PDA

View Full Version : DOW Down 300


barn32
03-07-2015, 10:34 AM
The dollar is up, unemployment is down, and the DOW is off 300 points.


Sometimes I wish I could pull back the curtain and see who is behind the controls.

_______
03-07-2015, 11:41 AM
The dollar is up, unemployment is down, and the DOW is off 300 points.


Sometimes I wish I could pull back the curtain and see who is behind the controls.

The dollar is up (hurting profits at multi-national coporations), unemployment is down (raising the prospect of a fed funds hike sooner rather than later), so the market is down (anticipating lower profits and competition from higher yielding bonds).

The sell off seems entirely rational for an instrument that is trying to predict the future.

barn32
03-10-2015, 10:27 AM
The sell off seems entirely rational for an instrument that is trying to predict the future.Fed Funds Rate: .25%
Discount Rate: .75%
Prime Rate: 3.25%

Should the Fed decides to raise interest rates a 1/4 of a percent or maybe even 1/2 of a percent, or perhaps two or three 1/4 percent raises, my God that would spell doom for this country.

I can see the headlines now:

INTEREST RATES HIT 1%!!!

I can remember a time when you could get 25% on a CD! 25%! I'm not joking. Long live Jimmy Carter (the greatest president of all time, by the way. I really loved his sweaters--I'm a sweater many myself you know, but I digress).

So the bottom line is that as interest rates take a little spike that will kill the stock market, profits will fall and the world will flock to bonds.

If the futures this morning are any indication, we may be in for a tumble, and yes, there will be an over reaction to any interest rate hikes, but longer term I'm just not seeing it.

lamboguy
03-10-2015, 10:33 AM
Fed Funds Rate: .25%
Discount Rate: .75%
Prime Rate: 3.25%

Should the Fed decides to raise interest rates a 1/4 of a percent or maybe even 1/2 of a percent, or perhaps two or three 1/4 percent raises, my God that would spell doom for this country.

I can see the headlines now:

INTEREST RATES HIT 1%!!!

I can remember a time when you could get 25% on a CD! 25%! I'm not joking. Long live Jimmy Carter (the greatest president of all time, by the way. I really loved his sweaters--I'm a sweater many myself you know, but I digress).

So the bottom line is that as interest rates take a little spike that will kill the stock market, profits will fall and the world will flock to bonds.

If the futures this morning are any indication, we may be in for a tumble, and yes, there will be an over reaction to any interest rate hikes, but longer term I'm just not seeing it.
i had a CD that was paying 16% it was for $10,000 and it was supposed to be for 10 years. the bank went under and the new bank wouldn't honor the rate. they didn't have to either, it was in the fine print of the contract that i signed back then

today banks are paying a little over 1% and if they go bad you might lose part or all of your money that you think is insured.

from a risk reward perspective, gold sitting at about the cost to produce it these days seems like a better bet than walking into a bank giving them your money to gamble with.

_______
03-10-2015, 11:33 AM
The other side of that calculation was the first home I bought with a 11.25% 30 year loan. That was a discounted rate from market at the time (around 14% as a recall) for first time buyers. It came with an income restriction (easily met when I was 27) but also clauses that made refinancing difficult and restricted who I could sell it to (also first time homeowner with maximum income restriction) without having to share any increased equity in the home with the state agency that backed the loan.

I was happy to give the equity to my first wife in our divorce a few years later and get into a standard 8% 30 year loan on another home.

My sense on the fed funds rate is that you will see a single 1/4% raise this year and then a long period for them to see the impact that has on the economy before any further moves.

pandy
03-10-2015, 01:39 PM
During the Clinton admin. interest rates on car loans were through the roof. After Reagan came in I bought a new car and my interest rate dropped 14%.

ReplayRandall
03-10-2015, 03:57 PM
Wall Street celebrates 6 year anniversary of market bottom with a near 300 point drop........The Big-Boys really know how to celebrate.. :cool:

badcompany
03-10-2015, 04:03 PM
Get off the ledge, guys. It's just a pullback. You have to remember, in an 18k Dow, a 300 point drop is only 1.66%.

The S&P is only 3% off an all-time high.

Here were my individual stock picks for 2015 in the prediction thread. All are up for the year.

This a long way from a bear market.

Here are some general money making ideas:

Short Yen
Short Silver/Gold
Short Oil
Short Grains
Short Coffee

Long Dollar
Long U.S Equities

Individual Stocks:
ACT
AVGO
HAIN
JCOM





http://i95.photobucket.com/albums/l142/thinlizzy21/9fd527cc136be0314c502ff4501eda6c_zpsfc77032b.jpg

lamboguy
03-10-2015, 04:06 PM
During the Clinton admin. interest rates on car loans were through the roof. After Reagan came in I bought a new car and my interest rate dropped 14%.
first of all it was the Carter admin. when Reagan and Volker walked in the interest rates went much higher than with Carter and then they dropped in his second term. i was in the car business when Reagan took over, i had a Chevy store and sold it and began a car leasing business that was great because of the high interest rates.

highnote
03-10-2015, 04:34 PM
I am still long in the market.

Savings accounts pay about 1%. If the Fed raises rates by a point, I am still not going to put money into a savings account at 2% when I get can get a much better return in the market with dividend paying stocks and stock appreciation.

badcompany
03-10-2015, 06:21 PM
While I don't own this stock, I have a soft spot for the company, mainly because it's an anchor store at the Wilton Mall, just outside of Saratoga.

It's a struggling company and surely the shorts have piled on, yet on a sharp down day, it's up big.

This type of action is consistent with a shakeout.

http://i95.photobucket.com/albums/l142/thinlizzy21/409ac727ebc93f5866013590d7824981_zpsba32ccdd.jpg

reckless
03-10-2015, 06:47 PM
FWIW, today I added to my Avnet position, added to my Viacom, added to my CBS, took a new small position in Intel, Fox News, Harris and Lazard.

All these stocks are either way undervalued or are at easily acceptable price points based on my outdated and stodgy stock analysis.

Good luck to all and fear nothing, especially about things we have little control over.

badcompany
03-10-2015, 06:51 PM
Here's another heavily shorted stock that bumped, today.

This is consistent with Market Makers trying to trigger margin calls.

IMO, that's a good move you made, Reckless.

http://i95.photobucket.com/albums/l142/thinlizzy21/fe37966001aa5de2b49c0207e4274c71_zps512d94c4.jpg