Market Crash of 2008

Discussion in 'Et Cetera, Et Cetera' started by lucky8, Oct 9, 2008.

  1. lucky8

    Gold Member

    Joined:
    Oct 30, 2006
    Messages:
    3,716
    Likes Received:
    17
    Gender:
    Male
    I'm bored so I've been doing some calculations, there's no real point to this thread.

    Since closing on Dec. 31, 2007:

    Dow Jones has dropped roughly 34-35%

    NASDAQ has dropped roughly 37-38%

    S&P 500 has dropped roughly 38-40%

    The Dow was trading at its highest margin ever exactly one year ago today.

    A vast amount of stocks in these markets were sold for a loss. We're talking about trillions of dollars, your retirement dollars, gone, never to be seen again.

    ...and the year isn't over yet

    Today, the Dow is trading below 9000...this will be remembered in history books as the Crash of 2008, it has not been this low since May of 2003.

    It's not done yet.

    I know the market and the economy are not all in the same. But they are strongly related to each; the market reflects the confidence investors have in our economy. If investors aren't investing in business, that means a HUGE part of our economy is at risk, and thousands of businesses are going to fail within the next year if big investors don't start investing again.

    My prediction for 2009: (based solely off of intuition)

    The Dow will remain between 7,000 and 10,000 until at least March of 2009. Market swings of 500-1000 points a day should be expected. We will see more bank failures, a lot more, a major U.S. auto manufacturer will go under, and move their major operations to China. A few airline companies are going to fail, a couple will merge. Gasoline will decrease dramatically in price...it's already down to $2.89 where I live. Houses will NOT start appreciating in value like everyone is hoping for. Medical costs are going to keep rising. Credit is going to be next to impossible to obtain. The cost of health insurance will rise by 10-15%. Gold will reach $2000 an ounce. Wages are going to remain unchanged.

    All of our problems now were bound to happen. A combination of ridiculously over valued homes, extremely high gas prices, 30% inflation in price of just about every product out there, depreciation of the value of our money, and non-rising wage rates, among others, are all behind this economic mess.

    What do we need to fix this? Confidence. Lowered income tax, lowered property taxes, lowered interest rates, lowered tax on big business (not the owners, the business itself), fuck, lower taxes for everybody BUT the oober rich, keep their tax rate the same, they aren't the ones struggling right now.

    Hold on to your asses, the next year is going to be worse than this year. The damage of governmental mismanagement has been done, and there is nothing that can be done to stop this crisis. It's all downhill for the next 2-3 years. Notice how every single time in the last month that the government has taken action, the market has drastically declined? Whatever the government decides to do, it will not work. This is a long term problem that can only be fixed with long term solutions. Essentially, we are fucked for the next few years, no matter what actions are taken.

    Rant over.
     
    #1 lucky8, Oct 9, 2008
    Last edited: Oct 9, 2008
  2. TurkeyWithaSunburn

    Gold Member

    Joined:
    Mar 23, 2005
    Messages:
    3,543
    Albums:
    5
    Likes Received:
    252
    Gender:
    Male
    Location:
    Denver, Colorado
    7 trading sessions and down 1900+ points

    US banks with twice as much leverage out there than any other country Feds may need to do more to help banks - Oct. 9, 2008

    At least we're not as bad as Iceland which is on the verge of national bankruptcy.

    Home prices still have to go down another 20-30% nationwide in order to be at the baseline growth of roughly 8% per year. That is get the bubble out of the bubble.

    Yeah we're fucked for the next couple years, especially with rumors that OPEC will defend $80 barrel oil.

    The only thing is I hope that we don't become Japan. Let's see real estate bubble, stock bubble, 10yrs of near zero growth, interest rates at ZERO percent and still people don't want to take out loans.
     
  3. lucky8

    Gold Member

    Joined:
    Oct 30, 2006
    Messages:
    3,716
    Likes Received:
    17
    Gender:
    Male
    Ya, Iceland is screwed...

    and OPEC has just announced they will be decreasing production
     
  4. speshk

    speshk New Member

    Joined:
    Feb 28, 2006
    Messages:
    378
    Likes Received:
    0
    Gender:
    Male
    Location:
    Pennsylvania
    I looked into my crystal ball and it told me that happy days will be here again when our manufacturing base is restored. Quite a ways down the road, howeva. For now, stockpile the essentials: shoes, tires, underwear, you know, stuff you'll need to get by till common sense returns and leadership emerges. Good luck everybody!
     
