Stock Market looking ill

AR - since the recession started, only 2.25% (or 1 out of 44) people in this country has lost their job. UE rate will top out around 10.5% or so, maybe 11%. In the Great Depression, the UE rate hit 25%. And yet we overcame that. We will overcome a lesser crisis (this one) as well. Yes, more jobs are in the service sector than in the 1950s - so what? Jobs are jobs, doesn't matter whether they are in the service sector or the manufacturing section. Job growth will resume.

"UE rate will top out around 10.5% or so, maybe 11%. In the Great Depression, the UE rate hit 25%"

methodology changed. I think U6 is a broader measure of unemployment that more closely matches the methodology that was in place during 30s - can someone confirm this? U6 is like 16.5% or so I think now.

I see the same comparison over and over again.
This financial collapse is bad, but it's no where near the Great Depression. Not even close. Do some reading on the after effects of the great depression, then take a walk around your neighborhoods in Manhattan.

UD - yeah, maybe the methodology was different, but the Great Depression was FAR WORSE than this crisis, by any measure.

Further on the service vs manufacturing point, the US is currently in the process of developing a major domestic energy industry. If you look at the massive nat gas discoveries over the past 2 years (shale plays), combined with future green technologies coming online, you will see major job growth in that sector alone. As a result, you will see our trade balance improve as we stop importing foreign oil. Major plus of the US economy over the next 10-50 years.

GDP in the Great Depression fell 25% from 1929 to 1932 - the current crisis will be nowhere near that.

http://en.wikipedia.org/wiki/File:Gdp20-40.jpg

of course it was. something like this happens like every 70 years or so, so you really cant call this a normal recession with a normal growth spurt after it - i question how consumer will drive growth if unintended consequences of higher taxes, higher rates, and more debt after this crisis and wealth effect adjustment.

when was last time we had a bout of debt deflation like this? the answer was the depression. i keep repeating myself, but its because comparing this to depression or not doesnt solve anything, what i fear is what consequences, what price we will pay as a result of what was done to avoid a very bad situation, maybe one so bad that it would have been comparable to the great depression.

the depression was a tsunami with many waves. even the depression had a HUGE % wise bounce before the end result hit and whacked everyone around for years - but that came much earlier in process and after the huge plunge - our huge plunge came well after the process began.

http://dshort.com/charts/bears/four-bears-large.gif

saying TGD was far worse than this crisis doesnt help us here. fact is, this is the deepest and most structurally flawed recession any of has seen in our lifetimes! Done. Unprecedented measures were taken. Done. We saw huge pain and are now seeing the bounce/effects of stimulus taken. Done. NOW WHAT! Thats what I care about. I changed my view slightly over the past few months. I think this stimulus lasts for 3-4 quarters, and we see it in economic data later in year. I was way off on wave 2. I dont think that happens until maybe mid 2010, maybe later. I was thinking alot about what Howard Lutnick said back in early June, and many disagreed - and now I am thinking he may be right on timing here!

http://www.urbandigs.com/2009/06/rogers_currency_crisis_ahead.html

Lutnick argued that Rogers is about '4 years early' on that trade and that the commercial real estate problem and the leveraged buyout problem (2006 deals) is far worse than anyone right now is willing to admit. Lutnick believes this to be a 2011 and 2012 problem, causing major problems for banks and the economy - as a result the flight to safety will CONSTRAIN the treasury market from rolling over as the 'fear factor' kicks in again.

My response at the time: "Lutnick's argument about treasury bonds being constrained by what I described as WAVE 2 of this crisis, is very interesting. I'm not sure I buy it, but its interesting. Lutnick says this will hit us in 2-3 years, I thought it would be earlier."

My thinking now: he may be right. banks raised ton of money, stimulus kicking in, confidence boosted with stocks rallying, this will boost economic data later, and when it comes out, it may further boost stocks if its not priced in big time by that time. may feed on itself for a while. system is geared for banks to earn way to better balance sheet. but for how long. lutnick 2011, 2012 timeline is very intriguing to me considering the last round of debt deflation timeline we had in the 30s

"This financial collapse is bad, but it's no where near the Great Depression. Not even close. Do some reading on the after effects of the great depression, then take a walk around your neighborhoods in Manhattan."

Ericho's mistake is assuming its over. The great depression didn't look like the great depression a few months in either... its the double and triple dips that really brought "it" about.

