How Will the Economic Future Unfold?

[Viperabyss]

Ready for some comedy?

http://www.marketwatch.com/news/story/amd-10-bagger-pick-2009/story.aspx?guid={D82F39D6-90CC-442A-AECF-FC1C7CE9BD1C}&dist=morenews

[halbhh]

Yes, I can think of many ways I might spend that $7,546.74. And if I, and the rest of the people in the country, spent it on things we would need/like, then many of the nation's industries would not be in trouble, their employees would not be getting laid off (instead be earning money upon which they would pay taxes), the stock market would do better, and the TV wouldn't be telling us nightly how bad things are. ....

Just so

[halbhh]

Fault lines emerge at Fed - MarketWatch




Gee, and here I thought nobody was paying any attention to the presses running full tilt 24/7. I believe I said the exact same thing here previously if they wait until inflation begins to reign in the money supply it's far too late to avoid hitting double digit inflation.

I would not count on that last part. It's thought that the Fed can pull in dollars rapidly when it decides to (the other side of buying T-bills is to sell T-bills). Also, Obama mentioned that when a recovery is happening, we have to get on a responsible fiscal track.

So...I'd say more that it's hard to predict how much inflation may happen between now and 2019. Stay tuned.

[halbhh]

Ready for some comedy?

http://www.marketwatch.com/news/story/amd-10-bagger-pick-2009/story.aspx?guid={D82F39D6-90CC-442A-AECF-FC1C7CE9BD1C}&dist=morenews

heh heh, entertaining.... not entirely impossible. That would be a rather good sign for the general economy!

[halbhh]

I still like the idea that they send the bail-out bucks to individual people. The people then either stick the money in the bank (except for those who stick it under a mattress), or they spend it where needed. If they save it, the banks don't run out of money so fast. If they spend it, industry doesn't build up excess inventory. Just giving it to the banks, etc and it doesn't do anyone any good, except a few executives who reward themselves with large bonuses.

hey, some economists don't even fully get what you've pointed out :-)

[halbhh]

Not just 1931, but 1932 and beyond as well, in my opinion. From what I see in too many governments around the world, they think they can print dollars and spend their way out of debt. This may work for a short time, but sooner or later people catch on. Another unfortunate side effect is that numerous recessions/depressions of the past have ended in major wars.

From the Chinese side of the family, things are going down fast in China. There has been rioting, and its getting harder for the government to maintain control. I fear that if they don't get some control of the situation soon, a crackdown could occur that sends them back into the darker days of Communism, with stern warnings from their government that all their problems were caused by venturing into capitalism. Since the younger generation has never known the brutality of the "Great Leap Forward" nor the "Cultural Revolution", but only the relative freedom they've had with capitalism, this could lead them into a bloody civil war.

Oh yes, as to our country, I make no bets, other than I think it will get bad. Nothing against Obama here, but I think he will have a tough time with things. Whether its with the stock market, or real estate, or anything else, I think the old message applies, don't invest what you can't afford to loose and don't buy what you can't pay for.

Just some thoughts.

It seems we are in interesting times.

[beerandcandy]

he is pointing out that banks dont actually control the economy

[Sailer]

Ready for some comedy?

http://www.marketwatch.com/news/story/amd-10-bagger-pick-2009/story.aspx?guid={D82F39D6-90CC-442A-AECF-FC1C7CE9BD1C}&dist=morenews

I read through that as well. Yes, AMD and a few other stocks have the potential for giving some great gains. But AMD and the others also carry some high, if not very high, risk. As I earlier said, a person should not invest what he/she can't afford to loose. I say this as someone who has taken a couple large looses on the market. As I regain some liquidity, I'll probably venture into some risk taking, along with some basic safe stocks. A nice balance, you might say.

I see that Alcoa took a fair hit today, Might dump a few dollars that direction. Don't see Alcoa going out of business anytime soon, and it does pay a nice dividend, and it should be one of those that not only survive, but come back with some good profits.

[djgandy]

Just a note on short selling. UK financials were banned from being shorted and have tanked since. It is really very ignorance to blame shorts.
Finance 2.0 Blog Archive Well the short ban in the UK did a lot…


I seriously think people need to stop blaming shorting. You cannot blame Billions of equity being wiped out in a single day on shorting. Not even naked shorting.

Naked shorting is to prevent manipulation of small cap stocks. It does not apply in the context of multi billion dollar market caps.

Why is everyone so stubborn on the short issue? Why can't people who own stock be selling it? Institutions are in the ****ter and need cash. Now if some big *** institution sells 0.5% of a company on any given day the stock is going to tank.

