HOLY SMOKES : Did i read this right? Dow below 10,000 S&P;1,100 Nasdaq 1500. Is this possible by October?

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Nude is mostly right. But, gold is not an inflation hedge. Gold is a preservation of wealth during positive acceleration of price increases. If the velocity of price increases is a constant, ie. CPI stays at 4% for months and months and years, gold will probably not increase. If the velocity of price increases increases, (acceleration), ie. CPI goes from 2% to 3% to 4% to 5%, gold will usually increase in price. Gold increases in price due to public perception. There is nothing complicated about it. If folks do not trust their currency, they want gold. It really is that simple. It is not price increase themselves which cause gold to move, it is the public's perception of price increases.
 
[quote author="awgee" date=1225446671]Nude is mostly right. </blockquote>
You say tomato, I saw tomato. CPI being the most publicly reported inflation index, I think you are quibbling over terms :P
 
Muzie,



Gold is God made and the U.S. Dollar is man made. You can easily print the dollar, but you cannot print Gold. I was just reading the book of Revelation from the bible and I was amazed to see how many times GOLD was mentioned to describe what heaven will look like.



Revelations 21:15 -21



The angel who talked with me had a measuring rod of GOLD to measure the city, its gates and its walls. The city was laid out like a square, as long as it was wide. He measured the city with the rod and found it to be 12,000 stadia in length, and as wide and high as it is long. He measured its wall and it was 144 cubits thick, by man's measurement, which the angel was using. The was made of jasper, and the city of pure GOLD, as pure glass.The foundations of the city walls were decorated with every kind of precious stone. The twelve gates were twelve pearls, each gate made of single pearl. The great street of the city was of pure GOLD, like transparent glass.



Obviously, it seems that the man above loves GOLD. The U.S. Dollar will lie, but GOLD will always tell the truth. History has shown us over and over that Gold will eventually rise above all fraud and deception of our flawed currency.



Should Panda put his faith and trust in Senor Bernanke or God? I think i am going to put my faith in God.
 
[quote author="PANDA" date=1225452654]Muzie,



Gold is God made and the U.S. Dollar is man made. You can easily print the dollar, but you cannot print Gold. I was just reading the book of Revelation from the bible and I was amazed to see how many times GOLD was mentioned to describe what heaven will look like.



Revelations 21:15 -21



The angel who talked with me had a measuring rod of GOLD to measure the city, its gates and its walls. The city was laid out like a square, as long as it was wide. He measured the city with the rod and found it to be 12,000 stadia in length, and as wide and high as it is long. He measured its wall and it was 144 cubits thick, by man's measurement, which the angel was using. The was made of jasper, and the city of pure GOLD, as pure glass.The foundations of the city walls were decorated with every kind of precious stone. The twelve gates were twelve pearls, each gate made of single pearl. The great street of the city was of pure GOLD, like transparent glass.



Obviously, it seems that the man above loves GOLD. The U.S. Dollar will lie, but GOLD will always tell the truth. History has shown us over and over that Gold will eventually rise above all fraud and deception of our flawed currency.



Should Panda put his faith and trust in Senor Bernanke or God? I think i am going to put my faith in God.</blockquote>


God also says greed is root of all evil. Its in the Bible. God also says not to be consumed by building wealth on earth as we already own the kingdom of heaven. Also in the Bible.



So really Panda, you're money should be going to help build churches and feed the poor so you can earn to be in that city of pure GOLD.
 
[quote author="blackvault_cm" date=1225453761][quote author="PANDA" date=1225452654]Muzie,



Gold is God made and the U.S. Dollar is man made. You can easily print the dollar, but you cannot print Gold. I was just reading the book of Revelation from the bible and I was amazed to see how many times GOLD was mentioned to describe what heaven will look like.



Revelations 21:15 -21



The angel who talked with me had a measuring rod of GOLD to measure the city, its gates and its walls. The city was laid out like a square, as long as it was wide. He measured the city with the rod and found it to be 12,000 stadia in length, and as wide and high as it is long. He measured its wall and it was 144 cubits thick, by man's measurement, which the angel was using. The was made of jasper, and the city of pure GOLD, as pure glass.The foundations of the city walls were decorated with every kind of precious stone. The twelve gates were twelve pearls, each gate made of single pearl. The great street of the city was of pure GOLD, like transparent glass.



