Is the stock market going to tank?

[Yossarian]

If the next one happens, it's going to be more Benny Profane style.
More of a prolonged slumpage as opposed to an outright monthly tankage, although it might very well start with monthly tankage and then just maintain with slow seepage for a while.

Either way, volatility is here to stay...VIX what?

[Benny Profane]

Hey, I eat my bran every morning. Daily dumpage in the BP household. And I'm not even addressing that seepage issue. ewwwwww.

[Chris Knight]

WheeeeeeeeeeeeeEEEEEEEEeeeeeeeEEEEeeeeeee.
DJIA back up to nearly 13,900.

[jrbd]

Remember, the stock market often dips significantly in October of odd-numbered years. My guess is that it has something to do with annual sales cycles, and doesn't happen in even-numbered years due to upcoming Congressional elections.

[Spats]

Do you think we should base our currency on a rock dug from mines in hostile countries? Floating currencies has been the fuel for expansion and globilazation.

Which is what has got us into the mess we are now in.

Yes, gold is just a rock. But it's a rock that the government can't destroy the value of by creating more rocks out of thin air. That has always been the point.

Inflation is a tax, not only on your income, but on your savings as well. It punishes savings and rewards debt. The inevitable result is larger and larger cycles of boom and bust, as debt builds unsustainably and then collapses. Keeping money supply growth in check means no big unsustainable booms like the past twenty years, but also no big collapses like the 1930s, 1970s, or the one we're heading into.

[4matic]

Looks like another record high for INDU and multiyear for Nasdaq. $80 oil, $1.42 Euro, $750 gold, and housing in the tank... Who'd have thought..?

[MeatPuppet]

Looks like another record high for INDU and multiyear for Nasdaq. $80 oil, $1.42 Euro, $750 gold, and housing in the tank... Who'd have thought..?

...past performance is no guarantee of future results...

[Brock Landers]

...past performance is no guarantee of future results...

wait...Ive heard that somewhere...

Any idea on the price of oil with winter coming up? Does the need for oil in the northeast (as well as the rest of the "cold states") generally shoot the per barrell price up?

[GrizzlyFD]

Crude oil and refined product (gas and distillates) have independent market prices. If you noticed $80/barrel oil (more than at any point last year) with expensive but not crazy gas prices now (much less than last year) that should point out the related but completely independent nature of the two.

Usually crude fetches a higher price during the summer than winter, mostly because of driving and the need for gasoline and jet fuel (diesel) for planes. That need decreases during the winter months and while heating oil (diesel) demand increases, it doesn't generally pull up the price of crude. Crude oil was priced around $50/barrel in January of this year.

The problem with all this is the gas companies and refineries dictate the price and we suck it up and give them out $$$ because we "need" it. If the refinery is operating at 80%, producing less oil than it can, but fetching a higher price, there's no incentive to produce more and drive the price down. Same with OPEC and other crude oil producers. If crude is cheap, they simply refine less driving the price of the refined goods up and make more of a profit off of it. If crude is expensive, same game, starve the market a little and drive the price up. The only thing keeping gas/diesel prices down now is a larger than year ago supply and no storm activity in the gulf.

/end rant/

With that said, heating oil should be as high or higher pricewise than it has been. Same for natural gas, even though both are trading lower on the market than in the past. What I'm hoping for is cheap gas so trips up north don't kill me this winter.

[bucbanzai]

Looks like another record high for INDU and multiyear for Nasdaq. $80 oil, $1.42 Euro, $750 gold, and housing in the tank... Who'd have thought..?

The market climbs a wall of worry..............

[MeatPuppet]

Any idea on the price of oil with winter coming up? Does the need for oil in the northeast (as well as the rest of the "cold states") generally shoot the per barrell price up?

One would think so, but if you look back at the last two years, the price of heating oil actually dropped during wintertime. If the winter is milder than expected the price will drop. If colder than expected the price tends to rise. So it's more about expectations and the weather than anything else.

Fundamentals really aren't my thing though. As Cono Este said in an earlier post in this thread; Don't predict, react! That's good advice, I try to follow it.

[SkiCougar]

it's not going to tank, but it will be flat for the rest of the year.

the housing market is still in a whole, there's no money to lend, energy prices are going up(as well as food staples) and DC is still on a spending spree despite what the donkeys said before the election and the rhinos said after.

despite what the businessmen say, this market is treading water. any other bumps could throw us back into another mild recession.

[Ripzalot]

well, maria barfaroma was right - at the worst part of the dip she called 14000 before the end of the year. i just didnt expect it so soon. glad i just sat tight.

[CUBUCK]

it's not going to tank, but it will be flat for the rest of the year.

the housing market is still in a whole, there's no money to lend, energy prices are going up(as well as food staples) and DC is still on a spending spree despite what the donkeys said before the election and the rhinos said after.

despite what the businessmen say, this market is treading water. any other bumps could throw us back into another mild recession.

