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Biggest stock market drop after Bernanke speaks

 
 
Reply Wed 22 May, 2013 08:55 pm
The chairman of the fed is a dope. He doesn't know when to keep his big mouth shut, and usually ends up doing the wrong things at the wrong time.

Another proof is today's announcement of slowing down the repurchase of long-term bonds that sent fear into the markets.

Their initial program to repurchase $85 billion in bonds every month was the first mistake. The message was clear, they wish to lower long term interest rates further. WHY?

Banks are still charging high, double-digit, interest on credit card and personal loans. Inflation isn't even on the radar screen.

They only create more problems for our economy.

I sold over 10% of my investments this month. My crystal ball tells me that the stock market is ready for a bust, and I'm not one to cry "fire" often.





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farmerman
 
  1  
Reply Thu 23 May, 2013 04:08 am
@cicerone imposter,
you seem to disagree with the founder of Berkshire Hataway.
But its never a bad idea to take some profits when you can. I don't think Id ascribe some doom at the end of a tunnel to do so. The market is still relatively UNDERVALUED.
cicerone imposter
 
  1  
Reply Thu 23 May, 2013 09:15 am
@farmerman,
The market doesn't fluctuate based on current "value." People buy stocks based on future value. When Bernanke made his announcement, it was to affect future value; it was the repurchase of long-term bonds.

Their strategy (which is all wrong) is based on the idea that making long-term bond interest cheaper will get companies to expand their capacity. That's wrong! We still have not recovered from the Great Recessions loss of jobs that increased capacity.

Without DEMAND, companies are not going to expand their operations. Especially since our GDP is growing at 2.5 to 3% while unemployment remains at 7.5% or over 11-million people without jobs.

I've always been against both Greenspan and Bernanke. From MPOV, they're both pretty dumb about economics.

Since I'm still keeping 90% of my investments, so I'm in for the long term.
There has been a time just before the Great Recession when I sold off 37% of my investments.

It's a small fire, but I believe it's going to impact the markets for the rest of this year.

farmerman
 
  1  
Reply Thu 23 May, 2013 09:19 am
@cicerone imposter,
you may be right but Im not arguing. I get HIS newsletters and those written by John Bogel (whom I trust more than anyone). Bogel is strong into 2015.

I red Brrons and see the balance tween doom sayers and rainbow riders, and I guess its all a crap shoot anyway.

ALL my losses of the GR have been recouped and I mde severl key buys during the down times that hve returned me a coupla key purchases.
cicerone imposter
 
  1  
Reply Thu 23 May, 2013 10:11 am
@farmerman,
My "gut" feeling about the market has been pretty accurate - so far. Since it's only a gut feeling, I don't tamper with my wife's investments (going on 3 or 4 years now), and let her manage it herself.

Nobody knows how the economy will perform for the short-term and long-term. We can only go by what we read with some understanding of macroeconomics, and the impressions we get from it. Anybody who says they know are not in their right mind - even Bernanke.



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