Market may have bottomed

[MikeNY]

Historicly Stock Markets bottom three months before a recession ends. I suspect we have seen the bottom, the lows might be retested but there is a good chance we hit bottom already. This does not mean the economy will thrive and the recovery might be anemic.

Let's all hope for the best.

[Free]

Mike, I don't know if I agree with you, especially if you think the recession will be over in three months. Everything is pointing towards a prolonged recession, and earnings projections are pretty bleak.

Anyway, I hope you are right, though I am betting that we won't see a bottom until at least the end of the year, or some time during the first quarter of next year. This volatility sure makes it difficult to identify the bottom though.

[JoeJustice]

The VOLATILITY is what's key here! this is what's driving me crazy. Every day the government comes out with a new list of corporate welfare goodies. How can investors and financial institutions balance their books when thing are changing so dramatically day in and day out?

$80 billion here. $120 billion there. Pretty soon we're talking about real money.

HEY WASHINGTON: Leave it alone and let the market correct itself. For historical reference to what happens when a government tried to centrally plan the economy, please see the Soviet Union. It is often time abbreviated as U.S.S.R. HISTORY PEOPLE! HISTORY!!!!!!

-Joe

P.S. Do I sound exasperated to you?
P.P.S. This is exactly why I could never figure out why people called Bush a right wing conservative. With all of this collectivist economic poison pushed by his administration, I hope we can put to rests the idea that he was a free market kind of president.

[MikeNY]

Joe; Change is what people voted for; only problem Bush and Obama appear exactly alike on this issue and many others. Lucky for us the change might well be the Clinntons steering Obama to the center. I always thought Bush was a Liberal.

[Andy62]

Change will come,but the problem is that so much of the change is coming from the outside as the world tries to readjust to the new reality. I would like to think the market has bottomed,but I am afraid it hasn't. As the recession moves from the financial sector to the real economy and the constant news of increasing job losses and business failures start hitting the media I am afraid that the market will contiunue ot react negatively.

[MikeNY]

Gordon I tend to agree with you. The US is becoming a much poorer country. Our Politcal Leaders on both sides have thrown away our advantages; built up debt in useless social enginering programs. We will either reform or have a much worse future. I don't see the Politico's in either Party accepting real reform so the future is bleak, think the movie Blade Runner.

[Andy62]

Mike I agree with you,but it isn't just the US. Europe is in worse shape that we are and China is always of the cusp of revolution. They have 87,000 uprising per year according to their own government figures. We are living in a time of great social and economic change.

[gruntbrain]

A couple of gurus on CNBC, Mike Holland & James Biaco, mentioned that INFLATION will soon appear after this deflationary "fakeout". They agreed that TIPS are a screaming buy right now.

Oct 2007 may be the Market's top in my lifetime

[MikeNY]

Fed's to buy 600 Billion in Mortgage assets and boost lending

http://www.newsmax.com/headlines/fed_buys_mortgage_debt/2008/11/25/154985.html

http://articles.moneycentral.msn.com/Investing/Dispatch/market-dispatches-112508.aspx


Let's hope for the best. World's Great Powers to just another European Stagnent Economy is a long slide. if given a choice European second rate beats a Blade Runner Poverty World.

[Andy62]

With all of the world's governments running their printing presses and dumping all of that money in the market it would be a miracle if we didn't have rampant inflation down the road.

[Free]

Obama's choice of Volcker is probably a good one, given that he has had to deal with inflation before.

[gruntbrain]

Volcker aside, what should individuals do to prepare for inflation? My choice is TIP which remains my largest single holding(behind CASH ); of course CASH is a poor inflationchoice

[Andy62]

It is not just the potential for inflation,but it is the unpredicability as we go through the changes that we are going to face. My answer is to keep as flexible as possible. I am keeping a core group of some commodities which I think are a good inflation hedge and a larger percentage of cash than I have for the last decade. The commodities are an inflation hedge and the cash, while very vulnerable to inflation, gives me maneuverability and flexibility to react to any unforseen changes and take advantage of any opportunites that may develop as well. Change not only brings problems,but it also brings opportunites. "Lily pad to lily pad across the pond".

[MikeNY]

The reason they are printing money as fast as they can is that the deflation we have expericened in the stock and financial markets leads to depression; inflation leads to recession. They'd rather deal later with a recession than a depression.

This economic downturn brought Obama to his senses and stopped his plans for a Socialist State. I think it is great that his change paradigm is bringing back the Clinton's and thier friends to run the country. Better safe with the Clintons pulling Obama's strings than his looney left pal's. I don't trust the goofy right either.

[Andy62]

I am much more positive on Obama than I was before. He is selecting smart and experienced people from the Clinton and Bush administrations. My main concern with Obama was defense. I thought that he was being very naive in that area. Maybe it was just his stragegy for the election or maybe it is that he has now seen some of the Top Secret Intelligence reports and is not just going on what he gets from the media,but he has changed. Whatever the reason the selection of Gates and Petraeus in my opinion is excellent. Paul Volker is very knowledgeable and is no new world economist. Geitner has worked hand in glove with Paulson in structuring the current bailout and Summers, while a egomaniac who has trouble working with people, is smart and knows Washington.