Dow Crash Coming To Your 401K (2007 to 2022)

[Benny B]

I am already taking advantage of dollar cost averaging (i.e. investing a set amount on a regular basis, no matter the market conditions).  Just wondering if a more agressive strategy might be worthwhile as the market bottoms out.  It is risky, but getting a stock at a really low price, when they are still a stable and attractive business, is hard to pass up.

Good to see that you practice that basic investment strategy. However, did you read the second sentence I wrote after I mentioned dollar cost averaging?  Why WOULD you pass up on a stock if you feel the price is low and you believe it to be an attractive business? 

[Neurotoxin]

my main message to fellow getbiggers is: when you combine a record weak dollar/greenback, the worst housing and credit bust since 1929 with hyperinflation, record gas and oil prices, a tapped out/in debt consumer who today accounts for 70% of our economy, it's bad. this ultimately will result in a DEEP RECESSION and STAGFLATION. (non-growing economy with high inflation) considered by top economists as the WORST of all possible scenarios.

imo, the above mentioned will hit the stock market HARD in the coming months and the little guy stuck in a 401k will get slaughtered on the way down.(as usual)  conversely, professionals on wall street make money if markets go up.......or down.

i've been in this industry for many years and have NEVER seen a situation quite like the one developing.............i just hope people listen.


NT
  

[Bindare_Dundat]

This is another brutal day. So much volatility.

[Neurotoxin]

This is another brutal day. So much volatility.

yes it is. the VIX is sitting at an all time high.




NT

[Neurotoxin]

now the auto industry needs 700 Billion.

if this madness continues, we'll soon be wiping our ass' with worthless 100.00 bills.

NT



DETROIT (Oct.09 ) - The chairwoman of the National Automobile Dealers Association says the credit crunch and economic problems are likely to cause 700 auto dealers in the U.S. to go under this year. Speaking to the Automotive Press Association in Detroit, Annette Sykora on Tuesday urged fast government action on putting a $700 billion financial industry rescue plan in place.

[dantelis]

now the auto industry needs 700 Billion.

if this madness continues, we'll soon be wiping our ass' with worthless 100.00 bills.

NT



DETROIT (Oct.09 ) - The chairwoman of the National Automobile Dealers Association says the credit crunch and economic problems are likely to cause 700 auto dealers in the U.S. to go under this year. Speaking to the Automotive Press Association in Detroit, Annette Sykora on Tuesday urged fast government action on putting a $700 billion financial industry rescue plan in place.

Census shows well over 25,000 new car dealers in the US.  Loss of 700 of them isn't going to cause much harm and is actually probably a good thing. 

[Neurotoxin]

Today marks the one year anniversary of the all-time closing high set in the Dow Jones Industrial Average. On October 9th, 2007, the DJIA set an Intra-day high of 14279.96. One year later, we are off 40% (as Thursday). Since this current situation is currently being compared to the Great Depression, let's do some comparisons...

On September 3rd, 1929, the DJIA reached a record intra-day high of 386.1. One year later, September 3rd, 1930, it had fallen 38.5% Notice how closely that parallels the current crisis.

So looking at the current level of the Dow, are you ready to jump in at these bargain-basement levels? Before you act, let's look at what happened in years two and three of the Great Depression. Suppose you jumped into the market in September of 1930 thinking you were looking at similar bargains...


By September 3rd, 1931, the Dow had fallen  65.5% from it's peak just two years before.

On July 8th, 1932, the Dow had an intra-day low of 40.56, or 89.5% off it's peak in less than three years.

So the next logical question is, how long did it take to recover back to the peak of 386.1? Are you ready for this?

November 26th, 1954...a full 25 years after the peak set in 1929.

Seeing how the first year of the current crisis is trading on par with the first year of the Great Depression, one could draw the conclusion that we may not see Dow 14K again until 2032.




NT

[Neurotoxin]

GBers, again no surprise to us. Dow closed down 678.00 points today to 8,578.00.

why is everyone so shocked on CNBC ? 


old news here. 



NT

[Neurotoxin]

Dow 10/9/07 = 14,278

Dow 10/9/08 = 8,578




NT 

[Straw Man]

where's the bottom?

[Neurotoxin]

where's the bottom?

SM, the Dow bottom is 0.00 (just kidding)

right now panic and capitulation have set in. 

i'll have a better idea where the bottom is over the coming weeks/months.



NT

[tu_holmes]

SM, the Dow bottom is 0.00 (just kidding)

right now panic and capitulation have set in. 

i'll have a better idea where the bottom is over the coming weeks/months.



NT

There's a lot of doom and gloom discussion on the street... Everyone is hording cash.

The credit markets are still sluggish despite the bailout bill... Investors are putting money elsewhere.