And since when is "its not the great depression" a sign of strength. We're already talking about the biggest recession since then. Since when is the second worst crisis in modern history not a big deal?

And don't forget... 1987, which was a pussy recession in comparison, RE in Manhattan took FOUR YEARS to bottom after the market did.

Its like the guy who falls off a building and says "see, we're fine" right before he goes splat.

UD - I said above it's going to take longer than the normal recession to recover from. But that doesn't mean it's as bad as the GD - it's just not. It's pretty bad, though. Job growth will resume as the economy recovers, believe me.

NYC - the worst is over. The policy mistakes of the 30s haven't been repeated.

BS - well Ill never argue about job growth as economy recovers, thats a given if not a ways away still, but Im not sure you are in the double dip camp. I think you see just a sluggish recovery, yet no 2nd recession that isnt known until say 2011 or 2012.

Dont forget, NBER is way lagging and so many denied any recession all the way up that announcement. when was it? so if recession began DEC 2007, it likely will be proven over mid 2009, or about now down the road. 18-20 month recession.

but will another come in a few years? that is the question.

nyc10022 you sound like a loon.

This recession is and will be nothing like the great depression.

There could be another recession in a couple years if govt spending gets reigned in and/or inflation spikes up, but it will be manageable.

you're starting to sound like you're trying to convince yourself. 10022 has it exactly right: we are way early in a completely unknown process. the stock market is behaving in its own lunatic fashion---other than that, where is any sign, any sign at all that things are leveling off?

the so called bank profits are an embarrassment to everyone's intelligence. how can they not make money...so GS makes huge profits in quarter when stock market goes way up. what a surprise. (by the way, i don't know how he's gonna do it, but i have faith that Obama will find a way to make sure that money does not get paid out in large amounts---otherwise he gets crucified politically)

Buffett will be proven 100% correct YET AGAIN...all the doubters will be proven 100% wrong.

October 17, 2008
Op-Ed Contributor
Buy American. I Am.
By WARREN E. BUFFETT
Omaha

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.

Why?

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

"you're starting to sound like you're trying to convince yourself. 10022 has it exactly right: we are way early in a completely unknown process. the stock market is behaving in its own lunatic fashion---other than that, where is any sign, any sign at all that things are leveling off?"

Yeah, I used to think that the morons thought they were convincing others. Now, I think you're right, they'll repeat nonsense over and over if only to convince themselves.

No, its not the end of the world. The human race will survive. We'll recover some day. We'll become idiots at some point again, I'm sure.

But some folks are just living in fantasy/denial land.

This is the most major recession in nearly a century. This is a BIG one. And it doesn't just end because of one company earnings report, or one anecdote of someone getting hired or buying a house. We're in the middle of something big... and not only do these things never turn on a dime, but WE'RE STILL DECLINING. GDP is still decreasing - thats why they call it a recession - and decreasing slower is STILL DECREASING. Housing prices are STILL DECLINING.

Yes, we'll see some green shoots. Yes, we'll see a positive factor here and there. But too many of the "positive' factors are positive only in that they tell a slightly less horrible story. And there will be genuinely positive factors even in a depression.

Its not just the denial fantasy. I think many folks just haven't been through a real recession. If 2000 is your model, then thats your problem. We never really "had" the recession... before the aftershock came, we had a new bubble. We never really had the damage. I remember the 80s recession, and that was really bad. And we're beyond that already.

Yes, there will be "positive" things to look at from time to time. But anybody who things we just hit a V, wow, do you really not understand the economy.

And RE, well, wow, you get that Manhattan is trailing the nation... which could be trailing the economy. Incredible that anyone things that we're anywhere but still on the downslope or something that NEVER does a V shape.

I'm not sure if this is lack of intelligence, or intentional ignorance, but folks get that while we do recover from bubbles, the recovery doesn't mean a return to bubble prices!

That is probably the biggest mistake of them all.

We can have all the recovery in the world, but that won't bring the bubble back.

“I skate to where the puck is going to be, not to where it has been.”

That about sums it up for most of the bears here.

If anyone can refute ANYTHING Buffett says in the op-ed piece, I would love to hear it.

nyc10022,
At what point would you consider the green shoot becoming a full blown recovery? What indicators or models are you using?

"“I skate to where the puck is going to be, not to where it has been.”