Do the math on shorting. The margin required and the risk that goes along with it is too large. Also look at short interest numbers. Even the biggest hit blue chips have very low short interest.

[djgandy]

JPM earnings
Bloomberg.com: U.S.

I'm really confused??

Jan. 15 (Bloomberg) -- JPMorgan Chase & Co., the second- largest U.S. bank by assets, said profit fell 76 percent, beating analysts’ estimates, as the company navigates the credit crisis with more success than most of its peers.

Fourth-quarter net income was $702 million, or 7 cents a share, compared with $2.97 billion, or 86 cents, a year earlier, the New York-based bank said today in a statement. Fourteen analysts surveyed by Bloomberg had an average earnings estimate of 1 cent a share.

How is $702M = 7c per share when $2.97B = 86c per share?

This implies they have 10B shares which they don't. What? Is there some crazy new form of accounting going on?

[BaldEagle]

And yet more Bail-out bucks for Bank of America.
24/7 Wall St.: Bank Of America (BAC) And The Incredible Disappearing TARP

The TARP may simply disappear before the debate about how it should be used is over. Bank of America (BAC) is negotiating with the government for billions and billions of dollars to close its acquisition of Merrill Lynch. That was not how it was supposed to work. BAC was supposed to have had the balance sheet to afford both Merrill and Countrywide.

What a bunch of idiots to think they had any balance sheet left after the Countrywide deal. Countrywide had more toxic assets then Bikini Atoll which is why they went under so early and so fast!!!

[djgandy]

Yeah. The incompetence in this crisis never ceases to amaze me. Some of the people handling it are just unbelievable. I'm surprised they even have the brains to feed themselves.

Why BAC bought CFC I'll never know. It must have been political, surely no company was run by people dumb enough to actually want to buy that junk?

The deals the goverments are cutting with the banks are awful too, especially in the UK. The gov are like "here's some money", please lend it, then the banks say "thanks for the money, sorry we can't lend it". Don't these people know how to knock up contracts? Why not just found a new government bank and lend the hundreds of billions yourself? Surely that's better than throwing it at the banks that are just using it to bail their own bad investments.

£100B is £2000 for every living person in the UK. The banks are swallowing that up and it is not going back in the economy. Argggg it really frustrates me!

[BaldEagle]

Ready for some comedy?

http://www.marketwatch.com/news/story/amd-10-bagger-pick-2009/story.aspx?guid={D82F39D6-90CC-442A-AECF-FC1C7CE9BD1C}&dist=morenews

Not so comical the potential is actually there. After they report on their Q4 08' we should have a much better handle on if they are looking toward a 2010 BK or they are really a 10 bagger. The first quarter 09' is going to be a giant crater and probably the following quarter so it's not going up much in the near future. Now come Q3 09' we may see signs of life assuming they still have $$$$ left.

Of course when Hector really gets the boot the stock is likely to jump a buck or so and throw off the whole 10 bagger idea.

[Gneisenau]

It seems we are in interesting times.

In the Chinese sense of the word....

[BaldEagle]

And unemployment cranks up after the holiday slowdown.
New jobless claims increase more than expected - Yahoo! Finance

The Labor Department reported Thursday that first-time requests for unemployment insurance jumped to a seasonally adjusted 524,000 in the week ending Jan. 10, from an upwardly revised figure of 470,000 the previous week. Analysts had expected 500,000 new claims.

The increase is partly due to a flood of requests from newly-laid off people who delayed filing claims over the holidays, a Labor Department analyst said.

The rise in initial claims came after two weeks of declines that economists said largely reflected those holiday-related distortions in the data. Analysts have said that retailers did not hire as many temporary seasonal workers this year, due to the recession, and so there weren't as many subsequent layoffs.

But the jump in last week's numbers, combined with a slew of layoffs already announced this week, could signal the resumption of an upward trend in claims that was evident last year.

Initial jobless claims reached their highest level in 26 years three weeks ago when the department said 589,000 people filed new claims. That was the highest level since November 1982, when the economy was emerging from a steep recession, though the labor force has grown by about half since then.

Wholesale prices falls for fifth straight month fueled by big energy drop.
December wholesale prices fall 1.9 percent - Yahoo! Finance

The 1.9 percent overall drop in the government's Producer Price Index for December, which measures costs before they reach consumers, represented the fifth consecutive monthly decline. The decreases were led by plunging energy costs.

Energy prices last month dropped by 9.3 percent, reflecting a record 25.7 percent plunge in the cost of gasoline. Food costs fell by 1.5 percent, the biggest monthly decline since February 2006.

[BaldEagle]

Looks like we could stop the market from dropping below 8000.

