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Monday, October 6. 2008

The sound of capitulation

When Jim Cramer says PANIC! SELL EVERYTHING! it sounds like true capitulation to me.

He predicts a 20% stock market drop soon or over the next quarter. If you sell now, that's a 15% tax hit, so, effectively, that 20% drop is only a 5% drop. Of course, Obama promises us higher cap gains taxes, which is another subject. As is pension money.

Posted by The Barrister in Hot News & Misc. Short Subjects at 14:10 | Comments (38) | Trackbacks (0)

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That in itself would cause a crash. I don't pay any attention to Cramer. When Kudlow advocates that we all sell and crash the economy, maybe I'll listen.

And what happened to that 700 billion dollars, anyway?
#1 rightwingprof (Link) on 2008-10-06 16:35 (Reply)
The news is that a Goldman-Sachs crony is going to oversee it. From the AP:

The administration has selected a former Goldman Sachs executive to be the interim head of its $700 billion rescue effort for financial institutions. Neel Kashkari, the Treasury's assistant secretary for international affairs, was selected Monday to be the interim head of Treasury's new Office of Financial Stability. The designation was made by Treasury Secretary Henry Paulson, who was the head of Goldman Sachs before he joined the Bush administration in 2006.
#1.1 njartist49 on 2008-10-06 16:44 (Reply)
Thank God it's a Goldman Sachs crony and not a Chris Dodd crony - or any other politician as a matter of fact.
#1.1.1 Gwynne on 2008-10-06 17:03 (Reply)
Cramer's too late - Oprah made that call 10 days ago when it wasn't near bottom (guessing)! One more piece of proof that Cramer's a joke.
#2 Kondratiev's Twin on 2008-10-06 17:09 (Reply)
My company 401(k) advisor circular said I have too little in stocks last quarter. Let's see what it says next quarter.
#3 Ron Hardin (Link) on 2008-10-06 17:43 (Reply)
Panic? Sell everything? And do what with it? Did that ass mention that?
`
#4 Meta on 2008-10-06 17:52 (Reply)
Why, Meta , don't you know your supossa to put all your money in glass jars and bury them in your back yard. Make sure the tree rats don't dig them up first. Don't forget where you bury them!!!
#4.1 jappy on 2008-10-06 18:13 (Reply)
I figger ...wait.... that's too close to the 'n' werd. Let me start over as money has no race. Unless you lissen to Cramer and race to the bank an' demand yore doe.

I figure I'll stuff them greenbacks under the little dent in my mattress where my butt rests when I'm reading. It's been a while since I flipped my mattress. What a great idea! :)
`
#4.1.1 Meta on 2008-10-06 20:16 (Reply)
I'm putting all my money into canned goods and ammunition.
#4.2 Pajak on 2008-10-06 21:19 (Reply)
Well, I just sold all my Dago stocks. Olive oil, Waste Management, and Piano Wire Company. I am buying Green Ink and Paper International , cause the Fed sure in hell is using alot of that stuff.

Mr. B. Don't let your dentist keep any of your gold fillings. Put those suckers under your pillow, for safe keeping!! : )
#5 jappy on 2008-10-06 18:04 (Reply)
Cramer works for the yoyo's at NBC and thus is in the tank for Obama. How convenient this financial crisis came along 6 weeks before Election Day? Now what could Mac's October Surprise have in store? Must be one helluva trump card!

How about Basic Combat Training for those who will have to do battle with the Obamafanatics in the swing state contested elections? Now the post-election court battles sure to come will really send reassuring signals to the financial markets, won't they?

America, where your capital is safe through all manner of stormy weather. Correct that to say "was safe". Suggest you all check out the link to the introduction to John Fund's "Stealing Elections" for a preview of coming attractions.

While preparation for the worst is always advisable, I remain optimistic to the point that I believe McPalin still has a good shot at winning this thing going away, despite the voter fraud. Don't despair, amigos, the cavalry is suiting up and heading to the stables.
#6 greenmtnpunter on 2008-10-06 19:05 (Reply)
I don't think we've seen capitulation yet, the volume wasn't high enough. We may have another 1000 points to go. Or maybe we bottomed intraday today, but I doubt it.

I don't understand the animosity toward going to cash being displayed here. Of course equities outperform everything over the long run, but why does that therefore mean you can't sit on the sidelines during a bear market? I went almost entirely to cash on the Friday when bailout negotiations initially broke down - I thought we were headed to Dow 8000 or worse without a bailout. What is wrong with preserving capital? Now I have cash on hand to buy everything at ridiculous discounts whenever this stops. Some of the stocks I owned are now down over 30% from when I sold them. Why is it good to just sit there watching your money evaporate? Because you know it will eventually come back? Of course it will, but it will come back bigger if you have cash on hand to buy everything cheap instead of just going alone for the ride.

