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Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 8:48 am
by planosteve
NEW YORK (Reuters) - U.S. stocks opened sharply lower on Wednesday as economic data reinforced concerns about the health of the world economy and that corporate merger activity may be slowing.
The Dow Jones industrial average (.DJI) fell 186.52 points, or 1.14 percent, to 16,128.67, the S&P 500 (.SPX) lost 21.84 points, or 1.16 percent, to 1,855.86 and the Nasdaq Composite (.IXIC) dropped 71.66 points, or 1.7 percent, to 4,155.52.
Re: Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 8:58 am
by GFB
Planosteve..my financial advisor?
HELP!!
Re: Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 10:02 am
by planosteve
I have some bad news. The FED is out of powder. The buy-the -dippers can't depend on them to goose the market back up again like they did in 2009.
But now, however, we are on the far side of the great monetary experiment known as ZIRP and QE. The money market rate is at the zero bound and has been pinned there for 69 months running—a stretch never before experienced even during the Great Depression. Likewise, the Fed’s balance sheet has grown by 5X to nearly $4.5 trillion—again a previously unimaginable eruption.
But what is profoundly different this time is that the Fed is out of dry powder. Its can’t slash the discount rate as Bernanke did in August 2007 or continuously reduce it federal funds target on a trip from 6% all the way down to zero. Nor can it resort to massive balance sheet expansion. That card has been played and a replay would only spook the market even more.
So this time is different. The gamblers are scampering around the casino fixing to buy the dip as soon as white smoke wafts from the Eccles Building. But none is coming. For the first time in 25- years, the Wall Street gamblers are home alone. This Time Is Different—–For The First Time In 25-Years The Wall Street Gamblers Are Home Alone
Check it out!
http://davidstockmanscontracorner.com/this-time-is-different-the-fed-is-out-of-bullets/
Re: Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 11:05 am
by LibraryLady
Our financial adviser told us yesterday that signs were that things were going to go south for awhile.
Not sure if it is just a "market correction" or sign of bad times ahead.
He has a list of factors and when xx number look bad/perform poorly, he liquidates some stocks and waits to buy when things are low.
He did that late Friday. I might add his ideas worked in the terrible times of 2008. We lost some, but not as bad as some of our friends did.
Re: Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 11:09 am
by GFB
I didn't lose a dime in 2008 and 2009. There is no reason anyone should have.
Your financial advisor is trying to time the market..risky business.
Re: Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 11:22 am
by planosteve
GFB wrote:I didn't lose a dime in 2008 and 2009. There is no reason anyone should have.
Your financial advisor is trying to time the market..risky business.
I'm my own financial advisor, always have been. Don't own stocks or stock funds except for two that include gold mining stocks. And I admit those haven't done that well lately. But, they will have their day.
Re: Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 11:25 am
by Red Oak
Plan-0 has a point about the FED being out of magic bullets.
Think 1937.
Re: Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 11:33 am
by planosteve
All market averages are now below the end of last year. Same in Europe where the markets are going off the cliff.
Re: Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 11:46 am
by GFB
"Be greedy when everyone else is afraid"
"Be afraid when everyone else is greedy."
Re: Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 11:49 am
by John in Plano
GFB wrote:"Be greedy when everyone else is afraid"
"Be afraid when everyone else is greedy."
Warren is a smart man
Re: Yikes! Get Your Powder Ready Greg!
Posted: Wed Oct 15, 2014 12:04 pm
by planosteve
John in Plano wrote:GFB wrote:"Be greedy when everyone else is afraid"
"Be afraid when everyone else is greedy."
Warren is a smart man
In other words buy low, sell high. But, you still have to determine when it's low and when it's high.