Stock Market

[85Hokie]

The sad thing about all this speculation is that it is just that !!!! I have seen so many people tell me sooooo many things that are going to happen.....and maybe they will ! But the oil game is that - A game between huge corporations and us poor little people, we get to spend more money elsewhere due to cheaper gas, but people will be laid off in the process (perhaps my oldest son)

But those that get on the boob tube and the net often talk about what is going to happen based on what has happened.....and I am not saying they do not know what they are talking about, but it places a panic on a lot of people that it otherwise will not affect.

AND more importantly, people hear and read what they want to, there are 3 parts of the truth, the truth, the WHOLE truth and nothing but the truth.

My uncle will hear some wise ass on the tube say that the president is banning all bullets from russia..........well there IS truth to that, but it is lack A LOT of information that becomes important once you READ the rest of the info..... one TYPE of bullet that goes in some special gun that we the typical user never uses.....

He told me that the NSA and the FBI had bought like (making the number up now) 2 million rounds of ammo last year, and why do they need all that ammo...etc etc.......government take over is what he thinks....

BUT when you look up the info, the fact is that bought twice that much the year before and the year before!!!! SO what sounds like a crazy government topic is not what is really is.

I just dont believe EVERYTHING that someone tells me on the tube or the net, sometime you have to see it for yourself.......there are people that are going to tell you who is going to win the super bowl right now, but when it comes down to brass tacks, they dont know shyte from shynola !!!!

The fact is that we never know what the hell is going on at anytime, NOW IF someone told you last year that gas would be at 1.84 gal now, would have believed them THEEEEN??????

hell the weatherman get it right about 50% of the time and he has computers out the ass to tell him what is going on.....

ok, my ramble is over ........

dont count those chickens that aint hatched yet!

 

[OldeEnglish]

I agree with you Hookie, some people/news agencies blast things way out of proportion. The first quarter of the year is typically always on the down side, especially January. It's the way it's always been, some corporations don't meet their projections for the holidays when most consumers are spending money. The holidays are over now and everyone is tapped out so not much spending happens in January.

Oil is a strange game that controls this world. Oil goes up, costs businesses more, stock prices go down. Oil goes down, stocks go down, and they blame it on oil. Back in the early 80's my father was working on an oil shale project owned by Shell. Things were good until the price of oil dropped and the project shut down without any notice and everyone was without a job. I hope that doesn't happen again for the sake of all the jobs created. In the 80's, it happened because we were buying oil from the Saudis cheaper than what it costs us to drill. It sounds like they may be doing the same thing again. The Saudis can sell oil dirt cheap because they don't have the debt we do. It will be interesting to see what happens, but right now I think the oil is worth less than the barrel it's in, that's insane but I'm not complaining.

 

[RIDETOEAT]

Done some reading today and I think it is already happening !!

 

[CaveCreekRay]

Hope you guys are right!

Problem is, as we saw in the last "crash" in 2008, derivatives played a huge role in that meltdown. This time, financial institutions and banks appear to have bought huge derivative contracts and the one's on oil will require them to pay the difference between the contract price and the current price of oil. These "contracts" are usually bought and sold quarterly, with the first contracts up now. Many more will come due in April and if oil is still down, some in the financial industry are saying banks will shut down as they are unable to cover their contracts.

This is the same "house of Cards" we saw collapse in 2008. Only this time there are fewer banking institutions because many consolidated or went away in 2008. Remember all the money Congress gave banks in 2008 to prop them up? Much of that money went into investments like derivatives. A bunch of it went into countries like Greece, who are about bankrupt.

The US government is beyond broke. We currently hold an estimated 70+ trillion in unfunded liabilities. That means there is no money to pay for these liabilities, most of which are future social security and benefit payments. All the while, we let millions upon millions more into this country, and right onto welfare and social security. This will not end well. The dollar will eventually collapse, as all fiat currencies have in the past. The surge in the dollar right now is simply because we are the "least dumpy house in a bad neighborhood." In other words, everyone else is worse off than we are.