[stormshadow]

SM, the Dow bottom is 0.00 (just kidding)

right now panic and capitulation have set in. 

i'll have a better idea where the bottom is over the coming weeks/months.



NT

LADIES AND GENTLEMEN

Listening to this man would have saved the average GBer with a 401k 30-40% of their porfolio.

NOBODY on getbig has made a contribution of this magnitude.

Hopefully a few of you listened.  I don't agree with the fundamentals of the 401k and have been out for almost two years now.  Nobody would listen to me about how much of a gamble it is to dump money into the 401k and bank on a retirement, but now they feel the pain.

8.3 Trillion has been lost in this market since Last October.

[War-Horse]

Socialism: A political theory advocating state ownership of industry.
An economic system based on state ownership of capital. All communists are socialists.


GBers, under George W Bush the government has now taken ownership of the mortgage industry, insurance industry and banking industry.

Nuff said.


NT


10/09 WASHINGTON - The Bush administration is considering taking ownership stakes in a number of U.S. banks as one option it might use to deal with a serious credit crisis, an administration official said Thursday.

Yes. thanks to dumbasses like coach, we are soon to be under socialism with an aspect of a dictatorship since the patriot act came along.    Republicans have built the biggest goverment in the history of america........socialist pigs.......

[Bindare_Dundat]

LADIES AND GENTLEMEN

Listening to this man would have saved the average GBer with a 401k 30-40% of their porfolio.

NOBODY on getbig has made a contribution of this magnitude.

Hopefully a few of you listened.  I don't agree with the fundamentals of the 401k and have been out for almost two years now.  Nobody would listen to me about how much of a gamble it is to dump money into the 401k and bank on a retirement, but now they feel the pain.

8.3 Trillion has been lost in this market since Last October.

But b,b,b but Alex said this was a MINI MELTDOWN and he insulted Neuro and others in this thread time and again. Alex beg for mercy or kill yourself now. 

[Bindare_Dundat]

[Neurotoxin]

GBers, as World Markets panic and collapse, i've never felt more relaxed in my life. 

hopefully this thread has assisted you.
 

NT


October 10, 2008
Stock markets around the world over fell sharply Friday as investor fears about the global financial crisis deepened, while government officials scrambled to contain the damage.

European markets got off to a terrible start. Within the first 10 minutes of trading, London's FTSE, the CAC in Paris and the DAX in Germany had each lost 10% of their values. European markets recovered some as the trading session wore on, but all were down from 4% to 9%.

Asian markets ended lower. The Nikkei Exchange in Japan closed down 9.6%.

Meanwhile, the Australian All Ordinaries index closed more than 8% lower and South Korea's KOSPI index finished the day off 4.3%.

Hong Kong's Hang Seng index was down about 8% in afternoon trading and Mumbai's BSE SENSEX was down 7.4%.

The losses brought more attempts by government officials to reverse the tide.

[Hugo Chavez]

can you say vindicated   Well fucking done Neuro...  You deserve a freaking medal for this thread.  

Seriously, good job on letting people know.

[Cromespyder]

nt, what do you think of this, the 42 trillion number? or anyone else here.

