Dow Loses Another 250. Points to Worst Recession in 50 Years

[leveymg]

There was an excellent diary by New Deal democrat up at DKos just as the blood-letting got started yesterday morning. http://www.dailykos.com/story/2007/9/7/84434/35396

What now spooks many is the prospect that the Dow's dizzying rise of about 2000 points since mid-March, an erection that has no particular connection to the health of the underlying economy, and it's subsequent retreat, may be the last stage before a massive sell-off in U.S. equities markets.

One of NDd's many interesting points concerned the buzz at the Federal Reserve made by Edward Leamer, an UCLA economist.

Leamer demonstrated that almost every recession since the end of World War II has been preceded by a slowdown in housing construction and secondarily in major consumer purchases like cars.

By Leamer's criteria, this country is headed straight down into the steepest recession in a half century. What really makes Leamer's paper stand out is that he says this is happening despite massive, escalating defense spending.

Something is sucking the U.S. economy down into a pool of debt. The "cure" is killing the patient.

***

Yesterday's 250 point selloff on the Dow was sparked by a perfectly dismal jobs report. There were fewer jobs in August than those counted the month before, the first actual decline in four years. By the end of the trading day, the Dow had lost almost 2 percent, down to 13,113, making the total market losses about seven percent off the mid-July peak of 14,021. The downturn reflects a spreading awarness about record foreclosures and that some underwriters for corporate bonds are encountering problems raising cash. It also reflects an emerging consensus about a wider debt crisis that isn't restricted to sub-prime mortgage lending.

A Crash of the Dow, or Just a Bear Market, Could Lead to a Severe Recession

Considering the very sick state of most of the rest of the US economy, it is not inconceivable that the Dow Jones Industrial Index could fall another 30 percent to around 9750 in the coming year. That would return the market to where it was two years ago.

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=djia&sid=1643&o_symb=djia&freq=1&time=9

That may seem a dire prediction, but it's still a bullish outlook considering what happened to the Nikkei Stock Index after the Tokyo land bubble burst in 1990. If we experience anything of the same magnitude of loss, the Dow would fall to about 4000. If the Dow were to lose as much value as the NASDAQ did seven years ago, the value of Blue Chips would be about one-third of their current values.

Seen through the eyes of a stock analyst, the present shape of the Dow, particularly its Real Estate Investment Trust (REIT) index, has the classic "head and shoulders" that preceeded the collapse of the Tokyo Nikkei stock index in 1990 and the Dow in 1929.



The Nikkei crash followed a blowout in the Japanese real estate bubble, also an eerie parallel with what has happened to overinflated real estate in many areas of the U.S.



As the real estate market overheated, Japanese speculators shifted their money out of overleveraged commercial and residential holdings into stocks, but that market toppled when the central bank decided to raise interest rates to prevent a new wave of inflation. See, http://www.cepr.net/index.php?option=com_content&task=view&id=608&Itemid=45

The Nikkei lost fully half its value in just a few months, and eventually shed fully 75 percent of its value, and stayed depressed for 15 years, dropping from a peak of 40,000 to less than 10,000.

As we seen above, the shape and duration of the 1929 Great Crash was virtually identical to the Nikkei crash in '90. The more recent 1997 Asia crisis saw a similar cascading collapse of national currencies and equity markets in a number of countries from Russia to Thailand across the Pacific to the Philippines. http://www.imf.org/external/pubs/ft/fandd/1998/06/imfstaff.htm. The 2000 NASDAQ crash that followed, shows the same classical formation:



A collapse of the Dow, even if not as severe as these other "great crashes" could easily result in an extremely severe recession. As Mark Wesibrot of the Center for Economic and Policy Research explains: http://www.cepr.net/index.php?option=com_content&task=view&id=608&Itemid=45

The collapse of the stock market bubble caused a recession in 2001, followed by a jobless recovery of unprecedented weakness in the labor market. We are still experiencing the fallout, including the aftermath of a corporate crime wave currently working its way through the courts. Millions lost much of their retirement savings; the government's latest household survey of employment reported last week showed that people over 55 accounted for an incredible 103 percent of jobs gained over the last year.

Economists at the International Monetary Fund -- which to its credit has been warning about our housing bubble for some time -- have estimated that its collapse could have as much as twice the negative impact on the U.S. economy as did the stock market crash in 2000-2002.

As the blowout of the NASDAQ in 2000 showed, if U.S. equities markets are primed to collapse, they will, and true crashes tend to follow a classic profile for bubble markets, as did the dot.com blowout.



