Oh Boy it's starting..... Black monday dawns again.

[theeedude]

BTW, here is how your favorite stocks are trading in Frankfurt.
http://money.cnn.com/data/premarket/frankfurt/?

 

[LegendKiller]

Originally posted by: Mavtek3100
Craig many here will find JFK crazy as he wanted to get rid of the Fed too 🙂

http://mcadams.posc.mu.edu/weberman/jfk.htm

 

[Fern]

Personally, I think it's the wrong time to invest overseas because of a weak dollar and high foreign stock prices.

IMO, one should invest overseas when the dollar is strong and the foreign market is depressed. I ascribe to the old fashioned "buy low sell high" philosphy.

The US stock market is starting to look good as an investment. But I'd wait until after the Nov elections. A Dem election often causes lower stock prices.

Fern

 

[LegendKiller]

Originally posted by: Craig234

Originally posted by: palehorse74

Originally posted by: Mavtek3100
When the economy tanks it's interesting to see some come out to cheer.........

Scary.

It's called 'looking on the bright side of life'... I learned it from Monty Python!

Then again, anyone with half a clue will also tell you that drastic downturns in the economy can be just as lucrative as upswings IF you know what you're doing and are among the few who have enough capital to exploit the situation and aren't locked into investments linked to the economy.

Most of us non-bots also recognize recessions as a healthy and natural cyclical occurrence in our markets, so we're probably not as nervous as you'all...

Those who fail to learn from history are doomed to repeat it.

48 years ago, there was a debate in the US, with the republicans arguing that recessions were cyclical, and could not be avoided, and JFK argued they could be much reduced with government activity to stimulate the economy at the right times. It was widely considered JFK was proven right when he accelerated billions of planned spending, and the universally predicted recession didn't arrive.

I'm not saying it's that simple that all recessions are just Republican laziness and ignorance not to prevent them, but I am saying that cliches and platitudes like the above are harmful.

I'll quote JFK again:

The great enemy of the truth is very often not the lie -- deliberate, contrived and dishonest -- but the myth -- persistent, persuasive and unrealistic.
- JFK

So, you take on example in history where it worked. What about the other dozen examples where it utterly failed? Care to explain how massive spending the mid/late 80's didn't stave off the the late 80s recession?

 

[Craig234]

Originally posted by: LegendKiller

Originally posted by: Craig234

Originally posted by: palehorse74

Originally posted by: Mavtek3100
When the economy tanks it's interesting to see some come out to cheer.........

Scary.

It's called 'looking on the bright side of life'... I learned it from Monty Python!

Then again, anyone with half a clue will also tell you that drastic downturns in the economy can be just as lucrative as upswings IF you know what you're doing and are among the few who have enough capital to exploit the situation and aren't locked into investments linked to the economy.

Most of us non-bots also recognize recessions as a healthy and natural cyclical occurrence in our markets, so we're probably not as nervous as you'all...

Those who fail to learn from history are doomed to repeat it.

48 years ago, there was a debate in the US, with the republicans arguing that recessions were cyclical, and could not be avoided, and JFK argued they could be much reduced with government activity to stimulate the economy at the right times. It was widely considered JFK was proven right when he accelerated billions of planned spending, and the universally predicted recession didn't arrive.

I'm not saying it's that simple that all recessions are just Republican laziness and ignorance not to prevent them, but I am saying that cliches and platitudes like the above are harmful.

I'll quote JFK again:

The great enemy of the truth is very often not the lie -- deliberate, contrived and dishonest -- but the myth -- persistent, persuasive and unrealistic.
- JFK

So, you take on example in history where it worked. What about the other dozen examples where it utterly failed? Care to explain how massive spending the mid/late 80's didn't stave off the the late 80s recession?

I answered that - there's a difference between the Keynesian approach taken by Kennedy specficially aimed at timing spending to reduce the recessions, and the sort of wild, aimless, huge debt increases under Reagan and other presidents. Frankly, I'm unaware of any presidents who had the JFK approach to the issue - you can't just point at some spending and say 'see, they tried the same thing and it didn't work'; and even if you could identify such attempts, since the intent is to reduce the effects, you couldn't simply show there were some economic problems at the time - after all, the coming problems are the reason for the policy - you have to determine whether the efforts reduced the effects that would have occurred without them, which is not easy. The strong consensus predicting the recession with JFK made it an especially useful test case for his policies, just as the 1993 tax increase on the top 2% of American, given the universal predictions of economic doom it would bring from the right, made it an excellent test of their ideology (and devastated it).

I said in my post it's not as simple as 'spend and you can prevent recession'. If you want to actually understand some of the policy, try reading JFK's top economic advisor, Nobel Laureate Paul J. Samuelson, who wrote about economics, or read more generally on the Keynesian policies.

