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  #61  
Old 18 January 2016, 17:14
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Originally Posted by DirtyDog0311 View Post
The FED is speaking out of both sides of their mouths through their various branches in an attempt to cover their asses should they be unable to contain what is, IMO, an inevitability.
They apparently felt the need to refute the Zero Hedge story on a federal and banking holiday. Curious.


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  #62  
Old 18 January 2016, 17:31
DirtyDog0311 DirtyDog0311 is offline
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They apparently felt the need to refute the Zero Hedge story on a federal and banking holiday. Curious.


Because, I suspect, they are lying.

From the zerohedge article:

Quote:
We can now make it official, because moments ago we got confirmation from a second source who reports that according to an energy analyst who had recently met Houston funds to give his 1H16e update, one of his clients indicated that his firm was invited to a lunch attended by the Dallas Fed, which had previously instructed lenders to open up their entire loan books for Fed oversight; the Fed was shocked by with it had found in the non-public facing records. The lunch was also confirmed by employees at a reputable Swiss investment bank operating in Houston.

This is what took place: the Dallas Fed met with the banks a week ago and effectively suspended mark-to-market on energy debts and as a result no impairments are being written down. Furthermore, as we reported earlier this week, the Fed indicated "under the table" that banks were to work with the energy companies on delivering without a markdown on worry that a backstop, or bail-in, was needed after reviewing loan losses which would exceed the current tier 1 capital tranches.

In other words, the Fed has advised banks to cover up major energy-related losses.
Any federal/banking official in that sector has absolutely no credibility. Not after the clear coverups and lying that was done in 2008. These people are professional liars that will do or say whatever it takes to keep people from realizing what's going on before it's too late.

They'll telling their rich friends how to GTFO before the average American wises up and does the same. Same exact thing that happens every time something like this occurs. The bankers protect themselves, everyone else can go get fucked in the ass.

Edit: I would not expect the FED to actually acknowledge the ZeroHedge article at all if it were false. Not many people read that website, so I wouldn't know why they would skyline themselves like that. Unless its a case of "The lady doth protest too much, methinks".
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  #63  
Old 18 January 2016, 17:34
edd1e22 edd1e22 is offline
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Those are some serious allegations being made by zerohedge. My take is that a member of the board such as Chris Doyle said something along those lines and someone else construed it as him speaking for the fed.

That site has good info but some of the articles they publish can be questionable.
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  #64  
Old 18 January 2016, 19:36
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There is no doubt in my mind that another stock market crash is coming this year, and probably the second "dip" in the long awaited "double dip" recession, which, quite frankly, amazes me that it took two entire Presidential terms to get to.

I do, however, think that this kind of event is completely distinct from an "end of civilization" event where the number of bullets in your basement is going to be the ultimate arbiter of how well you weather the storm. I think a lot of people here have the two confused with each other. Economic problems don't mean people gunning each other down in the streets wholesale. We have these things from time to time, always have.

I think a lot of people actually want there to be a civilization level ending event (or at least think they do) for whatever reason. IDK if its just to justify their enormous expenditures for weapons and survival gear, if they are manifestly unhappy with their station in life and feel they'd fare better as the local warlord than laboring away at a lousy job, or if they are just so disgusted with the idea of how things run in the world on a marco level that they just want to see it all burn.

Personally, I enjoy my life and my time with my family, and would like to see things work out in the long run, rather than to have our way of life torn asunder (although I am prepared for it if it happens). I think people underestimate how ugly it could get, and how you are going to navigate that ugliness with a family in tow, especially one with young children. It blows my mind that people actually relish the idea of everything we know comnig apart at the seams.
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  #65  
Old 18 January 2016, 19:40
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Personally, I enjoy my life and my time with my family, and would like to see things work out in the long run, rather than to have our way of life torn asunder (although I am prepared for it if it happens). I think people underestimate how ugly it could get, and how you are going to navigate that ugliness with a family in tow, especially one with young children. It blows my mind that people actually relish the idea of everything we know coming apart at the seams.
Agree. As a personal aside, I have a target year of 2034 for retirement (75) and I fully expect the normal economic oscillations to occur at least two more times, but I do not expect end times in any capacity at all in spite of the hysteria generated by the media.