Trading curbs would just spread out the process, but true crashes follow the same dynamics. Liquidity problems, of the type that are appearing in the NY money markets, are a common factor that accompanies all really serious market drops.

The Fed can drop rates again and again, but if nobody wants to trade cash for equities, American investors might as well buy mattress futures.

Worse, if we follow Leamer's reasoning, the cure for the stock market's woes is more defense spending, which to be proportional would require the biggest American war in a half-century.

Dangerous times, indeed.

Also available in orange: http://www.dailykos.com/story/2007/9/7/17632/96361
________________________________
2007, Mark G. Levey

[EVDebs]

1. A true Liquidity Trap

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

We can lower interest rates but going much lower and we'll be like Japan was awhile ago and be into negative rates.

Bush will do a 'helicopter drop' but only to Wall St, not Main St.

[leveymg]

7. That's right. The connection between inverted yield curves and

liquidity trap was discussed: http://www.dailykos.com/comments/2007/9/7/84434/35396/82#c82

Tell me if I'm wrong, but an inverted (3+ / 0-)
curve indicates that the Fed has essentially run out of room to continue dropping rates as a stimulus without risking inflation?.

Is the "conundrum" you described above the same thing that happened in Japan following the blowout of its real estate and equities markets in the 1990s? There was little or no growth despite negative real interest rates. The only thing that kept the Japanese economy going was the dominance of a few Tokyo-listed global corporations in a couple key export sectors, cars and consumer electronics.

Looks like we're headed in the same or worse direction as Japan, and the UK before it -- flat growth, a declining dominance of global financial markets, a hollowing out of the corporate sector, huge debt burdens, and a real threat to the Dollar as the world's reserve currency.

by leveymg on Fri Sep 07, 2007 at 07:26:12 AM PDT

<[br />
inverted yield curves/Japan
As to inverted yield curves: if the US were running surpluses as it was 50 years ago, the Fed could cut rates from 5.25% back down to 1% if necessary with no problem. Because of huge trade and budget deficits, however, every day we go hat in hand to foreigners to please buy our bonds. If the Fed tries to ignite another financial boom, those foreigners might think our money is a little less than rock solid -- so they may insist on being paid higher interest rates to hold especially longer-dated paper. That's the conundrum

On Japan, I haven't had the time to educate myself yet on that, although I understand that interest rates and inflation were already low before their long recession began. It is one point where I seriously diverge from bonddad. He thinks low rates mean no problem, I say US consumers continue to need ever lower rates in order to refinance debt, hence, problem.

Cheers.

"When the going gets tough, the tough get 'too big to fail'."

by New Deal democrat on Fri Sep 07, 2007 at 08:28:10 AM PDT

< Parent | Reply to This >

Looks like Euro moneymarkets are becoming a
viable, liquid and low-risk alternative to T-bills, anyway, so it's only a matter of time until long-term rates have to go up, and inflation with it.

The effect of a sell-off of Dollars is sure to act as a multiplier of that inflationary effect, so it really doesn't matter if the Fed determines to hold the line on inflation - it can't, anymore.

by leveymg on Fri Sep 07, 2007 at 09:22:52 AM PDT

< Parent | Reply to This >

[EVDebs]

15. Japan scenario is possible since the dollar is devaluing

Much like Nixon's post Vietnam war 'strategery' of letting the dollar devalue, inflation took off because the war had to be paid for; Dr K had Iran buy up surplus US war materiel to keep things crawling along for the M/I complex, while home equities soared in CA along with property taxes and the 'hidden tax' of inflation. Dr K then counsels the Shah to raise oil prices to pay for the US arms shipments. Big business hollowed out the US manufacturing industries-- and the tax code promoted this activity-- while the world was awash in Eurodollars and Petrodollars.

The value the Japanese thought they had turned out to be less than they bargained for since it was all dollar denominated. As long as oil is paid for in dollars, that get recycled into the financial system and can return to the US, there's still a chance for recovery.

However,

""In a thinly-veiled rebuke to the US Federal Reserve, the BIS said central banks were starting to doubt the wisdom of letting asset bubbles build up on the assumption that they could safely be "cleaned up" afterwards - which was more or less the strategy pursued by former Fed chief Alan Greenspan after the dotcom bust.

It said this approach had failed in the US in 1930 and in Japan in 1991 because excess debt and investment built up in the boom years had suffocating effects...

"Sooner or later the credit cycle will turn and default rates will begin to rise," said the bank.

