So the DOW went up 400 points yesterday

[nadinbrzezinski]

and it gave back 300 or so today.

We are holding at 12000... but just barely

We have not found the bottom folks. And what happened yesterday and TODAY tells you that this is a bear market, this is a recession and no, we are not even close to finding a bottom

Now for all the but...but the sky is not falling pollyana crowd, this should worry you... perhaps them cassandras were onto something

[Clear Blue Sky]

1. And down almost 300 points today...

[girl gone mad]

2. The best the Fed can hope to do at this point..

is walk it down rather than let it crash.

[nadinbrzezinski]

3. That is what I think they are trying to do

I have no idea if this will work though... but I'd rather take a deep recession over a 1929 scenario (which is my fear)

[PATRICK]

4. it seems simple

All the remedies make things worse in some way. There is nothing to latch onto for another bubble. Downturns always look like downward heading roller coasters with some hills but in the throes of gravity.
The ground is real value which the market is scam flying way above based on mutually held fantasy. the safeguards put in place since 1929 make things go slower, perhaps, but the greedy have wonderfully found ways around them.

(On edit: The ground is now a swamp of trillions of dollars of red ink.)

There is a difference between walking on the ground and splatting all over it making a big Depression.

[nadinbrzezinski]

6. Remember may of those safeguards

were removed already, starting with Reagan, so this will be fun to watch.

Though some are still in place, and slowing the trades came after the 1987 500 point drop under Reagan

[Mountainman]

5. It doesn't worry me. My problems are already happening.

The house I'm trying to sell is losing value. Buyers can't get loans, buyers are waiting until the market bottoms out. The money I planned on saving isn't happening. I'm paying rent and a mortgage. I can't pay off the debts I planned on paying off this year. I will have to retire later.

And I should be worried that someone loses paper wealth on Wall Street?

[nadinbrzezinski]

7. It is all related

and Wall Street is a late indicator of the problems.

Regardless what is going on right now, including the credit crunch you are experiencing, has way too many parallels to the credit crunch of the late 1920s that led straight to the '29 crash (a symptom really, not the end effect) and the great depression

Once you realize that it is related to your daily experience, seeing these wild swings matters. (Though not as much as the market gurus would like you to believe)

[Mountainman]

9. I think that if we were as concerned about whether the little guy can feed his family and

buy a house and put something away for retirement rather than worry about the game players that are the reason the little guy is having such a hard time, we could get the problem solved sooner. The economy is driven by consumer spending. Wall Street gambles on that. Because the little guy can't buy food and gas and make house payments Wall Street is losing value.

I would not worry as much about investors as I would about consumers ability to buy and save and pay off debt.

No I don't worry about Wall Street at all.

We should work to lower energy costs, food prices, raise real wages, offer tax relief and interest relief to the middle class! Fuck bailing out investors. That is trickle down thinking.

It's like a huge banquet where investors are sitting at the table and the rest of us are on the floor waiting for the crumbs to fall. If we feed those sitting at the table more and more there will be more crumbs falling on the floor. Screw that. Let's all sit at the table!

Telling people who can't make ends meet they should worry about whether the Dow is above or below 12,000 is like saying don't worry about your life it isn't the most important thing.

[spooky3]

14. to take nothing away from the urgency of your situation

(I've been there, I remember how it feels, believe me--couldn't sell a house for several years, had to rent it from another city to people who trashed it, lost tons of money on it eventually), remember that there are a lot of little guys and gals whose retirement money is in the stock market. It's not just the wealthy fat cats whose life savings are there. In fact, the wealthy probably have money tucked away in many other places--real estate, gold, foreign currencies, etc. When the stock market plunges 10% as it has in the past 6 months, the middle class are hurt too.

Maybe more directly--many people who might be in the market to buy your home have lost savings because of this turbulence. They also are scared of losing more--or of losing their jobs due to this mess, and so some are sitting on the sidelines instead of making an offer on your house. It's all interrelated.

[nadinbrzezinski]

15. In 1929 your argument would be more valid, as there were few

small investors

Care to tell me where 401 Ks are invested? You guessed it, the Stock Exchange (A well managed portfolio will be diversified, but that is another story)

People have seen thousands from their accounts go poof, and they can't afford it... for some, more than we think, there goes their retirement by the way.

They feel poorer

They spend less

They don't have money to buy your home

It is related.

Now not paying attention to the day to day minutiae, I agree, my dad has this fixation on it, and carrying it to his level I'd not care to do, but the last two weeks or so have been telling of where the economy truly is (crapper)

But seeing it break through PSYCHOLOGICAL barriers, is important, though not the most important thing in the world

But once again, the Dow Jones is a LATE sign of what is going on in main street,

[Mountainman]

18. 401K's are invested for the long term, we are talking about short term here.

The recession is a short term effect. The market will be back over time. Very few people have 401Ks. Most people have no retirement savings at all.

[nadinbrzezinski]

19. You are making some very wrong assumptions here

1.- 401 K are the means to save in this country any longer for retirement. Which means they are far more common than you think

2.- Tell me, you honestly think that every person who has a 401 K is NOT near retirement, or AT retirement? In fact, I'd hazard to say that a fair amount of the people with a mature 401 K are NEAR retirement and are being affected by this RIGHT NOW. No, they will not be affected in ten years (medium term) or even 30 years (Long Term), but in the VERY SHORT TERM, as in NOW.