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  #66  
Old 18 January 2016, 20:20
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Absolutely.

I'm with Mako, I kind of enjoy my life, though many here would find my lifestyle strange.

I see something akin to the great depression, but don't really expect total breakdown of society.
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  #67  
Old 18 January 2016, 20:35
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Originally Posted by MakoZeroSix View Post
There is no doubt in my mind that another stock market crash is coming this year, and probably the second "dip" in the long awaited "double dip" recession, which, quite frankly, amazes me that it took two entire Presidential terms to get to.

I do, however, think that this kind of event is completely distinct from an "end of civilization" event where the number of bullets in your basement is going to be the ultimate arbiter of how well you weather the storm. I think a lot of people here have the two confused with each other. Economic problems don't mean people gunning each other down in the streets wholesale. We have these things from time to time, always have.

I think a lot of people actually want there to be a civilization level ending event (or at least think they do) for whatever reason. IDK if its just to justify their enormous expenditures for weapons and survival gear, if they are manifestly unhappy with their station in life and feel they'd fare better as the local warlord than laboring away at a lousy job, or if they are just so disgusted with the idea of how things run in the world on a marco level that they just want to see it all burn.

Personally, I enjoy my life and my time with my family, and would like to see things work out in the long run, rather than to have our way of life torn asunder (although I am prepared for it if it happens). I think people underestimate how ugly it could get, and how you are going to navigate that ugliness with a family in tow, especially one with young children. It blows my mind that people actually relish the idea of everything we know comnig apart at the seams.
Bullseye!

I put it down to Most Likely Course of Action(MLCOA) and Most Dangerous Course of Action(MDCOA).

Imagine you decide to hold yourself accountable to a "financial CO" mentor you respect.

Do you think you'll get away with excessively resourcing MDCOA at the cost of under resourcing MLCOA?

Or failing to resource MLCOA at all?

You'll get your butt kicked in the back brief and told to adjust your plan.

The sun will still be coming up tomorrow. So enjoy today, AFTER you've invested time to educate yourself financially.

To end on a high note, the US is still the global epicentre for technological innovation and creation(but needs to work hard to maintain that competitive advantage).

And the Veteran community's potential impact on US business creation and innovation has barely been scratched.

The tech boom in the 90's owes much to downsized military industrial complex employees, contractors, soldiers, sailors, and airmen.

The same is sure to happen again.

Highly visible Veteran entertainment related businesses like Article 15 and RangerUp are just that...the visible ones...like the small visible part of a big 'ole iceberg.

Glass half full, especially when the zombies are rising from the dead "Woohoo! Once this passes, ALL this shit is going to be mine!"
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  #68  
Old 18 January 2016, 20:35
DirtyDog0311 DirtyDog0311 is offline
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Originally Posted by MakoZeroSix View Post

I do, however, think that this kind of event is completely distinct from an "end of civilization" event where the number of bullets in your basement is going to be the ultimate arbiter of how well you weather the storm. I think a lot of people here have the two confused with each other. Economic problems don't mean people gunning each other down in the streets wholesale. We have these things from time to time, always have.

I think a lot of people actually want there to be a civilization level ending event (or at least think they do) for whatever reason. IDK if its just to justify their enormous expenditures for weapons and survival gear, if they are manifestly unhappy with their station in life and feel they'd fare better as the local warlord than laboring away at a lousy job, or if they are just so disgusted with the idea of how things run in the world on a marco level that they just want to see it all burn.

Personally, I enjoy my life and my time with my family, and would like to see things work out in the long run, rather than to have our way of life torn asunder (although I am prepared for it if it happens). I think people underestimate how ugly it could get, and how you are going to navigate that ugliness with a family in tow, especially one with young children. It blows my mind that people actually relish the idea of everything we know comnig apart at the seams.
I want to preface this by saying I do not think it will be an "exinction level event" for the human species; but I think that, if given the scope of what we're facing (sovereign debt crises, monetary policy on a global scale) it COULD very well be the end of the world as we know it.

