Dow 9500 ... Where we go from here...

[StageLeft]

Originally posted by: Evan

Originally posted by: Skoorb

that is, as younger citizens pay off debt (and a little spend less) older Americans will retire and spend more (i.e. their retirement portfolios/savings). We have a huge Baby Boom population retiring within the next decade or so, and so I feel it will at least balance itself out.

Baby boomers are woefully underprepared, as a whole, for retirement. More of them will see a marked decrease in purchasing power and quality of life than an increase from those just waiting to start buying new sets of golf clubs the day they retire.A staggering half of households headed by 50-to-59-year-olds have $10,000 or less in their 401(k) accounts

Why are you the least bit surprised, 401K's have a tax shelter limit of 15,500, at that point there isn't a ton of benefit versus simply diversifying your portfolio outside a 401K. Besides, we're in a horrid recession. Just 13 months ago this was nowhere near the case, so I'm not sure what your point is. You can make anything look bad in a recession and great in a boom. The average numbers say Baby Boomers are going to spend a lot more than they are now.

And most retiring Americans don't keep the bulk of their savings in 401K accounts to begin with. Homes are by far their #1 asset, which you can do a variety of things with (refinance, reverse mortgage, etc.) to consume.

EDIT: Btw, I'd like to see the study but your link is completely devoid of sources, FYI.

Baby Boomers Retiring in Record Numbers With Average Retirement Savings of Only $88,000

July 31, 2007, New studies find shortfalls in retirement savings are significant in most age and income groups.Among middle-income households, 40 percent are at risk of having to downsize, while 53 percent of low-income households are likely to fall short.

 

[Dissipate]

Originally posted by: Evan
And most retiring Americans don't keep the bulk of their savings in 401K accounts to begin with. Homes are by far their #1 asset, which you can do a variety of things with (refinance, reverse mortgage, etc.) to consume.

EDIT: Btw, I'd like to see the study but your link is completely devoid of sources, FYI.

People are going to retire on the equity in their homes. That's a good one! :laugh:

 

[First]

Originally posted by: Skoorb

Originally posted by: Evan

Originally posted by: Skoorb

that is, as younger citizens pay off debt (and a little spend less) older Americans will retire and spend more (i.e. their retirement portfolios/savings). We have a huge Baby Boom population retiring within the next decade or so, and so I feel it will at least balance itself out.

Baby boomers are woefully underprepared, as a whole, for retirement. More of them will see a marked decrease in purchasing power and quality of life than an increase from those just waiting to start buying new sets of golf clubs the day they retire.A staggering half of households headed by 50-to-59-year-olds have $10,000 or less in their 401(k) accounts

Why are you the least bit surprised, 401K's have a tax shelter limit of 15,500, at that point there isn't a ton of benefit versus simply diversifying your portfolio outside a 401K. Besides, we're in a horrid recession. Just 13 months ago this was nowhere near the case, so I'm not sure what your point is. You can make anything look bad in a recession and great in a boom. The average numbers say Baby Boomers are going to spend a lot more than they are now.

And most retiring Americans don't keep the bulk of their savings in 401K accounts to begin with. Homes are by far their #1 asset, which you can do a variety of things with (refinance, reverse mortgage, etc.) to consume.

EDIT: Btw, I'd like to see the study but your link is completely devoid of sources, FYI.

Baby Boomers Retiring in Record Numbers With Average Retirement Savings of Only $88,000

July 31, 2007, New studies find shortfalls in retirement savings are significant in most age and income groups.Among middle-income households, 40 percent are at risk of having to downsize, while 53 percent of low-income households are likely to fall short.

Yeah, those statistics aren't really that bad considering people live a lot longer than they did 30 years ago and have to be better educated to retire early. You're living well into your 80's these days while you were living into your 70's just a couple decades ago.

 

[First]

Originally posted by: Dissipate

Originally posted by: Evan
And most retiring Americans don't keep the bulk of their savings in 401K accounts to begin with. Homes are by far their #1 asset, which you can do a variety of things with (refinance, reverse mortgage, etc.) to consume.

