Market crash: are we there yet ?

[wind_magic]

Hog, I don't know, but I think it's hard to underestimate how irrational people can be sometimes. It's tempting, and I almost nibbled a bit, but I really want to hold my breath and wait for that high VIX. If I miss the bottom, that's okay, I'd rather be late than early. I'm going to keep my powder dry and wait until I can see the whites of their eyes ..

[wind_magic]

Hog, I'd love to see a few more days just like this one .. we even got a pop on the VIX, what do you think ?

I really think they might be aiming at your mid-10k dow number ...

[Zephyr88]

The general consensus over here from the people I've spoken to is that you guys in the states are headed for a really heavy fall not too far off.

Our economy is resource driven, so the only thing thats going to be a real problem is inflation and that's being taken "care of" with the reserve bank continually increasing rates. Only problem that might occur is that they cool things down too much, then we'll hit the s*&t over here, and it won't be pleasant.

[sailhog]

Wind,
Your time has come, brother!

Zephyr,
If our economy goes to pot, so will China's, and then those Aussie mines, wells, smelters, ovens will grow quiet. The forces that have heated up your economy in recent years are the same that will slow it down. That's only my opinion. It'd be nice if you guys could escape the wrath of what's about to befall us... You guys are too much fun.

[sailhog]

Tent cities in Florida nothwithstanding, Rick505 was dead on:

5 Alarm Fire at Fannie Freddie Paulson Nixes Bailout for Now: Tech Ticker, Yahoo! Finance

[sailaway21]

The mismanagement of Fannie and Freddy were the true underlying concerns in the whole kerfuffle. Screw the florida condo market and even mortgage backed securities, the big chickens have come home to roost. I'll be watching with interest. (no pun intended)

[chris_gee]

Some are discussing this as if the bottom is close.
Reading chicken entrails is one thing but a couple of basic points. Profitability has been at a high as a share of GDP. That is unlikely to continue. Should it revert to the mean and PE ratios equally decline the result would be close to SP500 of 800 or likely less as both optimism and pessimism tend to be excessive. Some analysts are saying profits will increase by 50% by year end so there are still optimists about. My question would be where will those profits arise? Oil and commodities perhaps but rising input costs and lower demand are likely to give lower profits elsewhere. That may reduce demand for the former two, but prices have risen sufficiently for production to be cut back and for oil producers to still be better off. While prices fell along with demand after the first oil shocks the situation is different now in that they have greater other assets, demand is higher in places like China, and there is greater awareness of husbanding a limited resource.
I would expect a good deal of turbulence risk and swings in the market. The difficulty is to preserve capital against deflation in some spheres and inflation in others. Cash may involve some loss now but other fields more. Just my view.

[RAGTIMEDON]

113 PAGES OF SCARING THE CRAP OUT OF ME! I only read the first 8 pages (time constaints) but I find most sailors are crazy optimists --- 14000 Dow? Heck, I only hope it stays above 11000 for another year! The crazy optimist I married 44 years ago refuses to change her 401K and has lost 15% since 1-1-08. In March, I changed 90% of mine to 3 year guaranteed CD's (no, not Cruising Dad) so I have only lost about 4% since January. BTW, perhaps I should be called Cruising Grandad, since he said his first mortgage was at 10% - Mine was at 4.75 fixed! A two bedroom brick bungalow in a decent neighborhood cost me $102/month, including principle, interest, taxes and insurance! My current insurance bill is more than that! Tax bill 50% more! And I live in a modest home in the midwest, where real estate is affordable.

[sailhog]

I think a lot of people on this forum should admit that crow is on tonight's dinner menu...

Rick, where the hell are ya? Get back here and tell us what's going to happen next!

[sailhog]

Rick! Rick! I'm really scared right now, and I need somebody to tell me that everything's going to be all right! And I could really use a hug... RICK!