The last time it happened in 1929, we got socialism on a scale we've never really matched to date. Cullings of liberty. World War.

Now put those above terms into modern context. Socialism. Loss of liberty. World war.

That's millions, maybe even billions, dead (if you include the World War threat going nuclear).

Finally, I do not "relish" the thought of everyone getting the reset button hit on them..........but it's a FAR FAR FAR FAR better outcome than the totalitarian living nightmare that I believe many people WILL clamor for if we are struck by another Great(er) Depression. And you really think the fucking assholes at the heads of the 3 branches of govt will resist that call? I don't.

FWIW, it almost happened in 2008:

Quote:
Rep. Paul Kanjorski: “On Thursday at about 11 o’clock in the morning, the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States to the tune of $550 billion, as being drawn out in the matter of an hour or two.

“The Treasury opened up its window to help. It pumped $105 billion into the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn’t be further panic out there, and that’s what actually happened.”

“If they had not done that, their estimation was that by 2 o’clock that afternoon, $5.5 trillion would have been drawn out of the money market system of the United States, would have collapsed the entire economy system of the United States and within 24 hours the world economy would have collapsed.

“Now we talked at that time about what would happen if that happened. It would have been the end of our economic system and our political system as we know it. And that’s why when they made the point we’ve got to do things quickly, we did.”
The truly scary thing is, by all educated accounts, this time we're potentially facing an even more devastating outcome this time around because we've done NOTHING to solve the problem at all. We've been "extending and pretending". And making it worse.
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  #69  
Old 18 January 2016, 20:54
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Originally Posted by DirtyDog0311 View Post
I want to preface this by saying I do not think it will be an "exinction level event" for the human species; but I think that, if given the scope of what we're facing (sovereign debt crises, monetary policy on a global scale) it COULD very well be the end of the world as we know it.

The last time it happened in 1929, we got socialism on a scale we've never really matched to date. Cullings of liberty. World War.

Now put those above terms into modern context. Socialism. Loss of liberty. World war.

That's millions, maybe even billions, dead (if you include the World War threat going nuclear).

Finally, I do not "relish" the thought of everyone getting the reset button hit on them..........but it's a FAR FAR FAR FAR better outcome than the totalitarian living nightmare that I believe many people WILL clamor for if we are struck by another Great(er) Depression. And you really think the fucking assholes at the heads of the 3 branches of govt will resist that call? I don't.

FWIW, it almost happened in 2008:



The truly scary thing is, by all educated accounts, this time we're potentially facing an even more devastating outcome this time around because we've done NOTHING to solve the problem at all. We've been "extending and pretending". And making it worse.
Well, one could argue, that the masters of the universe were able to see the problem and immediately correct it in 2008. Why can't they do it again?

I'm just interested in the political dynamics as the result of another financial crisis. The normal instinct is to think this makes the election a landslide for Trump, as both Clinton and Sanders are vying for the mantle of a POTUS 3rd term.

Or, conversely, if it is bad as you think it will be, people might be like "What the everloving fuck with this capitalism bullshit!" and elect Sanders to reign in the abuses of Wall Street and redistribute wealth. (although I think that the guy to reform Wall Street in reality is Trump, in a "only Nixon could go to China" type way).

As much as I know that we are headed towards a technological totalitarianism, a persistant surveillance state, ect, these concens will likely pale in comparison to what we face as we approach the technological singularity. The very nature of what it means to be human will be completely erased within our lifetimes, unless of course, we get a "reset" as you put it.
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  #70  
Old 18 January 2016, 21:12
DirtyDog0311 DirtyDog0311 is offline
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Well, one could argue, that the masters of the universe were able to see the problem and immediately correct it in 2008. Why can't they do it again?
From what I understand of HOW they 'saved the day' back in 2008 --- they essentially used the dollar itself to pump up another bubble and keep stock prices high. They cannot do it again, as they've boxed themselves into a corner.

They initiated the QE programs to print money to the various hedge funds (and other financial institutions --- resulting in companies participating in 'stock buyback' programs) to keep stock prices artificially high, while simultaneously walking the tightrope between deflation and hyperinflation...........all the while knowing they can never raise interest rates to normal again simply because all that money printing raised the debt levels to un-serviceable levels.


