the small town people who work for these companies. One thing politicans do not like is millions of people mad at them.

Also, oil is very low which will definitely affect people buying more this season.

All these things have come into play as well as the loosening up of credit markets because the Federal Reserve and Treasury have been doing their best to debase the currency so the U.S. and the rest of the world with it does not fall into a deflationary pit leading to a depression.

The next beast will be more mortgage defaults and credit card company problems as well as inflation if the government keeps inflating the currency like it is doing. So the problems have been postponed, so expect some more rallies until more problems arise-which they will.

Unit, we appear to agree entirely
Mybigunit...(chuckle) gold will reach $2000 in 2009
betting on the big three, was in fact a big gamble...glad it worked out for you. I don't believe.....rephrase.....I am scepticle that when you use the phrase "fluke" to describe things, that you made anything but a really lucky financial move....perhaps "fluke" is the appropriate term afterall.

Originally posted by Res Ipsa
Unit, we appear to agree entirely
Mybigunit...(chuckle) gold will reach $2000 in 2009
betting on the big three, was in fact a big gamble...glad it worked out for you. I don't believe.....rephrase.....I am scepticle that when you use the phrase "fluke" to describe things, that you made anything but a really lucky financial move....perhaps "fluke" is the appropriate term afterall.

Of course it was a really lucky financial move. Everytime you make money in the stock market, it is lucky with some foresight. Especially in a schizophrenic market like this.

On your 2000$ gold...gold will only go that high if deflation is defeated. If deflation cannot be cut out of the picture by the Fed, then expect everything to go much lower. We would like to think with everything they are doing, they are going to cause HYPERinflation, but that is only if there are not further huge losses in the banking system and they refuse to lend. We cannot predict that gold will increase by that much at this point in time.

oh, I don't know crap about financial things, seriously. If there is anything that we law students are known for is our deficientcy in math, and in my case spelling too. deficentcy..."inability" "shortcoming" bah!!!!
....no, I got my $2,000 in 2009 from Peter Schiff, who I imagine you might be familiar with.....or was it John Lear?

Originally posted by Res Ipsa
oh, I don't know crap about financial things, seriously. If there is anything that we law students are known for is our deficientcy in math, and in my case spelling too. deficentcy..."inability" "shortcoming" bah!!!!
....no, I got my $2,000 in 2009 from Peter Schiff, who I imagine you might be familiar with.....or was it John Lear?

I do know Peter Schiff. I actually have been following him for a while. He has been talking about gold going through the roof, which may be true, but he didn't foresee the deflationary period that we are in. Like I said, the federal reserve is trying to create inflation right now because inflation is much easily dealt with and inflation didn't cause the Great Depression like deflation did (which if they were doing nothing, we would be in the grips of right now). The rallies are temporary, and people will go into cash again once more bad news is announced (including commodities). When oil hovers around 30-40 dollars a barrel, that is the time to buy commodities. If the Federal Reserve cannot inflate things, we are headed into some deep crap which is why I find it funny when so many people criticize Bernanke for what he is doing.

By the way..don't EVER listen to John Lear. He is a fake. Also, work on your spelling, lawyers need to know how to spell well

If I don't have a paralegal or spell checker then I am toast.
Now as a person with $125,000 in student loans and not an assest in the world....don't I want inflation big time?

Okay to give an informed and very broad picture on the Op question,

They need to hit around 10500 to around 10800 at the Least on the DJIA and STABILISE at that point with very little expected growth for at least 2 q's really you need 9 months, then we can say we are out of the Danger area, and no Depression immediately. Just a huge hangover.

However:

What is happening Now has happened in every other Depression, whereby they rise with massive previous Volatility and high volume of trades. If the above does not happen and really I am giving lot's of Leeway above the regain should be to 11000 at least and holding 1% rise per month sort of curve, if though as Before they rally now to Below those points then start dropping again even if slowly it will come and a Crash historically has always happened.

And I mean a crash in our case much much worse than anything the world has seen before due to Indebtness, Fiat money, a war before (as apposed to after previous ones) the start of the problems, and the general interconnectedness of the modern world.

Oh yeah we don't grow our own food anymore, or sew and repair much....

Hope that helps OP really in simple terms based On every other event like this before the signals to watch are as above.

So if it rallies now for say more than another 2 weeks the above is a very very good indicator.

But it could also just keep on going up and down before any real Rally or attempt at one happens.

Ignore anything you read about a Bottom being reached and stability then, that has never happened before in America or the UK it happened Japan yes but the situation is very very different with the US and Uk, we have to rally out of this and hold it for the system to not collapse.

Modern Capilistic economics is based on 2 things Debt and Growth, without either one of those its like a human trying to stand up with no legs!, he may hop slowly with one leg left... but both are really needed.

New debt is not happening, which conversely is what creates Money in this system!

Growth certainly is taking a very large hammering to say the least, so you could say we are currently with both legs amputated below the knees, and hoping to get a good plastic fitting to hop or hopefully walk out of hospital, with much pain still though!

It has to rally to around 10,00 at least and hold that for a significant period, if it gets to 10,000 and holds for 3 months or 1 yr then slides again even if slowly, within 2 years many people will be in soup kitchens unfortunately.....

Kind regards

Elf.

[edit on 28-11-2008 by MischeviousElf] spelling.

[edit on 28-11-2008 by MischeviousElf]

Could it be the lower volume now? I think most of those who knew it was going to tank have already bailed out. I'm talking the 100 million + guys and now the stocks have fallen to such a bargain price that even a half wit could make money. This I think wont last long simply because of the reverse bad effects to the economy --> all the trillions the govt is spending to patch things up.

So I think when the depth of what has really happened comes into play sometime around middle January 2009, we will see some of the worst one day declines in the stock markets ever recorded.

I think gold will go up to around $1200 by March, and then when the other countries realize what is happening it will get very ugly, with the stock markets around the world crashing and then we shall see the G-20 meet to try and come up with a rescue plan, which will involve taking all currencies out of the equation including gold and silver.

Originally posted by Res Ipsa
If I don't have a paralegal or spell checker then I am toast.
Now as a person with $125,000 in student loans and not an assest in the world....don't I want inflation big time?

You do want inflation big time. Just imagine, if bread cost 10,000 dollars. You could pay that off with pocket change. But then again, life will be Zimbabwe-like. And I wouldn't count on such high inflation (though many people here are saying there will be hyperinflation next year).

P.S.: 125,000 grand in student loans? I hope you went to top schools for undergrad and law

[edit on 28-11-2008 by RetinoidReceptor]