And regarding Kudlow, I love the guy and his show, but he has been completely wrong about all of this. Up until the recent meltdown he has been saying "bull market, goldilocks, buy buy buy". That guy on his show, Joe Batapaglia, who has been very bearish (and in fact he looks kind of like a bear) has been exactly right. At 11,500 he was saying get out of stocks completely, and Kudlow mocked him. I was intially on Kudlow's side, but it should take long to see the light when you see what's going on in the credit markets.
#7 Captain Obviousness on 2008-10-06 19:34 (Reply)
Captain,

Ever watch Saturday morning's Fox two-hour financial shows? I'd sit there and write something down determined to call my broker on Monday, and before I could finish writing, some other hot broker poopooed it. I watched a couple of years just to learn, and if there is one thing I learned and stand by to this day it's that everyone has the right opinion and no one knows a thing. I think it's safe to say right now that no one knows a thing. And for some to whom you recommend selling, you're talking a ton of money. Who wants the hassle of taxes when it may cost you in the long run?
`
#7.1 Meta on 2008-10-06 20:27 (Reply)
you're gonna pay more taxes under Obama than ever in you life so forget that as a reason. The market has already taken away the last fouteen years of up side...vanished. see my other comments at bottom
#7.1.1 Habu on 2008-10-07 04:28 (Reply)
If it doesn't go up, don't buy it.
#8 Ron Hardin (Link) on 2008-10-06 19:46 (Reply)
The new lows list in the WSJ has to reach three feet in length before you get a solid bottom, is the indicator I remember.

Another one is odd lot short sales (are there still odd lots?), because when the small investor gets into the spirit of it it means it's about to turn.
#9 Ron Hardin (Link) on 2008-10-06 19:49 (Reply)
HOWDY, ya'll. I thought I'd drop in and tell youse how to peel a hardbolled aig.


First, you pound the eggs on the counter so that the shell is completely broken into many small pieces. Then you remove just enough shell with your fingers so that you can catch the end of the spoon under the shell. This is with the back/bottom of the spoon away from the egg. Then, being careful to go just under the membrane and not into the egg, you use the spoon gingerly to lift off huge portions of the shell. It only takes a few moments and you're done. That might be a lousy description... much harder to talk about than it is to do. Like most things.

By Luther McLeod, The Egg Man
#10 Luther on 2008-10-06 22:58 (Reply)
That was really special, Luther. Thank you so much! I love detail.

Can you tell us how you hammer your muffins?
`
#10.1 Meta on 2008-10-06 23:03 (Reply)
Well, you know. We were talking about golden eggs, nest eggs, thousand year old eggs. And when you get down to it... eggs, with the attendant hens, might just be among a man's more valuable possessions in an Obama future. Hard boiled travel best. Muffins now... that is a special subject, I may have to talk money for that secret.
#10.1.1 Luther McLeod on 2008-10-06 23:29 (Reply)
Luther.

How deft you are. What about the spoon and that membrane thing? If you had a thousand-year-old aig, would you stick with the spoon or broker it with a mallet?
`
#10.1.1.1 Meta on 2008-10-06 23:35 (Reply)
Good question, Meta.

And it will cost you money to find out the answer... just call 1-800-999-0000. And you will receive the special price. Just for you.
#10.1.1.1.1 Luther McLeod on 2008-10-06 23:45 (Reply)
egg talk reminds me --we oughtta be investing in gold coins and henweighs.
#10.1.1.1.1.1 buddy larsen on 2008-10-06 23:58 (Reply)
Well, you know. If I have the only egg (and the hidden hen to lay more) and the other has all the gold, and is hungry. Other than force of arms... who wins do you think?
#10.1.1.1.1.1.1 Luther McLeod on 2008-10-07 00:05 (Reply)
The hungry one always wins, if he don't die trying.
#10.1.1.1.1.1.1.1 buddy larsen on 2008-10-07 01:59 (Reply)
Jappy,

What's a 'henweigh'? Is that a fine piano for a chicken? Does it make all the other hens' cloacas push out more aigs?

I would like to know who names body parts. "Cluck, cluck...dang, my cloaca needs some K-Y Jelly after Tchaikovsky's 5th."
`
#10.1.1.1.1.1.1.1.1 Meta on 2008-10-07 09:42 (Reply)
oops. Sorry Jappy. I was listening to Joe Cocker's, "The Letter", when I noticed it wasn't you who mentioned "henweighs". It was that darling Buddy who knows everything and never makes you feel dumb when you don't know something.