That about sums it up for most of the bears here. "

Only if one is illiterate.

99% of the bull case for RE over the last few years was past returns.

> If anyone can refute ANYTHING Buffett says in the op-ed piece, I would love to hear it.

I agree with Buffett... which is why I'm in stocks.
And not in RE.

"Today my money and my mouth both say equities."

Are you pretending that the guy really meant buy Manhattan condos?

Wait, is re suddenly correlated with the stock market again?!!? Can't remember where the RE bulls are in the flip flop this week...

Thanks for proving my point.

"At what point would you consider the green shoot becoming a full blown recovery? What indicators or models are you using?"

Recovery is fairly simple... return to pre-crash GDP. I'd probably want a pre-crash employment number as well to truly say "recovery".

"is re suddenly correlated with the stock market again?!!?"

Yes, since stocks going up never warrant posts for you. Stocks are only relevant to the discussion when they go down.

And why did you suddenly start ignoring the point you made?

I love how RE bulls are trying to use a guy saying "buy SOMETHING ELSE" as evidence that they didn't get it wrong.... even trying to lie about the history of things.

There was no bigger fundamental economic mistake then to assume RE would continue to go up.

"Recovery is fairly simple... return to pre-crash GDP. I'd probably want a pre-crash employment number as well to truly say "recovery"."

Until then, you would stay out of NYC REIT? But you'll also risking buying a place at substantially higher prices. Wouldn't you want to be greedy when others are fearful?

NYC - this thread is about the "stock market looking ill", not about NYC RE prices. I'm very bearish on Manhattan condo prices in the short term (1-3 years), however I'm majorly bullish on US equities over the long term (10-50 years). Hence the Buffett article - and I've put my $$$ where my mouth is by putting about 90% of my entire net worth in US stocks (as per my above post).

NYC10022,

The market in many ways is the economy. As earnings and future projected earnings are being priced in every day, you'll get a sense of where the economy is heading. And an improving economy will surely 'HELP' this housing crisis. So, watching the stock market and using it as a barometer for future prices in housing isn't that crazy after all.

I'm bullish on US equities even in the intermediate term - better than cash, better than NYC RE, better than bonds. Although if I lived in Las Vegas I would seriously consider buying RE there.

"The market in many ways is the economy."

You didn't even read the buffett piece... and yet you're still commenting on it.

The market runs AHEAD of the economy. And Manhattan RE trails it greatly.

You have to be pretty blind to miss that gap... its YEARS long.

But, I guess denial with do that to you.

"and I've put my $$$ where my mouth is by putting about 90% of my entire net worth in US stocks (as per my above post)."

I'm not that far from you. Check the threads.... I'm on record saying "buy SSOs" from 8k on down. That has paid off major for me, and I'm nearly back to peak wealth.

I owned some SSO but I sold it in late Feb to buy WFC when the latter plummeted due to the "stress test" hysteria.

The good thing about owning a bank is you borrow money at X and loan it out at X +2%. Then, if people default, you get to keep the collateral. It's a damn good business model if you've got smart management (as WFC does). I plan to own WFC for the next 30 years.

"The market in many ways is the economy."

huh? so, today the market is up through the roof---that means that all is well with the economy?

"And Manhattan RE trails it greatly.
You have to be pretty blind to miss that gap... its YEARS long."

We're in a global economy, this correction was vicious across the board. What used to take years, are now taking months. The same might happen on the recovery. Check out housing prices in U.K. and Asia. Deflationary pleasure are starting to dissipate and making room for an re-inflation trade. Don't fight the fed my friends...

"huh? so, today the market is up through the roof---that means that all is well with the economy?"

No no no...you got it all wrong. You're not seeing the picture correctly. The market is saying, whatever forces that cause this collapse is starting to lift. In order to be 'well' again, you have to start the climb from the absolute bottom. We're climbing.....

tell me that you don't really believe this, right? isn't this precisely what the market did right before it al collapsed?

allz clear... you may commence buying stocks again....while I sell into this rally... Santa, for selfish reasons, I would like to equity mkt to peak around X-mas and when everyone is blithely buying LIC RE @ $500psf (thinking that's the bottom), then I'd like the GOD of 10Ks to trickle out the fact the real economy is the US is heading towards a second leg down... and the shitstorm to commence anew.

Please Santa. You never got me the GI Joe collection when I was 12 and never came thru on the Millennium Falcon... but for this X-mas I'd like dow at 20,000....

