Next Stop Dow 11111

[DruulEmpire]

Some months back, I privately joked that the Dow might fall to 11111.  I didn't really believe it, hoping more that the magic sequence 12345 might be the true floor.

But we plummeted through 12345 today, and I rather suspect that more ground could be lost before we finally see any substantial rebound by, say, Thanksgiving.

Since I like to think that may be a definitive rebound, I consider this view long-term optimistic.  But remember, if we do keep sinking -- you heard it here first.

[gOOber]

Brother, can you spare a dime?

 

[DruulEmpire]

Eh, I think we'd have to be somewhere back below 10000 for THAT to happen ...

[BillN]

That reminds me I need to check on my 201K.  

[Hiram]

Personally I think The Dow will come back strongly at some point, it’s the when that is the worry.

The pain before the gain.

With rising prices (inflation) and slow growth, the specter of stagflation is upon us.

In my opinion all the runes are not good

[SwitcherX]

Everyone, especially the oil traders, are waiting to see if Bush bombs Iran.

[AZWolf]

Let the Dow rot.  What it does in the last few years has been to go up while the economy has been left to suck ass.  Let the Bush Class feel some pain.  

[3deroticer]

no need to panic like the crash in the 30's, it will be those that have huge stock in the market that will feel the pain.

[pedonbio]

Quote:
Hiram said:
Personally I think The Dow will come back strongly at some point, it’s the when that is the worry.

Louis Rukeyser once gave the ultimate market prediction, back in the early '70s (when the Dow was about 1,000): "The market will hit 100 and it will hit 10,000. But I can't say when, or in which order."

[DruulEmpire]

Luckily, I'd say Rukeyser was wrong about the 100 -- at least, until such time as society may dismantle the Dow Jones altogether.

[AZWolf]

I'd like to see it hit 111.  

[Hiram]

Quote:
AZWolf said:
I'd like to see it hit 111.  

I'd like to see it reach 11111111 - I'd be rich!

[AZWolf]

Quote:
Hiram said:

Quote:
AZWolf said:
I'd like to see it hit 111.  

I'd like to see it reach 11111111 - I'd be rich!

Thus my reply.  Would make speculators actually work for a living.  

[DruulEmpire]

To keep this all in perspective, I would point out that just ten years ago a thread like this with the title Next Stop Dow 11111 would have been positively cheery.

[SwitcherX]

Quote:
Hiram said:

Quote:
AZWolf said:
I'd like to see it hit 111.  

I'd like to see it reach 11111111 - I'd be rich!

You could be rich if it went from 11111 to 111 too.

[DruulEmpire]

As of today (Wed 11 June 2008, DJIA 12083.77), less than a thousand points left to fall ...

[DruulEmpire]

Aaaaand -- today (Fri 20 June 08) it hit 11842.  Less than 800  points left to sink ...

[DruulEmpire]

Closed today (Tue 23 June 2008) at 11807.  Less than 700 points left to fall.

[Hiram]

Looks like a bad day today on the dow - down 200 points so far!

[DruulEmpire]

Good point, Hiram -- it lost over 300 points and closed today (Thurs 26 June 2008) at 11453.

Personally, I was just keeping track of it falling below 11723.  Why 11723?  Because that was the "Clinton bull high," the all-time record high as of January 2000, from which point the Dow proceeded to fall, then hit 9-11-2001 and fell further.

The past eight years have indeed seen new highs, but they weren't able to kick in till late 2006.  Now we've dialed all the way back to the record highs of the dawn of 2000.

This also means that we are within a mere sixty points of going back to the record highs of 1999.


I sort of expected this (note this thread's title) -- but admittedly not quite so fast ...

[mastert]

Let's change the name of the thread from 11111 to 9999.

[DruulEmpire]

I'd rather not.

I swear by aesthetics.  About a year ago I cashed out at 13950, simply figuring "No way are we sailing out of the 13000's without a struggle."  My instincts served me before, so I'm betting they will again.  But if you want to start your own thread, knock yourself out, and we'll see who gets closest.

'Sides, I'm hoping it won't even quite hit 11111.  Realistically, I'm rooting more for 11114.