EDIT: Btw, I'd like to see the study but your link is completely devoid of sources, FYI.

People are going to retire on the equity in their homes. That's a good one! :laugh:

Why are you still posting after getting pummeled? :laugh:

 

[Dissipate]

Originally posted by: Evan
Why are you still posting after getting pummeled? :laugh:

Me getting pummeled? You are the one who refuses to admit your heroes ruined the economy and stole trillions of dollars.

 

[First]

Originally posted by: Dissipate

Originally posted by: Evan
Why are you still posting after getting pummeled? :laugh:

Me getting pummeled? You are the one who refuses to admit your heroes ruined the economy and stole trillions of dollars.

Yet in this very thread you wimp out of citing specifics to support said claim. Shocking! :laugh:

 

[HeXploiT]

Originally posted by: dmcowen674

Originally posted by: jpeyton
DOW 7500?

I know some talking head predicted it a few weeks before the election.

Can't remember who it was.

I said 7500 by the end of the year (well it's early) and bottoms at 3600.

Only 3900 to go.

End of the year? How about by the end of next week.
Also where do you get 3600?
Below 7500 there is no president and no chart to work with.
Anything below 7500 is a wild ass guess.

 

[StageLeft]

Originally posted by: Evan
Yeah, those statistics aren't really that bad considering people live a lot longer than they did 30 years ago and have to be better educated to retire early. You're living well into your 80's these days while you were living into your 70's just a couple decades ago.

That makes it worse. They will bleed their paltry funds dry and be reliant on social security. The baby boomers, as a whole, will realize a decreased standard of living when they retire. They did not save enough, did not invest enough, and the money isn't there for them.

End of the year? How about by the end of next week.
Also where do you get 3600?
Below 7500 there is no president and no chart to work with.
Anything below 7500 is a wild ass guess.

Dave pulled it from the same spot he pulls all his predictions: from the air in between medications at the clinic.

 

[Thump553]

As a parent and a baby boomer myself, I feel compelled to point out that quite a few of us squandered our money on paying for kid's college educations (at 100K per kid, minimum) instead of saving for our future retirement. When we went to school thirty years ago $1000 a semester for everything (including room and board) was very common-but our facilities were a lot less swank-more like an army barracks than the semi-luxury condos that are so common now.

 

[HeXploiT]

Originally posted by: Thump553
As a parent and a baby boomer myself, I feel compelled to point out that quite a few of us squandered our money on paying for kid's college educations (at 100K per kid, minimum) instead of saving for our future retirement. When we went to school thirty years ago $1000 a semester for everything (including room and board) was very common-but our facilities were a lot less swank-more like an army barracks than the semi-luxury condos that are so common now.

Not only should you feel compelled but you should understand that their heads were being filled with bullshit.
There's a reason it's so easy to get into good schools these days and it doesn't necessarily mean your child is a genius.

 

[First]

Originally posted by: Skoorb

That makes it worse. They will bleed their paltry funds dry and be reliant on social security. The baby boomers, as a whole, will realize a decreased standard of living when they retire. They did not save enough, did not invest enough, and the money isn't there for them.

Well no, they'll just work longer. The longer you live the longer you have to work. You could retire at 55 maybe 40 years ago because your expected death was 20 years from that point at most. Today you're expected to live into your 80's (depending on whether you're a man or woman), and as a result you can't retire at 55, otherwise you're looking at 30 years of no steady income unless you've got a great pension, have a gov't/military pension, etc.

 

[StageLeft]

Originally posted by: Perry404

Originally posted by: Thump553
As a parent and a baby boomer myself, I feel compelled to point out that quite a few of us squandered our money on paying for kid's college educations (at 100K per kid, minimum) instead of saving for our future retirement. When we went to school thirty years ago $1000 a semester for everything (including room and board) was very common-but our facilities were a lot less swank-more like an army barracks than the semi-luxury condos that are so common now.

