Global Meltdown is Over. Now is time to make Money.

Originally posted by johnny2127
reply to post by rattan1

 

Citi posted a OPERATIONAL PROFIT. What that means is revenue versus expenses. But it doesn't include taxes, toxic asset write downs, and normal asset declines. It also includes many one time profits.

In other words they still lost a boat load of money and are essentially an insolvent zombie bank..

The write down are mentioning are just book values and does not involve any cash outflows. Asset values will go up and down and what is more important to analyse is the actual profit made.

Originally posted by Jacob08
My biggest concern is with the rate of growth in the past 20 years before this crash, which in my opinion is far from over. In 1988 the DOW was at 2000, only 20 years later it was at 12 000 in 2008. That's a lot faster growth then the previous 20 years, in 1968 it was at 900 and grew to 2000 by 1988. In short 1968-1988 saw 122% growth (average of 6.1% a year), 1988-2008 saw 500% growth (average of 25% per year).

How much of those gains will have be returned until we are at realistic levels of growth over the 20 year period? I think the credit bubble was responsible for much of that huge growth and now it has burst much of it will be returned. If growth was at 122% for the last 20 years (the same as the previous 20) the market would have been about 4400 in 2008. That's not to say the past 20 years growth wasn't based on anything real or sustainable but it's worth thinking about.

[edit on 12-3-2009 by Jacob08]

No offense but your math is soooo off its pathetic. Here is the equation for how to find compounded annual growth rate(CAGR) is:

CAGR = (Ending Value/Beginning Value) to the power of (1/number of years)

So in the example you gave from 1988 we will use 2,000 as the Dow value in 1988, and 14000 as the Dow value in 2008.

CAGR = (14,000/2,000) to the power of (1/20) = 10.22%

Your calculation was 250% off. lol.

From 1965 to 1982 the market was in a complete dead era. Essentially flat. So that era isn't one to compare all others to. Although, we could be entering a similar time in which market indexes are essentially flat for an extended period of time. If thats the case, buy and hold won't make money, although active management will

I did mention that city group was just the beginning and more good news will come:

Wall Street up as Dimon's remarks buoy banks

Stocks rose for a second day on Wednesday after JP Morgan Chase's (JPM.N) chief executive said his bank was profitable in January and February, echoing comments by Citigroup's CEO a day earlier.

Jamie Dimon's comments to CNBC television, which reversed a broad decline, came after a speech where he said the bank's bond department had just had its two busiest months ever. His comments followed similar remarks on profits from Citigroup's Vikram Pandit that on Tuesday spurred Wall Street's biggest rally in nearly four months. JPMorgan shares rose 4.6 percent to $20.40, while an index of bank stocks .BKX climbed 3.1 percent. Dimon "calmed the markets down. He was the voice of reason," said Angel Mata, managing director of listed equity trading at Stifel Nicolaus Capital Markets in Baltimore.

For all those who has been criticizing my post I really hope that I will not come back to you and say I TOLD YOU SO

Originally posted by invisibleman11
the global melt down hasnt even began. what were seing is the tip of the iceberg and to say dont prepeare any more and buy stock after one day of gains is retarded. just because the dow rose to 6,970 something after falling from 14,000 something means nothing...its a propaganda tool for tools to buy more stock in a broken economy

indeed mate, i would have to agree with you. But do you know how many people..strike that Sheeple will fall for this?

reply to post by johnny2127


True. I added my per year % as an after thought,a poorly thought out after thought but my other numbers are correct and it's all relative anyway.



[edit on 12-3-2009 by Jacob08]

Originally posted by Jacob08
reply to post by johnny2127

 

True. I added my per year % as an after thought,a poorly thought out after thought but my other numbers are correct and it's all relative anyway.



[edit on 12-3-2009 by Jacob08]

No problem. You point is still valid. In my opinion, over the course of time an index should return in the 6-8% range if its healthy. More than that and its prone for bubbles. Of course short periods of time can greatly outperform

reply to post by rattan1


Haha, watch the markets close low today.

No, it is not over.
We're not at the 2 minute warning, more like end of 1st quarter. Plenty more to go my friends.

And stocking up on ammo and food...what's it hurt? You can still eat the food and still shoot the ammo, even if we get through without needing it for emergency. FIFO. First in First out. Just rotate your stocks and your preparations will continue to benefit you for years to come as prices rise, as well as keep you prepared for the unexpected.

Originally posted by rattan1
We are at a turning point guys. As I said many more good news will come.

Ok, I'll bite. Give me three other indicators that we are at a turning point for the positive. What is good for Wall Street isn't necessarily good for Mainstreet. Please be specific. I see that foreclosures rose in Feb. over 30% from Feb. 2008 Levels, that must be good news eh?

Nevada, Arizona, California and Florida had the nation's top foreclosure rates. In Nevada, one in every 70 homes received a foreclosure filing , while the number was one every 147 in Arizona. Rounding out the top 10 were Idaho, Michigan, Illinois, Georgia, Oregon and Ohio.

apnews.myway.com...

Originally posted by pavil
Ok, I'll bite. Give me three other indicators that we are at a turning point for the positive.

1.) Change

2.) Hope

3.) Er...I think those were the only two words our president has. You win.

[edit on 12-3-2009 by saint4God]

Originally posted by saint4God

Originally posted by pavil
Ok, I'll bite. Give me three other indicators that we are at a turning point for the positive.

1.) Change

2.) Hope

3.) Er...I think those were the only two words our president has. You win.

