How Will the Economic Future Unfold?

[Sailer]

Yeah, if only the local gas stations dropped their prices to match. No need to be skeptical, optimistic or pessimistic, what tomorrow and next week, etc will bring, we're just along for the ride. Now, if I could only figure out if we'll be riding a bull or a bear next year. What's that, we'll be riding bare?

[BaldEagle]

Originally Posted by Sailer

Yeah, if only the local gas stations dropped their prices to match. No need to be skeptical, optimistic or pessimistic, what tomorrow and next week, etc will bring, we're just along for the ride. Now, if I could only figure out if we'll be riding a bull or a bear next year. What's that, we'll be riding bare?

Today we ride the bull, but the bear is clearly in charge until Obama does something. Just one little statement about extending the Bush tax cuts or new tax cuts and were off riding the bull. Until then though the bear will squees the stuffing out of you regularly as we get closer to the Pelosi, Reid, Obama trifecta when it's decision time. Right now the market has no clue as to what Obama is going to do (other than he said he'll save the UAW) so we then lurch upward and drop regularly with a clear downward trend. Money is made in hours not days in this market.

Until we get to February we'll continue to trend down we should see a pop today and probably Monday but you'll want to wait to look for a spot hopefully above 9,000 to buy into a short ETF until we get some good news to signal a clear upward direction. I fully expected we'll see a big sell off before the Thanksgiving holiday because expectations for Black Friday are pretty low but since we've already punched a hole through the 8000 floor we shouldn't too see much more downward movement until after Black Friday. Now come Monday Dec 1 there are a lot of people who don't want to be left holding retail stocks when those sales figures roll out so they will be selling out as the market rises which may hold us down where we are right now. Now of course I sold off my QID early because I expected we'd stop at 8,000 so WTF do I know (I am over +20% for the year though because I did say we were headed into the toilet last December and went to mostly cash and short ETF).

I'd say we're looking at breaking below 5,000 on the DOW next year.

[BaldEagle]

Originally Posted by halbhh

heh....ok, I read rule#1 ;-0

ah, don't forget our favorite whipping boy:

Oil falls to 3-year low below $49 in Asia: Financial News - Yahoo! Finance

You don't agree with rule #1?
You know that is how Social Security actually works.

When I turned on Bloomberg this morning I heard something about $20 oil, but I think they were joking. Well I certainly I hope it was a joke.

[Gneisenau]

Originally Posted by halbhh

Health care:

People are willing to spend whatever it takes to stay alive.

Doctors/hospitals are willing to charge whatever the market will bear.

ergo--whenever there is any available discretionary income increase, then health care insurance/etc. will just....eat....it....up.

Solutions?

IMO one of the first things we have to do is severely limit lawsuits. This won't drop costs, but it can help them from increasing so fast. It will also help keep our doctors from dragging up.

When I lived in Las Vegas while building a brand spanking new pump stations to suck Lake Mead dry, they trauma doctors there demanded the state politicians limit awards to $200K or less or they would be forced to move to another state. The politicians called their bluff somewhat and limited the awards to $400K. The doctors left, closing the only trauma center in the state. I don't know if it's still closed or not now. It's been several years since this happened.

In fact, I think we should go back to the old way that lawyers couldn't advertise on billboards, in newspapers or on tv. I get so sick of seeing the same damn ads to call 1.800.bad.drug. It makes me mad this so many of these drugs saves thousands of lives and a few MAY of had a bad reaction and died so they sue the company. What complete BS. Sure there may be bad drugs out there, but in those few cases, people can find lawyers on their own. They don't need them advertising the promise of a windfall on tv.

[Sailer]

Originally Posted by BaldEagle

I'd say we're looking at breaking below 5,000 on the DOW next year.

Below 5,000? I've been predicting the stocks in the 5,000s for a while, but below 5,000? Of course, even if that does happen, I wonder if the Washington DC group finally will admit we're in a recession.

