<p>OK. I’m exaggerating. Maybe…Look at these stock prices…</p>
<p>Many owned by very rich families…</p>
<p>CBS is 5.39 Microsoft is 18.29 New York Times is 6.35 Citigroup is 6.40 Goldman Sachs is 55.15 Merrill Lynch is 9.60 Las Vegas Sands is 5.07 MGM is 10.20 Ford is 1.31 GE is 14.45 Intel is 12.49 US Steel is 25.21 Bank of America is 13.11 Dell is 10.35 News Corp (Owner of Fox News, the Wall Street Journal and other companies) is 6.59</p>
<p>Some of the richest people borrowed an incredible amount of money, or their firms did. Borrowed too much, just like poor people.</p>
<p>Some of those rich people are taking a major hit. Sumner Redstone is a world of hurt and Kirkorian’s investment in Ford has been a disaster. 100,000 high paying jobs are expected to be gone from Manhattan. New York is looking at an 18 billion shortfall and California is looking at a 11 billion. Everyone has to make do with less. This is not coming back anytime soon as the driver of our economy in consumer spending. No one has the money or wants to spend the money. If you really need a new car now is the time to buy. Colleges are in a world of hurt. State of California is cutting 10,000 students from its Cal State System cutting at least 10% of the freshman class and cutting a big proportion of transfer students. Of course the prison budgets are safe.</p>
<p>I was shocked by what I heard today–the market closed at the lowest level since 2003. That’s not all that long ago I thought, so all these gains people had came over 5 years. And if they can hold on (did not borrow heavily on the stocks at the peak) they can just wait to get their money back. Will it be in 5 years again? Who knows. Everyone said Bush did a losy job with growing the economy (stock and employment data notwithstanding) so with this real genius now in there with all his PhD advisors he should be able to do it in half the time it took Bush and company.</p>
<p>I don’t study the market, but my wild guess of a bottom is 7500.</p>
<p>And I estimate 3-5 years for it to get back to where it was before this mess started.</p>
<p>the jobs that are lost will have to be reborn in entirely new areas that don’t exist yet. I think rebuilding infrastruture (roads/bridges/electric (can we get the wires underground please!) is going to create jobs. We MUST develop solar, wind and whatever other kind of energy we can for our cars/homes/businesses. </p>
<p>The 20th century is OVER, we have to move forward or we will wither away. I know there are so many smart, hardworking people in this country and it pains me to see innocent people taken down by corporate greed and in some cases they dug their own personal finance hole. But we will survive. It will take time.</p>
<p>Cash RULES. I’m all cash since Sept 29. I do have some CDs and my retirement money is in the ONLY fund that has a guarantee not to lose value (about 3.5% interest YTD).</p>
<p>I am waiting this out. I am completely risk adverse so I was never full blown into stocks or mutual funds (and probably missed out on gains that would be gone now if I hadn’t sold)</p>
<p>“The Energy sector played the role of hero during the third quarter, contributing 40.4% of the S&P 500’s operating earnings – up from 16.2% a year ago,” said Howard Silverblatt, an S&P senior index analyst, in a statement. “Without Energy, the third quarter operating earnings for the S&P 500 would have hit an all-time low. Conversely, Financials have now posted their fourth consecutive quarter of negative earnings after accounting for 18.5% of operating earnings this time last year.”</p>
<p>It’s funny that you see it that way, ie the rich becoming middle class (or poor) like everyone else. The market has become the great equalizer. Up until recently I saw college as performing a similar function, ie poor people can send their kids to college and come out poor while middle class families can also send their kids to college and come out poor.</p>
<p>sueinphilly - I bet you also were warned by the very wise money manager types that you were actually exposing yourself to a greater risk by being in cash - the risk that inflation would erode the value of your savings. Well, at least at the moment it appears that DEflation is a greater concern than inflation.</p>
<p>I had my real-time streamer running so I was watching the tape. What kept my attention was C. I couldn’t believe the beating it took today.</p>
<p>There are a lot of people around me with kids in college or kids applying and nobody has changed their plans about their kids and their schools so gloom and doom isn’t everywhere. But it’s not as much fun.</p>
<p>I called Fidelity with some questions about TARP and their money market funds. They said that the amount as of September 19, 2008 is guaranteed by the Treasury until the end of 2008. So I’ll have to check and put anything over that into Treasuries.</p>
<p>A coworker asked me about an intermediate bond fund today. Why has it tanked? I took a look at the top 25 holdings. Top 15 were Treasuries. Then Fannie and Federal Home Loan Bank. Pretty sneaky. Coworker looked at the top-ten holdings only and saw all treasuries. If it were treasuries only, he would have had a nice gain.</p>
<p>Another friend has been doing very well in a TLT-type fund. Dollars and treasuries.</p>
<p>Very few traders I know are shorting the market. Mostly buying dips and getting stopped out. Many are afraid of shorting at these low levels. As am I. So just riding in cash and trying to make sure that the cash is in safe hands.</p>
<p>Most are hanging onto their stocks. My trading discipline says to take the loss when the trade falls outside your parameters for initiating the position. Taking the loss, is, of course painful. But a small loss beats a large loss. And as John Maudlin has said, holding onto a growing loss for a long time eats away at your mental capital.</p>
<p>Too True BC, I bought a very small amount of an IPO a couple of years ago, I think it debuted at $17 share price and immediately went to $15, I thought about liquidating and deciding just to leave it long term and forget about it and see where the company went. They went all the way down to $1-2, the started back up again this summer and BAM, the big crash and it is $0.85 Ah, well, I bought very little and it was a big gamble, but still frustrating to see the entire country tank because of the profligate ways of those who were paid the big bucks to be in charge and be brilliant</p>
<p>The danger is the formally middle class becoming the working poor. THAT will be the real tragedy. It would be something that will decide this country’s politics for decades to come. I shudder at the thought.</p>
<p>That 1999 number was as solid as the business plans for the Dotcoms that created it. Talk about your house of cards. I don’t try to really time markets but I was way out of that one before the fall. It was just goofy.</p>
<p>I was shorting the s&p with sh until today and I sold it. The trend however is still down but I expect a bounce soon before we go below the lows next quarter.</p>
Ah, well, I bought very little and it was a big gamble, but still frustrating to see the entire country tank because of the profligate ways of those who were paid the big bucks to be in charge and be brilliant</p>
I doubt that a typical middle class person is fluent in that.</p>