Posted on 05/24/2010 8:21:55 AM PDT by Zeddicus
Stock prices stabilized on Friday, but it felt like the selling ended more because of exhaustion than because of some return of optimism.
Since early May, the Dow Jones Industrial Average has lost almost 10% of its value — officially known as a market correction. But the big question on everyone's mind: Is this just a correction or the start of something worse, a new bear market?
Despite Friday's rally, the Dow ended the week down 4% and firmly in the red for the year. The results were just as bad for the Nasdaq Composite (down 5% for the week) and the Standard & Poor's 500-stock index (down 4.2%). European and Asian markets logged similar declines; oil and gold prices were also down.
So what's going on? Is it 2008 all over again? Or is this just a pause in the market recovery that began over a year ago and, until now, hadn't seen any serious setbacks at all?
(Excerpt) Read more at finance.yahoo.com ...
Nothing will improve until Socialism goes away. It is an economy killer.
This is a correction in a cyclical bull market within a secular bear. The current levels present a buying opportunity for the stock portion of your portfolio.
When you have wild daily swings in the price as you did in the fall of 2008 - or the last few weeks - there is change in the wind.
At one point today the dow swung 40 points in just a couple of minutes. Investors are nervous and skittish.
This is some scary stuff. The silver lining may be the realization that socialism has reached its obvious end and the only way to improve is to start rolling back the entitlements. I cannot see how Europe can continue to subsidize everything and everybody. Sooner or later common sense will arrive even in Europe. My only question is will this global deflation cause another World War?
I wish it were as simple as merely replacing Obama, but it isn’t. His predecessors over the past few decades had also contributed to the damage, as neither Democrats nor Republicans have been genuinely interested in real reductions to the size, scope, and power of the central government.
I’m afraid our fundamental form of Federal government as is exists today is hopelessly broken and corrupt, and has become a hideous mutation of what our nation’s founders had intended.
The public is controlled through TV. Until people cancel sat and cable Tv then any progress will be almost impossible.
There is no faith in paper money when govts keep piling up debt upon debt to give: govt union workers, illegals and cronies more and more money.
Gold and silver are going up because they are a better store of value that paper money which can be worthless at any time. See Zimbabwe, Argentina, Venezuela. Metals are not perfect but they have a value.
Paper money’s only value that is created is the interest rate backed by the bonds underlying the money.
That is far from a guarantee. Often, after countries become socialist toilets, they remain that way for a long time. Cuba, for example. Once the populace become drug addicts, nothing is predictable, other than the drug doing further damage. Such it is with socialism.
Once the populace become drug addicts, nothing is predictable, other than the drug doing further damage.
You may be correct, but my sense is now you have competing classes of entitled who realize that their entitlements are at risk and will vote to support their own. This will destroy most pure socialist politicians and force parties to decide on what entitlements must remain and those that must go. On top of this remember the young (in France persons under 30 face a 25% unemployment rate) will be the default funder of all solutions. Finally, Europe has bitten the immigrant apple and future violence is predictable between the natives and the interlopers. I don’t see this reorganization of society as peaceful but I do see it will be forced by democratic expression at the ballot box. The elites worldwide might find themselves on the loosing end of things for some time to come. Glad I didn’t go to the Ivy League so my worldview will not be completely destroyed.
We're seeing the Little Red Hen getting ripped-off by a lazy, unproductive class who are not called on it by a compliant media. If that doesn't change, if a spade isn't called a spade, then we will run into a wall.
Cyclical markets are finished for now. First we've gutted our industrial base so there is nothing that can ramp up after a decline. Secondly governments and a few big traders so dominate the so-called "market" no one can predict anything. It's a crap shot. Even worse than craps because the big players can move the dice after they land.
The damage is already irreversible. The Rule of Law (contracts, moral hazard, etc) is DEAD in this country.
I don’t think the situation is as dire for equities as you paint it. Commodities maybe, but not stocks.
No way to tell what company Democrats will take out the back door and shoot next. No way to know how much more debt or taxes they will pile on us—except that they will. No way to know what next scummy deal the Fed or Congress will make with bankers will be. There is no mark to market on many instruments so no one can know the true state of many banks. Last June, before they stopped reporting the figures, Goldman Sachs accounted for about 40% of the trades on the New York Stock exchange. How can anyone invest intelligently, into that? Its like bidding at an auction in which the auctioneers and those whose merchandise are up for sale have rigged the bidding.
So I guess you have a substantial short position? I am averaging into the Vanguard Total Stock Market Index. Time will tell which of us is rewarded?
It’s also worth noting that the value of the DOW may seem stable, but the value of the underlying dollar could plunge. So, an eye must also be kept on inflation.
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