Any Bets On What The Market Will Do 8/8?

[johnhp]

U.S. stocks plunged sharply Monday as Wall Street faced Standard & Poor's historical downgrade of the United States' credit rating.

The Dow Jones industrial average (INDU) sank 350 points, or 3%; the S&P 500 (SPX) lost 43 points, or 3.7; and the Nasdaq Composite (COMP) dropped 101 points, or 4 %.

http://money.cnn.com/2011/08/08/markets/markets_newyork/index.htm/?hpt=hp_t1

i am not sure that, all things considered 3% is a sharp plunge.

[notoc]

I believe you've answered your own question and demonstrated my point.  The "feelings" of "Hope and Change" plus the gradual realization that the Bush Doctrine would be upheld,  spurred a market hungry for good news.  Now that it's pretty clear the fluffy bunnies, unicorns and rainbows are not going to appear...

The only thing it demonstrates is that you'll take any market movement and twist it to fit  ... when the market rises it's because of Republicans and when it falls it's because of Democrats.

One last experiment ... your reasoning for the following: Oct, 2007 DOW @ 14000 - Feb 2009 DOW @ 7200 ?

Don't tell me ... Democrat fault, right?

 

[foodserver]

The only thing it demonstrates is that you'll take any market movement and twist it to fit  ... when the market rises it's because of Republicans and when it falls it's because of Democrats.

One last experiment ... your reasoning for the following: Oct, 2007 DOW @ 14000 - Feb 2009 DOW @ 7200 ?

Don't tell me ... Democrat fault, right?

 

Not really notoc.  I'm pretty much in over my head when it comes to the market and my sense is that the more expert someone is, the more inclined they would be to apply that statement to themselves. (don't try this at home kids) YOU may know more than I but that wouldn't be saying much.  My comment was more a good-natured jab at Pepsi than a serious attempt at prognostication.

To the extent the markets are effected by politics (spending and regulation) and of course they are, I would lay the blame at the feet of incumbency more than anything else.  Are the Democrats "worse" in my view than the Republicans?  Of course, and very much so but while the Democrats are more responsible for the problem in my opinion, the Republicans are as responsible for preventing the solution in that they act largely in protection of their own position as office holders.

The reasons I'm certain of a dramatic reversal, once Obama is removed from office are two-fold:

1) The situation is so bad, almost any move in the right direction will show significant improvement.

2) The existence of the T-Party to hold recalcitrant Republican's feet to the fire. 

[foodserver]

Oh and this...

Notoc asks,

your reasoning for the following: Oct, 2007 DOW @ 14000 - Feb 2009 DOW @ 7200 ?

This has also been covered elsewhere but stated as succinctly as possible the slide began with the meltdown in the housing market caused by over-regulation of the the loan industry (see "Fannie and Ginnie"  and the Community Re-investment Act)

[johnhp]

Oh and this...

Notoc asks,

your reasoning for the following: Oct, 2007 DOW @ 14000 - Feb 2009 DOW @ 7200 ?

This has also been covered elsewhere but stated as succinctly as possible the slide began with the meltdown in the housing market caused by over-regulation of the the loan industry (see "Fannie and Ginnie"  and the Community Re-investment Act)

Back up your assertion here with regard to specific regulations.

[notoc]

Not really notoc.  I'm pretty much in over my head when it comes to the market and my sense is that the more expert someone is, the more inclined they would be to apply that statement to themselves. (don't try this at home kids) YOU may know more than I but that wouldn't be saying much. 

Which makes you as good a judge of my trading knowledge as it does your overall knowledge of market economics ... which is to say, dreadful.

[notoc]

Oh and this...

Notoc asks,

your reasoning for the following: Oct, 2007 DOW @ 14000 - Feb 2009 DOW @ 7200 ?

This has also been covered elsewhere but stated as succinctly as possible the slide began with the meltdown in the housing market caused by over-regulation of the the loan industry (see "Fannie and Ginnie"  and the Community Re-investment Act)

'Over-regulation' ? .... you are stuck in some kind of dream-world, foodserver. Try under-regulation of every sector from the FED itself through bank reserve requirements to secondary market CDOs and CDSs ... then move on to the tame rating agencies blindly (and not so blindly) stamping AAA on rolled-up re packaged Junk.

Which all lead to one thing ... nobody left to pay the interest, let alone the principal.

This wasn't conservative or liberal economic policies ... it was everyone from AIG to Citi to Countywide to Goldman's to BoA to your local one-man brokerage, boiler-rooming. And not only did the so-called regulators turn a blind eye, government policies actively encouraged them to do so.

Exactly the same thing was going to happen whichever party was in power ... open your eyes foodserver, the truth will set you free.

edit

22.20 GMT DJIA's grey market is trading > 10700

[Sassy]

...All three major U.S. stock indexes sank between 5% and 7%, pushing the Dow below 11,000 for the first time since last November.

