The DOW is down 222 points today

Re: cicerone imposter (Post 3587980)
If you wait until the market hits 1,000, then begin to buy. But that will take a long time as it did in the 1930's. There will be no quick recovery UNLESS Obama is kicked out of where he never belonged in the first place and some conservative President can begin to fix the economy by giving the true catalysts of the economy room to make investments and start businesses. The Socialist Obama will never do that!

As I predicted, the market will be under 6,000 by the end of this month and THERE WILL BE NO LARGE RECOVERY TOMORROW. Cicerone Imposter and others in the left wing had better learn how to sell apples on the corners as they did in the 30's depression.

Thanks to Barack Obama and his Socialistic policies.

To channel the spirit of Frank Apisa, I think I don't know, and that neither does anybody else. This is true even if you go by the macroeconomic trends you're interested in. Here's why:

The three recessions that serious macroeconomists most frequently cite as precedents for this one are, (roughly in order of relevance) the Great Depression, Japan's deep 10-year recession in the 1990s, and America's double-dip recession between 1980 and 1982.

How did the stock market do during those recessions?

• In the Great Depression, the Dow Jones Index reached its minimum three years after its previous peak. The level at this minimum was seven times the level at the preceding maximum. If the current recession echoes that, the Dow will reach its minimum in 2010, and it will have fallen to 2000-3000 points by then.
  
• In America's recession of 1980-1982, the Dow Jones zig-zagged, but stayed more or less the same.
  
• In Japan, over the 1990s, the Hang Seng index didn't fall at all. It actually rose a good deal!

The lesson I take away from this exercise is that contrary to what they insinuate in the business press, stock markets are not good predictors or even indicators of the overall economy. Nobody knows where the stockmarket will go over the next years.

(All of the above is based on charts at http://finance.yahoo.com. Their chart is now Flash-based so I can't link to the time periods I want to show. But it should be easy enough to do it yourself.)

That is good information, Thomas. Thank You! Do you have any data on what will happen to 401K's? I am sure that you know that most people do not have pensions any more but are depending on thier 401k's for their retirement benefits.

I pity those who are retired now or close to retirement. Obama has managed to give such gloomy portents for the future, that everyone is bailing out of the market and are frightened.

Do you have any index that tells you when the voting populace will turn against the President and his cohorts?

How low will the Market have to go?

How battered will 401K's have to be?

Thomas, I understand that past history doesn't fully explain future economic recessions or depressions. That's because the domestic and international economies are in a constant flux with too many variables to really understand the macroeconomics of it. Add to that the governments intervention in the major economies of the world, and we have a whole new bag of tricks. I do think, though, that we do learn some lessons. How we apply those lessons are a mixed bag IMHO.

We are headed towards the socialization of some businesses with the influx of all those billions of dollars, but I'm not so sure what the benefits will be in the future. Rather than increasing my confidence, it makes me more nervous about our future.

Warren Buffett's BRK-B has lost 55% of their value over the 52 week period.

I can imagine how many who owns stock in Berkshire Hathaway are beginning to lose some confidence in their leader. It's a tough world out there.

Re: Thomas (Post 3588087)
That is good information, Thomas. Thank You! Do you have any data on what will happen to 401K's? I am sure that you know that most people do not have pensions any more but are depending on thier 401k's for their retirement benefits.

I pity those who are retired now or close to retirement. Obama has managed to give such gloomy portents for the future, that everyone is bailing out of the market and are frightened.

Do you have any index that tells you when the voting populace will turn against the President and his cohorts?

How low will the Market have to go?

How battered will 401K's have to be

i doubt that anyone really knows which way the stockmarket will go over the next 2 - 5 years .
listen to 10 economic forecasters and you get 10 different opinions .
it's likely that one or two will make the right "guess" and will later proclaim that they correctly forecasted the market - yet they likely just guessed like everyone else .

since the wild upswing was not really supportable by acual performance , i doubt that the downward trend is always based upon the true value of the various corporations .

i think NORTEL is a good example of a business where all predictions were wrong . it was certainly a valuable tech company some 20 years ago when the stock shot up to over $100 . certainly in canada , no stockbroker could see why anyone would not want to invest in such a valuable and forward moving company ; but somehow the wheels fell off the bus and after trading below $ 1 for some time , they are now in ch. 11 .
they had good products , excellent engineing staff , scientists , customers ... everything a company could wish for .
they were truly a GOLIATH ... and were eventually eaten up by some puny DAVIDS . they kept changing top management year-after-year rather than taking out time to determine how come those DAVIDS were so successful .
they simply were not changing with the times ... and now there is just a carcass left ....
never put a dime on their shares but almost all canadian pension funds invested heavily in NORTEL - seems that those analysts weren't so smart after all .
part of the blame must go to the "bandwagon" effect .. since many pension funds were sitting on that wagon already , the holdouts thought that they better jump on or they'd be left behind completely .
it's something that really happens more frequently than we think .
(london's canary wharf was another bad bet for canadian pension funds ) .

the owner of the (life insurance) company i worked for honed his skills by buying distressed insurance companies during the depression . the government actually paid him for taking the companies off their hands !
his grandfather (a scots seacaptain) had started the family fortune by taking canadian whiskey to south-africa and trading it for gold !
"it was a rewarding exchange ! " , his grandson said , "the demand for whiskey kept going up with every shipload delivered " .

if he would still be alive , i wonder what he might be investing in now .
he never pushed for fast growth - sustainabilty and stabilty were important to him .
the company has now passed on to his grandson - and seems to keeep growing - ever so slowly .
hbg

That's true; nobody really knows how the market will end up with the current crisis pushing all the wrong buttons. If anybody guesses right, it'll be just as good as throwing darts at a board with years posted in the rings. 2010, 2011, 2012, 2013, 2014, 2015...and so on. It won't matter whether the small or large number is in the middle. If 100 people threw a dart, they might even come close as an average. LOL

Today was the last day to put money into the Canadian sort-of equivalent of the 401K for 2008 tax credit purposes.

