How low can the stock market go?

  • silverfox

    Posts: 3178

    Mar 02, 2009 5:33 PM GMT
    I am asking this question more from an economic and scientific point of view as opposed to a bitching and wining session.

    I am just curious if the stock market could lose its entire value....or how close to it can it get.

  • Posted by a hidden member.
    Log in to view his profile

    Mar 02, 2009 8:43 PM GMT
    silverfox1 saidI am asking this question more from an economic and scientific point of view as opposed to a bitching and wining session.

    I am just curious if the stock market could lose its entire value....or how close to it can it get.



    In August 1932 the Dow Jones hit (I think) 41 from a peak of 280 or so in 1929. Basically it lost about 90% of its' value, so we have a ways to go yet to repeat that dubious record.

    Most experts think that the world has changed sufficiently to prevent another "Great" depression, but more and more economists are talking about a depression, which basically means a prolonged and severe recession (a GDP drop of greater than 10% seems to be one of the criteria). I am starting to hear whisperings of things turning around in 2011 instead of 2010. Almost everyone agrees that 2009 is going to be a bad year for the world's economy.

    The USA and Canada are actually "lucky" compared to the Asian economies that are seeing their exports drop off of a cliff. Eastern Europe is also suffering terribly.

    People are so pre-occupied with trying to keep the ship afloat nobody has turned their attention to the potential long-term impacts on people's pension plans, demographics (older people will have to stay in the workplace longer thus increasing unemployment amongst those coming out of school), etc..

    During times like these I can appreciate what the Chinese said about living in "interesting times."
  • Posted by a hidden member.
    Log in to view his profile

    Mar 02, 2009 8:45 PM GMT
    I hope this doesnt affect the businesses of anyone here on RJ! I worry about those who have built their livelihoods around this and are not vulnerable more than perhaps anyone for the crap some brickbreaker-playing, blackberry-carrying idiots on Wall Street caused.
  • Posted by a hidden member.
    Log in to view his profile

    Mar 02, 2009 8:59 PM GMT
    Caslon5billion saidI hope this doesnt affect the businesses of anyone here on RJ! I worry about those who have built their livelihoods around this and are not vulnerable more than perhaps anyone for the crap some brickbreaker-playing, blackberry-carrying idiots on Wall Street caused.


    I agree that Wall Street investment bankers are partially to blame, but more and more I am reading about the roots of this crisis stemming from the current account imbalances that started in the late 1990s (see link to opinion from Paul Krugman in NY Times).

    http://business.theglobeandmail.com/crashandrecovery/

    Also here is a link from the Globe and Mail talking about the economic term "depression".

    http://www.theglobeandmail.com/servlet/story/RTGAM.20090302.wdword0302/BNStory/crashandrecovery/home

  • Posted by a hidden member.
    Log in to view his profile

    Mar 02, 2009 9:14 PM GMT
    Today....we get a rather grim look at the world!!! Grab hold of something tight as our world is about to get rocked. It would appear that this Greater Depression is only at the earlist stages. IMO, I can easily see the DJIA falling below 3000, the NASDAQ below 1000 and the S&P 500 below 300. There simply is no support whatsoever except for Government handouts. Unless we get involved in a World War or simlar disaster we are finished. I seriously doubt that the current White House administration and current Congress would be want to see any real recovery as Rohm Emmanuel so eloquently put it: “”You never want a serious crisis to go to waste”. Anything to solidify power and establish a more totalitarian state would not really be that surprising. Look at how the US changed under FDRs “economic crisis” of the “Great Depression”. We have institutionalized welfare state programs that the country could never ever fully pay for, ultimately leading us to the current mess we are in today many decades later. Today the world stock markets resumed crashing and the outlook is in a word “grim”:

    World Indices look a little ragged this morning:

    http://biz.yahoo.com/ap/090302/world_markets.html

    US and EU market indices portend one ugly opening and perhaps a continuation of the Stock Market Crash as this Greater Depression intensifies:

    http://www.bloomberg.com/markets/stocks/futures.html

    The only market gaining strength this morning is of course the precious metals. I would definitely suggest that people get well positioned into the precious metals and prepare for many years of self reliant living. The last “Great Depression” lasted over 11 years before the Second World War, and this “Greater Depression” has the potential of bringing the world economy to utter and complete collapse. I believe that we have miised every opportunity to turn this sinking ship around and are now passed the tipping point. Man the “golden lifeboats”! should be the rallying cry from the bridge. I just for the life of me don’t see how it is possible to keep the global economy afloat any longer.