OBTW, they got the "new and improved" Millennium Falcon....

The market is not going to collapse again, as it did last fall. Forward looking - and future looks better than previously feared. Ericho is right on this one, CC.

ericho is wrong on NYC RE, though - bubble is still popping - long way to go down, even if market and overall US economy improves.

w67th - there will be no "second leg down" - you are too bearish, sorry. Listen to Buffett (read article above) - stocks will perform better than other asset classes over the next 5-10 years.

Buffett: "If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities."

BINGO - stop overanalyzing, you will miss out...

so...the stock market can continue to go up even as taxes rise (which they have to because we're certainly not going to stop spending) and interest rates go up?

"ericho is wrong on NYC RE, though - bubble is still popping - long way to go down, even if market and overall US economy improves."

I see weakness, but not a "long way to go down". Dynamics of the market has changed. Things are moving in light speed. Let's see what the fall brings....
Right or wrong, i will pump this thread up in 2-3 months.

BS, what makes you so sure that the economy is so much better? we've had 15 years of people funneling into non-productive "production" of RE and all that it has brought. The banks are all "hiding" behind FASB and the gov't is plugging the hole in the dike with Barney Frank's rainbow penis.. .and his penis is no where big enough to stop the next cracks thatz coming (CMBS, consumer loans, 2nd leg down on RE, unemployment, painful re-allocation of US production, inflation (in the longer term), higher taxes, California (the 8th largest economy and joined to the US physically and metaphorically) is paying with IOUs, and all the local/city/state budgets in shambles.

The equity mkt... "thinkz" it has priced in the "severity" of this recession.... it hasn't. Pass the popcorn and I'll take some Gummy Worms with that this quarter....

People like CC and w67th apparently think they are smarter than Buffett - this cracks me up to no end! Do yourself a favor and follow his advice. I have studied Buffett at great length and one thing I've learned about him is that NOBODY is smarter than him when it comes to investing. Period.

what is buffet's personal time horizon at this point?

w67th - if you wait until the near term future is clear, you will be waiting the rest of your life. The near term future is never 100% clear. Long term you can be sure the market will go much higher.

CC - Buffett's time horizon is what it's always been - the rest of his life (and even after since his Berkshire holdings will go to charity). Stop overanalyzing things - just buy when everyone is fearful (i.e., now). It's really that simple.

UD,

I see you are now pushing out your prediction for the next leg down to next year or the year after, or perhaps the decade after that. You crying uncle on our bet?

"Just buy when everyone is fearful (i.e., now). It's really that simple."

forgive me, but isn't today's rally a sign that everyone isn't fearful?

CC - you and w67th seem pretty fearful to me. If people really weren't fearful, the S&P would be at 1500, instead of 930.

...when Buffett wrote the article the S&P was at 1100, now it's 930. So obviously people are more fearful today than when he gave the advice to start buying last Oct.

BSexposer.... I know this too shall pass.... but I just happen to think it's a little premature ejaculatory right now.... pile on the equity, pile on BSex...

And ever hear of "never say never"? My father taught me to ALWAYS question a blindly following person... to think somehow Warren has never made a bad call is to actually go against his own words. He bought HRP at $12, it's now trading at $4.30... should you have blindly followed his call then? LMAO..... good luck with following him into the light at the tunnel... it's Barney Frank w/ a flashlight tied to his penis coming at ya!

Seriously, did anyone see him on Stewart trying to say he took no part in pushing for "Home Ownership"?

w67th - keep waiting until the future is clear to you - when it is, I can guarantee you the S&P will be over 1200. As for blindly listening, should I take advice from you (anonymous msg bd post) or Buffett (indisputably the greatest investor in history)? I think the answer is fairly obvious...

wow...now you're giving us credit for moving the market because of our fear?

yes...I am scared shitless because I believe that many, many people are not willing to acknowledge the depth of the problem. using the medical analogy, I believe that we have a very serious illness that is totally treatable but if ignored, will only get worse and perhaps reach the point of no longer being treatable.

we have a great thing going for a lot of us in this country (myself included) and I for one would like to see it keep going for my sake and my kid's sake. but pretending that things will fix themselves because they always have is not going to get the job done.