Not only should you feel compelled but you should understand that their heads were being filled with bullshit.
There's a reason it's so easy to get into good schools these days and it doesn't necessarily mean your child is a genius.

I'm sure he's happy to hear that. Really, though, BS or not, that toilet paper we call degrees gets job. I learned a lot of crap and some no so crap but it seems to have worked out.

Kids are expensive. I don't know Thump's situation, but many baby boomers squandered their money on more than an education, including a lot of useless crap.

 

[Budarow]

Originally posted by: ultra laser
When was the last time the market was this volatile?

Early 1930's...great depression. This 1 will be worse.

 

[Budarow]

Originally posted by: Skoorb

Originally posted by: HendrixFan

Originally posted by: Evan

Please cite the statistics that show most Americans are in bad debt. If you can't then GTFO, because your assumption is asinine at best. Individual consumers aren't the problem in the current meltdown, sub-prime had very little (like 5%) to do with this situation.

http://www.creditlawnetwork.co...es-1-trillion-dollars/

"Just 12 short years ago in 1996, Americans were only in 500 billion dollars worth of credit card debt. Now, only 12 years later, we have doubled that number with an additional 500 billion dollars in debt."

This was back in June, I know I read articles at the start of November talking about the explosion in Aug, Sep, and Oct in credit card debt, so that number is getting worse. That is why there is an industry wide choppage in existing credit lines, and a drastic reduction in new credit extended.

Now most Americans aren't in bad debt, but the amount of bad debt is increasing, spiking here these past few months.

A week or so ago I found a contemporary stat and it's a hair under $1Trillion now. It has been growing quite quickly, particularly in the last year or two as well.

I heard on CNBC last night there's $880B worth of credit card debt + students loans in default right now. I think that means payments are 90+ days late?

Shorting the stock market is the only way to "earn" for retirement (i.e., trading ETFs in an IRA). If you plan to leave your 401k money in stocks, and the market continues to go down, your shorting activity may at least off-set your loses (goes both ways though). Keep in mind you can still loose money in a down market while shorting stocks. Even these ETFs are strange and seem to track their benchmarks VERY loosly.

I'm hoping SRS falls flat on it's arse so I can get back in at a reasonable price AND before the REITs go broke over the next year.

 

[First]

^ Shorting is pretty dangerous even for seasoned investors though, and I wouldn't short in a market this unpredictable frankly. Your liability is potentially unlimited, after all. Though I do know someone who shorted Lehman in August. He made out. :laugh:

 

[Dissipate]

Originally posted by: Budarow

I'm hoping SRS falls flat on it's arse so I can get back in at a reasonable price AND before the REITs go broke over the next year.

I recommended buying SRS back on October 24th when it was $178 a share, now it is up to $216.

 

[StageLeft]

Shorting the stock market is the only way to "earn" for retirement (i.e., trading ETFs in an IRA). If you plan to leave your 401k money in stocks, and the market continues to go down, your shorting activity may at least off-set your loses (goes both ways though). Keep in mind you can still loose money in a down market while shorting stocks. Even these ETFs are strange and seem to track their benchmarks VERY loosly.

You could move it into bonds.

I got an email from my dad last night. They had avoided asking their retirement management how much of a hit they'd taken but finally had to call him after Thursday's rout. Turns out their fund has lost only 14% (as of the end of Oct, it would be a bit worse now). They're set to retire in several years, so much of it would have been bonds anyway, but whoever is managing their fund should get a medal.

 

[Budarow]

Originally posted by: Skoorb

Shorting the stock market is the only way to "earn" for retirement (i.e., trading ETFs in an IRA). If you plan to leave your 401k money in stocks, and the market continues to go down, your shorting activity may at least off-set your loses (goes both ways though). Keep in mind you can still loose money in a down market while shorting stocks. Even these ETFs are strange and seem to track their benchmarks VERY loosly.

You could move it into bonds.