A quick google found the following interesting tidbit on a later application of the policies, which also happens to take on the 'myth' about Reagan's economic recovery.

I think it's useful for showing how the facts are more complicated than the myths that mislead so many people:

All this was accompanied by a growing crisis in monetary policy at the Federal Reserve. Traditionally, the Fed has fought inflation by contracting the money supply, and fought unemployment by expanding it. In the 60s, the Fed conducted an expansionary policy, accepting higher inflation in return for lower unemployment. It soon became clear, however, that this strategy was flawed. Expanding the money supply created jobs because it put more money in the hands of employers and consumers, who spent it. But eventually businesses learned to expect these monetary increases, and they simply raised their prices by the anticipated amount (instead of hiring more workers). The result was that the Fed gradually lost its ability to keep down unemployment; the more money it pumped into the economy, the more businesses raised their prices. As a result, both inflation and unemployment started growing together, forming a twin monster that economist Paul Samuelson dubbed "stagflation."

Stagflation happened to reach its peak on Carter's watch, spurred on by the 1979 oil shock. How Carter can be blamed for a trend that began a decade and a half earlier is a mystery -- and a testimony as to how presidential candidates often exploit the public's economic ignorance for their own political gain.

However, Carter did in fact take a tremendously important step in ending stagflation. He nominated Paul Volcker for the Chairman of the Federal Reserve Board. Volcker was committed to eradicating stagflation by giving the nation some bitter medicine: an intentional recession. In 1980, Volcker tightened the money supply, which stopped job growth in the economy. In response to hard times, businesses began cutting their prices, and workers their wage demands, to stay in business. Volcker argued that eventually this would wring inflationary expectations out of the system.

The recovery of 1981 was unintentional, and with inflation still high, Volcker tightened the money supply even more severely in 1982. This resulted in the worst recession since the Great Depression. Unemployment in the final quarter of 1982 soared to over 10 percent, and Volcker was accused of the "cold-blooded murder of millions of jobs." Even high-ranking members of Reagan's staff were vehemently opposed to his actions. Congress actually considered bringing the independent Fed under the government's direct control, to avoid such economic pain in the future. Today, economists calculate that the cost of Volcker's anti-inflation medicine was $1 trillion -- an astounding sum. But Wall Street demanded that Volcker stay the course, and that may have been the only thing that saved him.

In the late summer of 1982, inflation looked defeated, so Volcker sharply expanded the money supply. Once as high as 14 percent in 1981, the Fed's discount rate fell from 11 to 8.5 percent between August and December 1982. Within months, the economy roared to life, and took off on an expansion that would last seven years. Because the recession had been so deep, and the number of available workers so large (with not only laid-off workers waiting to return to work, but also a record number of women seeking to join the workforce), the recovery was guaranteed to be long and healthy.

Interestingly, Volcker was transformed from villain to hero after the victory over inflation. His reputation and integrity were so unquestioned that when his term as Chairman came up for renewal, Reagan renominated him with overwhelming popular approval. Another interesting tidbit is that although Volcker's intentional recession was a classically Keynesian approach to combating inflation, he did so under the name of "monetarism". (The policies recommended by the two theories converged at this point.) Milton Friedman, the creator of monetarist theory, and other conservatives were pleased that the Fed had finally converted to monetarism. However, they were outraged in late 1982 when Volcker threw off the cloak of monetarism and openly returned to Keynesian policies for expanding the economy. Most economists now accept that the Fed was not monetarist at all during this period, and that the label was merely political cover for drastic but necessary action.

From this link.

Oh, while I'm on the topic of myths, most Republicans think of the height of democrats' irresponsible spending as the Geat Society under LBJ; but the last time the federal budget was balanced before late in Cltinon's term was 1969, the last year at the end of the JFK/LBJ presidencies, despite the expensive Great Society and Vietnam war. How do Republicans explain this contradiction? As far as I have seen, they don't; they simply ignore the facts. But they'd benefit from learning the facts, they might even not elect another George Bush.

 

[Craig234]

Here is another interesting read, on the histories of the JFK/LBJ tax cut versus the Reagan tax cut.

I won't excerpt it in this post as I think it's better read more entirely. It does have some interesting concerns about the coming Bush presidency, as it was written in 2001.

 

[blackangst1]

Originally posted by: Fern
Personally, I think it's the wrong time to invest overseas because of a weak dollar and high foreign stock prices.

IMO, one should invest overseas when the dollar is strong and the foreign market is depressed. I ascribe to the old fashioned "buy low sell high" philosphy.

The US stock market is starting to look good as an investment. But I'd wait until after the Nov elections. A Dem election often causes lower stock prices.

Fern

Have you looked at S America? Being a fan of mutual funds for the most part, thats what I mostly keep up with. S America is very attractive.

