<p>Forgive my ignorance, never had taken ANY economics class, but the weak dollar should be helping our export. I know that I personally hate the weak dollar whenever I am overseas (funniest thing happened on the flight back from Montreal - they announced drink prices at US$5 and CAN$7 and people started changing their dollars 1 for 1
I can see the impact of the weak dollar in my husband’s job - airport equipment and ground support of planes - their orders are up significantly from previous years. And while the weakening economy and recession do generally mean more unemployment, because of the weak dollar they have an edge over their biggest competitor , which is based in Germany, and they are actually hiring more people.</p>
<p>That’s it in a nutshell. US goods are more competitive today but going overseas for fun is expensive. I have heard thet tourism to the US is also way up. Germans, Japanese, and English are looking at second homes here now as they look cheap compared to prices at home.</p>
<p>I’d sell to them. Just as many US folks were buying up places in Italy, Central America, and Mexico.<br>
What’s wrong with it exactly? You think they are going to start making French the national language? International economics is generally good for everyone. The Brits have been moving to So. California for years. I don’t know of any major problems with them. They even speak the language kind of and everyone in LA wants a Brit receptionist–sounds so posh.</p>
<p>^^^ but how does foreign ownership of second homes in America hurt anything? To me it is a great thing. They help prop up sagging real estate prices, pay taxes to send our kids to school but don’t add any kids of their own to increase school costs. The negative would be???</p>
<p>I think it is slightly below rosy. Nowhere near bad and at worst OK. The gyrations of the stockmarket over the short term are just that-. If Bush wants to give me some election year money for a new plasma TV I’ll take it. It’s just psychology money.
Remember these (Wall Streeters)are the same guys who brought you the no documentation, no money down, negative amortization mortgages. They are neither smart nor honest. They run in packs and care less about you than your worst enemy. Two words to remember–Greed & Fear.</p>
<p>so, if the economy is “okay” why do we need a phycological boost? and gee, as for the loans, that was Bush’s cronies making…no regulation, one of Ron Paul’s fave things as well</p>
<p>Because people listen to all the news heads telling them how bad things are and start to make decisions based upon that rather than on the fundamentals. Positive psychology is important in the economy. When people pull back it does hurt the economy for real.</p>
<p>“I think it is slightly below rosy. Nowhere near bad and at worst OK”</p>
<p>Barrons, elsewhere you said the market turmoil is a blip. First off, I am very surprised by the markets today. Having said that, almost everything is a blip. Our lives are a blip.</p>
<p>The way these markets are behaving is not normal. Economically, things are not slightly below rosy.</p>
<p>There are many bizarre things happening. Europe refuses to cut interest rates and their markets drop 5% in a day. 38 countries are in bear markets. Banks all over the world are having financial problems. Nasdaq is down 15% so far this month. Never started a year like this.</p>
<p>These are not normal events. Twenty years from now, this will be a blip. </p>
<p>In the last 10 years, out of the largest 60 stock markets around the world, the US stock market 's performance ranks 57th in the world. I guess we can’t get too worse. :)</p>
<p>I don’t want to get too bearish because we are in a panic phase and the world markets have already taken a $5 trillion hit.</p>
<p>This (2000-2001) was a crash, yet we survived both this and 9/11 without any depression like symptoms. There is no perspective today. The S&P 500 fell nearly as much.</p>
<p>“On September 1, 2000, the NASDAQ traded at 4234.33. From September 2000 to January 2, 2001, the NASDAQ dropped 45.9%. In October 2002, the NASDAQ dropped to as low as 1,108.49 - a 78.4% decline from its all-time high of 5,132.52, the level it had established in March 2000.”</p>
<p>There is a difference between we will survive this and things are just short of rosy.</p>
<p>Many people got hurt in the 2000-2002 drop. They never recovered financially. The Nasdaq has never come close to recovering from the drop even with the addition of Google. The Nasdaq today is around 2222 down from 5000 at the peak. It’s almost 8 years Barrons, and the Nasdaq is down 55%.</p>