  5. rawbone8

    Gold Member

    Joined:
    Jun 30, 2004
    Messages:
    2,864
    Albums:
    1
    Likes Received:
    4
    Gender:
    Male
    Location:
    Toronto (ON, CA)
    Somehow Canada's banking industry has managed to stay relatively unscathed, to date.


    The Fed is rumoured to have approached Canadian banks to "help out" with the credit crunch. Some Canadian banks may be in a position to buy some US financial operations at bargain prices – if they are prepared to take on the risks.


    Is it our more sober Nanny state socialist attitudes toward banking regulation that has caused this ? Don't get me wrong. We do have rogue bankers too, and some of our smaller regional stock markets are renowned for bad deeds. The scale here seems different. Not as hyperbolic in growth nor as rapacious.

    Curious.


    Real estate here is still nothing like the USA, though the US and global situation is depressing our new home construction starts. Real estate prices simply haven't gone down much.

    We have a comparable sector that is based on fear and panic - The stock market and Mutual Funds and in particular the oil market is getting killed. Funds managers are dumping extremely good investments to move to cash or to cover their positions and it is going to strangle a lot of good companies that won't access the capital they need to grow. It's a great time for bargain hunters who choose carefully. It's hard to know which of the smaller ones will make it.
     
    #5 rawbone8, Oct 9, 2008
    Last edited: Oct 9, 2008
  6. Mem

    Mem
    Gold Member

    Joined:
    Jul 4, 2006
    Messages:
    8,087
    Likes Received:
    8
    Gender:
    Male
    Location:
    FL
    I don't see people changing their ways yet. I've gone to a few casinos around here and the parking lots and slot machines are full.

    Same with the stores, people are out shopping.
     
  7. faceking

    faceking Well-Known Member

    Joined:
    Nov 14, 2004
    Messages:
    7,535
    Albums:
    1
    Likes Received:
    110
    Gender:
    Male
    Location:
    Mavs, NOR * CAL
    Good post.

    1. Usually ppl pick time periods conducive to their take/theory. Like your 12/31 onward.
    2. Not sure if this is the crash. A crash needs a single event. You might not know, but it was lower in 2001... and had fallen percentage-wise, pretty much the same. "Crashes" have a bit of falling, then boom. There is a semi-technical definition of a "crash".
    3. Your tuitition... I had 5 years ago.. and have been right... and I think you are right, my prediction in 2002:

    the market will look A LOT like the 70s, but with higher bands of volatility both annually, and quarterly. The quarterly has come true, and now we'll see the annual shifts. Obama's tax and social and anti-business policies might aid in that... or they'll settle and get used to it. Heresay at this point.
    4. Gas prices... what often gets missed is how many foreclosures we had, yet interest rates were pretty much stable. Unemployment has been relatively stable and safe... but it was gas that hit ppl, but moreover created the fear. It was one snowball that joined with another IMHO.
    5. The bailout is like one patch on hull with multiple leaks, many due to get bigger. Hang on to seats kids.... (you know the rest).

    6. I vehemently disagree with lowering all those forms of taxation. Right now a number of government bodies... states, counties, etc... are already expecting a Cat 3 or Cat 4 fiscal hurricane. They'll need to operate... but given the bloat... I'd love to see these folks tighten their belts. Education for one... we keep throwing more and more money, and our return has been relativity constant (adjusted for innovation outside of education [technology, healthcare, etc...).

    Can't wait for the big automakers to fold. The most powerful unions will, finally in the end... lost. They've been whipping the mule for ever... and now they need to go the way of TWA and Pan-Am (paying union baggage handlers $60/hour that had been there 30 years, while Southwest had college kids doing a better job at $8/hour).

    7 (lucky 7). I sunk a shitload of $$$$$$$$$$$ into S&P futures at the close today. Sweet God... let the market move and move big tomorrow... as I will also double down on volatility.... CBOE VIX options.