Obviously, it seems that the man above loves GOLD. The U.S. Dollar will lie, but GOLD will always tell the truth. History has shown us over and over that Gold will eventually rise above all fraud and deception of our flawed currency.



Should Panda put his faith and trust in Senor Bernanke or God? I think i am going to put my faith in God.</blockquote>


God also says greed is root of all evil. Its in the Bible. God also says not to be consumed by building wealth on earth as we already own the kingdom of heaven. Also in the Bible.



So really Panda, you're money should be going to help build churches and feed the poor so you can earn to be in that city of pure GOLD.</blockquote>


Blackvault,



You are absolutely correct. I am consistently reminded the promise i made with him in senior year in college.
 
LOL. I was just messing with you.



I'm not going to even get into gold pricing as I don't trade it so I'm not familiar with it so I won't pretend either. Just thought you quoting Revelations was funny.

My dad is a pastor and I was forced to read the Bible many times over and memorize Bible verses. As a result I'm a very bad person today...
 
Tupperware party? <a href="http://www.marketwatch.com/news/story/Gold-parties-let-consumers-trade/story.aspx?guid={AEAFCA8A-CEA6-49C7-839C-FDDBF4E7E6D2}">Nope, a gold party where you can sell your gold</a>.

<em>

Say good-bye to Tupperware and hello to gold.



MarketWatch's Jennifer Waters goes to a gold party, where consumers exchange their old jewelry for cold, hard cash.

This was a gold party, and some of the women walked away with wads of cash in exchange for what they considered junk, unlike other neighborhood parties where they write out checks for plastic salad spinners or skincare and cosmetics.



Debbie Johnson was handed $1,600 after she turned in broken gold chains, earrings without pairs and the wedding bands from a marriage gone sour more than two decades ago.



"I had a baggie in my drawer that I've been throwing broken and old things into for 20 years," she said. "I had a good idea of what it was all worth."

Kathy Goro gave up a lovely gold necklace her husband gave her when they were dating more than 25 years ago, plus a bracelet and another chain from the 1980s. Her take: $230. Though she still liked the necklace and valued it sentimentally, she never wore it because it pinched the tiny hairs on the back of her neck. </em>



If this isn't a sign of herd behavior, then I dunno what is.
 
[quote author="graphrix" date=1225455313]Tupperware party? <a href="http://www.marketwatch.com/news/story/Gold-parties-let-consumers-trade/story.aspx?guid={AEAFCA8A-CEA6-49C7-839C-FDDBF4E7E6D2}">Nope, a gold party where you can sell your gold</a>.

<em>

Say good-bye to Tupperware and hello to gold.



MarketWatch's Jennifer Waters goes to a gold party, where consumers exchange their old jewelry for cold, hard cash.

This was a gold party, and some of the women walked away with wads of cash in exchange for what they considered junk, unlike other neighborhood parties where they write out checks for plastic salad spinners or skincare and cosmetics.



Debbie Johnson was handed $1,600 after she turned in broken gold chains, earrings without pairs and the wedding bands from a marriage gone sour more than two decades ago.



"I had a baggie in my drawer that I've been throwing broken and old things into for 20 years," she said. "I had a good idea of what it was all worth."

Kathy Goro gave up a lovely gold necklace her husband gave her when they were dating more than 25 years ago, plus a bracelet and another chain from the 1980s. Her take: $230. Though she still liked the necklace and valued it sentimentally, she never wore it because it pinched the tiny hairs on the back of her neck. </em>



If this isn't a sign of herd behavior, then I dunno what is.</blockquote>


This may be an example of herd behavior. If it is, what behavior is it exhibiting? What is the herd doing?
 
[quote author="awgee" date=1225481004][quote author="graphrix" date=1225455313]Tupperware party? <a href="http://www.marketwatch.com/news/story/Gold-parties-let-consumers-trade/story.aspx?guid={AEAFCA8A-CEA6-49C7-839C-FDDBF4E7E6D2}">Nope, a gold party where you can sell your gold</a>.

<em>

Say good-bye to Tupperware and hello to gold.



MarketWatch's Jennifer Waters goes to a gold party, where consumers exchange their old jewelry for cold, hard cash.