Gneisenau- I remember when the doctors made a big thing about leaving Nevada years ago. Maybe a trauma center closed for a bit down in Las Vegas, but up in the north state, we have had a couple very nice hospital expansions in both Carson City and Reno. No doctor shortage at all up here. Haven't heard of any problems in the medical field whatsoever in the south state either for awhile. Perhaps the doctors found out that other states were worse.

As for the lawyers, remember the old line, "After the revolution, hang all the lawyers". All those billboards and ads are nothing but modern day ambulance chasers, ghouls waiting to feast on the dead, dying, and injured.

[BaldEagle]

Originally Posted by Sailer

Below 5,000? I've been predicting the stocks in the 5,000s for a while, but below 5,000? Of course, even if that does happen, I wonder if the Washington DC group finally will admit we're in a recession.

Gneisenau- I remember when the doctors made a big thing about leaving Nevada years ago. Maybe a trauma center closed for a bit down in Las Vegas, but up in the north state, we have had a couple very nice hospital expansions in both Carson City and Reno. No doctor shortage at all up here. Haven't heard of any problems in the medical field whatsoever in the south state either for awhile. Perhaps the doctors found out that other states were worse.

As for the lawyers, remember the old line, "After the revolution, hang all the lawyers". All those billboards and ads are nothing but modern day ambulance chasers, ghouls waiting to feast on the dead, dying, and injured.

Sailer as of September, I lowered my forecast a couple thousand points as I believe we are going into a massive recession the likes of which has not been seen in about 70 years . I had expected us to bottom in the upper 6,000's next year and at 9,000's this year but we totally blew that out of the water in September so we're likely to go lower next year as well. We have all the makings of another Jimmy Carter era right here but are starting with an economy that is in worse shape so hang on tight it's gonna be an ugly ride.

When I heard "Mr. Inflate Your Tires" talk about conserving gas I couldn't help but think of Carters "Malaise" speech.

Jimmy Carter - Wikipedia, the free encyclopedia

I want to talk to you right now about a fundamental threat to American democracy... I do not refer to the outward strength of America, a nation that is at peace tonight everywhere in the world, with unmatched economic power and military might...

The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation.

In a nation that was proud of hard work, strong families, close-knit communities, and our faith in God, too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns. But we've discovered that owning things and consuming things does not satisfy our longing for meaning.

I'm asking you for your good and for your nation's security to take no unnecessary trips, to use carpools or public transportation whenever you can, to park your car one extra day per week, to obey the speed limit, and to set your thermostats to save fuel... I have seen the strength of America in the inexhaustible resources of our people. In the days to come, let us renew that strength in the struggle for an energy-secure nation.[57]

We won't know until next year if Obama takes the same path to disaster but I suspect he probably will since Pelosi hasn't held her part of the party together.
RealClearPolitics - Articles - What Jimmy Carter Could Teach Obama

[halbhh]

We just had an oil price shock that in inflation adjusted terms was not so different from the end of the 1970s. Back then gasoline was a larger share of total expenditures, thus that shock was worse for the economy then.

Inflation adjusted Gasoline Price Chart

If Carter could have magically prevented this, then he's at fault for not doing so. Of course, this oil price shock caused the strong recession (pair) that followed.

Neither Carter nor Reagan had control over this. They, like most presidents, had a very small role in the economy. I think only Hoover and FDR even had much effect on the economy at all in the last 100 years. People ascribing economic conditions to Presidents is one of our political myths. The dominate economic factors for the US in recent times are things like oil prices, the progress of technology, and the profound subsidy of China for its exports.

[BaldEagle]

Originally Posted by halbhh

We just had an oil price shock that in inflation adjusted terms was not so different from the end of the 1970s. Back then gasoline was a larger share of total expenditures, thus that shock was worse for the economy then.

Inflation adjusted Gasoline Price Chart

If Carter could have magically prevented this, then he's at fault for not doing so. Of course, this oil price shock caused the strong recession (pair) that followed. (You mean if he hadn't created it?)

Neither Carter nor Reagan had control over this. They, like most presidents, had a very small role in the economy. I think only Hoover and FDR even had much effect on the economy at all in the last 100 years. People ascribing economic conditions to Presidents is one of our political myths. The dominate economic factors for the US in recent times are things like oil prices, the progress of technology, and the profound subsidy of China for its exports.

