Stock Market Woes

[wabmester]

Yeah, I can't say that I find all of this terribly upsetting, given that we are talking about being less than 10% off multi-year highs.

You mean it's over now? Hooray!

 

[brewer12345]

You mean it's over now?   Hooray!

Not until Ha stops shoving needles into the bull figurine on his desk.

 

[laurence]

What good news is going to spark the market in the near future? Swammi says down or flat for months to come. Putting away crystal ball now.

 

[justin]

What good news is going to spark the market in the near future?

What good news? You know we've hit bottom when forbes/Money/newsweek/businessweek have a cover that says "Are Stocks Officially Dead?" Look for that news.

 

[brewer12345]

What good news is going to spark the market in the near future?  Swammi says down or flat for months to come. Putting away crystal ball now. 

I think the market is finally facing up to the fact that we either have rampant inflation or more Fed rate increases ahead of us. Its not the end of the world and earnings have by-and-large been pretty strong. Things will settle out soon. Call it another 5%.

 

[laurence]

What good news?  You know we've hit bottom when forbes/Money/newsweek/businessweek have a cover that says "Are Stocks Officially Dead?"  Look for that news.

Oooh, ya!  I'll be selling the silverware to raise money to buy stock at that point!  

 

[Danny]

http://intelligentspeculation.blogspot.com/2007/03/stagflation_09.html

 

[wabmester]

What are the chances of stagflation happening

Probably pretty low.   That memory is still fresh in the minds of the fed.   In fact, it's why they are so reactive when it comes to inflation.    They have a nuke called the Taylor Rule that is "guaranteed" to wipe out inflation.   At considerable cost to the economy, of course.    But the 70's taught them to take the pain up front rather than prolong it.

 

[brewer12345]

Dan, if Bernanke lives up to his moniker, inflation could indeed get out of hand.  But I tend to dounbt that will happen simply because there are enough inflation hawks at the Fed.  More likely, they will overshoot and push the economy into a (hopefully) mild recession.

The line I keep hearing is that we are less vulnerable to stagflation than in the past because the US economy is much less energy-intensive than it used to be (i.e. it takes less energy per unit of output now than back in the 1970s).  I think this is probably true, but I am not willing to bet the farm on it.  As such, I won't be selling my commodities or equity in companies that own/control real assets.

 

[modlair]

There was a report out of some brokerage last night saying that inflation numbers were about to get a 0.25% additional upward bias.

It's from housing. With the turn up in mortgage rates there are more renters, increasing rental demand. All of the housing data in inflation numbers derives from rents. That data did not reflect the housing price runup / bubble and now it will over assess inflation in housing at a time when home prices are dropping.

That portion of the measurement is bogus. If the Fed understands it, it will not influence them.

 

[wabmester]

If the Fed understands it, it will not influence them.

Well, if you believe the party line, it'll influence them heavily. It's widely believed that they have an inflation target for core inflation (ex-energy/food). Housing is part of the core, so if it goes up past 2% or so, the party line is for them to act fast and hard.

 

[haha]

That portion of the measurement is bogus.  If the Fed understands it, it will not influence them.

Absolutely! We have removed energy and food from the core, why not housing? As long as we are homeless beggars eating in soup kitchens and walking around all day, it will perfectly reflect our buying patterns.

And if we wear out too many shoes, thereby threatening to bump up the clothing category, just substitute old newspapers. Imagine the warmth the Sunday New York Times could provide to our toes!

Ha

 

[bpp]

I'll tell ya what I don't understand.

The market was up about 5% in all of 2005. It was up about that at the peak last week. So this means that over a 17 month period there was less than a 10% rise -- and somehow, God knows how, but somehow people who lived through the 90's were talking about how this was an absurd runup and a bubble waiting to pop.

It's all relative. For those of us whose base currency is the yen, and with a heavy dose of Japanese stocks, 2005 was the second best year in the market ever, beaten only by the final year of the bubble of the '80's.

The Nikkei average has more than doubled in the past 3 years. On top of which, the dollar strengthened against the yen last year, giving me much better returns on my US stocks than you got. (It has since given up some of that gain, but I'm still well ahead.)