CC - you admit that you are basically scared stiff - I think you just proved my point. As far as not willing to acknowledge the depth of the problem - where the hell have you been the past year? Have you bothered to turn on TV or read a newspaper? How is the S&P plunging from 1500 in 2007 to 666 earlier this year not acknowledging serious problems???

But thanks to you and w67th and similar permanent doom and gloomers, I will be buying up my share of American businesses at bargain basement prices and you nervous nellies will miss out. Thanks!

Bsex... so 1200 to 930... that's a great buying opportunity.... where do I get that kind of return... let me at em... let me at em...

Funny my dad always taught me to buy for $1 and sell for $2.... did your dad tell you to buy at $1.2 and sell at $.93? and/or keep buying at $.50 and then $.25 and keep buying and hopefully when you sell it'll be $2..... LMAO... I tell ya, there were plenty of people who had their entire life savings pissed away at this mkt correction and will take years to claw back to just being able to afford cat food....

FOR EVERYONE F"N person who thinks a retirement fund w/ a 12% annual return is a birthrite... well come and get some REALITY! You gain wealth by PRODUCING GOODS AND SERVICES the ECONOMY is willing to PAY FOR! THAT's a retirement plan.... not hoping that you price your f'n "IN" price at the ROULETTE table of equity mkts at the right time... you thinkz maybe BUFFETT HAZ an interest in SEEING THE equity mkt POP? YOU THINK?

CC,
You're wrong. Even the most die hard bulls acknowledge there are problems. It's the severity and duration of this problem that we are debating about. The verdict will be out in another 2-3 quarters.

w67th - I'm sorry, but you are clueless about investing. Perhaps you should dial down the arrogance and adopt a little humility (hint - yes, Buffett is much smarter than you). I'm humble enough to know that ole WEB knows what's going to happen a lot better than a smug know-it-all such as yourself - I will ignore your advice and follow his wholeheartedly - and I guarantee I will be happy with the outcome. You however, will have to content yourself with...cash, I guess (terrible asset over the long term). Good luck.

FYI, I don't think you understood my point on the 930 / 1200 thing. My point was that by the time you feel it's safe to go back into the market, the market will already have risen over 1200 and you will have missed out on a huge amount of appreciation.

I'm not scared stiff... my family is doing GREAT! Financially, we've been never been better off and it's only gonna get better.... (knock on plaster).... Wife and I are planning our great escape to Europe when we are 50, socking away money for the 2 kids trust funds, saving a ton on renting, and laughing at all the douchebags with their "pretend a wealth" lives that have GONE bye bye...forever.... (the RE borkers, flippers, I-bankers, dog walkers to the wealthy, salad shooter sellers, car dealers, etc etc etc).... They are selling so many yachts and slips at my yacht club, I don't know which one to CHOOZE.... but let me tell you one thing that is blatantly clear.... THERE WILL BE ANOTHER LEG DOWN... it may not come in one BIG WALLOP like 08', but it'll be a slow grind for a long time.... they'll write B-School text books in 20 years about the same BS equity mkt that Japan had....

I wish Obama all the luck in the world... but we are just "institutionalizing" kick the can economy for the foreseeable future....

Buy at 1 and sell at 2?
Your dad has taught you to be a greedy person. How bout buy at 1 and sell at 1.1? 10% return in this day and age is GREAT stuff girlfriend.

"I'm not scared stiff... but let me tell you one thing that is blatantly clear.... THERE WILL BE ANOTHER LEG DOWN"

OK, w67th, I take it back, you're not scared at all! LMAO. Get real, dude.

Let me make my point 100% clear - CC and w67th: you are WRONG and Buffett is RIGHT. See how it works?

Might be one of the best trades this decade....

"- The Goldman Sachs Group announced today that it has reached an agreement to sell $5 billion of perpetual preferred stock to Berkshire Hathaway, Inc. in a private offering.
- The preferred stock has a dividend of 10 percent and is callable at any time at a 10 percent premium.
- In conjunction with this offering, Berkshire Hathaway will also receive warrants to purchase $5 billion of common stock with a strike price of $115 per share, which are exercisable at any time for a five year term.
- Goldman’s CEO says “This investment will further bolster our strong capitalization and liquidity position.”"

http://www.istockanalyst.com/article/viewarticle/articleid/2646117

GS closed at 155 today.

it really is amazing how much we are talking past each other.

