T Nation

Stocks Going Up?

I heard that stocks are supposedly going to be going up for the next 4-8 weeks consistently. I was thinking of just throwing in $1000 into S&P 500 index. Any thoughts?

Im very new to the investing thing and this was advice from a friend.

Heck, don’t be such a patsy. Let it ride. I am sure the rumor you heard cannot be wrong. I mean, look! the stock market jumped 7% yesterday. You’re gonna miss out.

Take your friend’s advice now before it’s too late.

It’s a dead cat bounce.

No one knows, period. They went up because the fed promised to buy up bad assets. The market is down today. I really don’t see anything but volatility, but if your asking if we have bottomed out, I’d say yes and beyond. I think the markets dropped below the bottom.

My question about the whole thing is this. Why in the fuck did they do a stimulus, a spending bill and toxic asset buy up plan? Why not just the asset plan? If spending is you answer, that should have been the only thing needed. In 60 days this administration has coughed up approximately 3.3 trillion bucks, from where? We were already in debt. Now add a 3 trillion dollar budget on top of this and we are over 6.3 trillion?!?! Within 6 months! Does anybody besides me see a problem with this? I thought Bush was an irresponsible spender; shit, he was an amateur.

Pat

That is exactly the reason to avoid this market. The leadership and monetary policy is terrible. I don’t think anything can overcome that in the next 4 years.

The asset plan should have been the first and maybe only thing they should have tried. Even simpler would have been the elimination of the mark to market rule.

When you combine the poor leadership, naive policy decisions and general socialistic outlook that prevails in D.C right now you have a recipe for disaster and it is coming to pass.

[quote]Paste42 wrote:
Im very new to the investing thing and this was advice from a friend.[/quote]

If you are new to investing, do not take advice from “friends”.

Bush threw away trillions of dollars that got us nothing. At least the money Obama is spending is for some purpose.

I still think it’s funny that people like pat and hedo think they know better than people like Stiglitz what’s best for the economy. Especially when their criticism boils down to, “Well, I mean, that’s a LOT of money!” As well as the association of “socialism” with “spending lots of money.” The laughs never cease.

[quote]Loose Tool wrote:
Paste42 wrote:
Im very new to the investing thing and this was advice from a friend.

If you are new to investing, do not take advice from “friends”.

[/quote]

So then head to a place like ‘Scottrade’?

[quote]Ryan P. McCarter wrote:
Bush threw away trillions of dollars that got us nothing. At least the money Obama is spending is for some purpose.
[/quote]

Purpose and intent doesn’t mean a lick to natural law.

Spending money that does not exist is the same thing Bush did; it does not matter what the intent is. Economic law does not respond to the “good will” of politicians.

Debt is always debt and inflation is always inflation.

Obama is the same bag of tricks with a new name.

[quote]Ryan P. McCarter wrote:
Bush threw away trillions of dollars that got us nothing. At least the money Obama is spending is for some purpose.

I still think it’s funny that people like pat and hedo think they know better than people like Stiglitz what’s best for the economy. Especially when their criticism boils down to, “Well, I mean, that’s a LOT of money!” As well as the association of “socialism” with “spending lots of money.” The laughs never cease.[/quote]

I suppose you one those who think you can negotiate with the taliban too?

What exactly is the 6.3 trillion dollars getting us other than a greatly expanded government and a utterly crippling debt? It Bush years to spend that much money. Obama the clown, has it done in less than six months, if his excessively stupid and over bloated “budget” passes as is. Which I doubt because he is even managing to scare off democrats from it with it’s size.

You’ve made not point other than looking utterly uninformed.

Maybe you can explain to me how the fuck giving ACORN 4.2 Billion dollars and changing light bulbs stimulate the economy? We are dying to know.

[quote]Paste42 wrote:
Im very new to the investing thing and this was advice from a friend.[/quote]

If your friend is correct, it will be shear luck. Technically, we are at a place you should sell. However, eventually the market will break the technicalls and make a legitimate bear market rally. Whether or not that happens now or after a few more lows have been put in is anybodies guess. I’ve been getting my money out over the last couple of days.

[quote]Ryan P. McCarter wrote:
Bush threw away trillions of dollars that got us nothing. At least the money Obama is spending is for some purpose.

I still think it’s funny that people like pat and hedo think they know better than people like Stiglitz what’s best for the economy. Especially when their criticism boils down to, “Well, I mean, that’s a LOT of money!” As well as the association of “socialism” with “spending lots of money.” The laughs never cease.[/quote]

You avatar reminds me of this…They are strikingly similar as the clinched fist was also a popular symbol of the Communist party in the U.S.S.R…Somehow, I am not suprised

[quote]pat wrote:
Ryan P. McCarter wrote:
Bush threw away trillions of dollars that got us nothing. At least the money Obama is spending is for some purpose.

I still think it’s funny that people like pat and hedo think they know better than people like Stiglitz what’s best for the economy. Especially when their criticism boils down to, “Well, I mean, that’s a LOT of money!” As well as the association of “socialism” with “spending lots of money.” The laughs never cease.

You avatar reminds me of this…They are strikingly similar as the clinched fist was also a popular symbol of the Communist party in the U.S.S.R…Somehow, I am not suprised[/quote]

That bow and arrow would never shoot correctly.

[quote]LIFTICVSMAXIMVS wrote:
Ryan P. McCarter wrote:
Bush threw away trillions of dollars that got us nothing. At least the money Obama is spending is for some purpose.