I got an email from my dad last night. They had avoided asking their retirement management how much of a hit they'd taken but finally had to call him after Thursday's rout. Turns out their fund has lost only 14% (as of the end of Oct, it would be a bit worse now). They're set to retire in several years, so much of it would have been bonds anyway, but whoever is managing their fund should get a medal.

MY PREDICTIONS
As more and more peeps seek "protection" from a sinking stock market, U.S. government treasuries should do well UNTIL the stock market gets near the bottom (~DOW 4-5k, the DOW will eventually hit a bottom at ~3k).

Once the stock market no longer gets much attention (i.e., volatility sharply DECREASES and it doesn't move up and down much day to day), the attention will turn to the U.S. debt which will likely be ~$12-14T in 2 years. This will be BAD attention since the larger the debt goes, the more peeps will discuss a U.S. default. That's right a U.S. DEFAULT. This should cause interest rates on U.S. treasuries to skyrocket (to include all other interest rates) and bond prices to TANK.

Gold will hit $2,500 to $3,000 per ounce within 2 years and the value of the U.S. dollar will plummet. The U.S. dollar sinking assumes the other major governments in the world (EU, Japan, China, etc.) aren't in the exact same boat as the U.S. They may be, but maybe not since they don't have near the debt of the U.S. (at the moment). This could rapidly change though given the depression we're in/headed for in the near future.

Gold will still skyrocket due to fear alone. I'm hoping gold sinks to ~$550/ounce over the next few months due to deflation of commodities, but it may just continue to rise as it has over the last week. Gold will be VERY hard to time in the near future and picking a bottom.

Preserving capital and even making some money shorting the stock markets is possible; however, preventing your "money" from sever loses due to inflation (U.S. dollar sinking) is another MAJOR challenge.

We are ALL going to need a lot of LUCK to maintain even a semblance of our current lifestyle over the next 5-10 years. Truely, we ALL need to get used to the idea of having LESS money, possibly more FREE time and less "toys" (hopefully, we'll have shelter, food, water, utilities and reasonable health care).

 

[StageLeft]

Originally posted by: Budarow

Originally posted by: Skoorb

Shorting the stock market is the only way to "earn" for retirement (i.e., trading ETFs in an IRA). If you plan to leave your 401k money in stocks, and the market continues to go down, your shorting activity may at least off-set your loses (goes both ways though). Keep in mind you can still loose money in a down market while shorting stocks. Even these ETFs are strange and seem to track their benchmarks VERY loosly.

You could move it into bonds.

I got an email from my dad last night. They had avoided asking their retirement management how much of a hit they'd taken but finally had to call him after Thursday's rout. Turns out their fund has lost only 14% (as of the end of Oct, it would be a bit worse now). They're set to retire in several years, so much of it would have been bonds anyway, but whoever is managing their fund should get a medal.

MY PREDICTIONS
As more and more peeps seek "protection" from a sinking stock market, U.S. government treasuries should do well UNTIL the stock market gets near the bottom (~DOW 4-5k, the DOW will eventually hit a bottom at ~3k).

Once the stock market no longer gets much attention (i.e., volatility sharply DECREASES and it doesn't move up and down much day to day), the attention will turn to the U.S. debt which will likely be ~$12-14T in 2 years. This will be BAD attention since the larger the debt goes, the more peeps will discuss a U.S. default. That's right a U.S. DEFAULT. This should cause interest rates on U.S. treasuries to skyrocket (to include all other interest rates) and bond prices to TANK.

Gold will hit $2,500 to $3,000 per ounce within 2 years and the value of the U.S. dollar will plummet. The U.S. dollar sinking assumes the other major governments in the world (EU, Japan, China, etc.) aren't in the exact same boat as the U.S. They may be, but maybe not since they don't have near the debt of the U.S. (at the moment). This could rapidly change though given the depression we're in/headed for in the near future.

Gold will still skyrocket due to fear alone. I'm hoping gold sinks to ~$550/ounce over the next few months due to deflation of commodities, but it may just continue to rise as it has over the last week. Gold will be VERY hard to time in the near future and picking a bottom.

