DOW Closes UP nearly 1,000 points!!! - Page 4 - Mercedes-Benz Forum

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post #31 of 128 (permalink) Old 10-14-2008, 03:31 PM
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I really do think that last week was what we call "capitulation." And I will be surprised if we are not now on a long upward move--w/ lots of setbacks along the way. Under normal circumstances I would predict that we will be back above 11k or 12k on the Dow by year-end; but w/ all the government interventions around the world, all bets are off. I've been around a long time and thought I had seen it all--up until now. What we are seeing today represents a whole new chapter in financial histoire. It will be interesting to see what happens, but I won't be making many major predictions any time soon.
The only things that worry me are that there are a couple of shoes left to drop. We have seen the collapse of the Manufacturing sector in this country and much of the developed world. We are seeing the collapse of the financial sector as we know it worldwide. There are going to be new players coming into the game that will run the board. China, Saudi Arabia, UAE, India. And WE gave them much of the cash to become players with our soaring trade deficits.

We are going to still have to deal with a multi trillion dollar consumer credit crunch that is NOT on the current table and the retail crunch that will be ancillary to that. Those two will provide additional input to the increased unemployment numbers and will increase risk to a LONGER rather than shorter recovery.

Then the REALLY BIG PROBLEM is National Debt. We are at $10T now. The Bailout is going to cost at LEAST $1T more up front plus all the other Nationalization issues. Expect $12T Debt by 2010. The current COST of the debt is $600Billion [20% of revenue]. As debt goes up, that will rise to 25%. Taxes will have to go up just to service debt. If we can't/don't pay for the debt service, then the Debt just goes up an additional $600B annually. Most owned by folks like China, Saudi Arabia, UAE, India.

This is a BIG ASS HOLE we are in. We cannot buy our way out of this one.

Dig out your gray cloud guy.

McBear,
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post #32 of 128 (permalink) Old 10-14-2008, 03:46 PM Thread Starter
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The only things that worry me are that there are a couple of shoes left to drop. We have seen the collapse of the Manufacturing sector in this country and much of the developed world. We are seeing the collapse of the financial sector as we know it worldwide. There are going to be new players coming into the game that will run the board. China, Saudi Arabia, UAE, India. And WE gave them much of the cash to become players with our soaring trade deficits.

We are going to still have to deal with a multi trillion dollar consumer credit crunch that is NOT on the current table and the retail crunch that will be ancillary to that. Those two will provide additional input to the increased unemployment numbers and will increase risk to a LONGER rather than shorter recovery.

Then the REALLY BIG PROBLEM is National Debt. We are at $10T now. The Bailout is going to cost at LEAST $1T more up front plus all the other Nationalization issues. Expect $12T Debt by 2010. The current COST of the debt is $600Billion [20% of revenue]. As debt goes up, that will rise to 25%. Taxes will have to go up just to service debt. If we can't/don't pay for the debt service, then the Debt just goes up an additional $600B annually. Most owned by folks like China, Saudi Arabia, UAE, India.

This is a BIG ASS HOLE we are in. We cannot buy our way out of this one.

Dig out your gray cloud guy.
As usual I think you overstate most of that, but I agree we are in a big hole. As the financial system starts to come back, I think consumer confidence will start to come back too. Even w/ expected unemployment increases, a return of the Dow to 11, 12 or 13k will begin to have a positive impact on our economy--which the last time I looked was still growing! I expect that recent problems in the financial sector will begin to bring that growth in to negative territory. I still don't see the debt as having a major affect on our economy near-term, but it will have to be dealt w/ sooner or later. If the economy doesn't come crashing down in the next six months, and begins to show signs of life, I believe much of the debt "problem" will begin to take care of itself. And as for the BRICs taking over the world, I just don't see it. They will undoubtedly play an ever-increasing role in world financial/economic matters, but if you look at their current situation, they are in worse shape than the US--for the most part. (See below)
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Don't believe everything you think
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post #33 of 128 (permalink) Old 10-14-2008, 04:24 PM
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Things look good for now, but I await the next shoe to drop...


^^^^^ You will be rolling in a rickshaw and not in your 2000 Mercedes Benz S500

Jim
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post #34 of 128 (permalink) Old 10-14-2008, 05:58 PM
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As usual I think you overstate most of that, but I agree we are in a big hole. As the financial system starts to come back, I think consumer confidence will start to come back too. Even w/ expected unemployment increases, a return of the Dow to 11, 12 or 13k will begin to have a positive impact on our economy--which the last time I looked was still growing! I expect that recent problems in the financial sector will begin to bring that growth in to negative territory. I still don't see the debt as having a major affect on our economy near-term, but it will have to be dealt w/ sooner or later. If the economy doesn't come crashing down in the next six months, and begins to show signs of life, I believe much of the debt "problem" will begin to take care of itself. And as for the BRICs taking over the world, I just don't see it. They will undoubtedly play an ever-increasing role in world financial/economic matters, but if you look at their current situation, they are in worse shape than the US--for the most part. (See below)
You have been saying I have been overstating for the past two years and as I look back I keep thinking that I should have articulated more of the issues instead of just the ones I talked about.

You say you believe the national debt issue will take care of itself. HOW? We have a $3Trillion National Budget NOW, a $13Trillion GDP and folks wanting to cut taxes or add services. The math just doesn't work.

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post #35 of 128 (permalink) Old 10-15-2008, 10:52 PM
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DOW 8677 -733 -7.87%
NAS 1628 -150 -8.47%
S&P 907 -90 -9.03%

Not a very good day. We are back at what we hope will be the basement. Asia is down anywhere between 5-10% right now. Nikkkei is down right at 10%.

Europe will be the big red flag.

McBear,
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post #36 of 128 (permalink) Old 10-15-2008, 10:56 PM
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I am dressing that shopping cart for Jayhawk. Should I use Turtle Wax or McGuire?
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post #37 of 128 (permalink) Old 10-15-2008, 10:58 PM
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I am dressing that shopping cart for Jayhawk. Should I use Turtle Wax or McGuire?
I prefer McGuires simply because I like Barry's little program and figure it is my way of helping out production costs.

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post #38 of 128 (permalink) Old 10-15-2008, 10:59 PM
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Me too, does he still own the company?
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post #39 of 128 (permalink) Old 10-15-2008, 11:06 PM
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Me too, does he still own the company?
I think his family does but the way things change with buyouts, he might just be the spokesbabe.

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post #40 of 128 (permalink) Old 10-15-2008, 11:07 PM
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Originally Posted by mcbear View Post
DOW 8677 -733 -7.87%
NAS 1628 -150 -8.47%
S&P 907 -90 -9.03%

Not a very good day. We are back at what we hope will be the basement. Asia is down anywhere between 5-10% right now. Nikkkei is down right at 10%.

Europe will be the big red flag.
It is threads like this one, and events such as those quoted above that make Jaybaugh seem like such a bobbing hardon in a kiddie pool at the city park and rec.

Jim
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