The stock market is a slow-motion Ponzi scheme, with elements of check-kiting thrown in, but called “buying on margin” and “short-selling”. It needs a continuing supply of money coming in to keep it going. Guess what – that supply got cut off suddenly. They could not persuade Congress to “allow” people who paid Social Security taxes to instead steer the money to “investment plans”.

People who buy stocks on margin, gambling they can sell when the price will go up and pay off the loan, the interest, and make enough profit to cover losses on other stocks and to live off the rest of the profit are being burned big time.

Look at the blade on an upside-down hand-held saw. The teeth form a pattern, called a sawtooth pattern, going up slowly, then down rapidly, then up slowly again. That will be the pattern for the stock market. A saw-blade ride, not a see-saw ride. You get cut trying to time the market.

Isn’t it kind of stupid for people who work in small, privately owned businesses to invest their retirement in large, stock-based companies?
For example, the owner of a small pet supply store buys Wal-Mart stock. Wal-Mart is a competitor! And will put them out of business!

About a week ago, I was getting a feeling of deja vu from 1991. A year or two after the S&L bailout (you remermber the one that was only supposed to cost us 20-billion instead of the realistic 150-billion?), scared to death it might happen again, I cashed out all my stock while the DOW was passing 9500 (also on the way down) then. I was told this was stupid – it was time to BUY, not sell. Instead I bought and paid for a home, barn, land and water with the proceeds. I was told that was stupid as well – you should NEVER pay in full for a home for tax reasons. Seven years later, we are now 95% self-sufficient (giant vegetable garden, orchard, cow, & chickens), I make NO money, file NO taxes, live in a “cash friendly” state with no state income tax, haven’t had to pay $1104 a month in house payments, nor water/trash bills, nor association dues, nor extreme utility bills for seven + years. I just concluded a conversation on the phone with my old “your making a stupid mistake” financial advisor – he’s had a “run of bad luck”, had to “deleverage” (read: get foreclosed upon and move his family into a rental), he’s lost one of his vehicles to the repo man, his marriage is in shambles, and he now drinks more than when I was a drunk.

When will the stock market bottom out? Easy answer…..When we have a responsible government that doesn’t lie to us, when we’ve seen all the “players” that are sitting at the same table, when rules don’t change weekly, and when common people and politicians are held accountable for their crimes. I think many States of the Union will be seriously considering seccession before the market starts rising again from the dead. I wish there was even a bit of good news – but it was spent or stolen many many years ago. Even with the lies and deceit perpetrated on the American public, most I think realize and accept the fact that the worst has to transpire before this Nation gets any better. The public is much smarter than the government and wall streeters give them credit for and they’re in the mood for a good fight!

Don’t wait for housing to ‘bottom’, as it still has quite a way to go. Prices got bid way too high from 2002 through 2007; five years up means five years down, which means 4 more to go until housing prices flatten out. They will not march upwards; the buyers finally got smart and have mostly stopped overbidding.

I haven’t started buying stocks, but I’m readying my shopping list. There are some real bargains out there: start with profitable companies only, then screen for companies with growing earnings, then screen for the cheapest of those, then wait for the bottom, and then buy. It’s hard to lose money by (buying stocks that are) making money.

Money-losing non-banks will close. Work hard, support your local credit unions and commercial banks, and keep your heads down until the shooting stops.

Retired people are going to start taking money out faster than non retired people are putting in so it will keep going down down down down.

Law of supply and demand. High supply of stocks to be sold (from retired people trying to keep their life style going) and little demand (from young people who are only making $12 an hour if they are lucky).

Good luck everyone.

Alpert’s 9.5 for the S&P’s current P/E based on 2009 earnings estimates is DUBIOUS. It is based on the wall street “pros” prediction that 2009 earnings will be up 20%! Yeah Right!! More than likely the 09 earnings will be flat at best, which gives the S&P a current P/E of around 13. And 13 is not nearly low enough to get into this stock market crash. Not when we also face a major recession that has been delayed for years with easy credit.

For anyone who wants to play this market for a rally be my guest. Surely one is coming and it could be really big and exciting for a few days. Just long enough for Mr. Market to separate a few more people from their money.

It is not silly to look back at the Dow of 1929 to get an idea of how bad this could get. No guarantees of course, but I don’t need to put my safe retirement funds into a market crash that could still have another 40% downside.

On the other hand, on a short term basis the market is definitely oversold. A corrective move upward is definitely in the wings in a week or two, as confirmed from market index charts which indicate certain amount of buying action has started to occur now.

Mwaahahahahahahahahahahaha !!!

It is a question of if the ECONOMY is at the bottom yet.

I mean, no matter how cheap the banks make credit, people are still over leveraged as individuals. Our government is so totally bankrupt it makes me shudder.

And neither banks nor our leaders are telling us the truth yet and until they do, the “crisis of confidence” wont stop being a problem.

So everyone raise their hand who thinks either one of those are going to stop lying in anytime soon.

Indeed, the uncertainty surrounding these financial weapons of mass destruction [Warren Buffett's epitaph for CDS] is what has banks hoarding cash. Of course, if you are leveraged at 30-40:1, would you be willing to lend only to be left holding the “hot potato” CDS when it comes knocking?

A bit of good news might be welcome right now, but realism would be much more appreciated. It took years for this housing bubble/credit crisis to develop, it will take more than a month or two of bloodletting to turn the corner. Meanwhile, my money will sit on the sidelines a bit longer…

Good luck to those ready to dive back in.

Media and the government, bless their hearts for at least trying, are making a noble effort at trying to point this out, that a part of this selloff is due to fear. However, the initial reaction, which is the part we have witnessed over the past couple of weeks (months), is due to avid investors reactions and repositioning. If fear persists and the common investor (investments related to retirement lets call this “dumb money” inserted into the system by the general populous) gets anxious the markets could see a huge lemming effect in a flee to safety. Before anyone says anything about the statement of “dumb money” I am not calling the general populous dumb, rather the fact that the money invested is typically under the principal that the people in charge of the fund are going to do the best for it so the general public doesn’t take the driver seat. When, or if, they do decide they are best in the driver seat expect a well warranted drive to safety which will drive the floor down.

Always on the hunt for bargains…so I hate to say it but SELL SELL SEll. (So I can buy buy buy.) But there are a lot of stocks I won’t even touch with a twenty foot pole.