3.- The FUNDAMENTALS, which are reflected in the Stock Exchange, not the cause of them... are pointing to a DEEP recession if not outright a depression.

As I said, you can give a hoot or not... and the day to day gyrations are not important, except for how they are trying to keep this around the 12K with spit and wailing wire until Bush leaves office.

But to believe, as you seem to, that regular folk are not affected by this is not only wrong, but wrong headed. More people are invested in the stock exchange than ever before.

Hell, WE ARE... and we are FAR from rich. Then again, I am a rare bird, we have no debts and we have savings... but as I said, I am a rare bird... and if the fundamentals are as bad as they are... I will probably loose my shirt (due to inflationary, as in hyper-inflationary pressures that is)... not because I have not done things right.

By the way, if I am right about the parallels to 1929 and this goes down the depression route, (yes that is worst case and trust me, we have no clue what that means beyond academic thinking... I think actually I have a clue since I have seen that poverty in the ciudades perdidas in Mexico, by the by) you will have to hold on to that home for ten years. It took that long to make any descent recovery from the Great Depression.. and don't forget a world war.

Now have fun, thinking that people don't have money in the stock exchange... me, I know that if it crashes tomorrow, I have some time for that to come back before I retire... but many retirees don't have that time. Nor do people near retirement, got it now?

[Hannah Bell]

16. Parallels:

Florida real estate bubble: 1920s.

[nadinbrzezinski]

20. DING, DING, DING

and Miami entered a depressed economy two years ahead of the nation... and didn't quite leave until the 1950s

[DemocratInSoCal]

8. How About That Gold Shake Out

The PPT needed to find the money somewhere, to keep the market inflated yesterday, and try to hold things in control for most of this morning.

But you know what? I AM NOT AFRAID!! And you CAN'T FUCKING MAKE ME AFRAID.

Go ahead, shake the tree some more. Gold will be back above $1,000 before too long, and this minor fall will be looked upon like the drops when it was at $600.

No Retreat, No Surrender!!

[SlowDownFast]

10. Margin calls.

Major gold holdings are being liquidated to meet margin calls.

This also has a secondary (desired?) effect (by the PPT) which is to shake out the goldbugs and make gold look less enticing as a safe-haven.

It won't work.

Might it go even lower in the next few days? Possibly.

Gold will be back up well past $1000 again before you can spit, and as a result of this "shakeout", expect a comeback with a vengeance and no substantial "correction" for some time to come, since this was an indirect "correction" of sorts.

This is an excellent buying opportunity for both gold and silver.

It's a gift.

[whatchamacallit]

11. I sure hope you're right

I got back in quite recently, so the last few days have been a hard ride.

[SlowDownFast]

12. Goldbugs have been expecting this "correction".

I know I have.

It's possible it could dip as low as $850, though I doubt it will sink past $900 before bouncing.

I frequent some goldbug forums, and folks are "backing up their trucks" to buy this dip. I also frequent other economic forums who are anti-gold (deflationists), so I try to have a balanced outlook.

The fundamentals for owning gold and a gold price well above $1000 are sound.

Here's something to make you feel better (from Jim Sinclair's Mineset Blog):

Dear CIGAs,

Gold will trade at $1650.
The dollar will trade at USDX .5200.
You will benefit fully IF:

IF.....

IF you can keep your head when all about you
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:

http://www.kipling.org.uk/poems_if.htm

------------------


Dear CIGAs,

The reason for today's drop in gold, among other reasons given by media, was the Federal Reserve’s mentioning of inflationary warnings. This is outrageous as the Federal Reserve opens the flood gates of monetary expansion by offering to make loans to investment banks, two of which took up the offer today.

Apparently the equity market has not taken the bait that was entirely set for the best interest equity market. This makes today a total flop for the stabilizers (manipulators). This makes me think that the giants of finance have run out of aces. This is certain when the famous names run to the Federal Reserve to shore up failing balance sheets and depleted liquidity.

Being in gold it is hard to see the forest through the trees. All you feel is a headache as the gold price takes on the volatility of a shooting star.

Sit back and look at the media blitz operation in the gold and energy market followed by a major flop in the equity markets. It appears that the old manipulation of perception has fallen flat on its ass for the first time in 27 years. The big name investment banks today ran to the Fed for money, exposing the lamest of excuses to show that it is not a stigma to scream to mommy the moment you are in trouble.

Gold is a small market and energy is even more so. The equity markets are huge and the dollar market is a giant. Energy and gold were down, the dollar was up against the euro but down against most other currencies in a mixed market, yet the stock market bombed out completely. That was clearly not the PPT and Fed's plan.

I have no doubt whatsoever that gold will trade to at least $1650.

Inflation is out of control because the growth of monetary stimulation has no sane limits.

Soon the US Federal Budget will also balloon out of control.

If you must trade gold, you have to travel light, using no margin and buying gold on days like this, but be willing to sell 1/3 on Rhino Horn days or US nights.

I bought today and have thrown bids in over the US night.

If you are scared to death of the gold price, do not have margin and are losing faith believe in me. I am here for you.

If you use margin you are on your own.

Regards,
Jim

http://www.jsmineset.com/

And here's a chart from today which clearly shows major support before $900:

[abelenkpe]

13. Deflationists?

Are you saying that if there is deflation (monetary contraction) then the price of gold won't go up?

[Hannah Bell]

17. Why would it? n/t