We're still a long way from the peak of 1989-90, but a little breather seems about due.

And what's worse is those same people are now talking about the 4% drop of the last few days as if it was a "crash". These are people who saw The Great Crash of 2000 and they still are talking about 4% being devastating.

That I agree with. I didn't start investing until 2000, so I got used to regularly putting my money into a deepening hole from the start. Given how well cost-averaging through the dip worked out, I would love to have another, similar buying opportunity. The latest dip is not enough to get really interesting yet, but I can hope it is the start of a trend.

Bpp

 

[modlair]

That I agree with. I didn't start investing until 2000, so I got used to regularly putting my money into a deepening hole from the start. Given how well cost-averaging through the dip worked out, I would love to have another, similar buying opportunity. The latest dip is not enough to get really interesting yet, but I can hope it is the start of a trend.

And this is such an avalanche of bearishness that one is hearing everywhere. Bricks in the wall of worry?

 

[haha]

This is an option expiration week. Overall, this tends to be a plus week. So a weak day tomorrow might presage more weakness next week. Still, even if it is working downward, rarely does it go straight down.

Ha

 

[NinjaPigeon]

The percentages are definately not that bad yet, but considering I bought $21k split among mid-cap, small-cap and the s&p on Friday, it's definately a blood bath from my perspective Talk about your crappy timing, eh?

 

[cute fuzzy bunny]

Send me a message when the time comes. Thanks.

Shoot, I forgot to include you on the list.

It was yesterday.

 

[Danny]

Shoot, I forgot to include you on the list.

It was yesterday.

You kinda hurt my feelings by forgeting me like that and then laughing about it.

Hey the smoked trout is working for me..having it right now on toast, cucumber lettuce & mustard...thanks for letting me know about that

 

[cute fuzzy bunny]

Sorry man, I try hard not to hurt peoples feelings. Really, I do. Really.

Nobody was more surprised than I was that canned smoked trout would be decent. We keep about 10 cans of the stuff in the back of the pantry. Makes a mighty fine "what the heck am I gonna have" snack.

Makes a nice pate as well...little bit of horseradish, some cream cheese, bit of lemon, maybe a few drops of cognac...maybe a little minced green onion...

 

[Danny]

Sorry man, I try hard not to hurt peoples feelings. Really, I do. Really.

Nobody was more surprised than I was that canned smoked trout would be decent. We keep about 10 cans of the stuff in the back of the pantry. Makes a mighty fine "what the heck am I gonna have" snack.

Makes a nice pate as well...little bit of horseradish, some cream cheese, bit of lemon, maybe a few drops of cognac...maybe a little minced green onion...

I thought my whole week-end was going in the dumper, but thanks to your post, I'm doing much better now.

that pate sounds good too....and it looks from the post you were in the process of making it?...I'm picturing a younger version of Jacques Pepin.....remember to test the cognac before you mix it in

 

[cute fuzzy bunny]

Nah, havent made it in a while. Search for 'smoked trout pate' and you'll find plenty of mostly compatible recipes.

If you ever find smoked bluefish, in about the same approximate recipe its nearly orgasmic.

Oddly, I like cognac in a lot of recipes but not so fond of it by itself.

I do go through a bottle or so over the course of a year between steak au poivre and various pates...

 

[Nords]

Nobody was more surprised than I was that canned smoked trout would be decent.  We keep about 10 cans of the stuff in the back of the pantry.  Makes a mighty fine "what the heck am I gonna have" snack.

Apres-hurricane food...

 

[cute fuzzy bunny]

We have levy failures, flooding and potential mudslides here in place of the hurricanes.

And theres always that millions of years dormant volcano about 2 miles from my house.

 

[Martha]

We are out in the MH and Greg and I just ate 3/4 of a pound of smoked lake superior salmon on crackers. To die for.

When we are less full, out for a bicycle ride.

 

[Ed_The_Gypsy]

...reg and I just ate 3/4 of a pound of smoked lake superior salmon on crackers.

Martha, isn't that the oily grey stuff that smells bad? When I lived in Chicago, I bought some and had to throw it away. You should try some Chinook some time.

Ed