The problem is with the money itself now. And the fact that a few other countries are throwing monkey wrenches in their plans (china, russia, etc) by forming alternatives to the western central banking paradigms, and divesting themselves from their dependence on the dollar through bilateral trade agreements, etc.

In THEORY, if ALL the other countries were to go along with this in lockstep, they could keep the Keynesian system running indefinitely. This is only if everything ran in a hermetically sealed environment and all variables were accounted and corrected for. This is not even anywhere remotely possible in a real-world environment.

I have a sneaking suspicion the people in charge have no fucking clue what they are doing (while fully convincing themselves that they do), and are simply plugging holes as they come along. Sure, they have contingencies in the form of the Continuity of Governance plans and an overall goal of "well, if it all goes to shit, we'll just not let that crisis go to waste and get the stupid peasants to give us what we really want".

They'll use food as a weapon and a method of control. Just like ol Kissinger wanted to do in 1974.
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Old 18 January 2016, 22:42
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And the fact that a few other countries are throwing monkey wrenches in their plans (china, russia, etc) by forming alternatives to the western central banking paradigms, and divesting themselves from their dependence on the dollar through bilateral trade agreements, etc.
Huh? China is about to tank. Who is going to follow their currency when they do tank? Russia? With oil in the shitter they need to worry too. That leaves them with just natural gas for Western Europe. The Euro is over valued according to some and they are going to need to turn on the printing presses. No, for the foreseeable future the US dollar is going to be stable.

The end state is that QE gave people cheap money and they did stupid things with it. SA is trying to drive down oil prices and put US oil shale out of business, and as such all the loans that they (US oil) took can't be paid. Add Iranian oil that's about to hit the market and we have a compounded issue.

About every 10 years there is a boom/bust, and we are heading for a bust once again. You are all some doom and gloom MFers. Like Mako I'm more concerned with how our .gov will handle the aftermath and who will get elected. Timing will dictate the election, no doubt.
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Old 18 January 2016, 22:43
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They'll use food as a weapon and a method of control. Just like ol Kissinger wanted to do in 1974.
The folks behind "The Big Short" book and movie have been talking about investing in food as a way to invest in water.

I've done some reading on the macro water/food issue before.

Drought played a big role in sparking the dry tinder in Syria.

Could we be caught looking the wrong way with Syria/Iraq/Yemen grabbing headlines if East Africa(Uganda/Ethiopia/etc) upstream from Egypt sees a conflict/crisis spark as a result of drought and/or irreconcilable differences over Nile resources?

I might need to spend less time learning about geopolitics of food/water and more on strategic investment in food/water.
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  #73  
Old 18 January 2016, 23:12
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The folks behind "The Big Short" book and movie have been talking about investing in food as a way to invest in water.

I've done some reading on the macro water/food issue before.

Drought played a big role in sparking the dry tinder in Syria.

Could we be caught looking the wrong way with Syria/Iraq/Yemen grabbing headlines if East Africa(Uganda/Ethiopia/etc) upstream from Egypt sees a conflict/crisis spark as a result of drought and/or irreconcilable differences over Nile resources?

I might need to spend less time learning about geopolitics of food/water and more on strategic investment in food/water.
Indeed, the smart money is on water rights, which is what Michael Burry, the genius MD in the book and movie, is now investing in (the Bush family bought 300,000 acres in Paraguay that sits on a pristine aquifer).

I agree with the good Colonel, follow the money.
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  #74  
Old 18 January 2016, 23:56
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Huh? China is about to tank. Who is going to follow their currency when they do tank? Russia? With oil in the shitter they need to worry too. That leaves them with just natural gas for Western Europe. The Euro is over valued according to some and they are going to need to turn on the printing presses. No, for the foreseeable future the US dollar is going to be stable.

The end state is that QE gave people cheap money and they did stupid things with it. SA is trying to drive down oil prices and put US oil shale out of business, and as such all the loans that they (US oil) took can't be paid. Add Iranian oil that's about to hit the market and we have a compounded issue.