"The levels of leverage employed in private equity transactions have raised questions about their longer-term sustainability. The strategy depends on the availability of cheap funding," it said.""

That may not last much longer.



BIS warns of Great Depression dangers from credit spree
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/25/cncredit125.xml&ref=patrick.net

[leveymg]

38. Read up on the "Plaza Accord". Jim Baker got the Japanese to agree to a 25% write-off of

the US-denominated debt instruments they were holding. After Tokyo had it's arm twisted in 1985, the Dollar was allowed to drop by that amount versus the Yen and most other major currencies. http://www.epinet.org/content.cfm/briefingpapers_bp131

Of course, the result was the over-inflation of Japanese markets, and we know what happened in 1990.

I doubt the Japanese and Chinese and all the rest would be quite so accomodatingly self-sacrificial this time. We simply don't have the power and influence we had twenty years ago to impose our own terms,and frankly, the rest of the world thinks we have it coming.

Yet, the nut cases around Bush43 proceed as if they had The Power. Catastrophic miscalculation. The result when such off-the-scale delusions hit the pavement are horrifying. That's how most wars start. Those who start wars based in illusions usually end up losing everything. Such illusions can be exported. But, that's another story. See, http://www.scoop.co.nz/stories/HL0612/S00194.htm

[Mnemosyne]

2. Excellent comp of info, Mark. We are so

screwn.

I could actually afford to live here when I bought my tiny house in 2004, now I'm always behind.

[Cassandra]

3. "Something is sucking the U.S. economy down into a pool of debt"

Something? Try Bush cutting taxes to the rich and encouraging wages to stagnate from at least 3 different directions (outsourcing, immigration, union-busting). This is the result of a credit card mentality to running the economy; a free-lunch, push it off a couple of generations and only on to wage earners, trickle-down-offshore-only mentality.
Defense spending doesn't help as much as other industrial spending would and only if it's spent in this country anyway.

[EVDebs]

17. You nailed it. Underlined, exclamation point ! nt

[Cassandra]

34. I'm such a fucking genius...

I wish I knew what to do with all this brilliance. I've seen this coming for years and still don't know how to protect myself.

[EVDebs]

53. Whilest basking in your glow I came across Kondratieff Waves

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

We're way past due, check 'winter' in this,

http://www.kwaves.com/kond_overview.htm

[Warpy]

4. The Dow has been flat for the last 6 years

and, if you index it to inflation, it's fallen considerably. If you factor in the fall in the dollar, the fall has been a precipitous one. In other words, it has already occurred.

This new recession (or depression) will be the result of massive, uncollectable consumer debt, exactly as it was in the early 30s.

As housing prices slide, even after all those ARMs reset, people are going to find themselves in upside down debt, with the debt greater than their assets. There will be no way to leverage more debt, and we know that wages aren't going anywhere soon.

The consumer economy is two thirds of the larger economy. When people have inadequate wages and nothing to leverage debt against, they stop spending and the consumer economy collapses.

That is the inevitable outcome of purely supply side economics.

Until and unless it dawns on our brilliant leaders that demand side economics are at least as important as the supply side, this economy remains in extreme risk.

[leveymg]

8. That's essentially correct - the 15% gain in the DOW this year is a bubble,

a primary source has been a shift of money out of real estate, just as occurred in Japan in 1990.

[tom_paine]

22. And when you consider the massive weakening of the dollar under New Hitler

the Dow, even at it's highest, was actually haemmorhaging value.

[Cassandra]

35. The Soviet Union believed in supply-side industrial policy.

Did them no end of good, right?

[madrchsod]

5. both these statements are dead wrong...

"...this is happening despite massive, escalating defense spending.....

the cure for the stock market's woes is more defense spending...."


military spending generates 0 wealth.

if we took even half the money we spend on the military and applied that to public works we would`t be in the problem we are in now...

[leveymg]

9. I agree. That's exactly my point.

It's people at the Fed and some economists who have been drinking Kool-Aid about the impact of massive, sustained defense spending and tax cuts.

[EVDebs]

19. Military spending generates fanastic fortunes for those connected

Please read Kevin Phillip's Wealth and Democracy. We simply need to revise the tax code and not let accumulated wealth become so concentrated that it threatens democracy. This is the fate of the now extinct Spanish empire, the Netherlands empire, the British empire, and now the US economic empire. The sooner we realize it the better.

The funny thing is, this is in the wealthiest's own self-interest !

