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DOW at 7552


RedScare

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So, the Dow drops to 5 year lows. What's it going to do tomorrow? Shoot up or tank again in a pre-weekend selloff? What is starting to look good? Personally, I think Exxon and Chevron still need to drop a bit more, but GE and Altria are starting to look good. I was tempted to buy Ford when it hit $1.01 today. It recovered to $1.87 before dropping back to $1.28. That would have been a fun roller coaster.

What do you think?

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So, the Dow drops to 5 year lows. What's it going to do tomorrow? Shoot up or tank again in a pre-weekend selloff? What is starting to look good? Personally, I think Exxon and Chevron still need to drop a bit more, but GE and Altria are starting to look good. I was tempted to buy Ford when it hit $1.01 today. It recovered to $1.87 before dropping back to $1.28. That would have been a fun roller coaster.

What do you think?

Unless you can afford to immerse yourself in a 24-hour stream of data and actively work at stock trading as a profession, then you need to pull back and wait until next year. I'm going to be cash heavy again in Jan-Feb, and I think that's going to be a good time to be a passive investor going long on a margin account.

I think that in a long term context, the price of oil isn't high enough.

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I bought some Ford not too many cents ago. They're the best prepared cash-wise to weather the storm and they're light years ahead of the other two when it comes to re-shaping the product line into something that people want to buy....espescially the plans to bring the Fiesta, Mondeo, Kuga, etc over from Europe.

I'm going in big into some index funds when things get down around 7100-7200.

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Unless you can afford to immerse yourself in a 24-hour stream of data and actively work at stock trading as a profession, then you need to pull back and wait until next year. I'm going to be cash heavy again in Jan-Feb, and I think that's going to be a good time to be a passive investor going long on a margin account.

I think that in a long term context, the price of oil isn't high enough.

I agree completely, and have already sold off. The talk is that there is a lot more contraction to come. Still, there is a lot of up and down in the market as some investers try to guage when it has hit bottom. I'm wondering if tomorrow will have a big increase, even if it gives everything back by the end of the day.

I bought some Ford not too many cents ago. They're the best prepared cash-wise to weather the storm and they're light years ahead of the other two when it comes to re-shaping the product line into something that people want to buy....espescially the plans to bring the Fiesta, Mondeo, Kuga, etc over from Europe.

I'm going in big into some index funds when things get down around 7100-7200.

What index funds are you looking at?

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We're going to see wild swings. Tomorrow, we could see 800 points up. And then next week... those idiots get wiped out. It's happened at least a half-dozen times this year. Problem is that everything is over valued. Stocks, commodities, real estate. What is happening now with the dollar... we'll see collapse there too in the not too distant future. You're a fool if you think there is any strength there.

We have abandoned fundamental economics. Instead of being producers (and consumers of our own and imported products), we've turned into excessive consumers of imported goods, destroyed our manufacturing base in this country, have immersed ourselves into an artificial consume-everything, sky-is-the-limit credit-based economy, and are now on the brink of seeing the whole thing collapse in a deflationary event not seen since the 1930's. Congratulations Phil Gramm, Bernake, and Paulson. You idiots.

CNBC, Bloomberg, Jim Cramer, and all the rest of the talking heads, blowing hot air about "the bottom is here!" - turn them off. In fact, they need to cease broadcasting, because none of them know what the hell they are talking about.

NTH153Grim_Reaper.jpg

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They're not talking bottom anymore, at least not soon. They are now starting to come to the realization that this is really bad. They are admitting the old charts are not working, the credit crisis is now hitting commercial real estate, the banks got their money and hoarded it, and everything will suck at least into early 2009, as Niche suggests. The only thing they agree on is extreme day to day and intraday volatility.

Peter Schiff was talking about our false economy based on consuming goods manufactured overseas, and borrowing or printing money to pay for it. He suggests that as other countries realize that this won't sustain, the dollar will get pummelled. He says the current dollar is just the next bubble.

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CNBC, Bloomberg, Jim Cramer, and all the rest of the talking heads, blowing hot air about "the bottom is here!" - turn them off. In fact, they need to cease broadcasting, because none of them know what the hell they are talking about.

I'm sorry, but any pundit that says that I should stop listening to all the other pundits immediately loses all credibility. <_<

Instead I think I'm just going to stop listening to you.

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They're not talking bottom anymore, at least not soon. They are now starting to come to the realization that this is really bad. They are admitting the old charts are not working, the credit crisis is now hitting commercial real estate, the banks got their money and hoarded it, and everything will suck at least into early 2009, as Niche suggests. The only thing they agree on is extreme day to day and intraday volatility.

Peter Schiff was talking about our false economy based on consuming goods manufactured overseas, and borrowing or printing money to pay for it. He suggests that as other countries realize that this won't sustain, the dollar will get pummelled. He says the current dollar is just the next bubble.