About every 10 years there is a boom/bust, and we are heading for a bust once again. You are all some doom and gloom MFers. Like Mako I'm more concerned with how our .gov will handle the aftermath and who will get elected. Timing will dictate the election, no doubt.

I'm with you and Mako.

We've already seen a pretty decent pullback and there's a decent chance that the market continues to drop for a while. That's the nature of the beast. While the S&P 500 averages somewhere around 9-10% returns annually, the standard deviation of returns are super high as well. The market rarely provides a smooth ride. This is a great time to remember that the market and the underlying economy are two very different things. It's possible, and fairly common, to have a correction or even recession in the market without the economy taking a complete nosedive.

This correction is a good example of why it pays to diversify and rebalance holdings though. While the overall situation is tough, diversification through non-correlated or mildly correlated assets can protect you on the downside. The last few years have been great for the American stocks, however pretty much everything else has had a rough go of it. There's a good chance that another asset class will have the highest returns over the next few years though, so it's good to spread your money around. Rebalancing is important as a method of managing risk. By rebalancing on an annual basis, you can lower your risk and keep from becoming overweight in outperforming asset classes.

I've noticed that a lot of you mention buying physical gold or silver and if that gives you peace of mind then go for it. I would caution you to consider the twenty year period between 1985 and 2005. Silver was basically flat, not even keeping pace with inflation. If you don't keep up with inflation then you're effectively losing money through the loss of your purchasing power. The same issue comes up when considering holding large amount of cash. While inflation is at historically low levels, there's a good chance that it will eventually rise. Average inflation over the last century has been in the 2.5%-3% range. You're also losing out on potential growth through compound interest. I'm not saying that one shouldn't be prepared; instead I'm saying that by putting the majority of your money into hard assets like beans, bullets, and silver, you're placing a bet on a total breakdown of the American system and most likely you won't be compensated for that level of risk. By diversifying into a fairly conservative investment such as investment grade corporate debt or government securities, you can achieve a much better risk adjusted return.

Also, for those who see China or Russia emerging as a challenger to American economic hegemony, I don't know that I would worry about that too much just yet. China has a weak economy now and it's still faltering. While they have a headline GDP growth rate of ~7%, estimates of the real number put it somewhere under 4%. While they have funded massive infrastructure projects all around the world, I expect to see many of those dry up in the next few years. China has benefited from even more lax fiscal policy than the US when it comes to lending standards. Their shadow banking system has made credit incredibly easy to come by. While this boosted their economy for a time, it has hurt them now that they are working to transition from a manufacturing based economy to a service based economy.

As for Russia, they have some large issues themselves. Their biggest issue, as previously noted, is their lack of oil revenue. Their finances are predicated on $100 a barrel oil, a number which we are unlikely to see again for several years at the minimum. As Saudi continues to pump and Iran comes back to the table, the glut of oil is going to continue. Russia has already cut into their foreign reserves in order to strengthen the ruble however it is still near the weakest that it has been in years.

Also, don't expect to see Saudi cut off their oil pumping anytime soon. Their decision to go public with Aramco shows their resolve to keep oil low for the foreseeable future. The money they take in from making Aramco's downstream operations public will allow them to offset a good portion of the revenue they've lost due to the lower price of oil.

I am a financial advisor, so I do have a vested interest in the stock market. For the record though, I'm 100% into equities currently and am piling as much in as I can. While I don't know when the market will rise, I have 30 years before I retire so I'm not too worried. I'm all about that compound interest.
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Old 19 January 2016, 00:26
DirtyDog0311 DirtyDog0311 is offline
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I never said that China, Russia were going to overtake the USA as the economic powerhouse(s) that will emerge victorious from all this. I simply stated that they are selling their treasuries (China), and getting around the petrodollar paradigm that ensures continued demand for the dollar. Every country that does this chips away from the assumption that the dollar is, and always will be, the in-demand currency of the world.

I think it's a very objective statement to say that if the majority of countries no longer want the dollar, or more accurately, NEED the dollar, and start dumping their treasury holdings ---- All that money that was printed into existence in the form of debt, currently just sitting there on other central banks balance sheets, will eventually find it's way back to the USA, enter the money supply and could very well lead to a hyperinflation scenario.