<p>“The Nasdaq today is around 2222 down from 5000 at the peak. It’s almost 8 years Barrons, and the Nasdaq is down 55%.”</p>
<p>Certainly the NADAQ experienced the biggest bubble during the dotcom boom, so to compare the current levels to levels that were grossly inflated doesn’t really say that much. A more interesting comparison would be to compare today’s levels to what the NASDAQ would have been in 2000 without the anomaly of that crazy era.</p>
<p>Would you like to look at the Dow Jones Industrial Average instead? The high was around 11,700 around 8 years ago. Today, 11,800. About 2 percent in additional dividend gains.</p>
<p>So we end up with a 2% gain a year.</p>
<p>If the stock market doesn’t increase 50% in the next two years, this will be the worst decade for stocks since the 30’s.</p>
<p>We have a two year treasury note at 1.88%, a 5 year less than 2.5%, a 30 year at 4.15%. What does that tell you?</p>
<p>We will survive and eventually prosper but this idea that things are good right now…</p>
<p>These are not the interest rates when things are good.</p>
<p>Oh yes, the dollar is getting pummeled today in the foreign markets.</p>
<p>The great thing about markets is, if they are left alone, they will adjust and adjust quickly. We can get rid of the garbage and reinvent ourselves.</p>
<p>“If the stock market doesn’t increase 50% in the next two years, this will be the worst decade for stocks since the 30’s.”</p>
<p>Choosing decades as a measure of anything is rather pointless - especially when one of them begins in an anomaly. Based on my retirement modeling, the worst period to have begun a retirement was the early 70s.</p>
<p>Edit: note I’m not trying to say that things are “good” right now - just that when you continue to compare today’s markets to an outlying, non-repeatble point it doesn’t really say much of anything.</p>
<p>No the NasDaq and even the overall was horribly overvalued for reasons that sent some Wall Streeters and their pals to jail. The broader market has come back and hit 14000 briefly and has fallen back very recently. If you think it’s not coming back again sellout now and take your lumps. I’m betting you won’t. </p>
<p>The stock market is not the only measure of the economy. It may be decent over the longterm but in the short run it can be volatile and irrational as it is now. The unemployment rate is still historically near the structural low and nowhere near a recession level of 7-8% or so.</p>
<p>In the actual bad days I knew lots of people who were getting layed off. Right now I know of very few and most were in the SF mortgage business which will be bouncing back as the year goes forward as rates stabilize around the current low levels brings buyers back into the market. We are still hiring and busy. When we had a real recession we were much slower.</p>
<p>The choosing of a starting point can be arbitrary. I don’t want to waste time arguing why the year 2000 has meaning. </p>
<p>The following means something.</p>
<p>Anybody who has invested and gotten market returns or less during the last 8 years is not even covering inflation.</p>
<p>That’s a long time to make less than inflation. Makes it harder to retire, invest for college etc.</p>
<p>For example, college tuition increases have gone up quite a bit more than
stock market returns in the last 8 years. A lot of people are investing in stocks and hoping those returns will be higher than college tuition increases.</p>
<p>Didn’t happen for 8 years.</p>
<p>"We have a two year treasury note at 1.88%, a 5 year less than 2.5%, a 30 year at 4.15%. </p>
<p>In the last 40 years what do these interest rates signify? I hope 40 years is enough for you? :)</p>
<p>Why are people willing to invest for 2 years to make 1.88%? Why are people willing to invest for 30 years to make 4.15%? Inflation in the last year was 4.1% (Inflation may have peaked, but still?)</p>
<p>If you were smart? like me you did not buy into the market in that crazy late 1990’s run. While everyone was buying Pets.com and Homegrocer my money sat in a bond account making 5-6%. I was jealous for awhile but never jumped in. After the crash i put most of it back into broad equities funds and am still up about 50%. It will stay there for another 10 years or so, so this current correction is just a discount buying opportunity IMHO. I’m doubling my monthly investment to take advantage so my first bigger buy will be next Monday. I hope prices stay down until then.</p>