Many S American countries (the ones I know for sure-Venezuala and Peru) are growing quite nicely. Brazil and Argentina's exports are booming. Brazil in particular is in the top 20 of all GDP's on the planet. The nuevo sol and the Brazilian real arent doing to shabby either.

As far as mutual funds go, there are dozens that have averaged over 20% in the last 24 months. Very attractive. Not to mention oil investment.

 

[Fern]

Originally posted by: blackangst1

Originally posted by: Fern
Personally, I think it's the wrong time to invest overseas because of a weak dollar and high foreign stock prices.

IMO, one should invest overseas when the dollar is strong and the foreign market is depressed. I ascribe to the old fashioned "buy low sell high" philosphy.

The US stock market is starting to look good as an investment. But I'd wait until after the Nov elections. A Dem election often causes lower stock prices.

Fern

Have you looked at S America? Being a fan of mutual funds for the most part, thats what I mostly keep up with. S America is very attractive.

Many S American countries (the ones I know for sure-Venezuala and Peru) are growing quite nicely. Brazil and Argentina's exports are booming. Brazil in particular is in the top 20 of all GDP's on the planet. The nuevo sol and the Brazilian real arent doing to shabby either.

As far as mutual funds go, there are dozens that have averaged over 20% in the last 24 months. Very attractive. Not to mention oil investment.

No, most of my invest is tied up in commericial r/e.

If the foreign investment earns good returns, but the foreign currency is cyclically much higher than the dollar during that period, you have to be very careful when selling/liquidating it and bringing it back into dollars.

Lets say the conversion rate 1:1 now when it's earning 20%, but later dollar strengthens to 2:1, what good are all those returns when you get 50 cents on the dollar at liquidation/conversion time?

I'm mostly pointing out the benefits/downfall to swapping currency back and forth. I used to trade back & forth between dollars and French francs. The huge valuation swings between currency made me a nice profit.

But obviously that won't happen when you purchase foreign when the dollar is low, and then get back into dollar denominated investments when the foreign currency is low. The swings in currency conversion rates can hammer you.

Fern

 

[blackangst1]

Originally posted by: Fern

Originally posted by: blackangst1

Originally posted by: Fern
Personally, I think it's the wrong time to invest overseas because of a weak dollar and high foreign stock prices.

IMO, one should invest overseas when the dollar is strong and the foreign market is depressed. I ascribe to the old fashioned "buy low sell high" philosphy.

The US stock market is starting to look good as an investment. But I'd wait until after the Nov elections. A Dem election often causes lower stock prices.

Fern

Have you looked at S America? Being a fan of mutual funds for the most part, thats what I mostly keep up with. S America is very attractive.

Many S American countries (the ones I know for sure-Venezuala and Peru) are growing quite nicely. Brazil and Argentina's exports are booming. Brazil in particular is in the top 20 of all GDP's on the planet. The nuevo sol and the Brazilian real arent doing to shabby either.

As far as mutual funds go, there are dozens that have averaged over 20% in the last 24 months. Very attractive. Not to mention oil investment.

No, most of my invest is tied up in commericial r/e.

If the foreign investment earns good returns, but the foreign currency is cyclically much higher than the dollar during that period, you have to be very careful when selling/liquidating it and bringing it back into dollars.

Lets say the conversion rate 1:1 now when it's earning 20%, but later dollar strengthens to 2:1, what good are all those returns when you get 50 cents on the dollar at liquidation/conversion time?

I'm mostly pointing out the benefits/downfall to swapping currency back and forth. I used to trade back & forth between dollars and French francs. The huge valuation swings between currency made me a nice profit.

But obviously that won't happen when you purchase foreign when the dollar is low, and then get back into dollar denominated investments when the foreign currency is low. The swings in currency conversion rates can hammer you.

Fern

Gotcha. I am with you...I wouldnt trade currency. I was speaking only for stocks. I just mentioned currency as a health indicator 🙂 RE is a different animal I know little about

 

[LegendKiller]

Originally posted by: Craig234
text

Again, it doesn't prove anything. It worked in the past and might not work in the future. Economics is not a science, it's an art, and it's not perfect. The JFK times weren't preceded by large asset bubbles either.

 

[Craig234]

Originally posted by: LegendKiller

Originally posted by: Craig234
text

Again, it doesn't prove anything. It worked in the past and might not work in the future. Economics is not a science, it's an art, and it's not perfect. The JFK times weren't preceded by large asset bubbles either.

You're right, my post did not prove Keynesian economics in 100 words. It was not intended to, and I don't think it's possible to.

As I said, if you want the bigger picture, you will have to put the reading in - you are wrong to pretend that there's something wrong in my post not proving something like that.

We're not discussing at this point - we're simply dealing with your misplaced, IMO, sniping. You don't actually address the topic yourself, other than to say you don't know.