Just look at the last 20 years in Japan. Deflation. Everything is losing value. And now they have embarked on the same crazy "stimulus" program we have been doing for the past 6 years. Wonder why a gallon of milk is $4? A box of cereal is $5? Healthcare costs are through the roof!

I sure hope you guys are right. But, a lot of people way smarter than me are saying bad stuff is right around the corner...

 

[RIDETOEAT]

Done some reading today and I think it is already happening !!

I was referencing the loosing of oil jobs in speaking of the oil boom industry in the central midwest. I was reading news for Breitburn, BBEP and saw one of the their competitors had close up shop already and would be auctioning their assets in the north Texas and Oklahoma areas as well as others I don't recall. We just keep sticking our heads in the sand further in my opinion.

 

[skeets]

All I can say is ,you guys that have money to loose in the stock market. you should just bundle up that money and send it to me ,,I will spend it wisely on things that count for something,,, New Harley, New Kubota, New Silverado,, you know things that keep Americans working Im just trying to do my part

 

[Billdog350]

All I can say is ,you guys that have money to loose in the stock market. you should just bundle up that money and send it to me ,,I will spend it wisely on things that count for something,,, New Harley, New Kubota, New Silverado,, you know things that keep Americans working Im just trying to do my part

I think you all have good points. I agree that our GVT is f'ed up and our economy isn't much better. However, it is where we're all stuck (at least those on the forum from the US).

What we CANNOT plan for accurately is our future. Stocks may go up and down, the dollar may go up and down, etc etc. One thing that WILL keep value is something you can use, something that can make you money.

Tools, Kubota's (any equipment for that matter), firewood, and other materials.

The economy can fall apart, but I can use my Kubota (assuming I can afford parts and fuel) to log my property for firewood, do work around the property for maintenance, as well as do side jobs or even full time if I lost my job. How does a Stock do that for you? Tomorrow it may by worth $10,$100,$500...but it could go up or down at a moments notice.

I love my Chevy's but buying a new vehicle is definitely a loosing proposition, the vehicle will always lose value over time, except a classic.

I'm currently investing in tools....they can help me make money and SAVE money around the house, and will be there tomorrow if the economy collapses.

 

[85Hokie]

I was referencing the loosing of oil jobs in speaking of the oil boom industry in the central midwest. I was reading news for Breitburn, BBEP and saw one of the their competitors had close up shop already and would be auctioning their assets in the north Texas and Oklahoma areas as well as others I don't recall. We just keep sticking our heads in the sand further in my opinion.

Now that ONE market ....the oil business - that is what IT IS......there is a lot of "bad" things that can and might happen there, pure and simple - this is a pissing contest b/w the saudis and the russians and our great government. WE want to hammer russia for their ....well, decisions and we will do what ever we can to fck them up, whatever we CAN, the saudis can afford to sit around and take a beating for a while.....for a while.......

HOWEVER.......G R E E D will win in the end! NO one will take a beating too long, someone will go out of business, some will slow down production and them the saudis will slow down to get the $$$ right........

No one will wait around much longer.......remember WE get 85% oil from this country and canada........

(somewhere deep in the little places we dont want to know about - a handful of very powerful people are having a fun time!)

 

[Billdog350]

http://www.thestreet.com/story/1300...-sp-500-into-positive-territory-for-2015.html

 

[85Hokie]

Now that ONE market ....the oil business - that is what IT IS......there is a lot of "bad" things that can and might happen there, pure and simple - this is a pissing contest b/w the saudis and the russians and our great government. WE want to hammer russia for their ....well, decisions and we will do what ever we can to fck them up, whatever we CAN, the saudis can afford to sit around and take a beating for a while.....for a while.......

HOWEVER.......G R E E D will win in the end! NO one will take a beating too long, someone will go out of business, some will slow down production and them the saudis will slow down to get the $$$ right........

No one will wait around much longer.......remember WE get 85% oil from this country and canada........

