US Stock Market

[Resting]

While the global financial world seems to be set for collapse (from local governments - Detroit, MI to Los Angeles - to states, the country, and many other countries throughout the world), the DJIA seems to be oblivious to this FACT. As of today, the market closed at above 12000 http://stockcharts.com/freecharts/hi.../djia2000.html.

How can this be? Surely investors are NOT oblivious to what is going on. Even with the EU crisis heating up this week - I don't see any market corrections.

What do you think is going on?

[$teve]

Yeah even some analysts cannot understand the rationale behind many of the stock market movements.

But in this instance, traders are hearing lots of whispers around a fresh release of stimulus around the world. And in fact, that is what has been happening. If not direct monetary stimulus in the form of quantitative easing, it is lowered interest rates and other policy adjustments that frees up money and cash flows. For example, just this week, China and Australia have loosened monetary policy and in recent weeks other countries have as well. There's also chatter of Spain receiving imminent financial aid of some $46 billion to support its banks. The markets love stimulus, so then, when bad economic data is released, it is an indication that stimulus is soon to follow. The markets would of surged even higher if Bernanke had indicated Fed Reserve stimulus was certain and forthcoming. Even rumors of stimulus get the share markets all giddy and excited.

[Shannon9602]

Forgive.... Im an idiot when it comes to stock market and economics statistics. Are you saying the stock has risen quite sharply in the U.S. despite what is going on?

[OnceWasLost]

Forgive.... Im an idiot when it comes to stock market and economics statistics. Are you saying the stock has risen quite sharply in the U.S. despite what is going on?

Long term news is grim, but the market is a here and now situation and they trade on what is being said and expected.

When the today news is bad stocks tank. If unemployment numbers go up the markets get hammered, if Spain is told no on their bailout, it will be ugly come Monday, etc.

Oddly enough there is so much long term bad news it's amazing anyone wants to buy stocks.

[Resting]

You are correct: we hear lots of rumblings about more QE, but additional spending will only make things WORSE - possibly MUCH worse, at least in the long-term.

I realize the market is capable of wild fluctuations, especially over the past few years. Still, I consider all of the recent downgrades various countries have received - even the USA. Why doesn't the market react to THAT? And now there is this story: http://online.wsj.com/article/SB1000...259305826.html

Surely all of these financially SMART people would realize that spending like this can only lead to one place: financial collapse!

Unsustainable...I know it's become a cliche, but I think it is quickly becoming THE WORD of the year.

[Mom2ten]

Where is the next QE going to?

[outwest]

Forgive.... Im an idiot when it comes to stock market and economics statistics. Are you saying the stock has risen quite sharply in the U.S. despite what is going on?

I spent a few years in stocks, bonds and commodity trading. Remember the DJIA is Dow Jones Industrial Average. This number is based on the top 30 companies. Apple, IBM, Wal-Mart etc. When bad new comes in the market will go down, people selling out. People who are determined to stay in sell off riskier assets and put their money into the top 30 because they are seen as much more stable during market fluctuations.

As a rule, gold and dollars should always be opposite. Lately that hasn't been the case. That is a warning bell. I have seen in the past two weeks gold and dollar up at the same time and gold and dollar down at the same time. Not good.

Spoke with a few old investment friends and both said people were selling out of gold and cashing in for the physical stuff. Many are expecting an imminent collapse. I personally feel they will prolong this at least a few more months if not longer.

Japan and China recently agreed between the two to trade directly in their currency instead of dollars. Not good.

Reuters recently reported that as of last year China has been buying US Treasury without going through Wall Street. Our Treasury Dept. opened up a straight link for them to purchase without being made public who is buying our debt. Not Good

We got out of the market 100 percent in 08. I had not yet been born again, but O scared me. I am very thankful now.

[Tulip2313]

Spoke with a few old investment friends and both said people were selling out of gold and cashing in for the physical stuff. Many are expecting an imminent collapse. I personally feel they will prolong this at least a few more months if not longer.

Japan and China recently agreed between the two to trade directly in their currency instead of dollars. Not good.

Reuters recently reported that as of last year China has been buying US Treasury without going through Wall Street. Our Treasury Dept. opened up a straight link for them to purchase without being made public who is buying our debt. Not Good

We got out of the market 100 percent in 08. I had not yet been born again, but O scared me. I am very thankful now.

Can you please explain a bit more about "were selling out of gold and cashing in for the physical stuff." Are you talking houses, goods, etc.?

Also, when you got 100 percent out of the market, where did you put it?

Thanks.

[Raphael]

People are still gambling on stocks for the same reason they did before the crash of 1929: they are betting on the market not crashing, and betting they will make a few bucks. In 1929 many people were doubly ruined because they bought stock "on margin", meaning they borrowed money to buy stocks. When the market crashed, they still owed on their loans. Many suicides.

Gold is very complicated. Fear of market or dollar collapses generally makes it price rise - but what about its real value in, say, a true "survivalist style" collapse/panic. The valuable commodities with be food, fresh water, medicine, ammunition, weapons, etc.

