Black Friday - Live Thread

Stock Markets | 9/26/2008 | Semantic

[Notary Sojac]

Just crashed to -24. Lock and load :-)

[semantic]

Both of you are correct. In the short-term, we're going to see massive deflation as housing prices settle back down to a "real" sustainable value. For the last 7-8 years, the economy for goods/services has been driven by monetary inflation. With that out of the equation, we're going to see a severe recession with falling growth across the board. This in turn will feed back into the deflationary loop as prices are cut for a nice catch-22.

Unfortunately, with a $10T+ debt overhang staring us in the face, we're going to to have to achieve at least 50% inflation during the next economic upswing in order to get that number down to a more manageable level (in nominal terms).

My advice, for what's it worth, is to sit tight as real estate prices continue to drop over the next 2-3 years, then go all in with as much debt as you can carry.

[latina4dubya]

a free market solution without all the earmarks and freebies

exactly! congress is so disgusting... we are in this mess and they want to spend more and more... they don't get it... why is this not getting to the average person? i know the media is not going to cover this, but JMc needs to spread this message... can't they pass something without earmarks?

[kinghorse]

Did you listen to Reid speak? The Dow was all digging on his line of BS, then he said out of the blue “my constituent, a Clem Kiddiddlehopper, curio shop owner in Hellmouth (that’s 6 miles due east of Heater) Nevada called and asked what the heck was going on. Why don’t we let the market work on it’s own?

At that precise moment, the Dow dropped 15 points in one trade :). It’s been tanking since.

[kinghorse]

We’ll call this depression “Revenge of the Pea Pickers”.

[PapaBear3625]

I don’t consider -54 “tanking”

[Unrepentant VN Vet]

Nuestro MSM supuesto es simplemente una colección de putas del excedente de mercancías.

If any message about anything at all needs to be spread, we’re going to have to go do it.

My email accounts are already going nuts. Feel free to knock yourself out.
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(Da** it, I like that first line so much I’m going to use it for a tag.)

[AU72]

I'm looking a the volume and it is almost nil.

When something definitive happens look out.

[RobRoy]

>>My advice, for what’s it worth, is to sit tight as real estate prices continue to drop over the next 2-3 years, then go all in with as much debt as you can carry.<<

That is PRECICELY my plan (regarding real estate). I also began educating myself in actual technical trading and have discovered I have a knack for it. I really like optionable stocks. ;)

This thing is scary yet very exciting at the same time. There is no doubt that there is going to be a LOT of pain though.

[Tempest]

The stupidity of fear mongering.

[Betis70]

DJI up almost 20
^DJI 1:55PM ET 11041.58 Up 19.52

VIX is still pretty high
^VIX 1:35PM ET 35.48 Up 2.66

[Notary Sojac]

It's.....the Notary Sojac Eyewitness Bank Panic Report!

Here it is, in hardboiled Joe Friday style:

12:55 PM. Arrived credit union. Four cars in drive-thru. Normal for a Friday lunch hour.
12:56 PM. Parked car. Went to front door. Door unlocked.
12:57 PM. Got in line. Two patrons in front of me. Pitchforks and torches not visible.
12:59 PM. Observed patron immediately in front of me. Patron was making a deposit.
1:00 PM. Studied tellers. Three tellers. Not busy. Not wearing Kevlar or carrying.
1:01 PM. Talked to teller. Asked her if she knew who "Chris Dodd" was. Informed her Dodd not one of Santa's elves.
1:02 PM. Cashed check for $200. No mention of my account being frozen.
1:03 PM. Discussed upcoming WVU-Marshall game with tellers.
1:05 PM. On way out of building, observed clients in office with loan officer. All were smiling.
1:07 PM. Started car.
1:10 PM. Drove past local bank main office. Four cars in drive-thru. Door appeared unlocked. No broken glass.
1:13 PM. Drove past BB&T branch office. One car in drive-thru. Riot police not immediately apparent.

Concluding observations:
Cash available
Crowds normal
Safety level satisfactory; however, recommend members of WVU coaching staff not visit credit union.

Report complete
Officer N. Sojac
Badge FReep-714

[PapaBear3625]

Well, it's near the end of the day, the Dow is slightly up, other indices are mixed, not much movement. I guess we will see what Monday brings.

Personally, I'm hoping for no bailout at all,

[Freedom_Is_Not_Free]

A very sensible post and sensible strategy. I am taking that advice, but the entry point is always where you win or lose the game. I’m renting near Sacramento, CA and don’t plant to buy a house for 2 years or so, looking for housing to bottom in 2010. Maybe 2011 if the Alt-A resets keep unwinding that long.

The monkey wrench is, what will interest rates be in 3 years. That is the only caveat. I have to believe the 10 year bond and 30 year fixed rates are going to give clues to the impending inflation, but if I wait too long, I could end up with a 10% mortgage.

Then again, if rates are that high, they would just have to drop house prices that much further, wouldn’t they?