what is being done about our economy? the stock market falling doesn't correct anything. a tremendous number of people in our society cannot afford the lifestyle that they believe they should have and our politicians have been feeding us crap (from both parties) about the free ride for years.

take one small example and this isn't about the politics or the ethics, just the economics.

we went out and spent $1.5 trillion (give or take) on the Iraq war. money that we didn't have at the time and money that we still don't have. where is the money going to come from to pay for that and the accumulating interest? bond and equity trading by GS? I don't think so.

what's going to happen to all the trillions of retirement dollars that were lost in the last 12 months? for one thing, they won't get spent. that is trillions of dollars of consumption that won't take place because individuals don't have the government's alternative. never mind the human suffering that will be involved---what about the businesses that won't be able to sell goods and services because all that money isn't there to buy them?

ericho - of course it was a great trade - that's what Buffett does, he consistently makes genius decisions. Yeah, he's had a couple bad ones as well, which his critics relentlessly repeat - but that's like saying Federer sucks b/c he's lost 8 matches over his past 23 slams (against 150 wins!).

OMG, CC, just shut up already. We'll work though it. Did the Great Depression destroy America??? Of course not - neither will this. Cheer up for God's sake.

Bsexposer, is it me or do you have a serious problem of condescending bitchiness in your writing?

Bsexposer do you invest in equities as your full time job?

ericho69... that's right... your dad taught you to leverage up 10x and buy a depreciating asset at the Powerhouse.... DOH!

Let me make something clear... the economy will improve.... US will still be a great power.... no Russian tanks will come down B'way.... we just have a difference in opinion as to whether this is the GREAT DEPRESSION 2.0. and how long this slogs thru....BTW... I've been severely hungry before (literally no food in the pantry for weeks) so if I don't get food for a day or two, I don't get phazed ... but my children have never gone a day w/o food, much less 3 hours... so you think if we just had 12% UE (20%U3), an unheard of 30 month recession (we're way past 81'), => then maybe for OUR GENERATION it is the GREAT DEPRESSION? "Food" for thought.....

GOTTA go look at a MORGAN 38...

you're making my point. the answer is to cheer up and applaud warren buffet's trading prowess? every time you say that we made it through the great depression i shudder. that's good news?

w67th - sorry to point out that you are dead wrong. I see it touched a nerve! No, I don't manage money for a living but I've still managed to book a gain overall in equities in my personal portfolio over the past year (mainly by studying Buffett and doing arbitrage), so I must be doing something correctly.

...as of the close of the markets today, I'm up 10.8% over the past 12 months. While the S&P is down 22.5% over the same period. Luckily I keep my humility and realize that Buffett still knows way more than I'll ever know - so I keep buying...

CC and w67th - the great thing about people like you two is that somebody can show you guys absolute proof that the world is round but yet you still claim it's flat. [Hint - the "proof" is the op-ed I posted above]. I mean, seriously, it makes it way to easy for dopes like myself to outperform the markets.

It's an anonymous board.. what kinda wealth are we talking about BSexer? $100K? $1MM, 10?

Ericho's a 3rd rate coffee getter at the shoe shine place outside a 3rd rate bond house... but what about you Sexer? Are you making the mkt move?

Believe me, for selfish reasons.. I want this sucker's rally to pull ahead till July 27th... then don't give a shit till Dec 09', when I need it to be at an all time HIGH.... purely for selfish reasons... but I'm out post 12-09..... It has to do w/ personal estate planning... so forgive me for enjoying the equity ride but not "believing" that ALLZ CLEAR.

And no, you didn't hit a nerve... you actually sound like a bitch in your posts... you can be great as a "live" person... but sound bitchy on the forum... just go ahead and read your post again....

w67th - my personal portfolio is a little less than $1MM, but I'm fairly young, so I expect serious appreciation over the next few decades until I reach retirement age. I make over $200K - not rich, not poor. So, no, I don't move markets - do you? As far as "sucker's rally" and "all clear signals" - I think maybe you watch a little too much CNBC - you should probably read some of Buffett's shareholder letters - that's what real investing is about, not the garbage you see on CNBC / Seeking Alpha / etc. BTW, if you're "out post 12-09", then why are you arguing so much?

Here we go again...

It was going good until w67thstreet entered the ring. You have a habit of ruining threads my girlfriend.