Dems unveil $825 billion stimulus measure - Yahoo! Finance

House Democrats are circulating an $825 billion economic stimulus measure that emphasizes health care, education and highway construction as well as tax cuts for individuals and businesses.

A summary of the measure shows spending totaling roughly $550 billion and tax cuts of $275 billion, although the totals are expected to shift considerably as Congress works on the bill.

Democratic leaders plan to unveil the legislation later today. The Associated Press obtained a copy in advance.

Democratic leaders have pledged to have a bill ready for President-elect Barack Obama to sign by mid-February.

And you thought TARP was big spending we should actually get some of that back but this baby here is pure pork so it's 100% down the drain...

[Sailer]

Looks like we could stop the market from dropping below 8000.

Dems unveil $825 billion stimulus measure - Yahoo! Finance



And you thought TARP was big spending we should actually get some of that back but this baby here is pure pork so it's 100% down the drain...

And I wonder why all these bailouts and other maneuvers reminding me so much of the stuff that FDR pulled off during the 1930s? We're getting sold down the drain, and for what? What does the average person on the street gain by all this? Less than nothing. He gets nothing, but will get a big bill to pay.

[BaldEagle]

And I wonder why all these bailouts and other maneuvers reminding me so much of the stuff that FDR pulled off during the 1930s? We're getting sold down the drain, and for what? What does the average person on the street gain by all this? Less than nothing. He gets nothing, but will get a big bill to pay.

Some people never seem to learn from history...

Like how many centuries have the Jews and Arabs been going at it?
Worldview: Shift the blame to Hamas | Philadelphia Inquirer | 01/14/2009

Bouncing down to the 8K level on Day 7 of the stock beating....
http://www.marketwatch.com/news/stor...05512DD1E46%7D

[Sailer]

Some people never seem to learn from history...

Like how many centuries have the Jews and Arabs been going at it?
Worldview: Shift the blame to Hamas | Philadelphia Inquirer | 01/14/2009

The Arabs and the Jews have been going at it for about 10 centuries, but only in the past 6 decades has it been specifically against Israel. Oh, that's when the UN declared Israel a nation (1948). Funny thing how the news hardly ever reports that most of the Arab nations want nothing to do with the Palestinians, Hamas, etc. They will report on the wall that Israel is building to keep the Palestinians out, but they don't talk about the wall that Egypt built for the same reason.

I do agree with some of what the report said. Israel is in a no win situation. If it doesn't defend itself, it gives permission for Hamas and everybody else to bomb it at will. But is Israel does fight back, civilians will get killed. Truth is, that's all part of war and has been ever since the first tribe of cavemen invaded a different tribe of cave men. It would be best if the other Arab countries, the ones that don't accept the Palestinians, Hamas, etc, went in and cleaned out the problem. I doubt that will happen however. Its so much easier to pretend that Israel is the bad guy and not those who attack it.

[BaldEagle]

The Arabs and the Jews have been going at it for about 10 centuries, but only in the past 6 decades has it been specifically against Israel. Oh, that's when the UN declared Israel a nation (1948). Funny thing how the news hardly ever reports that most of the Arab nations want nothing to do with the Palestinians, Hamas, etc. They will report on the wall that Israel is building to keep the Palestinians out, but they don't talk about the wall that Egypt built for the same reason.

I do agree with some of what the report said. Israel is in a no win situation. If it doesn't defend itself, it gives permission for Hamas and everybody else to bomb it at will. But is Israel does fight back, civilians will get killed. Truth is, that's all part of war and has been ever since the first tribe of cavemen invaded a different tribe of cave men. It would be best if the other Arab countries, the ones that don't accept the Palestinians, Hamas, etc, went in and cleaned out the problem. I doubt that will happen however. Its so much easier to pretend that Israel is the bad guy and not those who attack it.

Ah yes we digress... Point was some never learn from history no matter how often they get the lessons repeated.

Now back to whats going on...

Yo Baby....after hitting 8K it's now Bailout fever time (speaking of never have learned from history).

The market has recovered from being down 200 completely with the Dow and NASDAQ both posting double digit gains into the green hoping that the change is for more bailout bucks.

Stocks regain ground as hopes grow for bailout - Yahoo! Finance

Did you pick up shares of Citibank or Bank of America today??? I grabbed some of each this morning C at $3.50 and BAC at $7.83 when we got toward 8K as I hoped for a good bounce off of 8K after being -200 on day 7 of the beating....
Woot...now running $4.12 and $8.80 so I expect we are done for the day so is it time to bail or hang on for bailout bucks?

This isn't investing it's degenerated into a government bailout lottery.
Edit:
Just to update I bailed out at $4.20 and $9.10 because I had enough "fun" (18%) for the day.