The Market, Now v. Past Crashes

Discussion in 'Stock Market' started by Toro, Oct 28, 2009.

  1. Toro
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    Toro Diamond Member

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    The market now is holding up better than the market during the Great Depression.

    [​IMG]

    In fact, it is most acting like the rebound in 1938 as opposed to 1930.
     
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  2. Old Rocks
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    Old Rocks Diamond Member

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    Well, that would be a very good thing. Of course, our local Obama haters will be severly disappointed to see the economy recover, and come back strong.
     
  3. Charles Stucker
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    Charles Stucker Senior Member

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    I disapprove of Obama.
    I want the economy to snap back stronger than ever.
    Unfortunately, Stock prices are not the entire picture - it is looking a bit dicey, though far short of the great depression.
     
  4. editec
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    editec Mr. Forgot-it-All

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    the TRILLIONS that the FED has injected into the banking system is the aswer to why we seem to be in better shape.

    But to be candid, I think this apparent fiancial recovery is illusionary.

    I actually am begining to think that the banks are still so stuffed with dubious debt that the real meltdown hasn't yet happened.

    I admit I'm kinda a bear, so take my POV with a grain of salt.

    But, still, I see absolutely no evidence of a REAL recovery because in order for this nation to really recover, we have got to put people back to work at a DECENT wage.

    And that ain't gonna happen, folks.
     
    Last edited: Nov 7, 2009
  5. Paulie
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    Paulie Platinum Member

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    If the Federal Reserve manages to pull off a miracle and avoid high inflation from all their liquidity injections of the past year and we get at least 10 years of something decent in terms of economic stability, I'll be happy.

    Obama hasn't really DONE anything, though. You seem to think because he sits in that office he either makes or breaks the recovery.

    Everything hinges on what the Federal Reserve does. Obama offered one stimulus package that in hindsight may very well be able to be viewed as unneccesary.

    Time will tell.
     
  6. veritas
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    veritas OBKB

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    Deflation would be worse than inflation. And if regular people don't keep the flow, the big boys will not start lending again........they all have mounds of toxic debt so lending is risky because they all know they have toxic debt........
     
  7. Paulie
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    Paulie Platinum Member

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    This is stupid. Deflation has its pros and cons just like inflation does.

    If you have a lot of debt, inflation is good. If you have low debt and a lot in savings, deflation is good.

    Neither one is really any better than the other one in a macroeconomic sense. Each individual derives their own benefit from each scenario.

    Since wages aren't rising with inflation, even IF jobs are added...if we see the huge price inflation that seems to be coming our way in the next year or two, how does that benefit us?

    It only benefits those who can use all those extra dollars to pay down debt. Otherwise, do you like paying $6 for a gallon of milk, $5 for a loaf of bread?

    Fucking $4 or $5 for a gallon of gas?

    Because that's the kind of inflation we're looking at if the Fed doesn't get this thing (so-called exit strategy) pretty much PERFECT.
     
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  8. Toro
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    Toro Diamond Member

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    I disagree Paulie.

    A bit of mild deflation would be fine. Deflation from technological improvements is fine. Debt deflation is not fine, however, at least not on a national scale, as deflation itself can lead to a change in psychology that in and of itself create a self-feeding mechanism that can be hard to break. The costs of breaking inflation in the 70s was enormous. The cost of breaking a similar deflation would also be enormous and probably more damaging.

    We may, however, have no other way out.
     
  9. Paulie
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    Paulie Platinum Member

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    Well debt deflation is what the bankers are looking at if they don't do something about the inflation potential.

    I know if I had a lot of debt, I'd use the extra dollars to pay it down as much as I could afford to while the extra dollars were readily available. And then when the next deflationary bubble burst happens, you're better positioned to weather the storm.

    People are deleveraging NOW when they can least afford to, because they realize that in hingsight they screwed up. If there's going to be inflation, deleverage when you HAVE it to deleverage with.

    It's obvious the Fed's strategy is create a bubble to fix a burst, and so on and so on. It'll probably never change.

    Most will not benefit from it. I will.
     
  10. JeremyNight
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    JeremyNight BANNED

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    That's not a good think IMHO. It looks too good to be nice. After short consideration I'm starting to worry - perhaps there is a second wave of crisis coming?
     

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