[edit on 12-3-2009 by saint4God]

You forgot TRANSPARENCY.
It's the new joke of the week.

At this point the "meltdown" is in job losses. Citi has very little to do with creating jobs on a large scale.

Fears in job loss came quickly, unfortunately, confidence in the US government and job creation will take time IMO.

The industrial revolution is behind about a hundred and fifty years. I don't think Citi Group loans are going to finance the future of green business.

Ethical anarchy will get all of us through these difficult times. We don't need an artificial stock market to dictate prosperity. All the good people of America need to take freedom in their own hands and go back to a barter system.

The current financial crisis is a manufactured event to promote more wealth distribution to those who least need it. Buying failed American corporations stocks will only encourage more handouts to toxic assets.

The current economic crisis is not a lack of money, it is a labor crisis. The number of capable workers of all skill levels can't be filled. Those who wish to make it big or be well in America need to understand the American way.

What is the American way? Lie, cheat, steal...But don't sell out your family and friends. The tribal clans of this country might have been deemed primitive savages but they were capable of an economic system that did not depend on big government.

We have to sell our labor at our defined cost and simply not garnish our wages to big government.

I could care less about the stock market. It doesn't dictate my ability to earn money. I've bought three homes in as many months, the most expensive for 7,000, the least for 1,200. Now is the time to buy homes or property, especially these bargain-basement fixer-uppers., I don't think you will see prices like these for a long time. Rental units are in big demand. You don't get wealthy by working, you get wealthy by owning.

Just an example of whats selling:
www.cleveland.com.../base/business-11/1236673812178760.xml&coll=2

The biggest damage to our economy in the US is from job loss, caused by a freeze in the credit market. Companies can't get credit so have to reduce spending. What the government is doing now is what is needed to resolve that. All this "run for the hills" talk is only making it that much easier to capitalize on depressed housing prices. IMO "run for the hills" is right up there with all these 2012 doomsday cults.

Entire sectors of our economy have been created in the past 20 years just from the computer and internet revolution. The 60s and 70s? Not much happened then that would account for large growth. The medical/biomedical sectors have been doing well also.

The future as said previously will be Biology, Genomics, Nanotechnology, and metamaterials.

We are at the point now where we have digitized genes and can drag and drop to make a lifeform on demand.

www.ted.com...

www.ted.com...

Someone's feeling bullish today.

3 days of green and it's declared that we've hit bottom. Thank god it's so easy to tell. I guess we can safely say, the stimulus package worked and it didn't even take 3 weeks. Geez, we should go through another enormous BOOM if it's supposed to prop up the economy for another year or two.

Citi makes a profit for 2 months and the stocks go berserk, but is your average American back out, shopping at Wal-Mart for $80 electronic nose hair trimmers made in China? I suppose the fact that 651,000 people lost their jobs last month is completely irrelevant too? Decreased wages/hours don't matter?

Originally posted by Angry Danish
I suppose the fact that 651,000 people lost their jobs last month is completely irrelevant too? Decreased wages/hours don't matter?

Both means less going into 401(k) as monthly contributions which surely is not good. Investors are 'shooting themselves in the foot' by insisting that companies cut cost when the cost is workers with 401(k)s.

Originally posted by saint4God

Originally posted by pavil
Ok, I'll bite. Give me three other indicators that we are at a turning point for the positive.

1.) Change

2.) Hope

3.) Er...I think those were the only two words our president has. You win.

[edit on 12-3-2009 by saint4God]

Those aren't indicators. The markets are just in a bear market rally right now. Completely normal. Here's what to watch for so you can tell the markets are turning into bull markets:

1) Economic indicators show economy is bottoming. Markets are forward looking. If the economy is bottoming, the market will trade for the coming economic expansion.

2) Housing inventories are decreasing and home values stabalizing.

3) Bank start announcing asset write-ups. We've seen all the write downs as asset prices decrease. As money moves off the sidelines, we will start seeing asset price write-ups. This is a big one.

4) Watch the 50 day and 200 day moving averages. If the market trades above them, a prolonged rally can occur.

Posted to the wrong thread, sorry.

[edit on 12-3-2009 by saint4God]

reply to post by johnny2127


I would agree those would be signs.

I love the spin they do on the markets, take this sample:

GE rose 13 percent to $9.57. The shares have surged 36 percent since March 6 in what may prove to be the biggest weekly gain since at least 1980. It “does not anticipate any significant operational or funding impacts” from the credit downgrade, according to a statement. The long-term debt rating was cut one level to AA+ with a “stable” outlook. GE is down 41 percent in 2009.

So GE gets it's rating cut from AAA to AA and the stock zooms 13%, sounds great right? Trouble is, GE Stock was at 33.96 a year ago, and their quarterly dividend just was chopped from 31 cents a share to 10 cents a share, thus the rating decline.

Don't get me wrong, GE is a good buy at it's current price. I just find it funny how "hey I am only down 71.6% in value and my dividend was cut down 66% from where I was last year", is somehow good news to a longtime GE Stockholder.

The people on Wall Street are the masters of making Lemonade.................

rattan i will tell you this

Now i believe is the best opp. in a while to "watch" the banking sector go long

ticker (KBW)

and when the commercial real estate collapse takes down the small and medium size banks the larger institutions may be able to power grab big time....

suspension of Mark to market accounting and uptick rule reinstatment may be the fuel for a sustainable bear mkt rally (instead of the buy the rumor/sell the offical news) time will tell.