It wouldn't be unprecedented. In fact, that's similar to what Russia tried to collude with China to do back in 2008.

Quote:
Mr Paulson:

"Here I'm not going to name the senior person, but I was meeting with someone… This person told me that the Chinese had received a message from the Russians which was, 'Hey let's join together and sell Fannie and Freddie securities on the market.' The Chinese weren't going to do that but again, it just, it just drove home to me how vulnerable I felt until we had put Fannie and Freddie into conservatorship [the rescue plan for them, that was eventually put in place]."
Again, I'm not saying that Russia and China are threatening to overtake the USA in terms of being the world's sole economic superpower ---- but while they have economic problems on the horizon, their actions could cause a very real problem with our CURRENCY itself. Which is a much more grave concern, in my opinion.

Wasn't it just back in the 70s that people in Europe were no longer accepting the dollar (I have read stories of travelers in Italy stating the hotels were no longer accepting their dollars and only wanted Lira)and inflation was absolutely through the roof? Which was right after Nixon took us off the Gold Standard and just before Kissinger flew to Saudi Arabia to set up the Petrodollar status? I'm quite positive some members of this board actually lived through and remember those times.

Edit: By all means, if I am wrong about something or misinformed about a particular aspect of economics or other activity, please chime in and let me know. There are a lot of smart individuals on this board and I welcome any insight.
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  #76  
Old 19 January 2016, 00:32
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That movie "The Big Short" was full of people like that. "oh ho ho! You really are a special breed of stupid if you think the housing market is in a bubble! Man you're dumb!". And, like earlier.............It's happening/happened again.
LOL, I remember meeting a girl in a bar in 2005. She bought a house and was buying another house on, what I would call, a very small salary for the area. All of this on the "projected" rise in home prices. She thought me dumb when I asked her if she really thought home prices could continue to rise, and if they did how anyone could afford them. In her mind the prices would never stop and in maybe 10 years they would just even out.

I only have an education from a state school and am horrible at math, but it didn't take Warren Buffet to realize that something was amiss. And here we are with QE and a stock market above 17,000 and everyone thinks it's all gravy
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  #77  
Old 19 January 2016, 04:50
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twenty year period between 1985 and 2005. Silver was basically flat
I'm not looking at as a means of asset growth. And I'm not saying I'm taking every dime I own and putting it in metal. I'm just putting back a percentage of my assets so that I have something besides the 401/IRA or standard paper currency.
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  #78  
Old 19 January 2016, 05:45
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mdavid mdavid is offline
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Location: High Springs, FL
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I'm in cash right now, missed some of the peak but pulled out early, paid off the house and cars a few years ago, no debt.
Since I don't understand the market I just buy SPX/IVV when I invest.

Biggest error my friends and coworkers have is they live way above their means, eat out too much and use credit for stupid things. Most folks aren't hurting financial from bad investing but rather bad living imo.

I'm looking to purchase when it looks like it's starting to recover. I'm interested in McDuff's statements as he sounds like he believes we're already at the bottom.
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  #79  
Old 19 January 2016, 05:56
Noah Werka Noah Werka is offline
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Snapshot

04:30PM: ... WASHINGTON (AP)