    :Flush: :Flush: :Flush: :Flush: :Flush: :Flush: :Flush: :Flush: :Flush:
     
  8. TurkeyWithaSunburn

    Gold Member

    Joined:
    Mar 23, 2005
    Messages:
    3,543
    Albums:
    5
    Likes Received:
    252
    Gender:
    Male
    Location:
    Denver, Colorado
    How much exposure do Canadian banks/financial institutions have to the exotic shell game of CDOs (Collateralized debt obligations) and credit default swaps? [Maybe someone can clue me in are they the same things with different names?] Which were marketed as "insurance" in all but name, but no assets had to be put aside to back them up. If they called it insurance they'd have had to be regulated and have something besides I.O.U. to back them up. There is somewhere between 50 and 60 TRILLION in outstanding default swaps (TV program 60minutes did a segment on them) They don't even know how much is outstanding because it was unregulated and not required to report anything. Just voluntary disclosures. Sad when you can't narrow it down any further than $10,000,000,000,000 :eek:

    This is a buyer's market for banking institutions. I'm sure the sovereign wealth funds (Norway, China, the Middle Eastern countries) are looking quite closely at anything that might be scooped up for pennies on the dollar.

    All hail the krone, yuan/renminbi, dirham, dinar, riyal, and the Euro! :frown1:
     
  9. lucky8

    Gold Member

    Joined:
    Oct 30, 2006
    Messages:
    3,716
    Likes Received:
    17
    Gender:
    Male
    Well the reason I say lower taxes is simply because people are running out of money. We can't give the government money if we don't have it to begin with. Our government will fail if our citizens go broke. I say put the people before the country. If the people are doing well, the country will do well. The government is already borrowing money, borrow more to keep struggling programs intact, and deal with our debt when our economy recovers by raising taxes when people have extra money to give.

    Honestly, even though it may not sound like it from my OP, I am very happy about the market situation. It is perfect for young people like me looking for long term investments and I am going to make bank in 10-15 years...it's just a matter of WHEN I should put my money in...I think the markets are going to go even lower, so I'm just waiting it out until I feel it's starting to hit bottom.

    Radical idea for a national debt solution: write it off. Fuck China.
     
  10. nudeyorker

    Gold Member

    Joined:
    Nov 6, 2006
    Messages:
    42,918
    Likes Received:
    38
    Gender:
    Male
    Location:
    NYC/Honolulu
    Any thoughts about starting major cuts in Federal spending?
    Let's take one tax cut idea...Has anyone done the math on what US taxes are going toward Secret Service protection for Caroline Kennedy, Susan Ford, Amy Carter and the Reagan clan, Chelsea Clinton and the darling Bush girls? My feelings are that when you are in office you and your family have Secret Service protection paid by US Taxes, after that you are a citizen and if you feel you need protection...Pay for it yourself!
    Anyone else have any ideas of how to cut the spending of what you and I hare footing the bill for?
     
  11. lucky8

    Gold Member

    Joined:
    Oct 30, 2006
    Messages:
    3,716
    Likes Received:
    17
    Gender:
    Male
    1)Department of Education
    2)Department of Homeland Security
    3)AmeriCorps
    4)Department of Energy
    5)The Legal Services Corporation...wastes over $300 mil a year
    6)McCain Feingold Campaign Fiance Reform Act (read this Worse Than Useless by Ron Paul)
    7)Patriot Act
    8)No Child Left Behind
    9)Women's Education Equity Program
    10)Strategic Milk Reserve
    11)The War on Drugs
     
  12. D_Bob_Crotchitch

    D_Bob_Crotchitch New Member

    Joined:
    Jun 11, 2006
    Messages:
    8,498
    Likes Received:
    18
    The waste within the federal government is staggering. Remember the cost of the hammers and toilet seats for jets? A man submitted a bid of just over $20 per toilet seat and the contract was awarded to a contractor for $750 a seat. Conventions, seminars, and training sessions cost billions. One governmental agency held a session in Europe. Look at all the extra supervisors. The post office has said for almost a decade that it was eliminating 15k supervisor positions. They still haven't done it. Those jobs have cost the postal customers billions of dollars in compensation. What about all the money that congress has forced the post office to kick into the kitty? The congress then spends the money. Look at all the perks that congress gives itself. Its excellent health care, fine dining, hair cuts, huge retirement packages.
     