(somewhere deep in the little places we dont want to know about - a handful of very powerful people are having a fun time!)

Speaking of people in little dark places ............not to say I believe him 100%............but...........

http://www.usatoday.com/story/money...audi-prince-alwaleed-oil-100-barrel/21484911/

 

[CaveCreekRay]

Gallup CEO Blasts US Leadership "The Economy Is Not Coming Back"

Authored by Jim Clifton, Gallup CEO & Chairman [13],

The U.S. now ranks not first, not second, not third, but 12th among developed nations in terms of business startup activity. Countries such as Hungary, Denmark, Finland, New Zealand, Sweden, Israel and Italy all have higher startup rates than America does.

We are behind in starting new firms per capita, and this is our single most serious economic problem. Yet it seems like a secret. You never see it mentioned in the media, nor hear from a politician that, for the first time in 35 years, American business deaths now outnumber business births [14].

The U.S. Census Bureau reports that the total number of new business startups and business closures per year -- the birth and death rates of American companies -- have crossed for the first time since the measurement began. I am referring to employer businesses, those with one or more employees, the real engines of economic growth.

Four hundred thousand new businesses are being born annually nationwide, while 470,000 per year are dying.

Until 2008, startups outpaced business failures by about 100,000 per year. But in the past six years, that number suddenly turned upside down. There has been an underground earthquake. As you read this, we are at minus 70,000 in terms of business survival. The data are very slow coming out of the U.S. Department of Census, via the Small Business Administration, so it lags real time by two years.

Net Number of New U.S. Firms Plummets

Business startups outpaced business failures by about 100,000 per year until 2008. But in the past six years, that number suddenly reversed, and the net number of U.S. startups versus closures is minus 70,000.


My hunch is that no one talks about the birth and death rates of American business because Wall Street and the White House, no matter which party occupies the latter, are two gigantic institutions of persuasion. The White House needs to keep you in the game because their political party needs your vote. Wall Street needs the stock market to boom, even if that boom is fueled by illusion. So both tell us, "The economy is coming back."

Let's get one thing clear: This economy is never truly coming back unless we reverse the birth and death trends of American businesses.

Dead-Wrong Thinking

It is catastrophic to be dead wrong on the biggest issue of the last 50 years -- the issue of where jobs come from. Our leadership keeps thinking that the answer to economic growth and ultimately job creation is more innovation, and we continue to invest billions in it. But an innovation is worthless until an entrepreneur creates a business model for it and turns that innovative idea in something customers will buy. Yet current thinking tells us we're on the right track and don't need different strategies, so we continue marching down the path of national decline, believing innovation will save us [15].

I don't want to sound like a doomsayer, but when small and medium-sized businesses are dying faster than they're being born [16], so is free enterprise. And when free enterprise dies, America dies with it.

Let's run some numbers. You will often hear from otherwise credible sources that there are 26 million businesses in America. This is misleading; 20 million of these reported "businesses" are inactive companies that have no sales, profits, customers or workers. The only number that is useful and instructive is the number of current operating businesses with one or more employees.

There are only 6 million businesses in the United States with one or more
employees. Of those, 3.8 million have four or fewer employees -- mom and pop shops owned by people who aren't building a business as much as they are building a life. And God bless them all. That is what America is for. We need every single one of them.

Next, there are about a million companies with five to nine employees, 600,000 businesses with 10 to 19 employees, and 500,000 companies with 20 to 99 employees. There are 90,000 businesses with 100 to 499 employees. And there are just 18,000 with 500 employees or more, and that figure includes about a thousand companies with 10,000 employees or more. Altogether, that is America, Inc.

Let me be very clear. America, Inc. is far more important to America's security than our military. Because without the former prospering -- and solvent -- there is no latter. We have enormous military power only because of a growing economy that has, so far, made it possible for the government to pay its bills. When former Chairman of the Joint Chiefs of Staff, Adm. Mike Mullen, was asked in a Senate hearing on June 28, 2011, to name the biggest current threat to the security of the United States, he didn't say al-Qaida. He didn't say Iran's nuclear capabilities. He answered, "I believe our debt is the greatest threat to our national security."