At the end of the day, there was a time to be bearish on the stock market (i.e., late 2007) and a time to be bullish on the stock market (i.e., March 2009). Those who are STILL bearish, such as w67th and CC, will NEVER outperform the market b/c they will wait for the future to be "clear" before committing their $$$ to the market - at which point the market will no longer be a bargain. Buffett is right and they are wrong - be greedy when people are fearful and be fearful when people are greedy. Right now I'm greedy to own as much US equities as I can. Nuff said.

note quote from wikipedia:

"However, even shortly after the Wall Street Crash of 1929, optimism persisted; John D. Rockefeller said that "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again."

He was right...its what came in between that he left out.

It's amazing how anyone can use 1929 as a basis for their trade.
We are not in 1929. Every recession starts and ends differently, this one will be no different.

This recession will prove to be about as bad or slightly worse than the early 1980s recession - UE was well over 10% then also. What it's NOT is a repeat of the Great Depression, with 25% UE.

Sound familiar (except that inflation is already low now)?

"According to Keynesian economists, a combination of deficit spending and the lowering of interest rates slowly led to economic recovery.[citation needed] From a high of 10.8% in December 1982, unemployment gradually improved until it fell to 7.2% on Election Day in 1984.[4] Nearly two million people left the unemployment rolls.[36] Inflation fell from 10.3% in 1981 to 3.2% in 1983.[1][37] Corporate earnings rose by 29% in the July-September quarter of 1983, compared with the same period in 1982. Some of the most dramatic improvements came in industries hardest hit by the recession, such as paper and forest products, rubber, airlines, and the auto industry.[36]"

http://en.wikipedia.org/wiki/Early_1980s_recession

Parts of the country are in a depression. If you are out of work, its definitely a depression. I think we are going to have a 1980's - 1990's Japan like experience.

I don't profess to be a very good investor, and must admit Warren Buffet has quite a track record. But consider the following:

1) The post above is talking about earnings returning in 5, 10 and 20 years - stocks could still fall quite a bit short term and be consistent with Buffet. In fact, I thought I read that Buffet was calling for more stimulus in a recent piece - not sure if this lends or detracts confindence from these predictions above.

2) Can't remember where I read it, but there was a higher than average volume of stock sales by insiders in the last quarter - hardly encouraging short term

3) My recollection of 2007 was that every time there was any bad news digested by the market that caused a drop in the dow, the next Fed meeting lowered rates spurring a knee-jerk mini-rally in equities. At some point interest rates are going to have to GO UP - what will happen to equities then? Not sure when this will happen, but unless interest rates stay zero forever, it MUST happen.

4) I don't remember where I saw this, (probably a post in Aboutready's important news thread), but someone noticed that if one removed the HELOC withdrawls from gdp, then gdp absent the borrowing boom would have been negative for the last three years or so. Remember this when our economy finally stabilizes to a "normal" level (in other words, what "normal" is the market pricing into its valuation assumptions)

In the end, there are probably great trades at any time if you know what you are doing and be one step ahead of the masses. Great environment for traders. But in aggregate, I still think the stock market (short term) has more downside than upside. Maybe not so good for investors. I have to imagine, just like the debates on NYC real estate - the bottom will be when people stop talking about it and it is no longer news...

Lecker..if your'e a girl, can we make out? If not just shake my hands buddy boy....

yes Bsexpert/Ericho69.... it's all about what's "priced into this equity mkt." I say a sharp V shaped economy is priced in, I just don't believe it... and yes I just flushed my toilet and it works... so America will be an amazing place to live for the foreseeable future...

Hate those squatty things....

"w67th - there will be no "second leg down" - you are too bearish, sorry. Listen to Buffett (read article above)"

Yes, it already happened. Right after buffett said "buy now". Down was abotu 8k... then it went to 6500. Now we're talking about a third leg down. THe more people say "it won't happen", the more likely it is.

Oh, there you are yepyepper, my little doggie!! I was worried sick about you, were you hanging out with the stray mutts or cruising around town in your Porsche (did everyone know he has a Porsche??) harassing the cats? Please come home to west 67th street so we can apply your hemorrhoid cream.

Look, it's painfully obvious that none of you think Buffett is actually smarter than you when it comes to investing. I marvel at your breathtaking arrogance. After all, all the guy did was turn his paper route money, earned as a teenager by delivering the Wash Post, into a fortune worth tens of billions of dollars solely through investing. I'm sure sure all of you have accomplishments that easily top that one! So of course you guys are wiser than him (*snicker*).

