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10-20-2007, 01:13 PM
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#61
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Quote:
Originally Posted by Razor
Only if the Fed cuts interest rates again. If not, the fall could last a while.
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Because?
Earnings are still quite robust for most companies. Aside from the actions of nervous boobs in the short term, earnings are what drives stock prices.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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10-20-2007, 01:49 PM
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#62
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Moderator
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,475
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Quote:
Originally Posted by brewer12345
Because?
Earnings are still quite robust for most companies. Aside from the actions of nervous boobs in the short term, earnings are what drives stock prices.
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Like most times, for this quarter there are some companies reporting blowout earnings and some reporting weak earnings.
It's just that in an "optimistic" market, the bad earnings are ignored while the bulls ride the blowouts to new highs. In nervous Nellie markets, the blowouts are ignored and each bad earnings report is evidence that the sky is falling.
__________________
"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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10-20-2007, 01:50 PM
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#63
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Recycles dryer sheets
Join Date: Sep 2007
Posts: 488
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Quote:
Originally Posted by brewer12345
Because?
Earnings are still quite robust for most companies. Aside from the actions of nervous boobs in the short term, earnings are what drives stock prices.
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Have you been following the economy at all? Earnings are mediocre and don't have as big an impact as interest rates and FED policy anymore, the housing bust is becoming more and more relevant, the value of the dollar is heading for an all time low and energy prices seem to be heading to an all time high. The market is overvalued and a major adjustment is in the near future.
Earnings drove market prices in the past, but speculators drive the prices now adays.
The internet drove the economy of the 90's and government spending, low interest rates, refinancing, and the home building boom fueled the economy of the first half of this decade. I see nothing in the immediate future that will boost the economy like those factors.
CNNMoney.com Market Report - Oct. 19, 2007
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10-20-2007, 05:08 PM
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#64
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Full time employment: Posting here.
Join Date: Mar 2007
Posts: 577
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Okay took another 5% of cash and placed an order for some mid cap value. My move should place a floor for Monday and set up a nice rally.
__________________
I highjacked a rainbow and crashed into a pot of gold - Bon Jovi
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10-20-2007, 08:26 PM
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#65
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Quote:
Originally Posted by Razor
Have you been following the economy at all? Earnings are mediocre and don't have as big an impact as interest rates and FED policy anymore, the housing bust is becoming more and more relevant, the value of the dollar is heading for an all time low and energy prices seem to be heading to an all time high. The market is overvalued and a major adjustment is in the near future.
Earnings drove market prices in the past, but speculators drive the prices now adays.
The internet drove the economy of the 90's and government spending, low interest rates, refinancing, and the home building boom fueled the economy of the first half of this decade. I see nothing in the immediate future that will boost the economy like those factors.
CNNMoney.com Market Report - Oct. 19, 2007
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I think its safe to say that I am a far more astute observer of the economy that most any journalist working for CNN, Fox "News", CNBC, etc. They are journalists trying to make sense of the economy. I am an economist studying what I was trained to study.
You been paying attention to what the BRIC(K) countries have been up to? The German banks may have been dumb enough to get wrapped up in US subprime paper, but the BRICK companies don't give a fig about all that. That is what has been driving the global economy in the last few years.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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10-20-2007, 10:50 PM
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#66
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 2,512
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One day a woman went for a walk in her neighborhood and came across a boy with some puppies. "Would you like a puppy? They aren't ready for new homes quite yet, but they will be in a few weeks!"
"Oh, they're adorable," the lady said. "What kind of dogs are they?"
"These are economists."
"OK. I'l tell my husband."
So she went home and told her husband. He was very interested to see the puppies. About a week later he came across the lad; the puppies were very active. "Hey, Mister. Want a puppy?"
"I think my wife spoke with you last week. What kind of dogs are these?"
"Oh. These are decision analysts."
"I thought you said last week that they were economists."
"Yeah, but they've opened their eyes since then."
__________________
ERD 50 says I should post this as a warning in believing anything I would post. I allocated one percent of my portfolio to calls for 2020 and then sold all my stocks on March 5, 2020. Returned back in on June 3, 2020.
https://www.early-retirement.org/forums/f44/why-i-believe-we-are-about-to-embark-on-a-historic-bull-market-run-101268.html
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10-20-2007, 10:55 PM
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#67
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Recycles dryer sheets
Join Date: Sep 2007
Posts: 488
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Quote:
Originally Posted by brewer12345
I think its safe to say that I am a far more astute observer of the economy that most any journalist working for CNN, Fox "News", CNBC, etc. They are journalists trying to make sense of the economy. I am an economist studying what I was trained to study.
You been paying attention to what the BRIC(K) countries have been up to? The German banks may have been dumb enough to get wrapped up in US subprime paper, but the BRICK companies don't give a fig about all that. That is what has been driving the global economy in the last few years.
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You're joking. Right?
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10-20-2007, 10:59 PM
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#68
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Moderator Emeritus
Join Date: Feb 2005
Location: San Diego
Posts: 5,248
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Quote:
Originally Posted by Razor
You're joking. Right?
