Bear market perspectives

[clifp]

I found this article by Schwab's chief market guru Liz Ann Sonders pretty interesting. Bear markets last 13 months on average, but what was really interesting was that by the time we actually enter official bear market terrority (-20% on the three market averages) the market is generally short lived as short a couple of weeks in some cases!

Emotionally, I sure we have not reached the bottom yet (despair) but we are getting close.

 

[unclemick]

Emotionally, I sure we have not reached the bottom yet (despair) but we are getting close.

Sigh. I know. I know. March Madness helps. But any way you slice it - football season is a long way off.

Let's hope Mr Market can keep us entertained til then.

.

heh heh heh - . After forty plus years since 1966, Mr Market's gyrations get a tad old. Now - watching football is a different story.

 

[REWahoo]

Unclemick, I would have sworn you were going to say that being a Saints fan you were very, very familiar with despair...

 

[clifp]

Let's hope Mr Market can keep us entertained til then.

.

heh heh heh - . After forty plus years since 1966, Mr Market's gyrations get a tad old. Now - watching football is a different story.

Many of the folks I play poker with are hard core sports bettors. (Personally, other than pick the square on the superbowl pool I don't do any.)

In Dec and Jan a couple of the kids were talking about the stock market, my ears perked up and told that the last few months the real crazy action has been in the market, plus the vig for the Wall St bookies is much less than Vegas bookies.

 

[al_bundy]

we're still in a secular bear market that started in 2000 for the nasdaq and sp500. beating the 2000 high by less than 3% is not a new bull market. i don't think we'll see a new bull market until sometime the next decade

 

[unclemick]

Unclemick, I would have sworn you were going to say that being a Saints fan you were very, very familiar with despair...

Ahem - no need to rub it in! .

But - another season awaits - hope springs eternal.

Sort of like that old Wall Street cliche - this time it's different.

heh heh heh - The way things look - I am not switching to the KC Chiefs! Going stay balanced index and putz with 'a few good stocks.' . You never know - might hit 'the one' any day now. Cheeseburger in Paradise here I come!

 

[AdventuresAddict]

Unfortunately, this financial crisis is the worst since WW2, and may well worsen into a depression. In other words, we can't presume that the Bush Administration, given its poor track records, is capable enough to end it as just another recession.

 

[Notmuchlonger]

Unfortunately, this financial crisis is the worst since WW2, and may well worsen into a depression. In other words, we can't presume that the Bush Administration, given its poor track records, is capable enough to end it as just another recession.

Yes because the Bush Administration wasn't around for handling the tech bust,Enron, and 9/11 blows to the economy.

 

[nepo]

Bear markets last 13 months on average, but what was really interesting was that by the time we actually enter official bear market terrority (-20% on the three market averages) the market is generally short lived as short a couple of weeks in some cases!

An average is past performance and nothing else. I'm afraid the current situation is not your run-of-the-mill crisis, bear market, slowdown, recession, depression or whatever they chose to call it. My advise is pay more attention to economists or money managers who saw the housing bubble before it burst. That is a relatively small group and I'm sure that people on the sell-side are not included in it.

 

[lazygood4nothinbum]

i don't think we'll see a new bull market until sometime the next decade

i might get these houses sold by then. perfect timing.

 

[clifp]

Unfortunately, this financial crisis is the worst since WW2, and may well worsen into a depression. In other words, we can't presume that the Bush Administration, given its poor track records, is capable enough to end it as just another recession.

You are joking right. Worse than the misery index (inflation+ unemployment) which reached 20+ in 79 and 80. The oil shock of 1973, complete with gas rationing, and odd and even days for buying gas. The S&L crisis of the late 80s and the resolution trust company. If President's Ford or Carter had the type of economic prosperity we have today they'd have both one 2nd terms.

Show me some data to back up this statement.

 

[Nords]

Unfortunately, this financial crisis is the worst since WW2, and may well worsen into a depression.

What ClifP said. I don't see how the current crisis even outweighs the 2000 tech bubble, let alone 1973-4 or 1966-82.

Next time you feel that people are beating up on you because of your relatively young age & relative lack of experience, you can refer back to comments like this one made without the links to back them up...

 

[barbarus]

What ClifP said. I don't see how the current crisis even outweighs the 2000 tech bubble, let alone 1973-4 or 1966-82.

Heck ya. Look what ole' Pham has to say about BB riden' to the rescue.

Bloomberg.com: Economy



Of course.... 3month T-bill yields have fallen to the lowest level ever.

 

[Hamlet]

I think this will end up being worse than the tech bubble, economy-wise (probably not stock market wise). At least with the tech bubble, most people weren't losing borrowed money. I think a couple of banks with a lot of bad loans in the bubble states will probably go under before it is through.

There is a lot of pain yet to come.

That said, I'm very encouraged by this week's downturn in oil and other commodities, and the improvement in the dollar.

You can't invest with the constant fear that we could live through the 70s again. It certainly could happen, but people keep saying it will happen every time the stock market goes through a little correction.