(Off topic, but folks get very angry when Wall Street moguls whose investments failed get giant bonuses and are set for life, while the smaller investors may be ruined for life.)

When it gets to the point that it has gotten to, there is only one "sure bet": Jesus Christ, the real "money master", and the source of all real wealth. He has promised to meet all our needs. There is no need for gambling on anything else.

[Mom2ten]

People are still gambling on stocks for the same reason they did before the crash of 1929: they are betting on the market not crashing, and betting they will make a few bucks. In 1929 many people were doubly ruined because they bought stock "on margin", meaning they borrowed money to buy stocks. When the market crashed, they still owed on their loans. Many suicides.

Gold is very complicated. Fear of market or dollar collapses generally makes it price rise - but what about its real value in, say, a true "survivalist style" collapse/panic. The valuable commodities with be food, fresh water, medicine, ammunition, weapons, etc.

(Off topic, but folks get very angry when Wall Street moguls whose investments failed get giant bonuses and are set for life, while the smaller investors may be ruined for life.)

When it gets to the point that it has gotten to, there is only one "sure bet": Jesus Christ, the real "money master", and the source of all real wealth. He has promised to meet all our needs. There is no need for gambling on anything else.

[Tall Timbers]

The DOW dropped from 13359 in May to about 12100 before recovering a bit in recent days. It's pretty much business as usual in the stock market. Companies have been reporting nice profits but in some sectors have begun to warn that coming quarters may be more difficult. Valuations have been historically low mostly for quite a while now, and that is mostly because of all the uncertainty out there. Investors like certainty. Besides the government(s) debt loads that are causing angst around the globe, the U.S. healthcare law is causing a lot of uncertainty as well. Hopefully the Supreme Court will shoot that beast down in it's entirety, though I'm not holding my breath for that outcome.

One of these days the bottom will fall out of the market... bringing financial ruination to millions. Then it will start to recover... For decades I was a long term investor. My investments were combined with other's to undergird and support a strong economy. Now, by necessity (on account of a view of the current reality), I'm more of an opportunist: Buying into dips and selling for chump change after a small recovery. That type of investing probably doesn't help our economy much. All of the uncertainty threatens the very foundation of our economic system. There are lots of cracks in that foundation. The government(s) (many governments) are to blame for the most part.

[Godslove]

Seems like by now in the year 2012 we should have figured out how our economy works and be able to get out of these crisis's. I mean this isn't something new, we've had economies now for thousands of years.

When you think about it no real business's or houses have been destroyed and the people are mostly the same. And they tell us we can't afford postal workers, while postal workers sit at home.

And over 40 years ago we put a man on the moon, and now we can't even transport the space shuttle over a river without damaging a wing.

[dmpeterson]

Seems like by now in the year 2012 we should have figured out how our economy works and be able to get out of these crisis's.

It's no longer a problem of figuring out how to get out of this crisis. It's no longer possible. Our debt now stands at 15.7 TRILLION Dollars while our GDP is 15.1 trillion. We are bankrupt with no way to pay this off. Add to this 728.2 Trillion dollars in derivatives which when the economy tanks will cause disaster on an order of magnitude never before seen. There is simply not enough money in the whole world to pay this off. As it is the Federal Reserve is propping the economy up by printing more and more money. Also notice that the media is always putting a positive spin on the economy including the stock market. If they told the truth there would be panic and the whole thing would come crashing down now. What can't be controlled is the euro, when that goes everything else will follow.

Trust In God, Not Gold!

[outwest]

Can you please explain a bit more about "were selling out of gold and cashing in for the physical stuff." Are you talking houses, goods, etc.?

Also, when you got 100 percent out of the market, where did you put it?

Thanks.

We are in the middle of Round Up on the ranch so I haven't been on since this morning. Sorry it took so long to get back.

We sold everything and paid off all debt. We have no monthly payments at all. I no longer buy into insurance or finance anything. Cash only. Although that is getting tougher. I do not trust this market and haven't for a while. Family members still have their retirement accounts and are losing more than gaining and its really hitting them hard. One brother-n-law moved everything into money market but that was just to keep from losing anything else since he retires in a couple of years.

As far as selling out of gold, rather than own the gold stock, they are cashing out of the market and putting their money into physical gold. I do not buy gold. I can't eat it and so therefore I don't need it. We have been blessed with a very safe and secure place to live and I thank God every day.

This market is so hard to gauge I am so glad I no longer have a foot in it. Very confusing times.

[outwest]

It's no longer a problem of figuring out how to get out of this crisis. It's no longer possible. Our debt now stands at 15.7 TRILLION Dollars while our GDP is 15.1 trillion. We are bankrupt with no way to pay this off. Add to this 728.2 Trillion dollars in derivatives which when the economy tanks will cause disaster on an order of magnitude never before seen. There is simply not enough money in the whole world to pay this off. As it is the Federal Reserve is propping the economy up by printing more and more money. Also notice that the media is always putting a positive spin on the economy including the stock market. If they told the truth there would be panic and the whole thing would come crashing down now. What can't be controlled is the euro, when that goes everything else will follow.

