Market crash: are we there yet ?

[sck5]

You would be mighty brave to think you know where the bottom of this mess is. And wherever it is, dont count on a bounce back - For the first time in many years the consumers will not be leading the charge back - they ran out of money and nobody will lend them any. If you doubt it go check the figures on househole financial obligations - a record hi.

[sck5]

househole. what kind of freudian slip is that?

[sailhog]

[QUOTE=wind_magic;336573]Hog, I'd like to see a vix spike of 35 or 40 after this drop, that's what we had years ago with that last big drop - one of those moments that makes a bull's heart skip a few beats ...
QUOTE]

Wind,
I heard Bob Pisani concurring with you this morning... somebody else went on to say that the big vix # and resulting "capitulation" would wash out everyone "with a weak hand." Brutal stuff... it's a take-no-prisoners kind of market. I think this is one of those truely large scale, way-of-life-changing moments in national life. Goodbye Navigator, hello Vespa Scooter! Lotta people believe the airline industry is going to become significantly smaller over the next few years.

[wind_magic]

Originally Posted by sailhog

Wind,
I heard Bob Pisani concurring with you this morning... somebody else went on to say that the big vix # and resulting "capitulation" would wash out everyone "with a weak hand." Brutal stuff... it's a take-no-prisoners kind of market. I think this is one of those truely large scale, way-of-life-changing moments in national life. Goodbye Navigator, hello Vespa Scooter! Lotta people believe the airline industry is going to become significantly smaller over the next few years.

To quote one of the best books ever written on the subject, "The Intelligent Investor", Benjamin Graham 1949, in his notoriously understated way ...

"Investors have lost a great deal of money in bonds that turned 'sour' - especially in the field of railroads and real estate. Yet even here, if in the first instance the investments had been made with an eye to their ability to withstand adverse change and if their position had been reexamined at regular intervals, either there would have been no great shrinkage at all or most of the loss could have been shifted to less alert and intelligent investors. (The convenient impersonality of the securities markets relieves such a transfer of ethical taint)."

[wind_magic]

Originally Posted by sck5

You would be mighty brave to think you know where the bottom of this mess is. And wherever it is, dont count on a bounce back - For the first time in many years the consumers will not be leading the charge back - they ran out of money and nobody will lend them any. If you doubt it go check the figures on househole financial obligations - a record hi.

Sck5, the market goes up and down. It doesn't go straight up, and it doesn't go straight down. It moves in steps, forward, then back, etc, and even the worst bear has rallies in it. It has nothing (or little) to do with macroeconomic trends, and certainly nothing to do with Bush and/or Obama.

Again, from the excellent book "The Intelligent Investor", by Benjamin Graham 1949 ..

Why could the typical investor expect any better success in trying to buy at low levels and sell at high levels than in trying to forecast what the market is going to do ? Because if he does the former he acts only after the market has moved down into buying levels or up into selling levels. His role is not that of a prophet but of a businessman seizing clearly evident investment opportunities. He is not trying to be smarter than his fellow investors but simply trying to be less irrational than the mass of speculators who insist on buying after the market advances and selling after it goes down. If the market persists in behaving foolishly, all he seems to need is ordinary common sense in order to exploit its foolishness."

Don't you see, Hog and I are just trying to help folks out - we want to be there with some cash to help them when they get terrified by giving them a little money for some of the stuff they are panic selling. Then, you know, after everyone calms down and takes a breath and remembers that the market does rally sometimes, we'll be happy to give them their stuff back in exchange for a small fee. We're just trying to bring a little happiness to the world, you see, one trade at a time.

[wind_magic]

Any of this sound familiar ?

Deflation ...

Everyone is so focused on inflation because of high oil prices, etc, that I don't think many people are wondering what will happen if those prices suddenly change direction because of decreased economic demand. It hasn't happened yet, but there are plenty of people out there wishing that gas prices would go down. Be careful what you wish for!

--
Cash, the new bubble!

[WSJR1]

Nice info, worth the read.

[WSJR1]

nice info, worth the read.

[wind_magic]

Hog, I don't know, what do you think ...

Still didn't get that vix number, and even today's rally stayed within the downtrend lines.

One day doesn't convince me ...

I haven't even seen anybody on the verge of tears yet, it can't really be the bottom until somebody starts crying, right ?

Edit ... picture of the VIX ..

I just don't think we're there yet ... I want to see some angry numbers ..

[sailhog]

Wind,
I hear you on the VIX. However... and I'm just thinking out loud here... and I'm thinking in terms of what people expect the economy and the markets to do in the future. With this in mind -- with people's expectations in mind --perhaps the VIX doesn't need to spike for us to call a bottom. This would be the case if investors and portfolio managers think the economy and market aren't going to tank but rather just bounce along at these crappy levels for some time to come. Their thinking is: I lose if I sell now; so I'm going to sell selectively into the rallies. Of course this would put a damper on any sustained rally. Anyway, Wind, I'm guessing no good nor devastating news for the Dow... NASDAQ's a different story... What are your thoughts? Lay it on me, baby!