[pedonbio]

I admire your optimism, DE. Recent bear markets have been short but painfully steep, and they don't turn until fundamentals turn. Part of the problem is that we geezers have memories. In 1973 the price of crude oil doubled (from $2 to $4) in a week, then trickled up to $5 over the next year. Everybody paid attention to the shortages caused by the Saudi boycott, but not the price change. The price change had no significant effect for about two years, until late 1975, when inflation suddenly jumped and kept steaming upward until 1981 or 82. What had happened was something that would take an economist to explain, but for the first couple of years the first-line companies ate the losses until it appeared that the higher price was here to stay.

It wrecked the presidencies of both Gerry Ford and Jimmy Carter, and kicked a hole in the economy until 1984 or so.

What the market is seeing is that inflation has started to pick up, exactly two years after the price of crude started to jump. What that means is that we're looking at a shitstorm of very high interest rates, high unemployment, and dropping corporate profits.

[gOOber]

So what are we going to do about it?

[SwitcherX]

The supreme court struck down DC's gun ban.....

[pedonbio]

Quote:
gOOber said:
So what are we going to do about it?

I'm gonna spend more time studying boobs, and less time on the business section.

What you got planned, gOOber?

[Hiram]

Quote:
pedonbio said:I'm gonna spend more time studying boobs, and less time on the business section.

Very wise advice, something I shall take heed of myself.

[Hiram]

Quote:
pedonbio said:What that means is that we're looking at a shitstorm of very high interest rates, high unemployment, and dropping corporate profits.

I saw some of this coming some time ago, its partly why I deleveraged most of my assets.

The need to have no debt and be cash rich, I think is the key to the next few years of financial personal health.

Edit:  Sell at the top, buy at the bottom.

[gOOber]

 

Quote:
 What you got planned, gOOber?  

I'll sing them ol' hard time broke down blues.

 

[Hiram]

Quote:
gOOber said:
 

Quote:
 What you got planned, gOOber?  

I'll plant more potatoes

[Q_BE]

It's topics like this that get me incensed, because there is this feeling that the Dow Jones Industrial Average is only the "rich" people's money, that only the "rich" are going to be hit, and that the "rich" deserve to take it on the chin.

The people with money, the "rich" people, are the ones making financial choices that influence the rest of the private sector. If you hit the rich, you hit the rest of the private sector. When you hit the rich, you hit the venture capitalists, the people who gamble with money to try to make more money. And people think this is a good thing: "Good riddance, he's got enough money already! He's taking money off the poor's backs!"

If you believe that: FAIL FAIL FAIL FAIL.

The economy is NOT a zero-sum game. The people engaged in the economy are constantly investing their time and energy to make MORE WEALTH than there was before. Time = Money, and with 300,000,000 people investing their time everyday in the creation of wealth (except for the government liberals), wealth has abounded for years and years, because people were given the incentives to create wealth by getting tax cuts which allowed them to keep more of their own money, percentage-wise, than they had had before.

What do they do with this wealth? They INVEST, they VENTURE into new opportunities, putting people to work, creating jobs, and creating a flow of wealth to people who get those jobs. It's the underpinning of Reaganomics--trickle-down economics--that money flows from the top-down, not the other way around.

Think of money like the water cycle. Time and the sun's energy is inputted to the water, say the oceans, causing the water to evaporate into the atmosphere. In the same way, time and energy is spent by corporations (and small businesses) in producing goods and services that people want to buy, and, for the sake of argument, people buy them.

That water which evaporated condenses into clouds—some big, some small–that contain the water, and which carry the water from place to place. The small clouds vastly outnumber the big clouds, so the vast majority of rain is produced by small clouds. In the same way, money is collected by the businesses which sell the goods and services, hopefully for a profit, and therein they take that money, pay the people who helped them produce the goods and services, and take the additional money (PROFIT) and either re-invest in the business, or give profits to stockholders via dividends.