    We can only look out for “number one” and protect ourselves and our families. Most of us have taken precautions and yet I wonder if it will be enough for the “Brave New World” we must face. I am intensifying my efforts to prepare beyond what I have already done. As always, “get out of debt and stay out of debt, stash enough cash for several months household expenses, accumulate silver and gold “porfolio insurance”, and beef up your longterm nonperishable food storage and supplies of basic necessities.

    http://www.bloomberg.com/apps/news?pid=20601057&sid=aOsz2ViSAxPQ&refer=futures

    Just the FACTS.....

    It is sunny here in Arizona...lol Garden's doing good too...
  • Posted by a hidden member.
    Log in to view his profile

    Mar 02, 2009 9:20 PM GMT
    Well they did say it's going to get worse before it gets better! Buckle Up, IT'S GOING TO BE A BUMPY RIDE! Having lost 15% of my retirement, pass being worried what can you other than ride out. I'm going out shoot myself. I'll just have to rebuild it if I can and if it's a total loss it is what it is.

    I had to start over before and I'm prepared to do it again if I lose everything.
  • Posted by a hidden member.
    Log in to view his profile

    Mar 02, 2009 9:23 PM GMT
    SurrealLife saidI agree that Wall Street investment bankers are partially to blame, but more and more I am reading about the roots of this crisis stemming from the current account imbalances that started in the late 1990s (see link to opinion from Paul Krugman in NY Times).

    http://business.theglobeandmail.com/crashandrecovery/

    Thanks Surreal. I sent that link to my congressman and both senators.
  • Posted by a hidden member.
    Log in to view his profile

    Mar 02, 2009 10:16 PM GMT
    Ducky45 saidWell they did say it's going to get worse before it gets better! Buckle Up, IT'S GOING TO BE A BUMPY RIDE! Having lost 15% of my retirement, pass being worried what can you other than ride out. I'm going out shoot myself. I'll just have to rebuild it if I can and if it's a total loss it is what it is.

    I had to start over before and I'm prepared to do it again if I lose everything.


    Ducky, I trust you meant to write: "I'm NOT going out [to] shoot myself". Am I right? I hope so.
  • Posted by a hidden member.
    Log in to view his profile

    Mar 02, 2009 10:38 PM GMT
    How low will it go? No idea, but its safe to say it will never go to zero. People will always have to spend money on food, gas, toilet paper, the latest iPhone and all the other necessities. That sets a basic level of economic activity. The size of the economy is also several multiples bigger than it was in 1929, so we won't see Dow 40 either.
    It was announced today that consumer savings rates were the highest since 1995, though that may be temporary as Jan sees a lot of cost of living adjustments and federal employee raises take affect. This is a double edge sword in that its great if Americans save more, pay down debt and rely less on credit to make purchases but at the same time the US economy is dependent on consumer spending. 2/3 of the economy comes from consumers. If we aren't out spending our money, than there is really very little other tools, such as government spending, can do to help turn things around. So go do your part and go shopping!! icon_smile.gif
  • Posted by a hidden member.
    Log in to view his profile

    Mar 03, 2009 2:45 AM GMT
    jprichva saidAnyone who really believes that the current government's plan is to prolong the crisis with the aim of establishing totalitarian power is seriously drinking the paranoid kool-aid.


    Well.....you never know...it has happened before!
  • Posted by a hidden member.
    Log in to view his profile

    Mar 03, 2009 2:48 AM GMT
    jprichva saidAnyone who really believes that the current government's plan is to prolong the crisis with the aim of establishing totalitarian power is seriously drinking the paranoid kool-aid.