Purpose and intent doesn’t mean a lick to natural law.

Spending money that does not exist is the same thing Bush did; it does not matter what the intent is. Economic law does not respond to the “good will” of politicians.

Debt is always debt and inflation is always inflation.

Obama is the same bag of tricks with a new name.[/quote]

You make the assupmtion that the money will do nothing. A curious assumption to make, when the broad consensus is that these measures (perhaps not these precise measures, but that’s debatable) are needed. I am curious as to what your suggested course of action is, if not to spend money on something.

[quote]pat wrote:I suppose you one those who think you can negotiate with the taliban too?

What exactly is the 6.3 trillion dollars getting us other than a greatly expanded government and a utterly crippling debt? It Bush years to spend that much money. Obama the clown, has it done in less than six months, if his excessively stupid and over bloated “budget” passes as is. Which I doubt because he is even managing to scare off democrats from it with it’s size.

You’ve made not point other than looking utterly uninformed.

Maybe you can explain to me how the fuck giving ACORN 4.2 Billion dollars and changing light bulbs stimulate the economy? We are dying to know.[/quote]

We did back in the 70s, when we were giving the Taliban money and weapons. The enemy of our enemy is our friend, you know, but I digress…

The money is for a few things, primarily sustaining demand through the dropoff in consumer spending, to recapitalize banks and maintain their solvency, and to get toxic assets off their balance sheets and restore the flow of credit. Now I’m not saying you can’t disagree with the methods implemented so far. What I am saying is that if you think we should cut the budget right now, and/or sit back and “ride it out,” you’re just flat out wrong, unless you want to see the American people suffer.

[quote]PB-Crawl wrote:
pat wrote:
Ryan P. McCarter wrote:
Bush threw away trillions of dollars that got us nothing. At least the money Obama is spending is for some purpose.

I still think it’s funny that people like pat and hedo think they know better than people like Stiglitz what’s best for the economy. Especially when their criticism boils down to, “Well, I mean, that’s a LOT of money!” As well as the association of “socialism” with “spending lots of money.” The laughs never cease.

You avatar reminds me of this…They are strikingly similar as the clinched fist was also a popular symbol of the Communist party in the U.S.S.R…Somehow, I am not suprised

That bow and arrow would never shoot correctly.[/quote]

Because it’s a COMMUNIST bow and arrow!

[quote]Ryan P. McCarter wrote:

You make the assupmtion that the money will do nothing. A curious assumption to make, when the broad consensus is that these measures (perhaps not these precise measures, but that’s debatable) are needed. I am curious as to what your suggested course of action is, if not to spend money on something.

[/quote]

There is no broad consensus that this spending will do more short term good than long term damage. You just need to think a little bit.

[quote]Ryan P. McCarter wrote:
[/quote]
You still haven’t read a single book on economics have you?

Are they spending the money precisely on what consumers would be spending it on? Do you understand how limited resourse are distributed through an economy? Do you not understand the harm in arbitrarily allocating said resourse despite what the market wants? Is there some magical consumer spending index we should be shooting for? And what will it cost us in terms of investment?

Only the shitty ones that wouldn’t be in business with tax payer money. Again, the federal gov’t deciding to keep money and resourses tied up in failed enterprises, rather than letting them fail so the capital they have been wasting can better be put to use by successful companies. Brilliant.

These assets are worth something. They would have sold to someone at market price. What we have just done is pay more than the market value for these assets. We will never how much we overpaid, but one can only assume it is considerable. $1,000 toilet seat anyone?

What is a normal flow of credit? Credit is a commodity just like every other commodity. It is controlled by the laws of supply and demand just like any good or service. Don’t you think we have just exited a credit boom? Should we return to spending money we don’t have?

Now I would like to address a contradiction. First you say that we need to consumer spending to return to some magical number that will right the economy. You then say we need credit to flow from banks like the Red River this week.

In order for banks to lend they need people to make deposits, ie save. Do you not see how these two contend for the same resourses? What about the stock market. Stock price don’t rise unless people buy stocks. How can they do this if they are spending all thier money on either saving to allow banks to borrow, or spending to make retailers happy?

What is the magical balance between consumer spending and consumer saving and consumer investing? Saving is actually investing but I list is seperately as not to confuse those that think they are different.

I would be interested to see the consensus on this.

What do you think double digit inflation and trillions of dollars in debt are going to do? Bring back the roaring 20’s?

You cannot create prosperity out of thin air. Capital and resourses are limited. They need to be deployed in the most efficient way possible. Market knowledge is the only thing that can deploy these resourse and capital in an efficient manner.

Market knowledge does concentrate in Washington. It is spread throughout the entire economy. Individuals that know their particular part of the economy better than anyone else. This knowledge is responsible for billions of transactions and decisions every day. It cannot be calculated or harnesses.

Leave capital in the hands of the individuals that drive the market (all of us) and we will all be better off.

[quote]Paste42 wrote:
I heard that stocks are supposedly going to be going up for the next 4-8 weeks consistently. I was thinking of just throwing in $1000 into S&P 500 index. Any thoughts?[/quote]

No. Wait for the 50 day moving average to move above the 200 day moving average. You’ll miss out on the drama but avoid any big drops.

The bear market will resume when the one trillion Obama created hits the economy. Inflation will soar and the market will collapse. But that’s a year away at least (unless the Chinese abandon the dollar).