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Which part? He really is trained and paid to do this for a living.
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10-20-2007, 11:01 PM
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#69
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,499
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Quote:
Originally Posted by Razor
You're joking. Right?
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Razor pay attention, he knows.
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10-20-2007, 11:08 PM
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#70
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Posts: 1,378
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Here's a puzzle for all the economists in the house. What does this graph tell us?
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10-20-2007, 11:10 PM
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#71
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: LaLa Land
Posts: 4,499
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I think it's a bad cardiogram reading.
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10-20-2007, 11:12 PM
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#72
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Posts: 1,378
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Quote:
Originally Posted by 73ss454
I think it's a bad cardiogram reading.
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I agree. I don't think the patient will make it.
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10-21-2007, 12:21 AM
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#73
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Moderator
Join Date: May 2007
Posts: 12,697
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Quote:
Originally Posted by twaddle
Here's a puzzle for all the economists in the house. What does this graph tell us?
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I am not an economist and don't pretend to be one, but I find this graph interesting for several reasons:
1) If history is any guide, the chance of a recession are fairly high right now, though drops in YOY returns have not always been followed by a recession.
2) In the past 25 years the frequency and length/severity of recessions has decreased quite dramatically.
3) In the past 25 years, the volatily of YOY percent change has decreased notably.
Let's face it, my interpretation of this graph is as good as anyone's... But it looks like something happened in the past 25 years which makes it difficult to extrapolate from these historical data what's going to happen this time around...
__________________
46 years old, single, no kids. Exited the job market in 2010 (age 36). Have lived solely off my investments since 2015 (age 41). No pensions.
Current AA: real estate 64% / equities 10% / fixed income 16% / cash 10%
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10-21-2007, 12:32 AM
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#74
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Thinks s/he gets paid by the post
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,396
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Not an economist. This chart seems to indicate that residential investment tends to be sporadic. Other factors, such as consumer spending and commercial real estate investments, will have to considered before making any prediction about where the economy is heading.
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10-21-2007, 12:49 AM
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#75
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Looks like only 1951 and 1967 showed a strong downward deflection in residential construction spending that did not come to a recesion. '67 of course was the eve of Mr. Johnson's ramp-up of the Viet-Nam war on top of the War On Poverty, the apogee of guns and butter. 1951 was coming out of the post WW2 recession, and was benefitted by enormous demand built up during the war years. So in each case there were very special circumstances and underlying strengths.
It is hard for us today to even imagine the sheer joy of consuming that people felt in the early fifties. The population was making good money, babies were everywhere, and families needed and had the means to pay for lots of things. Also, interest rates were quite low, and the economy was highly liquid.
From my vantage point, today we are running on hope and a prayer.
Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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10-21-2007, 06:25 AM
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#76
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Administrator
Join Date: Apr 2006
Posts: 15,786
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The trend in residential investment will probably turn around in the next year.
__________________
Living an analog life in the Digital Age.
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10-21-2007, 06:31 AM
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#77
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Thinks s/he gets paid by the post
Join Date: Feb 2004
Location: Mid Hudson Valley
Posts: 1,781
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What gumby said.
__________________
In a panamax down by the river.
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10-21-2007, 12:56 PM
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#78
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Thinks s/he gets paid by the post
Join Date: Jun 2006
Posts: 1,378
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Quote:
Originally Posted by Gumby
The trend in residential investment will probably turn around in the next year.
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On what are you basing your projection?
The inventory of homes is still climbing. The sales of homes is still declining. Even if no new inventory came on the market and sales stayed at current levels, it would take almost a year to burn off the current inventory.
I think an RI turnaround in one year is optimistic. But even so, RI is a leading indicator. We still haven't seen the effects on consumption or commercial investment. If those get hit, it'll be safe to say economic growth is dead, earnings will be hit, and the stock market will be hating it.
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10-21-2007, 01:03 PM
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#79
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Thinks s/he gets paid by the post
Join Date: Apr 2007
Posts: 1,304
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Is it over yet?
Still it could be worse. As of Friday, for the year, I am down 2.5% from my portfolio high and up 5.6% from the beginning of the year.
Am I glad I got my AA and 5 year 'money buckets' in place.
... sleeping like a babe.
__________________
Life is GREAT!
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10-21-2007, 02:34 PM
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#80
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Recycles dryer sheets
Join Date: Sep 2007
Posts: 488
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Quote:
Originally Posted by twaddle
On what are you basing your projection?
The inventory of homes is still climbing. The sales of homes is still declining. Even if no new inventory came on the market and sales stayed at current levels, it would take almost a year to burn off the current inventory.
I think an RI turnaround in one year is optimistic. But even so, RI is a leading indicator. We still haven't seen the effects on consumption or commercial investment. If those get hit, it'll be safe to say economic growth is dead, earnings will be hit, and the stock market will be hating it.
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I work for a multi billion dollar company in the housing industry. Last year our analysts predicted the recovery would begin in 2008. They have revised there predictions and and now expect housing to begin turning around late '09 into 2010. My company is taking appropriate actions to weather the storm which might last longer than expected.
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