How Can This Be?

by **duke3522** » Fri 09 Sep 2005, 14:50:15

As I write this the Dow stand at 10,685, up 89 points. How can this be? Energy prices are just off all time highs and looking to go higher. The Feds just warned of a 71% increase in NG this winter. Consumer confidence is falling like a rock. And, oh yeah, a good sized US city was just destroyed!!!

WTF is going on here. Are the financial markets looking to make a killing on the $60+ billion ( and may be as much as $200 billion) in spending the feds are getting ready to pour into the Gulf Coast. Commercial banks alone will make billions from selling the T-Bills to cover the spending. Let alone all the nice fat contracts being handed out.

But can this spending spare to US economy a massive recession? It would seem that with the CC minimum payment doubling, and folks facing a big unknown when it comes this winters heating bills, plus all the other economic turmoil, a recession is almost unavoidable.

by **UncoveringTruths** » Fri 09 Sep 2005, 15:03:06

I don't understand it myself and they just fired the head of FEMA and the Draw on petroleum stocks was half of what was anticipated. There cooking the books I tell you. You pay now or you pay later but you will pay.

by **falser** » Fri 09 Sep 2005, 15:14:22

Yeah, when a major catastrophe rocks the nation and oil industry, and causes a small rally in every sector some alarms should be going off. Don't doubt everyone else is watching and wondering because if this isn't irrational exuberance then nothing is. The problem is there's really nowhere to put money right now. Bonds are bad, real estate is cracking, oil stocks have already made their moves so what is anyone supposed to do? I guess just as it is patriotic to use a CC to buy things when you have no money, it's patriotic to buy stocks in the face of immense economic problems. If stocks continue to do well for the rest of the year then Q106 will be the biggest kick in the balls the US economy has ever seen.

by **Gigawatta** » Fri 09 Sep 2005, 15:30:08

This year:

1. London attacks.
2. Fed raised interest rates.
3. Oil/oil products prices going through the roof.
4. Hurricane Katrina.

and the stock market doesn't give a s***t...

by **vsixpack** » Fri 09 Sep 2005, 15:35:17

I am also shocked. I live in a suburb of NYC and the median cost of a home is up to 450k a year.

For some sick reason, everyone around me thinks that this trend of making 15-20% a year on the value of their home will go on forever.

I try to bring up the example of the tech bubble that burst in 2000 when all the overinflated tech stocks lost their value. At the time I just expected my stock to keep splitting and doubling because that was the way it worked from 1996-99.

When I tell people this example they just think I am being pessimistic. Its amazing how dense people can be when they don't want to beleive you.

I just can't see how people are going to go shopping this winter to keep the economy going when the price of gas is so high and natural gas is going to be up 71% this winter.

I totally think the market is being manipulated. The Dow being above 10,000 does something to people psychologically which makes them beleive that the economy is doing just fine.

by **some_guy282** » Fri 09 Sep 2005, 15:36:05

$this->bbcode_second_pass_quote('UncoveringTruths', 'I') don't understand it myself and they just fired the head of FEMA and the Draw on petroleum stocks was half of what was anticipated. There cooking the books I tell you. You pay now or you pay later but you will pay.

by **UncoveringTruths** » Fri 09 Sep 2005, 15:38:25

$this->bbcode_second_pass_quote('some_guy282', '')$this->bbcode_second_pass_quote('UncoveringTruths', 'I') don't understand it myself and they just fired the head of FEMA and the Draw on petroleum stocks was half of what was anticipated. There cooking the books I tell you. You pay now or you pay later but you will pay.

by **JoeW** » Fri 09 Sep 2005, 16:08:10

Let's think about the multiple issues that have been discussed here:
1) Real Estate
The hurricane actually increases the value of real estate, and here's why:
a) A number of evacuees whose homes have been destroyed will seek to purchase pre-owned homes, increasing demand for them
b) A number of evacuees will rebuild homes, increasing demand for building materials. The resultant increase of building prices increases the cost to build new homes nationwide and also increases the intrinsic value of existing homes.
2) Stock Market rally
It is difficult to know who loses money because of the disaster. It is a lot easier to figure out who makes money. That's why some money has poured into the market. It will be some time much later in the future when all of the effects of Katrina can be analyzed in terms of who benefited and who was hurt in the business sense.
3) Bonds jumped
Because the full effects of Katrina on the stock market cannot be known, some investors chose the relative safety of bonds. They may change their minds later if it looks like strong inflation is on the horizon.
4) Energy prices
Crude prices are below pre-Katrina levels. Gasoline prices have actually decreased in my area for the past few days. The impact has been much less than what it could have been, and see #5 for why.
5) Crude/Gasoline Inventory drawdown not as bad as feared
The SPR was tapped. Prices of refined products were dramatically increased and we have witnessed the demand destruction that we theorized would one day take place due to high prices.