The rain has therefore been taken from those who have water (the oceans and clouds) and given to places that need water (landmasses, rivers, lakes, etc.) And you know what? That water eventually re-evaporates or trickles down into the oceans, where it is recollected and the cycle starts all over again. Meanwhile, areas that needed water got water, and the rain cycle sustains life as we know it.

In the same way, by the businesses paying the people who helped produce the products or services, and by giving dividends to stockholders, ultimately, the money that the corporations make goes back into the economy, benefiting a whole host of people along the way.

So, when you hit the rich, you really hit the poor. The stock market is just the after-effects of this happening. So, delight in the misery of people—it's not going to produce one more dollar, one more barrel of oil, and is not going to solve any problems. The free market is adapting to the roadblocks thrown in its way by the US government and world politics, so be sure to thank your Democratic Congress for really helping the US economy. It's the least they've done for us.

Q-"A rising tide lifts all boats; a sinking tide drops all boats"-BE

[DruulEmpire]

I take it even more directly than that, Q.  These days, just about everyone's fortunes are directly tied one way or another to this -- by retirement plans, by mutual funds, by whatever you've got going with your bank.

It wasn't so long ago that people could scoff "Oh, what's this really got to do with anyone?" and they had a sliver of an excuse by virtue of not being invested.  But these days, chances are, you are invested one way or another whether you recognize it or not.

Personally, I'm not really crowing about the current bad patch.  I think it's been coming and needs to be seen through.  It's like a bout of nausea: you can sense it coming from very early on and wish it wouldn't, but you may as well ride it out.

I also think we may be beginning to see something quite radical begin to develop -- but that's a whole other thesis, and I will leave that be.

Anyhow -- as of today's close it's official.  Eight months after hitting an all-time high of 14164, we have dialed back some 2800 points all the way down to the record highs established in late 1999.

I'm still hoping we can stay above 11111 -- but it's looking like that could be tight.

[Bonkers]

Rich or the mega rich I call them, love all this. Right now is buying up all the blue stock’s of major or small companies dirt cheap and just to sit on it till it just right enough for them to sell for a major profit. because they have money resources to do so. whereupon the blue and white collar workers can't do so, without taking a beating.
I remember one rich investor who sold his gold stocks for a nickel profit. but he had millions of gold stocks, so a nickel on each stock total a cold profit to buy into another stock, adding it all up. they know what their doing and not telling the public.
Remember back in the depression of 1929, The Rockefeller’s, Kennedy’s, Dupont’s and all the other mega rich families brought up all people who lost their houses, lands, farms or whatever for peanuts, knowing quite well it will sell for a profit in time.  It took years, even decades but they made their profit bones of others.
Like they say the stock market is nothing but a gambling casino and the rich own the house and make the rules.
Bonkers

[Q_BE]

Drill Here, Drill Now, Pay Less.™

That'll get our oil-based economy jump-started and enable us to remain prosperous while the private sector discovers the long-term solution.

Q-"How about Bugs Crapping Crude?"-BE

[Q_BE]

Quote:
Bonkers said:
Rich or the mega rich I call them, love all this. Right now is buying up all the blue stock’s of major or small companies dirt cheap and just to sit on it till it just right enough for them to sell for a major profit. because they have money resources to do so. whereupon the blue and white collar workers can't do so, without taking a beating.
I remember one rich investor who sold his gold stocks for a nickel profit. but he had millions of gold stocks, so a nickel on each stock total a cold profit to buy into another stock, adding it all up. they know what their doing and not telling the public.
Remember back in the depression of 1929, The Rockefeller’s, Kennedy’s, Dupont’s and all the other mega rich families brought up all people who lost their houses, lands, farms or whatever for peanuts, knowing quite well it will sell for a profit in time.  It took years, even decades but they made their profit bones of others.
Like they say the stock market is nothing but a gambling casino and the rich own the house and make the rules.
Bonkers

FAIL FAIL FAIL FAIL.

Re-read my above post. The rich are getting shellacked, and in the process, so are the poor. The rich may be able to get along, but if the rich can't keep the engines of this economy running with their investments, it's the poor who suffer as a result of the government throwing up roadblocks and, in some cases, actually supplanting the natural economic processes I described above.

Q-"Economics 101"-BE