They've been wrong every time since the 70s

What ClifP said. I don't see how the current crisis even outweighs the 2000 tech bubble, let alone 1973-4 or 1966-82.

Next time you feel that people are beating up on you because of your relatively young age & relative lack of experience, you can refer back to comments like this one made without the links to back them up...

 

[cyclone6]

You are joking right. Worse than the misery index (inflation+ unemployment) which reached 20+ in 79 and 80. The oil shock of 1973, complete with gas rationing, and odd and even days for buying gas. The S&L crisis of the late 80s and the resolution trust company. If President's Ford or Carter had the type of economic prosperity we have today they'd have both one 2nd terms.

Show me some data to back up this statement.

I'll give a few things to consider:

1- 400B+ Federal budget defecits
2- 700B+ Current account defecits
3- The American Peso in a literal free fall
4- A negative savings rate
5- The real estate implosion
6- Inflation running rampant - regardless of the cooked numbers fed to us by the labor department
7- Wages being outstripped considerably by the non-inflation mentioned above
8 - Rising unemployment - headed much higher
9- Record individual debt levels
10- Outstanding Medicare and Social Security liability levels that literally could not be paid for with all the money in the worlds banks combined
11- The worst credit crisis since WWII (see Bear Stearns - do you really believe thats the only one on the horizon?) The entire world financial system hangs in the balance. Can the worlds central banks control the carnage?

Theres just a few. I'm sure I forgot some. The FED is desperately trying to inflate the economy. If I can count, I think they've got 2.25% left to cut. After that they have 0 room to move - just as the Japanese found in the 90s. And inflating the money supply equals only one thing - runaway inflation. When that becomes self evident, then the FED has their final choice to make - inflate our money to worthlessness, or raise interest rates to contain inflation and send the markets tumbling to un-thought of lows and creating a deflationary spiral (read depression).

Its simple in the end. We've lived far beyond our means for the last couple of decades. Our debt is killing us. Worst of all, we can't even control the outcome, as so many foreign nations now hold our future in their hands (China, Japan, Saudi Arabia, etc..., etc...) with all of the dollars they hold.

When was the last time we entered a very costly war (500B+) with no end in sight while we were cutting taxes? Remember the sacrifices everyone paid to fight WWII? Now we get everything for free...

What the hell ever happened to the old American principals of paying for what you bought, sustainable Federal, trade, and individual budgets. We are a nation that prospered on the labor of poor countries and unsustainable debt.

We are not even close to a bottom here. Its time to face the truth - that we must start paying for what we consume, start to pay down our debt, and suffer the economic consequences for quite a while to come.

If you want to believe that all will be fine - feel free - go ahead. But I seriously doubt any of you that follow whats going on can just stick your heads in the sand and say "yes, all is good"...

But hey, I gotta run - I'm missing March madness!

 

[Bikerdude]

Unfortunately, this financial crisis is the worst since WW2, and may well worsen into a depression. In other words, we can't presume that the Bush Administration, given its poor track records, is capable enough to end it as just another recession.

Gee, if I had to guess I'd say it was a Presidential election year .

 

[Spanky]

10- Outstanding Medicare and Social Security liability levels that literally could not be paid for with all the money in the worlds banks combined

One more thing - the payout of pensions to government retirees exceeds the payroll of government employees that account for 20% of the U.S. workforce.

 

[Notmuchlonger]

I'll give a few things to consider:

1- 400B+ Federal budget defecits
2- 700B+ Current account defecits
3- The American Peso in a literal free fall
4- A negative savings rate
5- The real estate implosion
6- Inflation running rampant - regardless of the cooked numbers fed to us by the labor department
7- Wages being outstripped considerably by the non-inflation mentioned above
8 - Rising unemployment - headed much higher
9- Record individual debt levels
10- Outstanding Medicare and Social Security liability levels that literally could not be paid for with all the money in the worlds banks combined
11- The worst credit crisis since WWII (see Bear Stearns - do you really believe thats the only one on the horizon?) The entire world financial system hangs in the balance. Can the worlds central banks control the carnage?

Theres just a few. I'm sure I forgot some. The FED is desperately trying to inflate the economy. If I can count, I think they've got 2.25% left to cut. After that they have 0 room to move - just as the Japanese found in the 90s. And inflating the money supply equals only one thing - runaway inflation. When that becomes self evident, then the FED has their final choice to make - inflate our money to worthlessness, or raise interest rates to contain inflation and send the markets tumbling to un-thought of lows and creating a deflationary spiral (read depression).

Its simple in the end. We've lived far beyond our means for the last couple of decades. Our debt is killing us. Worst of all, we can't even control the outcome, as so many foreign nations now hold our future in their hands (China, Japan, Saudi Arabia, etc..., etc...) with all of the dollars they hold.

When was the last time we entered a very costly war (500B+) with no end in sight while we were cutting taxes? Remember the sacrifices everyone paid to fight WWII? Now we get everything for free...