Trust In God, Not Gold!

I agree 100%. People do not look at the derivatives and that alone is overwhelming! No way out but to revamp the entire system which of course is where they are heading. This whole thing makes me think about how you cook a frog. Gradually heat up the water till he boils to death but as long as you go slow he will not jump out of the pot.

[Time4me2fly]

Go to the national debt clock (just google it) and look at the bottom , under unfunded liabilities. These are the promises the government has made to people, the number is 119 trillion, or 119,000,000,000,000. So to say that the national debt is 15 trillion is really a understatement. The stock market is currently benefiting from fear in other countries, but our boat, because of debt will sink also. This amounts to over 1 million dollars per taxpayer (look to the right of the unfunded liabilities) Everyone needs to look at this, but it will make a good nights sleep tough.

[Tulip2313]

We are in the middle of Round Up on the ranch so I haven't been on since this morning. Sorry it took so long to get back.

We sold everything and paid off all debt. We have no monthly payments at all. I no longer buy into insurance or finance anything. Cash only. Although that is getting tougher. I do not trust this market and haven't for a while. Family members still have their retirement accounts and are losing more than gaining and its really hitting them hard. One brother-n-law moved everything into money market but that was just to keep from losing anything else since he retires in a couple of years.

As far as selling out of gold, rather than own the gold stock, they are cashing out of the market and putting their money into physical gold. I do not buy gold. I can't eat it and so therefore I don't need it. We have been blessed with a very safe and secure place to live and I thank God every day.

This market is so hard to gauge I am so glad I no longer have a foot in it. Very confusing times.

Thank you for replying. I too have felt the need in the last 10 years or so to have no debt and to especially to pay off my house. My worry has been my husband's retirement account which is in the stock market. I had to roll this over and can't take it out without a hefty penalty. Now, we all know the stock market is going to crash. It is just a matter of time. If I take it out I will need to put it into an IRA and my feeling is that the banks and eventually cash will also go. I would love to use these funds to help family members get out of debt now and just haven't figured out how yet.

Since no one in my life fully believes the way I do, no one is discussing these things at all. I have Christian friends of various denominations and not one of their churches (or any I go to) is discussing the end times at all. It seems that everyone is just going along their merry way blind to everything that is going on. Because of my witnessing one person did ask their Bible study teacher and was informed that nothing will happen for a very long time (about 20 years or so). I am no Bible study teacher but I disagree.

I would love to find a good Christian financial site but haven't come across anything I trust yet.

When you mentioned people switching to gold I had to chuckle. I've been witnessing everywhere about the stock market collapsing, the Rapture and getting your heart right with God NOW. Most people are starting to think that I'm delusional or paranoid, which saddens me but hopefully when the Rapture does occur they will remember what I witnessed. One person didn't talk to me for a few days but then came back to let me know she invested most of their funds in gold! Even though I never mentioned this to her she took the time to investigate a possible stock market collapse and came up with this. I wish she had taken the main part of our conversation seriously but instead focused in on the money.

For me, I don't feel called to invest in gold and would rather invest in people. I know that the Lord has a plan for me and I trust in that. But I also need to be a good steward while I am still here.

Thanks for your help!

[carol1948]

IMO tptb think they are manipulating the stock market, but in fact God is holding it (this nation) us up economically. If/when He lets the stock market crash chaos will occur. I don't really see that happening because of the scriptures that tell us that things will be pretty much normal in the last days.

[Godslove]

It's no longer a problem of figuring out how to get out of this crisis. It's no longer possible. Our debt now stands at 15.7 TRILLION Dollars while our GDP is 15.1 trillion. We are bankrupt with no way to pay this off. Add to this 728.2 Trillion dollars in derivatives which when the economy tanks will cause disaster on an order of magnitude never before seen. There is simply not enough money in the whole world to pay this off. As it is the Federal Reserve is propping the economy up by printing more and more money. Also notice that the media is always putting a positive spin on the economy including the stock market. If they told the truth there would be panic and the whole thing would come crashing down now. What can't be controlled is the euro, when that goes everything else will follow.

Trust In God, Not Gold!

I agree about the derivatives being dangerous but not about the debt. Derivatives as they are currently structured should be made illegal IMO. However the debt just tells you how much money the private sector has. Debt=Money. How are our children going to go broke when they inherit all those treasuries from their parents/grandparents? Paying the debt off would just leave the economy with no money. Also its operationally impossible for a monetary sovereign country like the US to go bankrupt.

Didn't intend for my post to somehow imply that I was trusting gold more than God as I don't even own any of the yellow metal although my wife does own a small amount of GLD in her IRA. I try (best I know how) to trust in God alone and honestly I hate this world and can't wait for our exit.