This was a gold party, and some of the women walked away with wads of cash in exchange for what they considered junk, unlike other neighborhood parties where they write out checks for plastic salad spinners or skincare and cosmetics.



Debbie Johnson was handed $1,600 after she turned in broken gold chains, earrings without pairs and the wedding bands from a marriage gone sour more than two decades ago.



"I had a baggie in my drawer that I've been throwing broken and old things into for 20 years," she said. "I had a good idea of what it was all worth."

Kathy Goro gave up a lovely gold necklace her husband gave her when they were dating more than 25 years ago, plus a bracelet and another chain from the 1980s. Her take: $230. Though she still liked the necklace and valued it sentimentally, she never wore it because it pinched the tiny hairs on the back of her neck. </em>



If this isn't a sign of herd behavior, then I dunno what is.</blockquote>


This may be an example of herd behavior. If it is, what behavior is it exhibiting? What is the herd doing?</blockquote>


I think this is a herd of Panda behavior.
 
[quote author="optimusprime" date=1225482212][quote author="awgee" date=1225481004][quote author="graphrix" date=1225455313]Tupperware party? <a href="http://www.marketwatch.com/news/story/Gold-parties-let-consumers-trade/story.aspx?guid={AEAFCA8A-CEA6-49C7-839C-FDDBF4E7E6D2}">Nope, a gold party where you can sell your gold</a>.

<em>

Say good-bye to Tupperware and hello to gold.



MarketWatch's Jennifer Waters goes to a gold party, where consumers exchange their old jewelry for cold, hard cash.

This was a gold party, and some of the women walked away with wads of cash in exchange for what they considered junk, unlike other neighborhood parties where they write out checks for plastic salad spinners or skincare and cosmetics.



Debbie Johnson was handed $1,600 after she turned in broken gold chains, earrings without pairs and the wedding bands from a marriage gone sour more than two decades ago.



"I had a baggie in my drawer that I've been throwing broken and old things into for 20 years," she said. "I had a good idea of what it was all worth."

Kathy Goro gave up a lovely gold necklace her husband gave her when they were dating more than 25 years ago, plus a bracelet and another chain from the 1980s. Her take: $230. Though she still liked the necklace and valued it sentimentally, she never wore it because it pinched the tiny hairs on the back of her neck. </em>



If this isn't a sign of herd behavior, then I dunno what is.</blockquote>


This may be an example of herd behavior. If it is, what behavior is it exhibiting? What is the herd doing?</blockquote>


I think this is a herd of Panda behavior.</blockquote>


Isn't Panda going against the herd? In Graph's example, the herd is selling. Panda is buying.



I would posit that the real herd right now is hedge funds.
 
[quote author="awgee" date=1225484338][quote author="optimusprime" date=1225482212][quote author="awgee" date=1225481004][quote author="graphrix" date=1225455313]Tupperware party? <a href="http://www.marketwatch.com/news/story/Gold-parties-let-consumers-trade/story.aspx?guid={AEAFCA8A-CEA6-49C7-839C-FDDBF4E7E6D2}">Nope, a gold party where you can sell your gold</a>.

<em>

Say good-bye to Tupperware and hello to gold.



MarketWatch's Jennifer Waters goes to a gold party, where consumers exchange their old jewelry for cold, hard cash.

This was a gold party, and some of the women walked away with wads of cash in exchange for what they considered junk, unlike other neighborhood parties where they write out checks for plastic salad spinners or skincare and cosmetics.



Debbie Johnson was handed $1,600 after she turned in broken gold chains, earrings without pairs and the wedding bands from a marriage gone sour more than two decades ago.



"I had a baggie in my drawer that I've been throwing broken and old things into for 20 years," she said. "I had a good idea of what it was all worth."

Kathy Goro gave up a lovely gold necklace her husband gave her when they were dating more than 25 years ago, plus a bracelet and another chain from the 1980s. Her take: $230. Though she still liked the necklace and valued it sentimentally, she never wore it because it pinched the tiny hairs on the back of her neck. </em>



If this isn't a sign of herd behavior, then I dunno what is.</blockquote>


This may be an example of herd behavior. If it is, what behavior is it exhibiting? What is the herd doing?</blockquote>


I think this is a herd of Panda behavior.</blockquote>


Isn't Panda going against the herd? In Graph's example, the herd is selling. Panda is buying.