[whistle]

6. Not a recession but a full blown economic meltdown in which the means

...for an economic recovery will be wiped out: production capacity of U.S. dismantled; currency and savings diminished to worthlessness from hyperinflation; banking system collapse; food supply shocks and famine; unemployment will jump to staggering levels of 30% to 50%; and on and on.

[EFerrari]

10. I don't really understand this but a caller to WJ this morning

said her father was retired from the Central Bank and that he and his friends are predicting not recession but a terrible depression, that they are scrambling to move or convert their assets.

[leveymg]

13. If you have convertible assets, that's not an unreasonable response.

eom

[Mandate My Ass]

29. Convert to what exactly?

Gold? I think that went through the roof when the Dow plunged.

My little nest egg is all I have. I worked too hard for it to let it evaporate into thin air. :-( Thanks in advance for any suggestions you can provide.

[nadinbrzezinski]

49. Euros, and gold

that seems to be the answer

[DemReadingDU]

37. Curious, convert to what?

I got out of stocks last fall, and moved my nest egg to what is considered safe - a bond index fund, money market fund, and CD's. But if the dollar becomes worthless, what to do?

Move my nest egg to a secret swiss bank account? I don't think my nest egg is large enough.

Gold is too expensive to buy, maybe buy silver?

What about moving nest egg to a money market fund based in Euros?

How risky are annuities that guarantee a specific yearly percentage? I have talked with a few finance professionals and all want to sell me some form of annuity. But they seem to be based on stock funds. I just don't see how an annuity can be guaranteed if the entire economy tanks.

[EVDebs]

23. See post #19 Even those wealthiest 1 and 1/2 percenters know the political solution

is the only way out of this mess: a reallocation of wealth in order to sustain our democratic system. If they don't allow for it, as FDR (a wealthy patrician with common sense) did, then their GOP and any party they side with will go down the tubes.

Unless they opt for the 'Marie Antoinette'/Reign of Terror "solution" of course which will be open class warfare. Guess what, they're hopelessly outnumbered.

[leveymg]

27. I think a lot of them expected that we'd have taken over Saudi Arabia

and/or Iranian oil fields by now. Remember the promise that the Iraq invasion would "pay for itself"?

The neocon Mid-East plan was a desperate high-risk gamble that failed.

[EVDebs]

52. Rummy and Cheney just tweaked some old plans off DoD's shelf

and renamed "Saudi Arabia" to "Iraq"

Document reveals Nixon plan to seize Arab oil fields
'70s embargo sparked 'last resort' measure, says British memo

Lizette Alvarez, New York Times

Friday, January 2, 2004
http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2004/01/02/MNG8G427D61.DTL

Matches the plot to Three Days of The Condor too, except that the NYTimes wouldn't print as we now find out !

[leveymg]

12. Let's see, where else has that happened?

Honestly, don't think it's going to be that bad. But, the historical lesson is clear:

[defendandprotect]

39. Capitalism and democracy are not synomous . . .. but brankrupting Treasury can submerge democracy --

Thanks Bush -- !!!

[cliss]

11. Beautiful thread, great images.

Thanks for the visual graphics. They did it for me. It's pretty obvious: those lines are PARALLEL.

Anyone who's in the business has GOT to know: we're on the edge of the abyss, looking down.

Recommended for a beautiful description on an ugly subject.

[leveymg]

14. This is my visceral response to the subject:

[slipslidingaway]

16. Thanks K&R It especially important for those looking to retire in

the near future whose incomes have slowed. Even if the housing and stock markets stay relatively flat for the next 5+ years, there may not be any significant improvement in one's retirement money, so protecting what you do have is necessary.

The S&P was pretty much flat for many years in the late 60's, 70's and into the early 80's. Those hoping for large gains from the market either had to wait a long time or just start cashing in for retirement. Of course back then many pension plans were of a different nature, the company invested the money and then paid you. Many pension plans have been switched to self-directed plans where people get a limited choice of funds, unfortunately people were given a choice and not the knowledge or range of products available to the big guys. Most did not have precious metal funds or short funds when gold broke up through the long term trendline and the equities markets displayed topping patterns in 2000.

S&P 500 Index (1960 - 2006 Weekly)
http://stockcharts.com/charts/historical/spx1960.html

Thanks for your post, staying invested in equities over the long haul if you are young and your retirement portfolio is small is probably the correct path, but it may not be the correct path for everyone.

Some technical analysis of the markets is not unhealthy, although many would like people to believe that.

[SoCalDem]

18. Two "masking agents" have been at work this time around

1. credit given to high-risk borrowers
2. equity loans handed out like Halloween candy..