Declining Businesses Mean Declining Revenues for Social Spending

Keep in mind that these 6 million businesses, especially small and medium-sized ones, provide jobs for more than 100 million Americans and much of the tax base for everything. These small, medium and big businesses have generated the biggest economy in the world, which has allowed the country to afford lavish military and social spending and entitlements. And we've been able to afford all of this because, until now, we've dominated the world economy.

When new businesses aren't being born, the free enterprise system and jobs decline. And without a growing free enterprise system, without a growing entrepreneurial economy, there are no new good jobs. That means declining revenues and smaller salaries to tax, followed by declining aid for the elderly and poor and declining funding for the military, for education, for infrastructure -- declining revenues for everything.

America has maintained the biggest tax coffers in the world because its 300+ million citizens have produced and owned one-quarter of virtually all global wealth. The United States clobbered everyone in the battle of free enterprise, in the battle of business building, and in the battle of inventing the future. Until recently, America had blown the world away in terms of economic success. We are now quickly losing that edge, and everything we're trying to do to fix the problem is dead wrong.

Here's why: Entrepreneurship is not systematically built into our culture the way innovation or intellectual development is. You might say, "Well, I see a lot of entrepreneurial activity in the country." Yes, that's true, but entrepreneurship is now in decline for the first time since the U.S. government started measuring it.

The whole country and subsequently the world are having their own dead-wrong moment, and it is causing America and the whole world to make everything worse. And people know it, though they may not know why. When Gallup asked Americans to rate how much they personally worry about particular problems facing the country [17], the top three issues that respondents worry about a "great deal" were the economy (59%), federal spending and the budget deficit (58%), and the availability and affordability of healthcare (57%).

The more we execute on our leadership's erroneous belief in innovation, the more our engine stalls out -- and the more people rightly worry about economic issues.

Because we have misdiagnosed the cause and effect of economic growth, we have misdiagnosed the cause and effect of job creation. To get back on track, we need to quit pinning everything on innovation, and we need to start focusing on the almighty entrepreneurs and business builders. And that means we have to find them.

 

[tiredguy]

Interesting how we all are glad when fuel prices drop. Somehow we don't like it when investment drop. Aren't they generally tied together some how?

The price of oil goes higher when the US dollar is worth less, and a lot of what's available stock market wise is a mixture of companies all over the world or doing business all over the world. Then factor in the fact that all countries currency is fiat, and keep playing the monopoly game. Your money is worth more invested in a company that simply sitting in a bank doing nothing so nothing ventured nothing gained.

Actually unless you've been selling you haven't lost anything and I bet most weren't complaining as it was going sky high breaking records etc. Unless you sold it nothing's changed it will continue to go up and down over time.
That's life!
Al

 

[CaveCreekRay]

GREAT explanation of what we are facing....

The Beginning of the End of the $100 TRILLION Bond Bubble
By Phoenix Capital Research
Created 01/19/2015
The big story in the world is the bond bubble.

For over 30 years, sovereign nations, particularly in the West have been buying votes by offering social payments in the form of welfare, Medicare, social security, and the like.

The ridiculousness of this should not be lost on anyone. Politicians, in order to be elected, promise to allocate taxpayer funds on social programs that will benefit said taxpayers down the road (we’re simply talking about social spending, not infrastructure or other costs.

The concept that taxpayers might simply just keep the money to begin with never enters the equation. And because everyone believes that they are somehow spending someone else’s money, they play along.

When you believe that you are spending someone else’s money, it’s very easy to write a blank check, which is precisely what Western nations have been doing for years, promising everyone a safe and secure retirement without ever bothering to see where the money would come from.

When actual bills came due to fund this stuff, Governments quickly discovered that current tax revenues couldn’t cover it… so they issued sovereign debt to make up the difference.

And so the bond bubble was created.