Did you ever listen to Carter's speech? Here it is.

American Rhetoric: Jimmy Carter -- "A Crisis of Confidence"

The guy was an absolute blithering idiot.

What I have to say to you now about energy is simple and vitally important.

Point one: I am tonight setting a clear goal for the energy policy of the United States. Beginning this moment, this nation will never use more foreign oil than we did in 1977-- never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980s, for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade -- a saving of over four and a half million barrels of imported oil per day.

I recall something similar from "Mr. Inflate Your Tires" only he called it Carbon.

Point two: To ensure that we meet these targets, I will use my presidential authority to set import quotas. I’m announcing tonight that for 1979 and 1980, I will forbid the entry into this country of one drop of foreign oil more than these goals allow. These quotas will ensure a reduction in imports even below the ambitious levels we set at the recent Tokyo summit.

WTF??? He actually created the oil shortage!!!

Tokyo Summit? Kyoto Protocol? Why does stupidity seem to eminate from the world leaders vacation in Japan? Obama's set to do him one better and really create an energy mess with Carbon Credits.

Point three: To give us energy security, I am asking for the most massive peacetime commitment of funds and resources in our nation’s history to develop America’s own alternative sources of fuel -- from coal, from oil shale, from plant products for gasohol, from unconventional gas, from the sun.

Three decades ago we were going to have a massive commitment of funds for solar power..... And that worked out fabulously, right? So it's going to work this time because; he is black? he is younger? he is from Harvard not Yale? he recycled half of his cabinet with Clinton appointees?

Oh wait I think I get it if you Carbon tax the crap out of everything else then solar becomes cheap energy right? Either that or the trees in the back actually start looking really attractive in say a wood burning stove.

And here we still did ethanol (gasohol? what a word ) again what a bunch of idiots in Congress. Well at least beef prices have come down from the stratosphere.

These efforts will cost money, a lot of money, and that is why Congress must enact the windfall profits tax without delay. It will be money well spent. Unlike the billions of dollars that we ship to foreign countries to pay for foreign oil, these funds will be paid by Americans, to Americans. These will go to fight, not to increase, inflation and unemployment.

Now refresh my memory wasn't Obama the guy just talking about a windfall profits tax on Exxon Mobil? I'm sure it will work much better this time because he's such a really nice guy that Exxon-Mobil will gladly pay more taxes.

Point four: I’m asking Congress to mandate, to require as a matter of law, that our nation’s utility companies cut their massive use of oil by fifty percent within the next decade and switch to other fuels, especially coal, our most abundant energy source.

Hey something actually worked...

Point five: To make absolutely certain that nothing stands in the way of achieving these goals, I will urge Congress to create an energy mobilization board which, like the War Production Board in World War II, will have the responsibility and authority to cut through the red tape, the delays, and the endless roadblocks to completing key energy projects.

We will protect our environment. But when this nation critically needs a refinery or a pipeline, we will build it.

Or we just hand over $700B to "King" Paulson to dispense as he see's fit?

A refinery? Oh yea we'll cut right through that red tape and build one maybe sometime in the next 100 years. Until we find the right endagered species needed to shut it down forever.

Point six: I’m proposing a bold conservation program to involve every state, county, and city and every average American in our energy battle. This effort will permit you to build conservation into your homes and your lives at a cost you can afford.

Better go check my tire inflation and turn down the thermostat. Hey wait, Maybe we could lower the speed limits to 55 again.

The economy is waaay further into the tank that when Carter took office thanks to the subprime meltdown, and he's well on his way to a Carter scale disaster and even bigger (Carbon Credits) IF he does as he has promised.

[BaldEagle]

Looks like we've bottomed at 7500 on the DOW and 1300 NASDAQ, we should see a rise from here to 8,000 before a plunge on Tuesday or Wednesday.