In earlier crashes/recessions, middle to lower echelon people did not have high debt from credit cards, and most even had some savings. the ones who owed on a house, probably had affordable house payments, so if they did not lose their jobs, they could still hang on to their houses.

With the re-fi frenzy and equity-trolling that's gone on for a decade or so, many people are upside-down on their houses, and walking awy becomes easier when that happens.

Many people have been supplementing their incomes by using credit cards and by siphoning money from their homes.. Once those two sources of "income" dry up, they are NOT going to be able to spend spend spend and keep our economy "growing"..

It's really sad, that the US economy is almost entirely consumer driven.. as people tighten their belts to conserve their own money, they inadvertantly drive the stake deeper into the heart of the economy, making things worse..

[tom_paine]

20. You forgot the Plunge Protection Team

Just how many tax dollars were stolen and diverted to this cause of keeping the circus afloat until Clown Hitler leaves, to be replaced by Fred ClownHitler?

[leveymg]

21. The essential problem is income inequity - rise at top taking from the rest - a bubble

And, that's been the cornerstone of economic policy since 1980.

Time to reverse the controls -- well past time.

[slipslidingaway]

28. Wish I could find the information on how the pension plans

were cashing out of equities in the late 90's while the public was buying in their retirment accounts. Just a wealth transfer :(

[SoCalDem]

32. watch for the NEXT big transfer..upwards.. Retiree's health care costs n/t

[slipslidingaway]

42. They will find some way to keep that from happening or at least

soften the blow.

[EVDebs]

25. And the US consumer economy is what, around 25% of world GDP

If we stop buyin' then the rest of the world starts dyin' is the scenario.

[fasttense]

30. The only solution seems to be to get jobs

and more jobs and better paying jobs to the US right away. That would take a responsible government. It ain't going to happen.

[SoCalDem]

31. We need to go back to what worked..

Local people constantly recycling the money they made at their jobs..back into their local economy, thus creating the NEED for more or sustained jobs..

As long as our workers are paid shit-wages, and the use that money to buy poisonied plastic crap from big-box stores, their money goes OUT of their communities..

Money used to cycle and recycle through the community... now it's sent offshore..just like the jobs..

we are now an economy where we all pay each other to service each other in some fashion..producing very little of actual useful products.. whne the chain is broken, it all falls apart..people CAN cut their own hair, clean their own clothes, entertain each other, wash their own cars, look after their own kids (especially when Mom loses her job)..

[Cassandra]

36. Republicans no longer wish to invest in America.

We are a mature market and there are better profits elsewhere.

[slipslidingaway]

43. "Going With The Flow?

A few snips from the August commentary>>

http://contraryinvestor.com/2007archives/moaug07.htm

"Going With The Flow?

…You probably saw that the 2Q GDP report came in relatively strong, as was absolutely no surprise at all. Inventories were rebuilt relative to the contraction in 1Q, which is academically additive to the GDP calculation. Government spending was also quite strong, especially defense spending. No surprise at all. Non-residential real estate construction also added to the strength in the headline number. But what stood out quite strongly is that personal consumption expenditures slowed dramatically, up a whopping 1.3% on an annualized basis. For those who have read our work over the years, you know that one of our primary macro themes is that the US economy is not running on a traditional business cycle, but rather on a credit cycle. These days that thought can in a sense be extended to the global economy in that the growth rate in monetary aggregates among the major industrialized countries across the planet has been running double digits.

If indeed we are anywhere near correct in this thematic view of life, data in the 1Q Fed Flow of Funds statement demands attention and monitoring as we move forward. Getting right to the point, the issue that stood out to us like a sore thumb in reviewing this material was what sure as heck appears to be change at the margin in terms of the character of household leverage. Who knows, maybe we’re making a big deal out of nothing, but what we are seeing are the very first signs of change in the direction of household leverage acceleration that until now has been consistent and intact for many years, if not decades in a good number of cases.

A while back now, we penned a discussion questioning just what the baby boom generation was going to do for money/liquidity as they entered retirement years. Our observation at the time in reviewing household balance sheets was that households held plenty of real estate and qualified plan assets (profit sharing, IRA, 401(k)), but very little in the way of cash. We questioned for how much longer would households, and especially the baby boomers, be able to continue leveraging up as retirement years for the boomers were fast approaching. And lastly, we pointed to the fact that throughout a good portion of their adult lives, the boomers had learned to embrace asset inflation for their “savings” activity, evidenced by appreciation in stocks and real estate, and the lack of traditional savings as would be calculated by the savings rate.