Preserving capital and even making some money shorting the stock markets is possible; however, preventing your "money" from sever loses due to inflation (U.S. dollar sinking) is another MAJOR challenge.

We are ALL going to need a lot of LUCK to maintain even a semblance of our current lifestyle over the next 5-10 years. Truely, we ALL need to get used to the idea of having LESS money, possibly more FREE time and less "toys" (hopefully, we'll have shelter, food, water, utilities and reasonable health care).

I like your attention to detail but see a problem in a couple of points, though I do think the national debt will easily be $12T in two years, no argument there.

1) US is not at risk of defaulting (at least within the next few years). It is still a AAA credit rating, one of the few if only countries with that. It is at risk of losing it, but defaulting, no. The US national debt doesn't even match its GDP (yet--it will very soon at this rate; < 5 years), which is better than quite a few countries (though certainly worse than many).

2) The other governments ARE in the same boat, some a bit better, some worse, so it's not longer that likely that the US alone will see a toilet paper currency.

3) Actually your last point I agree with. Some of us already don't have that many toys. I don't live a frugal lifestyle, but for my income I certainly am better than most. Of course, most are so off the deepend I have to wonder if I'm merely better than average but still worse than I should be. Maybe I will find out. In any case, the standard of living will certainly fall for some, as they were merely mortgaging their future prosperity for impulsive garbage now.

 

[TheSlamma]

Originally posted by: Budarow
We are ALL going to need a lot of LUCK to maintain even a semblance of our current lifestyle over the next 5-10 years. Truely, we ALL need to get used to the idea of having LESS money, possibly more FREE time and less "toys" (hopefully, we'll have shelter, food, water, utilities and reasonable health care).

I've always been living with less (at least compared to the typical American). I've always had the mentality "Work first, play later"

I agree though.. many people are going to be screwed and massive lifestyle changes for them. Honestly with people rolling around in their "Hollywood" SUV's and their 8 maxed out credit cards, I can't seem to locate any pity for these people. I'm aware some people are just fucked and can't help it, I do wish the best for them, but I don't feel they are the majority sadly, I think the gluttons are the majority.

 

[LegendKiller]

Originally posted by: Budarow


I heard on CNBC last night there's $880B worth of credit card debt + students loans in default right now. I think that means payments are 90+ days late?

This sounds *WAY* too high to me.

 

[TheSlamma]

Originally posted by: LegendKiller

Originally posted by: Budarow


I heard on CNBC last night there's $880B worth of credit card debt + students loans in default right now. I think that means payments are 90+ days late?

This sounds *WAY* too high to me.

Americans are amazing people when it comes to spending money they don't have.

 

[LegendKiller]

Originally posted by: TheSlamma

Originally posted by: LegendKiller

Originally posted by: Budarow


I heard on CNBC last night there's $880B worth of credit card debt + students loans in default right now. I think that means payments are 90+ days late?

This sounds *WAY* too high to me.

Americans are amazing people when it comes to spending money they don't have.

You don't understand. That's way out of line with the amount of CC and student loan debt out there. Total US Consumer debt is about 2.5TR. That includes cars, credit cards, student loans, among others.

Credit cards are about 800-900bn, student loans are far less than that, maybe 500bn. You're telling me that 880bn out of 1.4bn is in default?

The statistic sounds like a typical CNBC bullshit throw-away scare comment.

 

[Budarow]

Originally posted by: LegendKiller

Originally posted by: TheSlamma

Originally posted by: LegendKiller

Originally posted by: Budarow


I heard on CNBC last night there's $880B worth of credit card debt + students loans in default right now. I think that means payments are 90+ days late?

This sounds *WAY* too high to me.

Americans are amazing people when it comes to spending money they don't have.

You don't understand. That's way out of line with the amount of CC and student loan debt out there. Total US Consumer debt is about 2.5TR. That includes cars, credit cards, student loans, among others.

Credit cards are about 800-900bn, student loans are far less than that, maybe 500bn. You're telling me that 880bn out of 1.4bn is in default?