This isn't going to settle out until after the Credit Default Swap payoff auctions on Oct 23. Only then will everyone know just how exposed everyone else is. Many banks will fail no matter what the government does. But many will also survive and once shown to be sound their business will resume.
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What is scary to me about this is the way governments are taking over ownership of private sector financial institutions and private industry. Just think of the banks being run like the IRS or the Post Office - and by the very same people with political mandates. While it would hurt, it would be better to just let many of these banks fail and be replaced with new ones. All this life support is going to do is lead to perpetually sick banks run by politicians for political purposes.
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Guess I will repost this for those who didn't see it the first time. Skip it if you have seen it already.
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The $45.6 trillion Credit Default Swap Crash vs. the $700 bil Sub Prime Crash
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All of this because 5% of U.S. mortgages are defaulting? This 5% isn’t that big a number compared to the world financial markets. After all, the other 95% are still paying and yielding a cash flow. So if sub primes didn’t cause this what is going on?
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What is going on is a Credit Default Swap caused crash. A CDS is a form of insurance on loans that pays off if the loan defaults. CDS are totally unregulated and un-monitored by any government agency. CDS are not called insurance because insurance is regulated. If it was called insurance, and regulated, the issuers of the policies would be required to have assets enough to cover any claims. But it isn’t insurance. And it turns out the issuers of CDS never had the assets to cover any claims – even a small claim like the sub prime mortgage defaults. If they had paid off the sub prime defaults everyone would have their money and there would be no bailout.
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The banks and financial institutions that issued unregulated CDS made billions collecting the premiums (but they are not called premiums because it isn’t insurance). But when the sub prime backed instruments started to default they couldn’t pay off because they had no assets to pay off with. AIG is one example. And everyone noticed and started to worry.
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The real problem is that CDS were not sold to cover just mortgages loans. They were sold to cover almost every kind of lending instrument. Obviously, a bond that is insured against defaulting is more valuable and higher rated than one that is not insured. So once the CDS began defaulting on the subprime market it became obvious they were worthless insurance on everything else they insured, which is just about everything else out there. So the value of every bond, hedge fund and other investment instrument dropped on the books of every institution holding them. And they dropped fairly sharply.
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And then there are the CDS themselves. They were on the books as an income producing investment instrument just like a bond from a legitimate insurance company. Now they are virtually worthless. How much were they worth before the truth about them was revealed? $42.6 TRILLION. For perspective, this is equal to the entire household wealth of the U.S.; the U.S. stock market is capitalized at $18.5 trillion. So what really has happened is that the global financial markets have just taken a $42.6 trillion dollar loss of assets.
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Our recent bailout is only $700 billion, a tiny fraction of the outstanding CDS and not enough to make a tiny tiny dent in the debt the financial institutions are now holding. So what did our elected officials just do? They bailed out their campaign donors and gave them a chance to cash in their chips and leave the game with some cash in their pockets.
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The sub prime defaults are just a minor diversion that takes your eyes off what has really happened. Huge companies, here and abroad, (CDS started in Europe) committed a fancy complicated form of fraud. They sold insurance that wasn’t really insurance, collected billions in “premiums” that pumped up their books and made billions for their executives and brokers. They often issued a CDS to a buyer to pump up the price of a bond or financial instrument they were selling and thus increased their profits two ways.
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If a real regulated insurance company had done this the executives would all be indicted, prosecuted and put in jail for a long time. It was fraud and I hope our government will go after these weasels and put them in jail. But I doubt that will happen.
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The problem right now is that no one knows who is holding what or even how to begin to value holdings. The value of holdings of all kinds have clearly dropped. But by how much? In the sub prime mortgage market, for example, the houses are still out there and clearly they have some considerable value. But how much? The same holds across all the markets. The tangible assets securing most of the loans are still out there. But what are they worth now? We are about to see a huge 100 year shake out on the value of everything and everyone is going to take a hit. The more leveraged any business or individual is the more they are going to devalue. And that is another new aspect of this crash.
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Super low interest rates made borrowing possible – smart – at rates that would have been unthinkable 20 years ago. 20 years ago being leveraged at a 5 to 1 rate was the normal limit. Today 30 to 1 is normal. 4% interest rates simply could not be ignored and go unused. Hedge funds with 4% interest rates made extreme leveraging even more extreme for large investors and funds. It turns out some hedge funds had 100 to 1 leveraging. (Hedge funds are another unregulated market) So our entire economy, the businesses, the banks, individuals are credit extended like never before in history. So they are all going to be devalued like never before. This is going to be the perfect financial storm. And it isn’t going to end anytime soon.
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A lot of companies are going to fail – unavoidably. There is going to be a lot of unemployment. A lot of retirement funds are going to fail – including government backed retirement funds like state funds. And the U.S. government cannot bail them all out. But it will try at first. And the government will have unemployment claims and welfare claims like never before. And all this will cause another problem that will cause more pain. Inflation.
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Inflation like we haven’t seen in decades. Because the only way the government will have to pay off its debts – and they are going to be huge, even compared to our present huge debt – is to print money. Lots of money.
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We are going to see something unthinkable in the past. High unemployment, bankruptcies, banks closing and a very slow economy, BUT with high inflation because every government in the world is going to print money to try and bail things out.
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[Neurotoxin]

can you say vindicated   Well fucking done Neuro...  You deserve a freaking medal for this thread.  

Seriously, good job on letting people know.

how about some fancy stars HC ? 

seriously....thank you. it's my pleasure to help GBers.


NT

[24KT]

can you say vindicated   Well fucking done Neuro...  You deserve a freaking medal for this thread. 

Seriously, good job on letting people know.

"The fundamentals of our economy are strong!"  

              

[Neurotoxin]

GBers, if the unfortunate event of 1929 replays itself, a plan of having extra CASH on hand would be prudent.

think safety.


NT

[Bindare_Dundat]

See/hear  Bush's speech? I like the part where he said they'll criminally prosecute peope that manipulate the market. lol

[Hugo Chavez]

See/hear  Bush's speech? I like the part where he said they'll criminally prosecute peope that manipulate the market. lol

HAAAAAAAAAAAAA!!!!!! EPIC

WHAT A FUCKING INSULT... PRESIDENT STUPIDFUCK THINKING WE'RE DUMB.

[dantelis]

GBers, if the unfortunate event of 1929 replays itself, a plan of having extra CASH on hand would be prudent.

think safety.


NT

NT, how much cash do you currently have on hand?








...And what is your address?