But it's okay if you want to answer, Jappy. :)
`
#10.1.1.1.1.1.1.1.1.1 Meta on 2008-10-07 09:47 (Reply)
I do not believe there has been capitulation yet. The intraday volatility tells me that there are still many traders who have not thrown in the towel.

Besides, I do not think too many are thinking about the risk of a deflationary economy. Now that would be bad for stocks. The play would be long-term bonds if it happens because rates would decline to near zero. The 10 year bond could be in the 1% range. It will likely take coordinated central bank to thwart deflation.

I am not ready to say this definitively because I have not fully acted upon it. But I am thinking about it.

Time will tell.
#11 Barrett on 2008-10-06 23:08 (Reply)
You want to know what we, my husband and I, are doing about all this panic and bad language and Chicken Little-ism? Exactly nothing. We're retired, living on a limited income, and we've made things as bullet-proof as we can quite a long time ago. So we're just sittin' here, rockin' on the front porch, and checking the Dow every so often. My husband looked at me this afternoon and said ... "remember, what goes down must come up. Sometime."

Marianne
#12 Marianne Matthews on 2008-10-06 23:37 (Reply)
ha ha, Marianne. :)

You go, girl. :}
`
#12.1 Meta on 2008-10-07 09:49 (Reply)
i stayed terty percent in cash throughout the run up. too much cash, i know --oppurtunity losses piling up daily. but now that terty percent is sicksty percent, and it's still the same amount! how'd THAT happen? must be the power of compound idiocy.
#13 buddy larsen on 2008-10-06 23:55 (Reply)
For the interim buy TIPS..you can look them up . Bills ,notes na dbonds tied to inflation which should come raring at us within the year. You are guarnateed your principle plus any inflation increase. You wond het rich but you buying pwer won't erode on that portion of the money. I would go beyong 5 years and the bidding for those is October.

Or build a bond latter. When the market locates the botton or near(like you knows) the move back inot mutual funds that are well known.

But I believe TIPS are you best bet right now Google them for more . You can buy them from the comfort of where you're sitting.
#14 Habu on 2008-10-07 04:19 (Reply)
ok notice the terrible mispellings etc then notice the time. a 4 am bathroom break turns into a blog..don't worry I washed my hands
#15 Habu on 2008-10-07 04:23 (Reply)
re:TIPS..I wouldn't go beyond 5 years. There is an active markey in them so you can buy or sell from home. etc.
#16 Habu on 2008-10-07 04:31 (Reply)
"I don't understand the animosity toward going to cash being displayed here."

That's not the issue. It's the Y2K problem (which, thank God, didn't materialize). If lots of people sell all their stocks, it tanks the economy.

That's the problem. Cramer made an irresponsible statement (like that's new).
#17 rightwingprof (Link) on 2008-10-07 09:22 (Reply)
"what goes down must come up"

Exactly. I haven't logged in to check my 401K (I just really don't want to know right now), and I'm sure like everybody else, I've lost money, but when the stock market starts to recover, that will reverse.

Chill, folks. Don't make it worse.
#18 rightwingprof (Link) on 2008-10-07 09:52 (Reply)
Lots of good news this morning. If I knew what I was talking, I'd tell, but I don't understand the vocabulary. Habu or Buddy can explain it.......... if Habu wakes up before tonight. :)

Steve Forbes was on Fox & Friends this morning. I like him. He is such a gentleman and pretty much seconded what Rightwingprof just said. Drudge didn't do the world any favors with his page yesterday ... what is his problem?

Guiliani came on and in his allotted three minutes managed to fillet Obama. It was great. I have to go take a valium.
`
#19 Meta on 2008-10-07 09:56 (Reply)
Yeah I've been just awful lately. I haven't had a good workout in about six weeks which means at my age you've got to go back to zero and start all over. I've just been in a funk ..but to the money thing.

Right now cash is your best friend. A bond latter or the TIPS I mentioned.
You're absolutely right when you say "they know everything and nothing"....
But you need the inflation hedge,something that will maintain it's purchasing power when inflation hits hard.

It may take decades for equites to recover.

You can see the fear even on TV. I'd enjoy hearing what they really think.

Funnt how they'll try everything but not taxing us more. On second thought that's not funny at all.

Special offer.Send a certified check to HABU, Grand Cayman Island and I'll take care of it for you.

Best..debate time..ugh
#19.1 Meta on 2008-10-07 20:55 (Reply)
Hey Habu.... Thanks for your consistent advice and knowledge. How frustrating it is to be in thrall to the vagaries of the market. Yeah, I'd like to know what they say behind the scenes, too.

I hope you get your spirits back. I know you're not me - you signed my name, but I don't mind and gladly send you some good vibrations with the transfer.
`
#19.1.1 Meta on 2008-10-07 23:30 (Reply)

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