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Old 01-14-2009, 10:15 AM   #21
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Don't really see recovery until housing comes into line.
My laymens take on what is wrong. Way back in 1974 first married, both made about
10K, both cars paid off,no debt. Of course my new Plymouth Duster only cost 2800. Was able to save about 15-20K by 1976, bought first house brand new 40K. Bought second bigger house brand new 1979 only me working for about 15k, house cost 69K. It was a stretch with only one working, had 3 little kids, but made it, still in second house. So my simple distillation of the problem is that the cost of housing and living in general needs to come in line as to where ONE salary can support an average middle class family and its costs. By the way in 1976 there was also a housing recession so we got a 2000 tax credit, which brought the house price to only 38k. If they want to jump start the housing market, prices need to come down, and a tax credit, not a deduction is needed. Can't remeber what gas cost in 1974 but in 1972 after I returned from Korea was in the army it was .32/gal.
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Old 01-14-2009, 10:18 AM   #22
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Here are charts showing the first twelve months after the market bottomed out, with descriptions of how long it was until the market fully recovered. Sorry, not on one sheet. All this talk of "triple bottoms," "V-shaped vs U shaped recovery," etc serves as a reminder that we are now inhabiting the hall of mirrors known (laughably) as "technical analysis"--a special field of practice capable of explaining anything and predicting nothing. The only take away worth having (IMO): The stock prices took a lot longer to recover than they took to go down.

[IMG]file:///C:/DOCUME%7E1/MARKWA%7E1/LOCALS%7E1/Temp/moz-screenshot-30.jpg[/IMG]
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Old 01-14-2009, 10:23 AM   #23
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The only take away worth having (IMO): The stock prices took a lot longer to recover than they took to go down.
Not surprising to me. Greed is a powerful motivator for many, but for the masses I think fear is a lot more so.
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Old 01-14-2009, 12:01 PM   #24
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Oh! Well... this explains it all.

(slow paced but interesting)
Why 'bad banks' might be a good thing
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Old 01-14-2009, 12:11 PM   #25
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Don't really see recovery until housing comes into line.
Housing won't "come into line" until we have employment and non-real estate investment performance improvements.

I think the real issue is that employment/wages and non-real estate investment performance has to improve so that people can afford higher prices for real estate. Housing prices won't rise while folks can't afford the higher prices (most can't afford today's prices!) without risky zero down, ARM, interest only, etc., mortgages.

So, I agree, a full recovery will require real housing to recover. But a housing recovery won't happen without employment and non-real estate investment recovery first.

A population out of work or under-employed and with their investment portfolios in the tank isn't going to be bidding up the prices of homes.....
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Old 01-14-2009, 12:13 PM   #26
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So, I agree, a full recovery will require real housing to recover. But a housing recovery won't happen without employment and non-real estate investment recovery first.
The problem is that falling housing prices, unemployment and a terrible stock market are all feeding on each other in a vicious cycle that's tough to break. And as long they continue to drive consumer sentiment down to multi-decade lows, it's hard to see what catalyst will snap us out of the cycle.
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Old 01-14-2009, 12:44 PM   #27
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Just looked Dow down 255.75. Guess it has not read the article.
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Old 01-14-2009, 12:47 PM   #28
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Just looked Dow down 255.75. Guess it has not read the article.
So much for New Year's Cautious Glee, I'd say...
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

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Old 01-14-2009, 12:51 PM   #29
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Just looked Dow down 255.75. Guess it has not read the article.
Remember the qualifying statement in the original article?

"...when things start to show signs of improvement..."

Today obviously isn't "when". I haven't seen anything pointing to signs of improvement, only more gloom & doom.
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Old 01-14-2009, 01:00 PM   #30
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Hey! They did say it was down from 300!
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Old 01-14-2009, 01:24 PM   #31
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Perhaps W2R could start a thread about cautious pessimism--that's the ticket!
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Old 01-14-2009, 03:13 PM   #32
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I'll take a recovery at any speed right now !
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Old 01-14-2009, 03:19 PM   #33
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To me a good investment plan isn't based on hope. I'll take Shillers view on the matter.

