Dow at 10 year low...

[diehard]

down to 7550 with a long way left to drop. Auto makers looking for 10s of billions more. Nothing even talked about to address the causes of this collapse. Just attempts to reinflate the bubbles with what will end up being trillons of borrowed dollars. Not a lick of sense anywhere near Washington. Grow a Victory Garden.

A large round of retail failures is next. Then a commercial real estate collapse. Then another round of home foreclosures. Then... Then... And still nothing to address the causes. Good luck guys, we're going to need some. Our only hope is Franken will get seated in the Senate.:eek:

[bga1]

After the stimulus package was approved Obama discussed his next big initiative: Working on his next budget he said he would be looking for ways to cut costs to balance the budget. Certainly one of the most ironic statements in the checkered history of politics considering that he just blew 800 billion- mostly on long term non-stimulus related programs. Here's the part that blows away the market: He stated that costs would have to be cut or taxes increased. Which do you think it will be??? Hmmmm. Looks like we are going to start spreading the wealth around or evening out the poverty.

Enter socialism.

[Stan]

beej is a one trick pony. Bash and bash O. You still have not addressed a question that has been asked of you often and that is if cutting taxes is so critical, why did W's tax cuts fail so miserably? Are you just going to turn every comment on the economy into bashing O?

[Schnoodler]

We're at my predicted bottom. Diehard's predictions are looking more realistic every day. His depiction of a downward swirl is so emblematic of a depression and so very likely. I will lay a little hope out there that in contrarion thinking when it most seems the ugliest, when the everything seems to have no hope, or conversely no end to prosperity, it's about to turn. I'm sensing the end, but I think we still have to live out Diehard's inevitable forecast. All I will say, is that it is already happening and perhaps we only have this year left of free fall. But it could be a long, long bottom.

We really need to guard against viewing the economy as we would our personal savings account, or our business. It doesn't work that way. Cutting costs, while seeming pragmatic in our own lives, is so contractionary that it'll add to Diehard's prognosis. The time to cut costs is during boom times, we missed that chance. Austrian economics would suppose that such cost cutting tactics are in the end the best thing, and maybe they are right, but what they don't explain well is how much deeper the bottom would be, and how much more painful and devestating the impact. All in the name of a brighter and sunnier outcome....for some.

[bga1]

beej is a one trick pony. Bash and bash O. You still have not addressed a question that has been asked of you often and that is if cutting taxes is so critical, why did W's tax cuts fail so miserably? Are you just going to turn every comment on the economy into bashing O?


Stan - Obscured by your faulty memory or vision (not sure which of your senses is off) is the fact that Bush's tax cuts did work- in fact they worked incredibly well.

In 2000-2001 we saw an incredible sea change in our manufacturing economy. Millions of jobs were lost to China and other low labor cost nations. Those jobs were lost as a result of global competition, not policy per se. Also, Bush was faced with a recession handed to him, though not nearly as deep as what Obama faces today.

The tax cuts were a tremendous help to businesses and consumers to revive the economy for the next five plus years where we had unstopped growth in jobs and the markets. The crisis to follow had zero to do with the tax policy and everything to do with the sub-prime crisis. It is a documented fact that the Bush administration repeatedly went to congress to warn about the subprime situation. Where Bush IS at fault is he should have taken this concern to the people as well. I have said repeatedly that Bush's downfall was not policy- it was communication. He was terrible at it.

I think Obama is a sharp guy. Very bright and a great communicator. The situation he faces today is not of his doing. However, I just happen to disagree to the core with his ideas about what will make our nation better. His concepts about redistributing the wealth and his ideas about foreign policy make me shudder. They cut against what has made our country great for so long. We are heading face first into socialism. If you like his ideas so be it. I'm not like those that called Bush names or those that will call Obama names. I am simply arguing policy, not belittling the man or his talent. I need for him to succeed and right now I fear he will not take us in the right direction.

[Gopher4Life]

>>I think Obama is a sharp guy. Very bright and a great communicator.<<

That's the plus side. He's also sneaky, arrogant, inexperienced, and dishonest.

[diehard]

schnoodler- I'm not as hopelessly pessimistic as it may seem. I do see a deep bottom and a slow turn around, but I also see a chance to rebuild the economy again on a solid foundation like we did in the 50's. It took us 60 years to unlearn the lessons of the last Great Depression. Guess we just cycled back to the roaring 20s. Clinton and Bush, the MCs of our recent roaring 20s, both had monetary policies with unrealistic low interest rates that led us into the multiple economic bubbles that are bursting from cheap money and being awash in money. We need to go back to earning money the old fashioned way. Earn it. Then save a portion instead of living off credit. Expensive credit. The average household has over $14k in credit card debt. Think we are headed for a increase in personal bankruptcies? It will be difficult, in the end we will be fine.

[Schnoodler]

An increase in bankruptcy's like never before. I'm looking forward to the former wealthy facing bankruptcy. I can't imagine how fast the bankruptcy law changes of a couple of years ago get reversed. The self righteous clammering for relief and to hold on to their million dollar homes and lexus'. you can bet they'll be singing a different tune.

but you're right, about most if not all. I will say though that if we believe that these changes will occur without the aid of legislation to protect against it happening again we might see this recycle it self in 15 years. the system created this, and the system has not been altered. Most of what led to this were changes in regulations made over the last thirty yeas. We need to look at what changed. And we need to make decisions on what worked and what didn't. Clearly deregulation was needed when instituted, but also clearly deregulation (or lack of) was a big part of the bubble problem.

[Goph4phan]

That's the plus side. He's also sneaky, arrogant, inexperienced, and dishonest.