Well, I will let you geniuses all bask in the luminous glow cast by your brilliance - I will be busy buying cheap stocks. We shall see in the end who was right - you guys or Buffett. Good luck!

Put your money where your mouth is BS, buy some BRK.A. Its "cheap" at only $90K - down from its 52 week high of $147K. If he's so brilliant, explain that, but then if you think he's so great then buy his portfolio of investments rather than pick your own brilliance.

Buffet is one of the greatest investors that ever lived. Period.
Why even argue this point? Look at what he has done over the past 5 decades.

tom has an excellent point....why bother confusing yourself? just bet with the master.

"Well, I will let you geniuses all bask in the luminous glow cast by your brilliance - I will be busy buying cheap stocks. We shall see in the end who was right - you guys or Buffett. Good luck!"

LOL - 8 weeks have passed - early indications are (SURPRISE!) that Buffett was right - YET AGAIN. It's highly amusing to read old posts and people's predictions - highly amusing indeed.

BTW, I do own BRK - it's about 9% of my portfolio. Cheers...

OK, enough gloating - now back to work. Check back at the end of the year, when Buffett will STILL be correct. Later.

"yes Bsexpert/Ericho69.... it's all about what's "priced into this equity mkt." I say a sharp V shaped economy is priced in, I just don't believe it"

Looks like you were dead wrong 9 weeks ago, w67th - but don't let hurt your confidence, dude. I'm sure you're right TODAY. HAHA. See ya.

"Sorry, very busy today.

Sideways trading over the next few weeks. Expect S&P 880 then off to the races. S&P 1,000 by year end.

Mark this post.

Thank me later, and please stop talking behind my back. I'm watching you..."

I posted this 10 weeks back..talk'n about nailing it.....
Low for the pullback was 879...

Like I said, ericho, it's highly amusing to see how people's predictions have turned out. Some have been on the mark, while others...not so much. But don't expect certain people to admit that they were 100% wrong. LOL.

I was 100% wrong, on the issue of the market pullback at least. early is wrong.

but i got out before the crash, and since then, as i've said, i would not have been able to follow your or the oracle's advice. i don't have the stomach for much other than bonds and equities.

if only warren would start a no-load mutual fund. i'm a big fan of WWWD. but what he would really do, sometimes recently he's been a little slippery in the press.

Any one of you picked up byddf back in Spring? It's a Chinese battery company (manufacter's of Iphone battery) that Buffet ended up buying 10% of the company. When the news broke, it was traded at 2 dollars....it's now over 8 bucks. Not bad for 4 months of work.

"I was 100% wrong, on the issue of the market pullback at least."

There is a god after all.

I am lovin' things. My SSOs (I told folks to buy when the dow was in the low 8s, 7s, and 6s, check the threads) are now up 70-150%... and RE still in the toilet.

Feels good to be right.

"but let me tell you one thing that is blatantly clear.... THERE WILL BE ANOTHER LEG DOWN... it may not come in one BIG WALLOP like 08', but it'll be a slow grind for a long time...."

Still waiting, dude. LMAO.

be careful, BS.... or you might be one of those guys who was "still waiting" for the first crash the month before it happened. Not to mention, the quote you are giving says "slow grind".

I'm stock bullish, but, yeah, I'm still worried there is a chance that happens. Hell, we're still down 25%...

"At the end of the day, there was a time to be bearish on the stock market (i.e., late 2007) and a time to be bullish on the stock market (i.e., March 2009). Those who are STILL bearish, such as w67th and CC, will NEVER outperform the market b/c they will wait for the future to be "clear" before committing their $$$ to the market - at which point the market will no longer be a bargain. Buffett is right and they are wrong - be greedy when people are fearful and be fearful when people are greedy. Right now I'm greedy to own as much US equities as I can. Nuff said"

S&P has gone from 903 to 1297 since I first posted in this thread telling people to follow Buffett's advice and buy equities. That's 44% up. I hope at least some of you took Buffett's advice...

Bsex, indeed, but where to put that money now? Keep it in equities? Not looking great for the near future, it seems.

I don't know how to predict what happens in the near future as far as stock prices are concerned. I do know that in the long term, the stock market goes up. That's how you get rich - invest for the long term. Personally, I keep almost all of my $$$ in equities, except for $$$ I will need in the next 6 months. GL.