Leading economist fears decade of weakness in US


Leading economist fears decade of weakness in US - Times Online
Not to sound flippant, but to me a good investment plan isn't based on experts' predictions. Use firecalc, and LBYM so you can adjust if things turn out to be worse than history.
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Old 01-14-2009, 06:00 PM   #34
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Good Contrarian Indicator

For those looking for a positive sign of a recovery about to begin....

Even I'm getting scared.

I haven't sold yet but I've been tempted.
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Old 01-14-2009, 06:13 PM   #35
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Oh crap - maybe this time is different - I'm retired and ain't gonna work. Famous last words.

So we get one of those decades of higher earnings growth in history, the P/E slowly falls thru the years toward 6 until someone spoils it all with another 'Death of Equities' type article.

Meanwhile the Norwegian widow cashs her dividend checks and goes shopping - ever mindfull of that guru Yogi's admonition that cash is almost as good as real money.

heh heh heh - and perhaps congruent with the end of the Mayan calender(2012), the Saint's finally make the Superbowl.
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Old 01-14-2009, 07:26 PM   #36
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I don't watch CNBC or any other financial news anymore. What's the point? . I figure it's gonna take 5-10 years for the markets to recover. If it happens sooner than that, great. So all I do now is read a brief recap from Yahoo finance as to what the markets did for the day. And I don't do that every day.

Hey, I think the med's are working.
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Old 01-15-2009, 06:44 AM   #37
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Many banks are still on perilous ground, even after TARP.........
Most of the jobs he will create will be GOVT jobs, those jobs don't raise GDP long term.........
So, Walmart will succeed and 20 other retailers will fail, how is that going to spur on the economy??
I wasn't trying to make any predictions. I could make an equally valid argument on how the whole economy could continue to sink into a deep depression.

We aren't seeing any signs of recovery. My point was, "Yes, I can see a way for the economy to make a fast recovery. The money we are throwing around is like throwing fertilizer on parched land. Whether anything will actually grow is a big question mark. But if it does start to grow, then we have fertile ground for a fast recovery."
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Old 01-15-2009, 07:59 AM   #38
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For investing? Just remember they start buying 6 mos beforehand...thus see whay some on TV are saying..Not till summer..will the recovery start..
and when are Houses Sold? Spring and Summer..

Gas will go up ? gee, yah think? Doesn't it always before Labor day?
Market may hit new Bottom in Jan...> Gee with Earnings reporst from 08' comming out then and they were all Loosers..Yah Think?

From my Broker at Willimington Trust.....

Good time to be buying when Market hits a New Bottom again in Jan..and if you feel confident a Recovery is comming?
You can Use 50% as Much $ this time by just buying some Leveraged Funds from Pro Funds.. ( pays 2-1 ) I bought UAPIX ( Small cap) on 11/21.. just don't hold it forever.. Recoveries last ave of 18-24 mos.. He was right and it Worked In late 02' for 03' and 04' and don't see why it won't again..

$15k Min. to own them....in 03' they paid 105% rtn while the SC Index did only about 46%...

That ought to pay for your Gas for your car and your Boat for the next few yrs! LOL
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Old 01-15-2009, 07:59 AM   #39
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The "dump your Broker" trend should help improve things.

Morgan Stanley and Smith Barney Merger: Consolidation and Client Anger

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As former SEC Chairman, Arthur Levitt told Bloomberg News:
“Brokerage is such a personal, intimate business…What we’re going to see in the brokerage business is breakaways from these managed institutions and the beginnings once more of boutique brokerage firms.”
But not so fast. ... investors arent happy with their -40% returns and blame their advisors for not being better at their jobs.

Clearly there is an opportunity for new models to emerge that can address the needs of individual investors and provide a better service.
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Old 01-15-2009, 08:00 AM   #40
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The money we are throwing around is like throwing fertilizer on parched land. Whether anything will actually grow is a big question mark. But if it does start to grow, then we have fertile ground for a fast recovery."
I guess what we need here is a good gardening/farming analogy for the ground hoarding all the fertilizer that's being spread around and not using it to grow the seeds lie within it...
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