U.S. stocks have fallen 15% during the past two weeks.

http://money.cnn.com/2011/08/08/markets/markets_newyork/index.htm/?hpt=hp_t1

[johnhp]

'Over-regulation' ? .... you are stuck in some kind of dream-world, foodserver.

To be fair, foodserver thinks this is over-regulation....



Of course this from a guy who claims he is a slave.

[johnhp]

...All three major U.S. stock indexes sank between 5% and 7%, pushing the Dow below 11,000 for the first time since last November.

U.S. stocks have fallen 15% during the past two weeks.

http://money.cnn.com/2011/08/08/markets/markets_newyork/index.htm/?hpt=hp_t1

Those baggers went after the poor and took a chunk out of the investing class.   

[notoc]

To be fair, foodserver thinks this is over-regulation....



Of course this from a guy who claims he is a slave.

foodserver claims to be many things ... here's a quote from a previous conversation in which he puts forth his market acumen:

Oil started going up and you figured out gold would go up.

Congratulations are surely in order. 

He's intimating that I said there was a correlation between the spot price of Oil and the futures price of Gold and that this correlation is so obvious that it caused him to give me the raised eyes and a splash of sarcasm.

I said no such thing, but he obviously thinks the correlation is a 'no brainer'.

So here you go foodserver ... riddle me this:

28 Mar 2011 : Crude $114.66/bb - Gold $1380/oz

08 Aug 2011 : Crude  $80.16/bb - Gold $1720/oz

[johnhp]

FS is just not too swuft (yes, swuft with a "u") as we say where i am from.

[notoc]

I'm staying short and holding on to my seat ... I expect the US PPT to be heavily involved today so I think it's going to be a choppy ride down to >10500 - but it's a crap shoot.

01:30 GMT Grey Market DJIA Futures dipped below 10500

But hey, what do I know that you don't, foodserver?

Like John said .... you're just not too swuft. 

[foodserver]

Which makes you as good a judge of my trading knowledge as it does your overall knowledge of market economics ... which is to say, dreadful.

I wouldn't be qualified to judge your trading knowledge-correct as for market economics I've already said I'm predicting that unemployment is going to remain above 8% that inflation will at least begin to manifest itself (3-5%) and that gasoline will be in the $4 per gallon range.  Cheap for you Brits I imagine.  This are the numbers that will be concerning Obama as election time rolls around and if they're where I think they're going to be will sink his chances.  If I turn out to be right, I'll be more or less satisfied with my grasp of "market economics."

[foodserver]

'Over-regulation' ? .... you are stuck in some kind of dream-world, foodserver. Try under-regulation of every sector from the FED itself through bank reserve requirements to secondary market CDOs and CDSs ... then move on to the tame rating agencies blindly (and not so blindly) stamping AAA on rolled-up re packaged Junk.

Which all lead to one thing ... nobody left to pay the interest, let alone the principal.

This wasn't conservative or liberal economic policies ... it was everyone from AIG to Citi to Countywide to Goldman's to BoA to your local one-man brokerage, boiler-rooming. And not only did the so-called regulators turn a blind eye, government policies actively encouraged them to do so.

Exactly the same thing was going to happen whichever party was in power ... open your eyes foodserver, the truth will set you free.

edit

OK notoc, I'm a bit pressed for time here so I'll make it short.  The Community re-investment Act, started during the Carter administration was later strengthened during the Clinton administration to penalize the lending industry for not making loans to people, the industry was not on their own inclined to make loans to.  Hence the beginning of the "sub prime loan" industry. If you were in the business and you did not loan people money the government wanted you to make loans to, you were fined.

So government forced the industry against their own better judgment to make these loans.  

Mortgages are routinely packaged and sold as securities but of course are only as good ultimately as the borrowers willingness to pay their mortgages.  Predictably, a much higher percentage of these borrowers began defaulting on loans they probably shouldn't have taken out in the first place.  So yes, the government forced these loans on the loan industry and the loan industry found a way to make them work by doing exactly what they did with their other mortgages.  Packaging them into securities. The "community re-investment act" was one of those good time charlie program titles designed to get incumbents re-elected.  The people who conceived and implemented this act, had not soiled their own professional hands in the lending industry but they were of course more qualified to tell those who were how to do their business and offer that as a reason for their own re-election in the process.  I suppose if someone really wants to increase home ownership they'd at least consider lowering taxes and decreasing regulations.  THAT might have a real impact.  But nobody would ever give the Senate Finance Committee any credit for that.  So instead we got this program with a grand title no doubt in the paper and associated with politicians running for office and most for re-election and the only reason the lending industry is being blamed for this is because they're the guys holding the bag.

I think your cynicism ("Exactly the same thing was going to happen whichever party was in power") is well founded and rooted in my pet systemic problem and that is eternal incumbency. Make re-election impossible no matter how much cheating lying and reneging is going on and a lot of it will go away.