  13. TurkeyWithaSunburn

    Gold Member

    Joined:
    Mar 23, 2005
    Messages:
    3,543
    Albums:
    5
    Likes Received:
    252
    Gender:
    Male
    Location:
    Denver, Colorado
    Didn't Nixon keep a retired police chief as his security and no Secret Service? (I could be wrong but I think I remember seeing that somewhere)

    How about getting rid of the Rural Electrification Administration? Yeah it's still around, that program that started in the 30's is still around! Interesting to note that the REA serves Aspen, Colorado. The place where the billionaires are buying out the millionaires. (That's a quote from one of the newspapers a few years ago.)

    I am glad though that the National Helium Reserve has been phased out.:cool:

    Get rid of credit cards at the Pentagon! Nothing like paying for your girlfriend's boob job on the government tab, even if it was repaid in full(?)

    I'm with lucky8 in getting rid of all of those things he listed! :biggrin1:
     
  14. kalipygian

    Gold Member

    Joined:
    Dec 3, 2005
    Messages:
    1,982
    Albums:
    1
    Likes Received:
    35
    Gender:
    Male
    Location:
    alaska
    Sell the two Air Force One 747's and get a Lockheed Constellation, like Eisenhower had.

    Rawbone, would you Canadians give anything for Alaska? (we've got the better part of B.C.'s coastline:biggrin1:)
     
  15. The Dragon

    The Dragon New Member

    Joined:
    Sep 11, 2007
    Messages:
    6,278
    Likes Received:
    6
    Our markets dropped a further 5% by close today.
    Almost time for me to step down into the markets and start buying shares.
    Mind you I have been watching these companies for some time and I have done my due diligence in regards of working out what price to pay for their shares.
    I am making a killing on buying half finished developments from over extended developers.
    Fuck I adore breing liquid in this sort of market.
    I am going to come out of this very, very well.
    I think the free market as very organic.
    The companies that are over stretched and have gotten greedy go to the wall and die.
    Their assets get taken up by other companies.
    And so you have a massive wealth redistribution.
     
  16. faceking

    faceking Well-Known Member

    Joined:
    Nov 14, 2004
    Messages:
    7,535
    Albums:
    1
    Likes Received:
    110
    Gender:
    Male
    Location:
    Mavs, NOR * CAL
    This all fine and good, but global credit is kaput... they only have so much cash, where will the financing come from?

    Not sure ya'll git what is going on here... this is a big shit sandwich and we ALL are going to take a bite.
     
  17. faceking

    faceking Well-Known Member

    Joined:
    Nov 14, 2004
    Messages:
    7,535
    Albums:
    1
    Likes Received:
    110
    Gender:
    Male
    Location:
    Mavs, NOR * CAL
    I was never able to get in on volatitily (i.e. the VIX) as the spreads and intrinsic value is re-god-damn-dick-u-lous.

    However... my entire position was worthless within minutes of the open. Figured I'd hope for next week. Decided to check in on things near the close...

    "the dow is up 175! the dow is up 175! the dow is up 175! the dow is up 175! "

    I missed it, but still caught things positive and actually made a considerable amount of money.

    I doubt there is anyone from St Barth's here.. but will be at Le Barto' at the Guanahani this eve. Drinks and refreshements are on Faceslob. I'm done with this market. Make sure you stock up on gold bars and an assembly of ammunition, it's going to be a long bumpy ride.

    Thankful, humble, realistic, and spent.
     
  18. Rikter8

    Gold Member

    Joined:
    Jun 30, 2005
    Messages:
    4,488
    Albums:
    3
    Likes Received:
    51
    Gender:
    Male
    Location:
    MI
    I pulled my 401K when Shrub and co got in the game. I lost money, but not as much as what I would have lost if I left it in the market.
     
  19. faceking

    faceking Well-Known Member

    Joined:
    Nov 14, 2004
    Messages:
    7,535
    Albums:
    1
    Likes Received:
    110
    Gender:
    Male
    Location:
    Mavs, NOR * CAL
    Shrub?????

    I can't even mention the luck I had with my 401K. A pure technicality.
     
  20. exwhyzee

    Gold Member

    Joined:
    Jun 5, 2005
    Messages:
    4,578
    Likes Received:
    36
    Gender:
    Male
    Interesting graph here, comparing past bear markets with this one, in terms of percentage drop and duration.

    I have lost about 25% of my stock value in the past few months...I am heavily invested in Bank America. I'm not panicked, yet. I've been through this many times before...noteably 1987.
     
Draft saved Draft deleted