I would posit that the real herd right now is hedge funds.</blockquote>


Individuals in a herd follow a direction simply because others in the herd are following the same direction. Hedge funds aren't following each other, they just don't have any other choice but to sell. I'm not sure what the correct group analogy would fit best for this, some sort of mass slaughter... maybe genocide? oops I ran off a tangent with this one... oh well
 
[quote author="blackvault_cm" date=1225453761][quote author="PANDA" date=1225452654]Muzie,



Gold is God made and the U.S. Dollar is man made. You can easily print the dollar, but you cannot print Gold. I was just reading the book of Revelation from the bible and I was amazed to see how many times GOLD was mentioned to describe what heaven will look like.



Revelations 21:15 -21



The angel who talked with me had a measuring rod of GOLD to measure the city, its gates and its walls. The city was laid out like a square, as long as it was wide. He measured the city with the rod and found it to be 12,000 stadia in length, and as wide and high as it is long. He measured its wall and it was 144 cubits thick, by man's measurement, which the angel was using. The was made of jasper, and the city of pure GOLD, as pure glass.The foundations of the city walls were decorated with every kind of precious stone. The twelve gates were twelve pearls, each gate made of single pearl. The great street of the city was of pure GOLD, like transparent glass.



Obviously, it seems that the man above loves GOLD. The U.S. Dollar will lie, but GOLD will always tell the truth. History has shown us over and over that Gold will eventually rise above all fraud and deception of our flawed currency.



Should Panda put his faith and trust in Senor Bernanke or God? I think i am going to put my faith in God.</blockquote>


God also says greed is root of all evil. Its in the Bible. God also says not to be consumed by building wealth on earth as we already own the kingdom of heaven. Also in the Bible.



So really Panda, you're money should be going to help build churches and feed the poor so you can earn to be in that city of pure GOLD.</blockquote>


Oh, boy... See, this is what I mean when I say goldbugs are sometimes.. awkward. I don't mean to be harsh, but when an investment has in its thesis that I should buy it because God said so, I can't help but feel we are being taken for fools. You probably meant it as a semi-joke (I think?).



I'm pretty sure nowhere in the Bible does it say that God recommends that you should buy lumps of rock and hoard them so that you can later sell them to your brothers for profit during a period of great economic suffering. Let's not mix religion & the stock market here, it's too much of a slippery slope.
 
I have an open question: What would be a catalyst to another wave of selling?



I think we are in a bear rally, but I do believe the markets will rally from here. Everything bad about the economy is known. People already believe Obama is going to win, so there are no surprises waiting there (except maybe a McCain victory). I think the sellers have spent themselves for a time.
 
[quote author="IrvineRenter" date=1225512663]I have an open question: What would be a catalyst to another wave of selling?



I think we are in a bear rally, but I do believe the markets will rally from here. Everything bad about the economy is known. People already believe Obama is going to win, so there are no surprises waiting there (except maybe a McCain victory). I think the sellers have spent themselves for a time.</blockquote>


Private equity firms are overleveraged. They may be coming unglued, but I have no idea when. Markets could easily rally. The Fed has injected 2 trillion. It has to go some place.

Obama will win.
 
[quote author="IrvineRenter" date=1225512663]I have an open question: What would be a catalyst to another wave of selling?



I think we are in a bear rally, but I do believe the markets will rally from here. Everything bad about the economy is known. People already believe Obama is going to win, so there are no surprises waiting there (except maybe a McCain victory). I think the sellers have spent themselves for a time.</blockquote>


Massive defaulting on municipal bonds is a clear candidate.



Failure of banks on an even grander scale (think Citi, or a "fortress" bank like Wells Fargo) would do the trick too. I think Paulson would be watching for that, though. So it can't happen (right?).



Failure from the US Government to sell its treasuries to other countries (aka other countries basically downgrading the US's credit rating) would probably be pretty bad too.



I'm hopeful we got a bit of time before any of these things happen.



Word is AIG will fail. I think that's accounted for now in the market... I hope.
 
Not that I'm a bull, but I thought this was a good article regarding market valuation. Rich was right the last time he wrote a similar article saying it was overvalued, so who knows, maybe we start the slow upward climb from here.