The large banks, that have a monopoly on managing sovereign debt auctions, were only too happy to play along with this. The reasons are as follows:

They can use these alleged “risk-free” assets as collateral to backstop tens of trillions worth of derivatives trades. A $1 million investment in your typical US Treasury can backstop over $15 million worth of derivatives if not more. The profits from the derivatives markets remains a primary source of revenue for the banks.
Sovereign Governments are only too happy to bail out the big banks if the stuff ever hits the fan on the trades that are backstopped by the sovereign debt (see 2006 onwards). Since the banks are the ones holding the sovereign debt, they can always threaten to dump bonds, which would render the whole social welfare Ponzi bankrupt (see what happened in Europe when sovereign bonds collapsed in 2011-2012).
In a debt-based financial system such as the current one, sovereign bonds are the senior most assets in the system. Those who own these in bulk are at the top of the financial food chain in terms of financial, economic, and political clout.
Since it was rarely if ever a problem to issue sovereign debt, Governments kept promising future payments that they didn’t have until we reach today: the point at which most Western nations are sporting Debt to GDP ratios well north of 300% when you consider unfunded liabilities (the social spending programs mentioned earlier).

Now, cutting social spending is usually considered political suicide (after all, the voters put you in office in the first place based on you promising to pay them welfare payments down the road). So rather than default on the social contract made with voters, the political class will simply push to issue MORE debt to finance old debt that is coming due.

The US did precisely this in the fourth quarter of 2014, issuing over $1 trillion in new debt simply to pay back old debt that was coming due.

This is how the bond market becomes a bubble. Between 2000 and today, the global bond market has nearly TRIPLED in size. Today, it’s north of $100 trillion in size. And it’s backstopping over $555 trillion in derivatives trades.

There is literally no easy fix to any of this. The pain will be severe. And so everyone in charge of the important decisions (the political elite, the big banks, and the Central Banks) will push this as far as it can possibly go before taking the inevitable hit.

The fact that Central banks are now openly cutting interest rates to NEGATIVE should tell you how far along we are in terms of funding problems (at these rates, bond holders are PAYING the Government for the right to own bonds). From a baseball analogy we’re in the late 8th, possibly early 9th inning. When the game ends, the entire mess will collapse. And it will make 2008 look like a joke.

 

[Stubbyie]

Use Morningstar (Consumer Reports is a reasonable alternative infomation source, just less extensive and less data) to examine type, risk, returns, fees of all mutual funds. Well worth the effort. The only sources for unbiased research.

Go only for "no fee" or "no load" funds---not technically correct but the fees will be so low (tenths of a percent) you won't mind---much.

Be selective based on your personal level of risk aversion.

For 2014 we had a couple mutuals in the 3% range and a couple delivering mid-to-high-20% range---all without undue risk. Resulted in an acceptable rate of return in our scenario. You will be different in all aspects.

Be sure with any mutual fund to maximize your returns by reinvesting all dividends and short- and long-term capital gains.

Balance your portfolio so when one fund is down the other may--should--be up.

Hard to beat a no load index fund managed by one of the majors.

Avoid the strange quirky expensive international niche funds. I'm in it to make money, not protect polar whales from carbon.

Avoid also ANYTHING related to mutual funds sold by bank or insurance company----go directly to Schwab, TRowePrice, Fidelity, Qualified, Vanguard and bypass the middleman getting into your pocket. Use any of the major 'namebrand' players.

Avoid ANY financial planner that takes a cut of your account. Or is related to bank or insurance company. If you need planning, pay for service. If you need planning services, you know it; if you don't, don't pay for it.

Comments pertaining to this post invited.

Please post back your experiences so we may all learn.

 

[retiredlawnboy]

That is why my retirement funds are considered a bonus, I don't anticipate much being there when I am due the dividends. In addition I own a Kubota that farms my own food and have a couple of horses to go to town if I so desire. I also can go out and chop another tree out of the woods or off the fenceline for heat. What I would go for I don't know cause there wont be much there. Oh I also have a few rifles too!