AGAIN, let me get this point back clear following your comments, I'm responding to the post above with a 'recessions, you can't do anything about them' comment, pointing out that in fact, there is history to suggest you can do something about them. How often and to what degree you can is debatable, but I was pointing out the missing history that argues against his point.

If you want to say that government policy can not have any effect on recessions, let's see you make that case. But I doubt you are - you just seem to be pointlessly sniping.

 

[Pabster]

I'm late to this one, guys. Anyone blamed Bush yet? :laugh:

 

[nageov3t]

Originally posted by: Pabster
I'm late to this one, guys. Anyone blamed Bush yet? :laugh:

I think every president is blamed/praised for whatever the economy happens to do under their watch, regardless of how much or how little they actually had to do with it themselves.

 

[Legend]

Originally posted by: Mavtek3100
Strangely I thought the international markets would fair ok, I was moving my money to international funds to stem this thing. Needless to say I'm going to move to CD's or guaranteed income. Yikes the international markets reacted this way, how is our market going to react tomorrow?

Don't move your assets to short term now. That's reactionary, and when the rebound eventually occurs, you may miss it. You're selling after losses, and market timing. That's not a good strategy.

 

[blackangst1]

Originally posted by: Legend

Originally posted by: Mavtek3100
Strangely I thought the international markets would fair ok, I was moving my money to international funds to stem this thing. Needless to say I'm going to move to CD's or guaranteed income. Yikes the international markets reacted this way, how is our market going to react tomorrow?

Don't move your assets to short term now. That's reactionary, and when the rebound eventually occurs, you may miss it. You're selling after losses, and market timing. That's not a good strategy.

Yep. Amazing people dont understand buy LOW sell HIGH. Truly amazing.

 

[Slew Foot]

This is awesome, stocks and housing prices heading for the floor. Time to load up on some investments soon, Really glad I have cash on hand to take advantage.

 

[IronWing]

Originally posted by: Slew Foot
This is awesome, stocks and housing prices heading for the floor. Time to load up on some investments soon, Really glad I have cash on hand to take advantage.

Dang, I spent all mine trying to prop up the economy. 🙁


Edit: Wait! There is hope! I can buy stock on my credit card and pay it back with the $800 that Bush is going to give me. 🙂 I'm in the money, I'm in the money! :music:

 

[Mavtek3100]

Originally posted by: Legend

Originally posted by: Mavtek3100
Strangely I thought the international markets would fair ok, I was moving my money to international funds to stem this thing. Needless to say I'm going to move to CD's or guaranteed income. Yikes the international markets reacted this way, how is our market going to react tomorrow?

Don't move your assets to short term now. That's reactionary, and when the rebound eventually occurs, you may miss it. You're selling after losses, and market timing. That's not a good strategy.

Nah, most of my stuff hasn't really lost, I'm anticipating huge losses so I'll take my chances going somewhere more secure. I had a lot of short term gains recently so assuming I can sell before there's a big tank I'll sell at a gain. It maybe reactionary, but I don't see a real rebound until 2010. Last year I moved around $10,000 into prosper, that has worked out well for me. Maybe I'll move more into prosper or like others are saying Silver or gold.

 

[Craig234]

Originally posted by: Pabster
I'm late to this one, guys. Anyone blamed Bush yet? :laugh:

Any Bush apologists shown up yet?

Check.

Of course, Bush's reversing the policies of Clinton and bringing back several-hundred billion dollar deficits among other problems have no harm to the economy, now or later.

 

[IronWing]

Originally posted by: Craig234

Of course, Bush's reversing the policies of Clinton and bringing back several-hundred billion dollar deficits among other problems have no harm to the economy, now or later.

Hey buddy, that's what's called a stimulus, kind of like a French tickler.

 

[CaptnKirk]

Originally posted by: ironwing

Originally posted by: Craig234

Of course, Bush's reversing the policies of Clinton and bringing back several-hundred billion dollar deficits among other problems have no harm to the economy, now or later.

Hey buddy, that's what's called a stimulus, kind of like a French tickler.

. . is that so you can enjoy them screwing you over even better?

 

[SSSnail]

Economic stimulus, roflmao... it's like "why not go for broke, might as well"...

 

[Slew Foot]

Hmmmm... my "sources" say that the Dow will gap down about 500 points tomorrow and then rise during they day, they advocate buying the dip and selling during they day. I'm too busy to go for it, but we'll see how that plan goes.

 

[Engineer]

Originally posted by: Pabster
I'm late to this one, guys. Anyone blamed Bush yet? :laugh:

Actually, you were to first to mention Bush in the thread but since you brought the bastard up, he has been over the country for 7 years now and the Nasdaq and S&P are both negative for that period and the Dow is up less that 15% (in 7 years) and looking to head lower. A great job driving the economy forward there...almost as good as his wonderful foreign policy! 😀

 

[BarneyFife]

Bush will be forever known as "rebate check man"