So let’s start with a very brief review of household asset inflation circumstances as perhaps being the genesis responsible for this change at the margin that we are seeing in recent quarterly numbers. As always, the charts tell a big story, so we’ll try our best to keep the commentary short. First, the big overview of asset inflation. What we’ve done in the chart below is to calculate the percentage of real estate and equity price appreciation responsible for household net worth growth by decade over the last half century plus. As you can see, increasingly gains in real estate and stock prices have accounted for ever greater amounts of total household net worth growth since the 1970’s. And importantly we need to remember that the baby boomers as a group really began to come of age in the late 1970’s/early 1980’s. In essence, what they’ve known in their adult life and have thoroughly enjoyed is household asset class inflation."


FWIW September article

http://contraryinvestor.com/mo.htm

"As you’ve probably heard in consensus commentary lately, many a pundit has stated, “there isn’t going to be a recession as long as unemployment is low and payroll growth continues”. In deference to these consensus thinkers, let’s have a look at what we believe are leading indicators for employment trends and the “messages” they are currently sending. For without question, if you don’t believe trouble in mortgage credit markets will impact consumer spending quite negatively, maybe trouble in payroll employment will do the trick. Let’s get right to it."

[NMDemDist2]

24. K&N, I am so glad DU educated me and I have moved to protect

my assets and reduced debt to almost zero

[nadinbrzezinski]

51. which is defintely one way to protect yourself

zero debt is ideal

(And the credit cards hate my type)

[NMDemDist2]

56. no credit cards, no mortgage

just 22 months of car payments left :woohoo:

[Viva_La_Revolution]

26. "Recession" my ass!

DEPRESSION is more like it. :(

[backwoodsbob]

33. aint life great

thank God I've got a total debt of less than 40,000 right now.

[defendandprotect]

40. Resurrect New Deal and this time, ensure economic democracy -- not Capitalism --

The elite have once again shipped our wealth out of the country --
We need to nationalize our natural resources --
And end any trade agreements that do harm to US labor --

"All that does harm to labor is treason."
Abe Lincoln

[defendandprotect]

41. How is TV handling this -- whose financial reports are you watching???

Just put TV on -- advertisement, tennis, advertisements, golf, soap operas, advertisements . . . .

C-span is covering USHR hearing on America's bridges -- that's good.

[kineneb]

44. investment tip for the poor and near-poor: buy non-perisable foodstuffs

I know it sounds odd, but for those of us who lack "liquidity" (cash, savings, retirement funds, insurance policies), there is no harm in stocking up your pantry with canned goods and other non-perishable foods (pastas, etc). It may beat going hungry when the manure hits the ventilator. And the states won't count your pantry against your asset allowance for Medicaid and other programs.

We don't have any investments, other than the house in which we live. Everything else got spent down so Hubby could get health care. Sigh. Good luck to all of you have to deal with the stock market, etc.


edit to add: the graphs are great! They visualize what all those numbers really mean. And damn, the patterns are so similar. It may get ugly out there.

[high density]

45. Who knows. We can't predict the future

Finding graphs that may line up in some anecdotal way does not equal a prediction, either. Comparing the 2007 market that has immediate news delivery and computerized trading with that of the 1920s market makes no sense.

[Marrak]

46. Goof -bag B*oush at the wheel...

and asleep! "let's see ...where be tem wapaons of mass distinction...Morgages! oh shi*t

:nuke:

[fed-up]

47. k/r for the evenng crowd nt

[nadinbrzezinski]

48. But, but, but... many of us have been noticing this

and the bulls keep laughing and telling us that we have no clue

I hope to eat humble pie when all is said and done, but I don't think so

[BlooInBloo]

50. End Days!! END DAYS!!!!!!!!!!!!!

:rofl:

[Historic NY]

54. Market correction or giant flushing sound...............

you can't buy goods if your wages are down, you can't pay mortages when you shouldn't have had one in the first place, this artificial market thrives on cheap money and the piper is now demanding its due. I was in Pa. 2 weeks back and saw signs all over for people to rent a new house.

[Nevernose]

55. "Defense" spending is bullshit, not bullish

If you want government spending that helps the American economy, go for medicine (which helps businesse AND workers) or infrastructure.

The infrastructure thing pisses me off the most. Yes, many or even most of our roadways were started as boondogles to "the folks back home." But that kid of infrastructure, along with rural electricity and water, public education money, and about a hundred other things, are the things that have ultimately ENRICHED us.

[Eurobabe]

57. The DOW's erection is propelled by Viagra n/t