What the hell ever happened to the old American principals of paying for what you bought, sustainable Federal, trade, and individual budgets. We are a nation that prospered on the labor of poor countries and unsustainable debt.

We are not even close to a bottom here. Its time to face the truth - that we must start paying for what we consume, start to pay down our debt, and suffer the economic consequences for quite a while to come.

If you want to believe that all will be fine - feel free - go ahead. But I seriously doubt any of you that follow whats going on can just stick your heads in the sand and say "yes, all is good"...

But hey, I gotta run - I'm missing March madness!

Well if that isn't a contrarian indicator I don't know what is. Must be time to buy more stocks...

 

[cyclone6]

Well if that isn't a contrarian indicator I don't know what is. Must be time to buy more stocks...

Funny you should say that. I'm of the same mind. I've been sitting on way, way too many CDs for quite some time. As soon as the new Vanguard managed payout funds become available (I called last week and the prospectus is going to be available this week) I'm going to start dollar value averaging in.

But its going to be over the next 3 years. I figure somewhere along the line this thing has to bottom. Hell, even the 30s and 70s had a bottom.

And its much more comfortable starting at Dow 12000 than 14200...

 

[dex]

Gee, if I had to guess I'd say it was a Presidential election year .

Good point - I'm sure we will be hearing how things are looking up right after Jan.

 

[al_bundy]

I'll give a few things to consider:

1- 400B+ Federal budget defecits
2- 700B+ Current account defecits
3- The American Peso in a literal free fall
4- A negative savings rate
5- The real estate implosion
6- Inflation running rampant - regardless of the cooked numbers fed to us by the labor department
7- Wages being outstripped considerably by the non-inflation mentioned above
8 - Rising unemployment - headed much higher
9- Record individual debt levels
10- Outstanding Medicare and Social Security liability levels that literally could not be paid for with all the money in the worlds banks combined
11- The worst credit crisis since WWII (see Bear Stearns - do you really believe thats the only one on the horizon?) The entire world financial system hangs in the balance. Can the worlds central banks control the carnage?

Theres just a few. I'm sure I forgot some. The FED is desperately trying to inflate the economy. If I can count, I think they've got 2.25% left to cut. After that they have 0 room to move - just as the Japanese found in the 90s. And inflating the money supply equals only one thing - runaway inflation. When that becomes self evident, then the FED has their final choice to make - inflate our money to worthlessness, or raise interest rates to contain inflation and send the markets tumbling to un-thought of lows and creating a deflationary spiral (read depression).

Its simple in the end. We've lived far beyond our means for the last couple of decades. Our debt is killing us. Worst of all, we can't even control the outcome, as so many foreign nations now hold our future in their hands (China, Japan, Saudi Arabia, etc..., etc...) with all of the dollars they hold.

When was the last time we entered a very costly war (500B+) with no end in sight while we were cutting taxes? Remember the sacrifices everyone paid to fight WWII? Now we get everything for free...

What the hell ever happened to the old American principals of paying for what you bought, sustainable Federal, trade, and individual budgets. We are a nation that prospered on the labor of poor countries and unsustainable debt.

We are not even close to a bottom here. Its time to face the truth - that we must start paying for what we consume, start to pay down our debt, and suffer the economic consequences for quite a while to come.

If you want to believe that all will be fine - feel free - go ahead. But I seriously doubt any of you that follow whats going on can just stick your heads in the sand and say "yes, all is good"...

But hey, I gotta run - I'm missing March madness!

medicare and social security don't have to be repaid with one check, but over 40 years or so

and medicare is taking steps to cut expenses and control access to medical care

 

[brewer12345]

That said, I'm very encouraged by this week's downturn in oil and other commodities, and the improvement in the dollar.

Ding, ding, ding! Finally, someone else noticed!

As equities and any kind of bond but treasuries have taken a beating, the two momentum play sectors have been commodities and currencies. The sudden back-up in both last week suggests to me that we may be in the process of seeing money come out of those sectors and start going into non-treasury bonds and equities. Might be choppy in the meantime, but I think it is a quite encouraging sign.

Money market assets are at a historical high right now and I think there is a lot of money on the sidelines that needs to get invested. When people start getting comfy that we hae seen the bottom, there could well be a sharp upswing in the stuff that has been beaten down. No telling how long such a move could last, but...

 

[Notmuchlonger]

Yes, it was basically a 2 day plunge in commodities. Maybe it will continue down ward this week. About time coffee went down that was getting ridiculous.

 

[mb]

Money market assets are at a historical high right now and I think there is a lot of money on the sidelines that needs to get invested. ..

Is there a chart showing say MM assets as a percent of total investment assets versus time somewhere on the web that is easy to access?

MB

 

[unclemick]

Soooo - balanced index for defense and offense on full auto so the play calling doesn't get confusing.

I bet once again the Pat's will cobble together a good football team but in my heart I will root for the Saint's.

And I 'sertainly hope' Mr Market, the election and other world events don't consider themselves as important as football.

heh heh heh - I wonder with all this high water how kayaks will sell this spring/summer?