<a href="http://www.pcasd.com/us_stock_market_now_priced_for_good_returns">http://www.pcasd.com/us_stock_market_now_priced_for_good_returns</a>
 
[quote author="IrvineRenter" date=1225512663]I have an open question: What would be a catalyst to another wave of selling?



I think we are in a bear rally, but I do believe the markets will rally from here. Everything bad about the economy is known. People already believe Obama is going to win, so there are no surprises waiting there (except maybe a McCain victory). I think the sellers have spent themselves for a time.</blockquote>
The fifth of November is one possible catalyst. Let me be clear, I expect an Obama win. I also expect people to sell prior to 12/31/08 to avoid the guaranteed hike in the capital gains tax rate, regardless of what level of income Obama is currently setting as a cut-off. It's one thing to speculate about who wins, but it's another thing when the election is over and a winner is known. If we get a rally above 2006 levels after the election, I expect a lot of profit taking by people that are looking to save 5% in taxes. The reality of a new tax policy for the next 4 years will also lead people to adjust their portfolio accordingly.



Another possible catalyst will be this new clearinghouse exchange for derivatives, which according to CNBC, will begin publishing info next Monday. I think that shining a bright light into that area of high finance will cause a great deal of panic trading as institutions run away from the overexposed players. But even if they don't run for the exits right away, can you imagine what would happen to any firm that didn't put their CDS into the market when it became possible considering how carniverous the trading has become? If I was forced to guess, I think this has a bigger potential to cause a sell-off than either candidate winning.
 
[quote author="IrvineRenter" date=1225512663]I have an open question: What would be a catalyst to another wave of selling?



I think we are in a bear rally, but I do believe the markets will rally from here. Everything bad about the economy is known. People already believe Obama is going to win, so there are no surprises waiting there (except maybe a McCain victory). I think the sellers have spent themselves for a time.</blockquote>


Commercial RE. I don't think people comprehend how bad it really is, and hopefully acmpe can chime in here too. It also goes back to awgee saying that PE is overleveraged, because they are with their commercial RE investments. It is late, and I am too lazy to do the search, but growth capital (I think that is the name) is in some serious deep doo doo. They own the shops at the Palazzo in Vegas, plus two other giant malls in Vegas. They have a $900mil loan coming due next month for which they do not have the cash to make due on, and even Goldman was unable to help them raise the funds. There have been several other commercial RE bust related articles in the WSJ lately, and this is as the job market has started to get bad. These commercial RE debtors are burning through their interest reserves, and as the job market gets worse, then they will burn through them even faster. They can't refi, because no one wants to touch RE, commercial or residential right now.



So far it is already priced in for commercial RE, but again I don't think people comprehend how bad it is about to become. The Kool-Aid is still being served in this sector. No one believed me when I said residential foreclosures were only going to get worse, and my predictions were too optimistic. I think that the same will happen with commercial, my predictions will seem too optimistic. The difference will be that I will not be as surprised when it happens to be worse than I thought.
 
I think at this point that all of the bad news is really known with the exception of how far consumer buying will fall. The fact that we didn't crash after the consumer spending numbers came out I took as a positive sign, but if people keep tightening their belts, and we get a massive decrease in spending... well, I'm not sure that's factored in the market. Christmas sales numbers, I would imagine, would be where we would see that fear happening.



From now until when the Christmas numbers come out though.... I think we may see a rally until that time. All the bad news from here to there isn't going to be surprising, I would think.



If Obama wins, and we have to deal with the potential of a gigantic capitulation crash from the Christmas numbers, then I think the best hope would be that he states as BEFORE the numbers come out, that he will leave the capital gains tax alone for 2009, and that he is going to launch a stimulus plan aimed directly at consumers. And if he could say that we fully expect the numbers to be really awful until that stimulus unfolds, then that would take the bang out of the bad news.



I don't think that throwing gobs of money at americans is a long term solution, but just to get everyone firmly out of panic mindset and into "S&L, Dot com bust" correction mindset. If 2009 calms down the herd, then 2010 would be the year where you raise taxes, and start re-organizing your fiscal house. That's a bunch of ifs.



What do you guys think? Terrible consumer numbers will or will not freak out people in the future? Do you think people aren't aware of the credit/prime loan/commercial loan market falling to peices? It seems to me that banks aren't lending money to anybody at all, so they already think no one is worth lending too. And it appears everyone else is aware of that as well. Am I wrong?
 
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