I held off until about 5:00 p.m., then drove to a branch of my local bank (now 5th largest in the world - thanks to non-Canadian banks tanking). Usually if I'd waited that long in past years there would have been line-ups.

No line-ups. Bank staff eager to assist me. I tucked in as much as I could manage and still have a reasonable slush fund if everything goes tits-up tomorrow.

Not sure it was the perfect thing to do, but hopefully it wasn't the worst possible thing to do.

I'll be a couple of desks over from Soccer George and CJane if it was the worst possible decision.

No. Had you done the same thing 18 months ago, it might well have been your worst possible decision.

ehBeth, Once you made the decision to do it, don't look back and regret it. Nobody is able to time the market, so your guess at this time for tax purposes at least had some purpose in it.

I'm not selling anything now, but looking forward to buying more in the future.

That's only a guesstimate on my part, but for the long-term it's worked out pretty well for us.

The market dropped 300 points today. Just wanted to post this for posterity - or something.

Re: Thomas (Post 3588087)
That is good information, Thomas. Thank You! Do you have any data on what will happen to 401K's? I am sure that you know that most people do not have pensions any more but are depending on thier 401k's for their retirement benefits.

I pity those who are retired now or close to retirement. Obama has managed to give such gloomy portents for the future, that everyone is bailing out of the market and are frightened.

Do you have any index that tells you when the voting populace will turn against the President and his cohorts?

How low will the Market have to go?

How battered will 401K's have to be

Re: cicerone imposter (Post 3587938)
Thzat's what you left wing morons got for voting for a Socialist. Most of you are hard heads and do not understand that Obama is dejavu---FDR. Read about FDR and the depression that did not recover until World War II>

Maybe Obama can save us when Iran attacks Israel and we HAVE to go to the aid of Israel. I am sure that the ingenous Obama can find a rationale.

Prediction--Dow Jones BELOWa 6,000 BY THE END OF MARCH.

Then the left wing can stick their fingers in their mouths and break up their furniture for heat if it is still cold in their areas.

What a bunch of loonies!!! You voted for an unknown quantity( we in Illinois know that he is a fraud ) and now you will reap the results. Just wait until the 401K reports come out after the first quarter.

Some( even the left) will say--WE DIDN'T KNOW THAT CHANGE MEANT OUR LIFE SAVINGS WOULD BE PRACTICALLY WIPED OUT!!

And Obama, so eager to pass his legislation bad mouthed the economy for months. Way to go-Barack-way to go!

Jobs report comes out Friday, and it's not going to be pretty. Watch for the DOW to tank again, and it will be really ugly Monday.

All politics aside for the moment, things are going to become difficult in the future. Looking at the struggles of small cities and counties in CA that rode out prior recessions with little worry, the outlook is dire.

And as they say, so goes CA, so goes the rest of the country.

I think I'll start a thread, asking if we're truly prepared for a Great Depression. One here already that I might have missed?

Yup, it's coming.

Cycloptichorn

ALV, I'm a little bit more optimistic than you are; I know for sure things are going to get worse during the next few months, but as the stimulus plan begins to show a little promise, a slow turn-around will begin. This will be one of the longest recessions in history, but that's to be expected from a world-wide financial crisis. We must begin to see some hiring by the thousands all over the US in order to build, repair and maintain our infrastructure soon, or confidence will fall so low that it'll take much longer to revive our economy. People has to "see" some progress soon, or we're going to see the deepening of our economy to a depth that'll make recovery a lost cause. The government can't say this is a crisis, and the legislation must be signed immediately, then sit back and not start showing some progress. That'll be a program killer.

At this point in the recession when thousands are losing their jobs and homes, urgency is very important to keep hope alive. When hope is lost, all bets are off.

I agree the key will be to get people working again.

The question is how quickly this will occur, and if the number of new jobs will even impact the jobs that have been lost.

For example, look at our situation here in CA where cities, school districts, and counties are preparing their fiscal year budgets. Layoff notices have gone out in many cases, and job cuts are being planned as city revenues have fallen due to lower property taxes and sales tax receipts. These newly unemployed city workers will be looking for work in two months or so.

By the time a Federal Publics Works program affects this, we'll have cycled down too far, I'm afraid. People will need to buy items in their towns, property values will have to rise, to make cities and states solvent again.

I realize this is a myopic view is relation to what's occurring in the rest of the country, but somehow, I think it is being replayed over and over again...

I agree; this scenario is not unique to California; the whole country is showing signs of stress, and the government is acting too slowly for an urgent crisis. They're spending too much time and effort on issues that are secondary to job and home loss; the bailout of US auto companies doesn't resolve the country's problems. Nobody can buy cars when workers fear they may lose their jobs soon. It's discouraging to see our government expend so much time, effort and money on issues that can wait.

Most on main street still feels left out of this stimulus plan; until our government can convince us they are going to help stabilize jobs and increase jobs, nothing else matters. That's one of the reasons the stock market will continue to show losses; all we hear are companies laying off workers by the thousands. Why can't they hear the cries?