They're not talking bottom anymore... today. Tomorrow, if we get a 400, 800 point bounce... you'll see things like "Is the worst over?" ... "Has the train left the station?" ... and then the talking heads will start talking up the recovery. Buy! Buy! Buy! Happens every time.

Chart people are like voo doo doctors. I am not sure why they are given any air time. No amount of chart analysis can predict where we are going, because present-day conditions are never the same. Every day is a different day. Those so-called experts need to read A Random Walk. In that book, the author flipped a coin with his class. Heads, advance by a point, tails, decline by a point. Made a chart. Showed it to a chart person... that person said, without a doubt, the stock was a buy. The author then disclosed how the chart was made. The chart person looked like an idiot and I believe became angry with the author.

Also, I don't see everything sucking only into early 2009. That implies maybe one or two quarters. As the 401Ks of this nation completely collapse, I see everything sucking for all of 2009, going into 2010. Also, expect a major shift down when the CDS regulated exchange comes on line in January and the roaches flee for the exits as the light of day is shown into that arena. The numbers do not add up.

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They're not talking bottom anymore, at least not soon. They are now starting to come to the realization that this is really bad. They are admitting the old charts are not working, the credit crisis is now hitting commercial real estate, the banks got their money and hoarded it, and everything will suck at least into early 2009, as Niche suggests. The only thing they agree on is extreme day to day and intraday volatility.

Peter Schiff was talking about our false economy based on consuming goods manufactured overseas, and borrowing or printing money to pay for it. He suggests that as other countries realize that this won't sustain, the dollar will get pummelled. He says the current dollar is just the next bubble.

The US Dollar has already gotten pummelled going back several years. The imbalance of trade is not news, and that's not what is placing downward pressure on the USD at this time. In fact, increases in exports (which resulted from a weaker USD) are about the one factor that has sustained positive GDP growth in 2007-2008.

What should be acting against the dollar right now is that industrial production fell off a precipice in the last two months coupled with that the money supply suddenly started expanding in a ridiculous and totally unpredictable way. If the U.S. economy stood alone, what would happen is that the USD would devalue in a big, big way. But the U.S. economy is in fact essential to the global economy. The very sectors that many other countries (especially developing countries) have gained a comparative advantage in are the sectors that are most affected by business cycles. Durable goods manufacturing just sucks right now. And so relative to theirs, our economy seems more stable right now. And we're not the only country resorting to loosened monetary and fiscal policy, either. There have even been murmers about the political stability and sustainability of the Euro as a currency.

The end result: the USD has strengthened. :o Incidentally, a fair chunk of the apparent reductions in commodity prices from the standpoint of American consumers is really linked to global economic volatility having yielded a strong USD, and is not entirely a reaction to physical supply and demand. This is the kind of deflationary pressure that I'm OK with (as someone who gets paid in US Dollars). If I were getting paid in Euros, I'd be kind of pissed off.

And naturally, just in the last couple of quarters the balance of trade has started trending back towards a widening deficit in the net export account. So there is reason to believe that we're going to have to make up for it. But for today, the US Dollar is our friend.

Looking forward isn't really possible. Personally, I think that the international community is going to coordinate to infuse the global economy with cash so as to counteract deflation risk without creating too many major incidents of one currency's precipitous devaluation relative to others. I also think that coming out of that kind of policy is going to be like breaking an addiction to crack and that it'll be mismanaged and messy. Really, it just depends on government and central bank policy in every single major economic power on Earth. It's beyond my predictive powers.

This last thought is OT but is very relevant. I bought a couple of small crystal balls from Magick Cauldron a month or so back and keep them on my desk at work. I also put them in my front pant pockets and take them to executive meetings. Any time someone asks me to discuss/forecast matters like this one, which I'm smart enough to know that I can't, I reach into my pockets, rub my crystal balls, state that I'm rubbing my crystal balls, that nothing is coming to me, and then I whip out my balls and ask if the questioner thinks that they'd have any better luck rubbing my balls. Sometimes they rub my balls. Sometimes not. Usually depends on BAC. But they never arrive at a satisfactory answer and I never try to give them one.

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All the people (ie hedge funds) who are selling their stocks, oil futures, whatever are converting them to dollars which is causing a run on dollars. To prevent inflation, people need to keep transferring their dollars into stocks instead of waiting for the market to bottom out. Otherwise we'll actually have to depend on the slowing economy for retailers' price-slashing to counteract the resultant inflation. That's how I see things anyway.

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All the people (ie hedge funds) who are selling their stocks, oil futures, whatever are converting them to dollars which is causing a run on dollars. To prevent inflation, people need to keep transferring their dollars into stocks instead of waiting for the market to bottom out.

For every seller of a security, wishing to convert to US Dollars, there is a buyer wishing to convert them to a securitized asset.

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