The statistic sounds like a typical CNBC bullshit throw-away scare comment.

Anyone else able to shed some light on this issue?

 

[First]

Originally posted by: Budarow

Originally posted by: Skoorb

Shorting the stock market is the only way to "earn" for retirement (i.e., trading ETFs in an IRA). If you plan to leave your 401k money in stocks, and the market continues to go down, your shorting activity may at least off-set your loses (goes both ways though). Keep in mind you can still loose money in a down market while shorting stocks. Even these ETFs are strange and seem to track their benchmarks VERY loosly.

You could move it into bonds.

I got an email from my dad last night. They had avoided asking their retirement management how much of a hit they'd taken but finally had to call him after Thursday's rout. Turns out their fund has lost only 14% (as of the end of Oct, it would be a bit worse now). They're set to retire in several years, so much of it would have been bonds anyway, but whoever is managing their fund should get a medal.

MY PREDICTIONS
As more and more peeps seek "protection" from a sinking stock market, U.S. government treasuries should do well UNTIL the stock market gets near the bottom (~DOW 4-5k, the DOW will eventually hit a bottom at ~3k).

Once the stock market no longer gets much attention (i.e., volatility sharply DECREASES and it doesn't move up and down much day to day), the attention will turn to the U.S. debt which will likely be ~$12-14T in 2 years. This will be BAD attention since the larger the debt goes, the more peeps will discuss a U.S. default. That's right a U.S. DEFAULT. This should cause interest rates on U.S. treasuries to skyrocket (to include all other interest rates) and bond prices to TANK.

Gold will hit $2,500 to $3,000 per ounce within 2 years and the value of the U.S. dollar will plummet. The U.S. dollar sinking assumes the other major governments in the world (EU, Japan, China, etc.) aren't in the exact same boat as the U.S. They may be, but maybe not since they don't have near the debt of the U.S. (at the moment). This could rapidly change though given the depression we're in/headed for in the near future.

Gold will still skyrocket due to fear alone. I'm hoping gold sinks to ~$550/ounce over the next few months due to deflation of commodities, but it may just continue to rise as it has over the last week. Gold will be VERY hard to time in the near future and picking a bottom.

Preserving capital and even making some money shorting the stock markets is possible; however, preventing your "money" from sever loses due to inflation (U.S. dollar sinking) is another MAJOR challenge.

We are ALL going to need a lot of LUCK to maintain even a semblance of our current lifestyle over the next 5-10 years. Truely, we ALL need to get used to the idea of having LESS money, possibly more FREE time and less "toys" (hopefully, we'll have shelter, food, water, utilities and reasonable health care).

Sorry, but you have to be a bit loony to honestly believe the Dow is going to hit 3K or that the U.S. is anywhere near default. For one the overall U.S. market is already below 13 P/E, so for it to sink to about 3K you're talking below 6 P/E. No sensible reason for stocks to hit that low short of a massive terrorist attack. You're also flatly wrong that countries like (as one example) Japan won't be in the same boat as the U.S, particularly since Japan is already in recession and has a massive debt just like the U.S.; in fact, Japan is in far more debt than the U.S., about twice their annual GDP. We're at about 80% of our annual GDP.

Gold won't touch $2500-$3000 anytime in the near future either, that's just jumping the shark. At this point shorting is wildly dangerous, flatly stupid really, to recommend to the average investor. And as far as ETFs go, because it trades like a stock whose price fluctuates daily, it does not have its NAV (net asset value) calculated every day like a mutual fund does. Its disadvantages are numerous; you have to pay commission when buying and selling (most open end mutual funds and index funds are no-load funds, you buy and sell at NAV). Narrow niches undermine the broad safety of index funds, so these niche funds are more suited for short-term speculation than long term investment, and therefore many are designed for speculators who wish to bet on short term movements. Any short-term lunacy should be avoided, basically stick with blue chip equity mixed with a more conservative ratio of bonds and commodities.