Citi look like the next bank casualty. It's down over 50% for the week and still taking on water below $4.00/share. Now this is the same outfit that was going to buy up Wachovia because they were going under right? And now isn't it ironic that the predator has itself become prey.

Banks are just getting too risky. You never know when they are going to just blow up.

[1Tanker]

Originally Posted by BaldEagle

Looks like we've bottomed at 7500 on the DOW and 1300 NASDAQ, we should see a rise from here to 8,000 before a plunge on Tuesday or Wednesday.

Citi look like the next bank casualty. It's down over 50% for the week and still taking on water below $4.00/share. Now this is the same outfit that was going to buy up Wachovia because they were going under right? And now isn't it ironic that the predator has itself become prey.

Banks are just getting too risky. You never know when they are going to just blow up.

Hmmm.... maybe all the college/university educated economists, bankers, etc.etc. that run the banks....should have stopped at the high-school diploma...worked for me. Really, i know how much you guys loathe autoworkers, but a hell of a lot of college/uni graduates aren't any smarter(though they think that degree on the wall automatically makes them smarter), than the average-Joe...but, they are in a position to do far more damage to the country/people with their over-inflated egos. I agree that Doctors/nurses, lawyers...well...maybe not lawyers deserve to make much more than high-school educated, pot-head, blue-collar workers(there..like me better now. ). Qualifications for a great majority of jobs is a joke. Just look at what we're on this site to (originally) discuss...computers. A great deal of us on here know oodles more than a guy with A+ certification... so, what gives? Qualifications??? Politicians carry some of the most useless credentials in the world. Arnie... a muscle-head, he was a 'roid- injecting musclehead who toked and screwed every female he could(that{womanizer} is a political prerequisite, BTW ). Bush(dubya)... a super-unsuccessful business man, who got into the white house(nepotism.. is alive and well), thanks to his fathers' legacy. Ross Perot... a rich/eccentric a-hole. Consider this... Arnie is probably one of the much-better politicians, and his resume' for the job looked terrible...being married into the Kennedy clan obviously didn't hurt, but he's actually a somewhat-smart, and very very motivated person. I guess Reagan had similar creds, and he was one of the better recent presidents..unlike a great majority of the politicians, who start out as lawyers. I know that it seems unfair that Pro athletes make absolutely obscene amounts of money(not to mention actors/actresses), garbage-men/auto-workers/etc.etc. compared to their post-secondary school educated counterparts.... but tell me when.... in the whole history of mankind, has life been fair?? I see some of the guys in here last night, saying... i'd quit my IT job right now, to go make $30/hr. to put 1 bolt in(fallacy) a car on an assembly line. Hey... autoworkers have made big bucks since before i was born...you picked your career path(they could have gone down that path)... now deal with it. As much as they say they'd like to go work there... i have a distinct feeling they wouldn't. Okay... that's all i'm going to say on the subject anymore... i just didn't like all the autoworker-bashing....when their wages is a minute piece of the auto-industrys' rapidly failing pie.

[BaldEagle]