Or in short, a politician. (minus the inexperience)

[bga1]

schnoodler- I'm not as hopelessly pessimistic as it may seem. I do see a deep bottom and a slow turn around, but I also see a chance to rebuild the economy again on a solid foundation like we did in the 50's. It took us 60 years to unlearn the lessons of the last Great Depression. Guess we just cycled back to the roaring 20s. Clinton and Bush, the MCs of our recent roaring 20s, both had monetary policies with unrealistic low interest rates that led us into the multiple economic bubbles that are bursting from cheap money and being awash in money. We need to go back to earning money the old fashioned way. Earn it. Then save a portion instead of living off credit. Expensive credit. The average household has over $14k in credit card debt. Think we are headed for a increase in personal bankruptcies? It will be difficult, in the end we will be fine.

A financial advisor friend of mine said this: "The government is levering up while we begin to lever down."
Here's the problem: What happens when the government has reinflated the bubble by increased leverage and then newly confident consumers, knowing that they always get bailed out, begin levering up again. Then you have a highly leveraged consumer population backed by an extremely leveraged government. Dangerous?

[diehard]

Down 200 more. I don't know why Obama keeps talking down the pyschology of the market. Clinton said yesterday that Obama needs to be talking about the light at the end of the tunnel and about his plan to will get us there. I don't really think the Obama administration has a strategy/plan put together yet. Maybe we will hit bottom faster this way. There is still a ways to go. There will be great deals and opportunities for those with wisdom and courage. I'm seeing more and more predictions of a 5 year contraction/depression and 15% unemployment. Glad we paid everyhing off last summer. We will look for new opportunities as things impove. They will improve, someday. Meanwhile we are stuck on foreign oil.

[diehard]

6832. Danger ahead.

[Gopher4Life]

>>Obama needs to be talking about the light at the end of the tunnel and about his plan to will get us there.<<

He has to lower the expectations so that any success he stumbles upon will appear to be enormous. He's the messiah after all.

>>I don't really think the Obama administration has a strategy/plan put together yet.<<

Good thinking.

They actually have a big plan for taking America leftward, but the plan has little to do with recovery.

[FiveStarFan]

We will be talking below 6000 by the end of the week...Sorry to be negative but with all the bad news and now a administration that is completely anti wall street we have a ways to go yet.

[diehard]

I originally thought 6000 was the bottom. I now think 4000 with a very slow recovery is possible. I have heard reputable economists (a number of them predicted this) say that we would be at 4000 now without the original TARP. Looks like we are delaying the inevitable and extending the pain. How's that for change? (not a knock on Obama, much)

[FiveStarFan]

Ya I'm hearing a S&P of around 400 as a bottom...That would be a 25% decrease in earnings from here.

[Gopher4Life]

Face it. Nobody has a clue, including Obama and his team. They're just tossing billions around without a serious plan. (Hint: If there was a plan, they'd be lining up to explain it to us.)

[GopherRock]

All I know is that I'm glad I stayed out of my 401(k) when I had the chance to start it (January 08, before anyone knew of the total meltdown awaiting later in the year)

[Schnoodler]

Might be a good time to start thinking about getting back in. This will bounce back, all moneys in now are probably looking at a double within the next 5 years. Even if we drop another 50% between now and then. Just a thought.

[monk10]

I had to prioritize how to pay for the next little one to come into our lives. We have to leave our assets in the stock market until it turns around. I'm guessing it will turn a profit by the time the kids need some college money, which will be great timing :).

I'm glad we didn't wager our SS on the stock market, as we would be in a huge crisis with the number of people retiring.

[Gopher4Life]

Just asking...

Is this economic crisis so unusual and out of control that no president could be expected to fix it, or might a successful businessman like Mitt Romney have had a better grasp on the problem from the start?

[Schnoodler]

No, this is the anti buisiness (demand side) recession. He would have likely compounded the problems. We will probably need business stimulus during the recovery period after our lengthy bottoming out period. maybe the next election will be better for a supply side president.

[diehard]

Handling this recession in the most effective manner requires a 180 degree change from what we are doing. We are making it much much worse than necessary. A supply side solution isn't the straight up solution by any means either. Our entire economic base was finished when we unnecessarily eliminated our manufacturing and industrial base. We have to rebuild them for national security reasons as well. We can not survive as a service economy. Especially when we promoted our financial sector into selfdestruction mode. We need to grow up and cut up our credit cards (personal and the governments). I don't hear any voices saying any of this either. Ds or Rs. Well, maybe Ron Paul. Both parties suck right now.

[Schnoodler]

going along with rock, it was once thought that real growth was tied lockstep with GDP. More basic, real growth is tied directly with what we can take out of the ground and make the most efficient use of. Efficient use would be to remove it from the ground and use american labor to turn it into sellable commodities thus maximizing the multiplier effect all the way up the money chain. You create something new and the country has more wealth. The last 20 years have put that to question as the service industry and the shipping of manufacturing off shore seemed to make for an economic boom while at the same time making very inefficient use of our resources. It's now appearing that the last 20 years was an illusion. I'm not quite sure where we go from here. We have an entire economy that fed off the bubble. I'm not sure the service sector will bounce back so well.

[Gopher4Life]

Schnoodler,

>>He would have likely compounded the problems.<<

It's difficult to imagine how an astute business man with plenty of administrative experience could have compounded the problems more than Obama is.

>>I'm not quite sure where we go from here.<<

You couldn't possibly mean that. We're rushing leftward as rapidly as they think the public will allow. Didn't Emanuel say that this crisis can't be wasted?

diehard,

>>Both parties suck right now.<<

If the behind-the-scene truth were known, when have they not sucked? They're both clearly in it for themselves and trying desperately to maintain power while letting the two-party system monopolize the debate.

[diehard]

6624. The running of the bulls! Do I remember hearing on here how 8000 was the floor?:eek: