T Nation

Black October

"NEW YORK (Reuters) - Central banks across the world scrambled to meet desperate demand for cash on Friday, just a day after Washington Mutual collapsed in the largest ever U.S. bank failure.

As investors focused on the prospect of a $700 billion bailout for Wall Street, the European Central Bank, the Bank of England and Swiss National Bank collectively put up $74 billion of one-week funds into the markets.

The Federal Reserve was actually forced to drain some of its recent reserve injections to keep its overnight borrowing target at 2 percent."

Sell all stocks, except gold stocks. Go to all T-Bills.

http://www.weissfund.com/

I am far from a doom and gloom person but I think we still have a while to go before we get to the bottom.

I have little faith this $700 billion is going to have any positive effect in the long run.

DAMN this election is screwing with my head!

I thought that this thread had something to do with Obama, and the lead up to the election!

Mufasa

Opening bell is going to be exciting tomorrow morning!!

[quote]LIFTICVSMAXIMVS wrote:
Opening bell is going to be exciting tomorrow morning!![/quote]

Start counting the heart attacks! Stress meters off the scale. Time to phone in sick.

Looking a little into the future. I will find it interesting to see how the individual is responding to this. Novembers “Black Sunday” should prove to be a great indicater.

The retail industry has alway used this day as an indicater of things to come over the holiday season. This year I think it will be speaking of more than the holiday season.

Dow futures are up. Dollar is up. Oil is down.

I am sure that we still have a little ways to go before we can look back ans see we are out of the woods, but I am equally sure that there is going to be no catastrophic crash.

People get hard-ons for bad news.

[quote]rainjack wrote:
Dow futures are up. Dollar is up. Oil is down.

I am sure that we still have a little ways to go before we can look back ans see we are out of the woods, but I am equally sure that there is going to be no catastrophic crash.

People get hard-ons for bad news. [/quote]

2 Asian markets are up 1%. 2 are down 1% so far. Where’s the catastrophe?

Looks like the markets will take a hit this morning.

Dow futures are down 150 - BUT oil is down $4/barrel, and the Euro is taking a pretty good sized hit against the worthless dollar.

“U.S. banks borrowed a record amount from the Federal Reserve nearly $188 billion a day on average, showing the central bank went to extremes to keep the banking system afloat amid the biggest financial crisis since the Great Depression.”
— more Reuters

Because of fractional reserve banking, a debt bubble has 10 times (or more) the impact compared to the problems of any other industry. Trillions in derivatives are turning in upon themselves.

The Great Depression of 2008 is underway. It’ll last at least 20 years, possibly most of our lifetimes.

Update from Reuters:

“They are throwing billions around, but things seem to be getting worse. They are throwing everything they can at the problem but nothing seems to be working,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.

“There’s a monster amount of fear out there. This is global contagion, it’s no longer just the United States.”

[quote]Headhunter wrote:
The Great Depression of 2008 is underway. It’ll last at least 20 years, possibly most of our lifetimes.[/quote]

Assuming the government keeps trying to ‘help’.

[quote]LIFTICVSMAXIMVS wrote:
Headhunter wrote:
The Great Depression of 2008 is underway. It’ll last at least 20 years, possibly most of our lifetimes.

Assuming the government keeps trying to ‘help’.[/quote]

The scary scenario is when the American people demand that the government ‘do something’. One reason Obama’s poll numbers are rising is that he’d be more likely to ‘do something’ than a Republican. People want the benefits of a free market system without the systemic zig-zags of capitalism. Then, one could argue that the zig zags are heightened in ferocity by people voting for politicians who promise to smooth out capitalism, consequently making everything worse.

I suppose we’re doomed to some sort of fascism, where the government is the partner in the economy.

[quote]Headhunter wrote:

I suppose we’re doomed to some sort of fascism, where the government is the partner in the economy.

[/quote]

As opposed to what we have now.

The Dow is down about 22% so far this year. Been a coupla sucker rallies and I think today’s is another one. When people around the world see how massive the cost of keeping everyone solvent is, the decline will continue.

[quote]AynRandLuvr wrote:
The Dow is down about 22% so far this year. Been a coupla sucker rallies and I think today’s is another one. When people around the world see how massive the cost of keeping everyone solvent is, the decline will continue.[/quote]

Europe had several banks collapse in the last 2-3 days. The Euro is falling like a rock, and you are seeing a slight ease on the credit markets right now.

I’m not saying that we are out of the woods, but it’s 24 hours later, and I have yet to see any mobs roaming the streets in search of food.

It’s rarely as bad as the pessimists see things, and rarely as good as the optimists see the same thing.

That’s the part I don’t understand. The people who actually favor the bailout – or “rescue plan”, whatever – keep walking around with their heads in the clouds, ignoring the fact that this is not the end. In fact, the more our dear leaders mess with it the more it will ensure we keep seeing worse and worse.

[quote]rainjack wrote:
AynRandLuvr wrote:
The Dow is down about 22% so far this year. Been a coupla sucker rallies and I think today’s is another one. When people around the world see how massive the cost of keeping everyone solvent is, the decline will continue.

Europe had several banks collapse in the last 2-3 days. The Euro is falling like a rock, and you are seeing a slight ease on the credit markets right now.

I’m not saying that we are out of the woods, but it’s 24 hours later, and I have yet to see any mobs roaming the streets in search of food.

It’s rarely as bad as the pessimists see things, and rarely as good as the optimists see the same thing.

Note: I don’t currently own any stocks, but have in the past. I only bet when the odds are heavily in my favor.

[/quote]

A lot of people jumped on stocks in late 1929 and in 1930. The Dow lost 90% of its value.

Stocks historically trade at about 15 PE and dividend yield of 5%. Right now the PE is well above 22 and the yield is terrible, below 3%. Odds would favor at least a pull back to a 15 PE, which is about 7500 on the Dow and proportionally to the S&P. In this environment, a PE of 12 would be appropriate, which gives us a Dow of 6000. However, in a true crash earnings will plummet so a Dow of 3000 would be the floor at which I’d put every penny within reach into stocks.

If you can find stocks that rise under such circumstances (which there actually are) then that’s cool. Most people will be losing their shirts.

[quote]AynRandLuvr wrote:
rainjack wrote:
AynRandLuvr wrote:
The Dow is down about 22% so far this year. Been a coupla sucker rallies and I think today’s is another one. When people around the world see how massive the cost of keeping everyone solvent is, the decline will continue.

Europe had several banks collapse in the last 2-3 days. The Euro is falling like a rock, and you are seeing a slight ease on the credit markets right now.

I’m not saying that we are out of the woods, but it’s 24 hours later, and I have yet to see any mobs roaming the streets in search of food.

It’s rarely as bad as the pessimists see things, and rarely as good as the optimists see the same thing.

Note: I don’t currently own any stocks, but have in the past. I only bet when the odds are heavily in my favor.

A lot of people jumped on stocks in late 1929 and in 1930. The Dow lost 90% of its value.

Stocks historically trade at about 15 PE and dividend yield of 5%. Right now the PE is well above 22 and the yield is terrible, below 3%. Odds would favor at least a pull back to a 15 PE, which is about 7500 on the Dow and proportionally to the S&P. In this environment, a PE of 12 would be appropriate, which gives us a Dow of 6000. However, in a true crash earnings will plummet so a Dow of 3000 would be the floor at which I’d put every penny within reach into stocks.

If you can find stocks that rise under such circumstances (which there actually are) then that’s cool. Most people will be losing their shirts.

[/quote]

No one will lose anything until they sell. If you are a panic seller, then you:

a.) have no business handling your own investments

b.) are a fool

I am beginning to agree with the others that you and HH are the same person. No one in their right mind should be predicting a DOW of 3000.

[quote]rainjack wrote:
AynRandLuvr wrote:
rainjack wrote:
AynRandLuvr wrote:
The Dow is down about 22% so far this year. Been a coupla sucker rallies and I think today’s is another one. When people around the world see how massive the cost of keeping everyone solvent is, the decline will continue.

Europe had several banks collapse in the last 2-3 days. The Euro is falling like a rock, and you are seeing a slight ease on the credit markets right now.

I’m not saying that we are out of the woods, but it’s 24 hours later, and I have yet to see any mobs roaming the streets in search of food.

It’s rarely as bad as the pessimists see things, and rarely as good as the optimists see the same thing.

Note: I don’t currently own any stocks, but have in the past. I only bet when the odds are heavily in my favor.

A lot of people jumped on stocks in late 1929 and in 1930. The Dow lost 90% of its value.

Stocks historically trade at about 15 PE and dividend yield of 5%. Right now the PE is well above 22 and the yield is terrible, below 3%. Odds would favor at least a pull back to a 15 PE, which is about 7500 on the Dow and proportionally to the S&P. In this environment, a PE of 12 would be appropriate, which gives us a Dow of 6000. However, in a true crash earnings will plummet so a Dow of 3000 would be the floor at which I’d put every penny within reach into stocks.

If you can find stocks that rise under such circumstances (which there actually are) then that’s cool. Most people will be losing their shirts.

No one will lose anything until they sell. If you are a panic seller, then you:

a.) have no business handling your own investments

b.) are a fool

I am beginning to agree with the others that you and HH are the same person. No one in their right mind should be predicting a DOW of 3000.

[/quote]

Who is John Galt?