I'm not trying to debunk any conspiracy theories here, but rather just pointing out that you could take a more moderate point of view on just about every issue here and sound quite reasonable doing it.
Personally, I believe a recession is on the way in 2006. However, I believed that even before Katrina.

by **jaws** » Fri 09 Sep 2005, 16:13:08

Repeat after me: i-n-f-l-a-t-i-o-n. The stock market goes up because everyone is loaded with money with nowhere else to put it.

by **lateStarter** » Fri 09 Sep 2005, 17:15:12

And don't forget all those recently displaced folks from NO and surrounding areas that may suddenly have a big 2k to blow at Wallmart (if they ever get their debit card from FEMA).

I love the recent quote from the Houston Astrodome officials who are preparing to boot out the current occupants (for their own good) so they can't get back to 'normal' life. WTF?

It must be so nice to have a few million in the bank somewhere and go home at the end of a hard day of speculating about how to deal with the ignorant masses of humanity, and have a few Single Malt scotch's, do the wife or girlfriend (or maybe both) and then carry on as usual the next day, while the wife drives the kids off to soccer practice and you worry about who you will be stuck playing golf with this weekend.

by **richardmmm** » Fri 09 Sep 2005, 18:11:28

read the forum - "buy on rumor sell on news", we discussed why the oil market fell and the stocks rallied in great detail.......partly before the move happened. :-)

by **dinopello** » Fri 09 Sep 2005, 22:35:40

$this->bbcode_second_pass_quote('jaws', 'R')epeat after me: i-n-f-l-a-t-i-o-n. The stock market goes up because everyone is loaded with money with nowhere else to put it.

by **LadyRuby** » Fri 09 Sep 2005, 23:22:06

I don't understand it either, it seems so irrational to me. It seems so obvious to me that the economy has nowhere to go but down.

by **FoxV** » Sat 10 Sep 2005, 01:16:16

I like how the economists are debating whether the end results of Katrina will be bad for the economy

Hello! Word to the Clueless! The biggest disaster in US history IS NOT A BULL SIGNAL

by **Snowrunner** » Sat 10 Sep 2005, 02:47:38

$this->bbcode_second_pass_quote('dinopello', 'T')he House of Saud has a lot of money now, and while they have been investing a lot in the Middle East, there are only so many skyscrapers you can build in the desert. Where are the rest of the petrodollars going ?

by **aldente** » Sat 10 Sep 2005, 03:04:39

$this->bbcode_second_pass_quote('LadyRuby', 'I') don't understand it either, it seems so irrational to me. It seems so obvious to me that the economy has nowhere to go but down.

by **jaws** » Sat 10 Sep 2005, 03:09:55

$this->bbcode_second_pass_quote('LadyRuby', 'I') don't understand it either, it seems so irrational to me. It seems so obvious to me that the economy has nowhere to go but down.

by **richardmmm** » Sat 10 Sep 2005, 03:56:04

$this->bbcode_second_pass_quote('Snowrunner', '')$this->bbcode_second_pass_quote('dinopello', 'T')he House of Saud has a lot of money now, and while they have been investing a lot in the Middle East, there are only so many skyscrapers you can build in the desert. Where are the rest of the petrodollars going ?

by **Dukat_Reloaded** » Sat 10 Sep 2005, 06:54:00

I do think the markets are now manipulated by the US governement. I think the fed is printing money and dumping it into the market. There is no way modern markets built on the assumption of cheap oil can surive in times of expensive oil prices and holocausts to US cities. At finanical sense they say the Gold train is about to leave the station and you better get onboard quick before your left behind with the 99% of the population.

I think in the near future 99% of the population will live in poverty whereas the 1% who own gold will be rich. A rich man could throw a gold coin into a poverty stricken food stamp crowd and they will scramble over themselves to get it and many will die.

by **frankthetank** » Sat 10 Sep 2005, 14:34:52

DUkat~

That rich man better have an LOYAL army to back him up... i have a feeling the starving zombie mass would chew on him like a piece of jerky.

How Can This Be?

How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Re: How Can This Be?

Who is online