Originally Posted by 1Tanker

Hmmm.... maybe all the college/university educated economists, bankers, etc.etc. that run the banks....should have stopped at the high-school diploma...worked for me. Really, i know how much you guys loathe autoworkers, but a hell of a lot of college/uni graduates aren't any smarter(though they think that degree on the wall automatically makes them smarter), than the average-Joe...but, they are in a position to do far more damage to the country/people with their over-inflated egos. I agree that Doctors/nurses, lawyers...well...maybe not lawyers deserve to make much more than high-school educated, pot-head, blue-collar workers(there..like me better now. ). Qualifications for a great majority of jobs is a joke. Just look at what we're on this site to (originally) discuss...computers. A great deal of us on here know oodles more than a guy with A+ certification... so, what gives? Qualifications??? Politicians carry some of the most useless credentials in the world. Arnie... a muscle-head, he was a 'roid- injecting musclehead who toked and screwed every female he could(that{womanizer} is a political prerequisite, BTW ). Bush(dubya)... a super-unsuccessful business man, who got into the white house(nepotism.. is alive and well), thanks to his fathers' legacy. Ross Perot... a rich/eccentric a-hole. Consider this... Arnie is probably one of the much-better politicians, and his resume' for the job looked terrible...being married into the Kennedy clan obviously didn't hurt, but he's actually a somewhat-smart, and very very motivated person. I guess Reagan had similar creds, and he was one of the better recent presidents..unlike a great majority of the politicians, who start out as lawyers. I know that it seems unfair that Pro athletes make absolutely obscene amounts of money(not to mention actors/actresses), garbage-men/auto-workers/etc.etc. compared to their post-secondary school educated counterparts.... but tell me when.... in the whole history of mankind, has life been fair?? I see some of the guys in here last night, saying... i'd quit my IT job right now, to go make $30/hr. to put 1 bolt in(fallacy) a car on an assembly line. Hey... autoworkers have made big bucks since before i was born...you picked your career path(they could have gone down that path)... now deal with it. As much as they say they'd like to go work there... i have a distinct feeling they wouldn't. Okay... that's all i'm going to say on the subject anymore... i just didn't like all the autoworker-bashing....when their wages is a minute piece of the auto-industrys' rapidly failing pie.

I think you have the wrong thread for the real union bashing?

We've tried to keep the union bashing to the UAW in the auto bail-out thread:
Should we have an auto bailout?

I don't believe we've ever said that the auto workers aren't smart, I know i certanily have not. Now overpaid and underworked yes, but certainly not unintelligent. Now on the other hand I do recall calling Congress idiots not once but time, and time, and time,... again in fact most recently it's just a few posts back. And I do truly mean that some of them are real idiots law degree or not. I recall having to fire an engineer that had graduated with a 3.95 GPA because he was an idiot because he would never finish anything because it wasn't perfect. So I guess that "book smart stuff" isn't necessarily the end all be all it's cracked up to be either.

There are a number of very intelligent "uneducated" people that have become very sucessful:

Millionaire's Respond to American Retirement Crisis by Teaching their Financial Secrets in New Book

Over 80% of American millionaires are self made, many built wealth without high paying jobs or college degrees.

The good paying jobs, that go with certain college degrees help no doubt but it isn't the only way to get there.

See now some of us "old" guys here just missed the days of computers with tubes and are actually older than the term "personal computer" so we had to learn everything the hard way, on our own, as it developed. You haven't lived until you have built your own computer with jumper settings for IRQ's it's a wonder I still have any hair.

Now backin them thar old days weren't not none of that book learnin' stuff bout puters cause'n they was top secret stuff in them fancy new fangled gemini spaceships.

[halbhh]

Originally Posted by BaldEagle

I think you have the wrong thread for the real union bashing?

We've tried to keep the union bashing to the UAW in the auto bail-out thread:
Should we have an auto bailout?

I don't believe we've ever said that the auto workers aren't smart, I know i certanily have not. Now overpaid and underworked yes, but certainly not unintelligent. Now on the other hand I do recall calling Congress idiots not once but time, and time, and time,... again in fact most recently it's just a few posts back. And I do truly mean that some of them are real idiots law degree or not. I recall having to fire an engineer that had graduated with a 3.95 GPA because he was an idiot because he would never finish anything because it wasn't perfect. So I guess that "book smart stuff" isn't necessarily the end all be all it's cracked up to be either.

There are a number of very intelligent "uneducated" people that have become very sucessful:

Millionaire's Respond to American Retirement Crisis by Teaching their Financial Secrets in New Book



The good paying jobs, that go with certain college degrees help no doubt but it isn't the only way to get there.

See now some of us "old" guys here just missed the days of computers with tubes and are actually older than the term "personal computer" so we had to learn everything the hard way, on our own, as it developed. You haven't lived until you have built your own computer with jumper settings for IRQ's it's a wonder I still have any hair.

Now backin them thar old days weren't not none of that book learnin' stuff bout puters cause'n they was top secret stuff in them fancy new fangled gemini spaceships.

reminds me of Robert Heilein, who wrote in one novel:

“A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly.”

-- Robert A. Heinlein


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