Another mild recession? When was the last mild recession?

[Endlessseason]

??

What I really want to know is who in the US has experienced only 0.08% inflation as the government reports?

[Spats]

??

What I really want to know is who in the US has experienced only 0.08% inflation as the government reports?

No one.

The CPI is deliberately falsified so that the government can attempt to inflate its way out of the Social Security shortfall that will otherwise completely bankrupt us or leave the dollar worthless (as in 0 CAD/Euro).

Social Security, and many other big benefits, are indexed to the official rate of inflation. By creating massive real inflation but lying about the rate of actual inflation, the government can decrease the value of its future obligations.

Greenspan, Bernanke and the Fed have created this inflation by lowering interest rates to a value that keeps money gushing into the economy. This enriches the Wall Street bankers who make billions from shuffling money from one place to another, while impoverishing the middle classes who are on a fixed salary by inflating away the value of that salary and any savings you have accumulated.

The end result will be an Argentina-style destruction of the middle class. It doesn't happen all at once...it's a slow destruction. No matter how hard you work, you can't quite keep pace with inflation (and, soon, bank failures). Yes, it will happen here in America, and it is happening right now.

The only candidate for President whose policies can slow or stop this is Ron Paul. Voting for anyone else is fighting over the arrangement of deck chairs on the Titanic...it just won't matter in the long run. Giuliani will bankrupt us with the Iraq war, Hillary will bankrupt us with an ill-conceived and inefficient version of national heath care that benefits existing large insurance corporations and delivers health care only as a side effect. Only Ron Paul has had the balls to stand up, tell us all what is happening, and tell us how he will fix it.

[Tourette Dude]

But: Is the US, stock, market (let assume for sake of discussion the DJIA in particular) going to tank (let's say, drop more than 500 points) in the next six months?

Most likely.

[Ireallyliketoski2]

Buy some SDS or SJH and enjoy the ride.

[Benny Profane]

??

What I really want to know is who in the US has experienced only 0.08% inflation as the government reports?

The CSI, incredibly, does not include housing costs (except energy). So the whole run up, and now crash, will not be reflected in it. But, really, what kind of costs have you seen rise dramatically recently?

[liv2ski]

WheeeeeeeeeeeeeEEEEEEEEeeeeeeeEEEEeeeeeee.
DJIA back up to nearly 13,900.

Dooh...Closer to 13000 today. If it breaks to 12700, shit could hit the fan to the downside.

[Tourette Dude]

Bump...

Yen carry-trade is unwinding. Correlations breaking down. Asian markets are taking a big hit right now. Monday could get interesting.

[skiaholik]

I think we may test lows of August but I think we'll stay just above that. I also don't think we're going into a recession (as defined as two consecutive quarters of negative growth) in the next year. Decelerated growth yes, but negative growth consecutively? nope.

Regarding the carry trade unwinding this article is prettyinformative.

The global economy is too strong and with the US at full employment its going to take more than the potential of not even 1% of the mortgage market to default. Ya there's going to be less public to private M&A and there's less liquidity now, but shit hasn't hit the fan quite yet. IMHO.

[Ireallyliketoski2]

FXP looks good for the short term too.

[Tourette Dude]

I think we may test lows of August but I think we'll stay just above that. I also don't think we're going into a recession (as defined as two consecutive quarters of negative growth) in the next year. Decelerated growth yes, but negative growth consecutively? nope.

Regarding the carry trade unwinding this article is prettyinformative.

The global economy is too strong and with the US at full employment its going to take more than the potential of not even 1% of the mortgage market to default. Ya there's going to be less public to private M&A and there's less liquidity now, but shit hasn't hit the fan quite yet. IMHO.

The credit issues have spread far beyond the mortgage market. The systems foundation is based on easy access to the debt markets. Don't discount systemic risk/counterparty risk. It sounds like you already do, but if not just follow the trends in the debt, currency and commodities markets. Hopefully I'm just overreacting, it wouldn't be the first time.

[Spats]

I think we may test lows of August but I think we'll stay just above that. I also don't think we're going into a recession (as defined as two consecutive quarters of negative growth) in the next year. Decelerated growth yes, but negative growth consecutively? nope.

Don't look now, but we're already there. If you calculate inflation the way we used to, before we took housing and energy out of the index (i.e. most of the household budget) and introduced pure fiction like "hedonic adjustments", you get about 10% inflation, meaning real GDP growth has been negative for some time now.

Besides, most of the economic activity since 2001 has been fake, based entirely on HELOCs, not actual productivity. You can spend $10K on a credit card advance, or work a job and spend $10K of your income: the short-term economic effect is the same, but in the long-term, there has to be underlying productivity to sustain spending. We don't do productivity, we outsource it.

In the next few years we are going to find out exactly what the real American economy looks like. Hint: unless we elect Ron Paul, the answer is "Argentina".