    I woulda thunk it about the Bush administration, but I think the Obama administration has attacked the economic meltdown head on. I think we're currently feeling the delayed reaction of Bush Co.'s lack of action 12 - 18 months, ago.
  • Posted by a hidden member.
    Log in to view his profile

    Mar 03, 2009 2:50 AM GMT
    it will probably not go much lower below the value of the underlying assets (value of buildings, intellectual property, etc.), or else there'd be a firesale; the companies would be taken over for or below the value of the assets, reorganized and resold at profit.
  • MikemikeMike

    Posts: 6932

    Aug 08, 2011 8:51 PM GMT
    good topic to bring up now-It just got worse. The DOW was down 200 today, then Obama spoke and it took a swift drop to close 634.76icon_sad.gif

    upside might be good time to buy Apple APPL.icon_smile.gif

    The government is dropping interest rates on mortgages to around 4%. Sounds good right but they havent been this low since Truman. What happens next people buy homes, if they even can, higher priced than they normally would and they end up losing them when one or both parties lose their job. Not the answer!!!
  • Posted by a hidden member.
    Log in to view his profile

    Aug 08, 2011 8:52 PM GMT
    MikemikeMike saidgood topic to bring up now-It just got worse. The DOW was down 200 today, then Obama spoke and it took a swift drop to close 634.76icon_sad.gif

    upside might be good time to buy Apple APPL.icon_smile.gif

    The government is dropping interest rates on mortgages to around 4%. Sounds good right but they havent been this low since Truman. What happens next people buy homes, if they even can, higher priced than they normally would and they end up losing them when one or both parties lose their job. Not the answer!!!


    To answer the question, the DOW can go pretty fucken low!
  • MikemikeMike

    Posts: 6932

    Aug 08, 2011 11:55 PM GMT
    Straight from the New York Times Sunday Review "what happened to Obama?" -those of us who were bewitched by his eloquence on the campaign trail chose to ignore some disquietin­g aspects of his biography. He had accomplish­ed very little before he ran for President having never run a business or a state- that he had a singularly unremarkab­le career as a law professor, publishing nothing in 12 years at the University of Chicago other than an autobiogra­phy. He occasional­ly voted present on difficult issues. - OOPS liberals having buyers remorse -can you spell Hillary?


    She was definitely the better man for the job!!!!!!!!!!!!!!
  • CuriousJockAZ

    Posts: 19136

    Aug 09, 2011 12:05 AM GMT
    ruck_us saidI think we're currently feeling the delayed reaction of Bush Co.'s lack of action 12 - 18 months, ago.



    Just when ya think you have heard it all....icon_rolleyes.gif
  • MikemikeMike

    Posts: 6932

    Aug 09, 2011 12:07 AM GMT
    My God not true Ruck- His actions have made it worse!!
  • Posted by a hidden member.
    Log in to view his profile

    Aug 09, 2011 3:24 PM GMT
    Things are rebounding today a little. It's not all doom and gloom.
  • Posted by a hidden member.
    Log in to view his profile

    Aug 09, 2011 3:25 PM GMT
    CuriousJockAZ said
    ruck_us saidI think we're currently feeling the delayed reaction of Bush Co.'s lack of action 12 - 18 months, ago.



    Just when ya think you have heard it all....icon_rolleyes.gif


    Guys this may be a little hard to hear, and may crush your world, but the president does not dictate whether the market goes up or down...its kind of the people...
  • Posted by a hidden member.
    Log in to view his profile

    Aug 09, 2011 3:50 PM GMT
    Depends, does it have apple bottom jeans and boots with the fur?
  • MikemikeMike

    Posts: 6932

    Aug 09, 2011 5:46 PM GMT
    Gold stocks are now higher than platinumicon_biggrin.gif
  • Posted by a hidden member.
    Log in to view his profile

    Aug 09, 2011 5:54 PM GMT
    MikemikeMike saidGold stocks are now higher than platinumicon_biggrin.gif


    Good news for me... I sold some gold last Saturday, Aug. 6th when the price was $1663. BUT, the buyer has a 30 day guarantee that if the price goes up, they will pay the difference. I'm hoping it tops $2000 before the end of the month. I think today, it was around $1800 something.
  • coolarmydude

    Posts: 9190

    Aug 09, 2011 6:16 PM GMT
    MikemikeMike saidMy God not true Ruck- His actions have made it worse!!


    His comment was from March 2009.

    But what of Obama's actions has caused the stock markets' volatility? The DOW Avg has nearly doubled since he took office.