Last week's harrowing plunge in U.S. stocks fueled by economic fears about China and plummeting oil prices left investors anxious and alarmed. Some wondered if it signaled an approaching recession in the United States. The answer, most analysts say, is no. The American economy is expected to prove resilient and nimble enough to avoid serious damage, at least anytime soon. For all the economy's challenges, the job market is strong, home sales are solid and cheaper gasoline has allowed consumers to spend more on cars, restaurants and online shopping. The companies that make up major stock indexes are far more vulnerable than the economy itself is to distress abroad: Companies in the Standard & Poor's 500 index derived 48 percent of their revenue from abroad in 2014, up from 43 percent in 2003. By contrast, exports account for only about 13 percent of the nation's gross domestic product the broadest gauge of economic output. That's one of the lowest such shares in the world. Exports to China equal just 1 percent of GDP. "While the U.S. economy's exposure to China is relatively small, the multinational companies that trade on the stock market are much more exposed," said Mark Zandi, chief economist at Moody's Analytics. The S&P 500 sank 2.2 percent Friday and has tumbled 8 percent since the year began, deflated by expectations of even lower oil prices ahead and fears that China's once-explosive economy is slowing more than anyone had expected. On Friday, the Xinhua news agency reported that Chinese banks reduced loans last month from a year earlier. It was the latest sign that China's economy continues to decelerate an ominous trend for U.S. companies, like heavy-equipment maker Caterpillar, that have significant business there. (Caterpillar shares shed 2.7 percent Friday.) "For many of these companies, the narrative behind their growth and earnings prospects is China," Zandi said. "If you throw that narrative out, investors get nervous." The disconnect between the actual economy and the price of stocks isn't new. From the waning days of the Great Recession into the tepid recovery that followed, stocks managed to gradually rise despite persistently high unemployment and tepid economic growth. Now, the opposite seems true. "Main Street is better, and Wall Street is suffering," said Jim Paulsen, chief investment strategist at Wells Capital. The broadest gauges of the economy look fundamentally sound. GDP likely expanded 2.4 percent last year, according to JP Morgan Chase. Zandi foresees its growth hitting 2.8 percent in 2016 hardly spectacular but decent, especially at a time when many industrialized economies are struggling to grow at all. The job market appears particularly robust. Employers added an average of 221,000 jobs a month during 2015 and 284,000 a month from October through December. The unemployment rate has sunk from 10 percent in 2009 to 5 percent, a level associated with a healthy economy. Improved job security layoffs have slowed to exceptionally low levels has helped embolden many Americans to shop. Consumer spending, which drives about 70 percent of U.S. economic activity, rose at an annual rate of more than 3 percent in the spring and summer. Auto sales hit a record last year. Not that the U.S. economy has been left unscathed by the weakness abroad. Partly because a stronger dollar has made their goods more expensive abroad, U.S. manufacturers are suffering. Industrial production fell in December for a third straight month, the government said, and orders to factories dropped in November for the third time in four months. Last year, factories added just 30,000 jobs, the fewest since the recession year of 2009. What's more, energy companies are reeling from sharply lower oil prices. And though falling oil prices have helped boost consumer spirits and encourage spending, they also helped slow the overall economy last year by causing energy companies to slash investment. In addition, the Federal Reserve has signaled that it expects to further boost interest rates this year after raising them from record lows in December, and some fear it will move too fast. Fed hikes were considered a trigger for three of the past four recessions. Economists don't entirely understand the links among the world's major economies. The International Monetary Fund has acknowledged surprise over just how much China's slowdown has hurt other countries in the developing world. It's also possible that damage to the United States could prove worse than direct trade ties suggest. Wells Capital's Paulsen notes that small- and medium-sized U.S. companies supply the multinationals that do big business overseas. When exports falter, those companies can suffer in ways that don't show up in trade numbers. Tumbling stock markets themselves can also cause economic damage, by making Americans who have money tied up in stocks feel poorer and less inclined to spend. A month ago, Joel Naroff, president of Naroff Economic Advisors, predicted that the U.S economy would grow 3 percent this year. Now he's considering cutting his forecast. He's not worried about the impact of economic weakness overseas. He's worried about the toll that falling stocks may take on consumer confidence. Still, he doesn't think a recession is coming, no matter how scary the stock plunge of late. As famed economist Paul Samuelson once quipped, "The stock market has forecast nine of the last five recessions." Condon reported from New York.
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  #80  
Old 19 January 2016, 08:27
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SATCOM SATCOM is offline
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Quote:
Originally Posted by Noah Werka View Post
04:30PM: ... WASHINGTON (AP) Your cut/paste
Why do a cut/paste? Ensure you comment on things you post here and if it is referencing a published news story.... provide that link so that the Forum may see and review the source material for your post.

Example:

"I read this interesting article from the Associated Press about the US economy, which appears to be on the verge of a recession."

Or....

"Bill Bernanke advised CNN yesterday that Wall Street firms are skittish on trading due to the news about fresh crude prices..."
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