Take a ride on the fear express!

Stock market volatility is a little scary. It would be more scary if I had been whole-hog in the stock market; fortunately, I was selling all last year, increasing my allocation to cash and bonds. Cash has done fine during the past year (make sure it’s FDIC), and bonds have done great (treasuries, TIPS, and munis). It would have been less scary if I’d sold even more stocks.

Now, what would have been REALLY scary is if Bush had succeeded in his push in 2005 to privatize Social Security and handed it all over to Wall Street: all of that money would have gone in at the top of the market and been lost. The bond portion (if any) would no doubt have gone into mortgage bonds and been vaporized. Fortunately, the Democrats came along in 2006, won the mid-term election, and stopped the Bushies right at the goal line.

For the sake of our sanity, we really need to preserve and beef up Social Security; it’s in surplus now ($800 billion in and $600 billion out per year), and it has a sizable accumulation in the Trust Fund, all in Treasuries, where it belongs. Keep it safe from ‘non-bankers’. The stock market is not a good place for retirement money; it’s just too risky. However, itt can be used to try to grow ‘extra’ money, for people who have strong stomachs and lots of time to recover from the periodic crashes.

To be honest, the volatility gives me solace insofar as it confirms exactly what I have been expecting for at least the past two years. None of this is to suggest that I am in any way “happy” about the current conditions, but I am at least confident and reassured that my understanding of “reality” is “real”. The market did not make any sense for many years and I couldn’t figure it out. The meltdown confirms everything that I knew to be true.

The market does not scare me. I welcome it. The government’s intervention concerns me. They caused the mess in the first place. At any rate, I expected the market to fall massively.

It is shocking the “experts” more like idiots did not know or care. It was not Rocket Science. My gosh, the market went crazy. Home prices more than doubled in a few years. Refinancing went through the roof.

A $300,000 home became $700,000. Expensive cars, “flippers”, remodels, big screen TV’s, etc.

I said, “Who is affording all these expensive homes”. What, did the world become wealthy all of a sudden? PRICES WERE MANIPULATED OUT OF GREED !!! Funny thing, the “Flippers” were small time hustlers compare to Wall Street and the Government.

Now, the party’s over and all involve (Homeowners, Wall Street, Gov’t.) have a “hangover”. Worse yet, they’re like druggies looking for their next “fix”, at taxpayer expense. SICK!

How dare the government use taxpayer dollars to prop-up prices. HOMES WERE UNAFFORDABLE. They are finally becoming affordable.

The Presidential candidates want to adjust home prices to current market levels and fix the interest rates at a favorable rate. The owners of that $700,000 house can receive a $200,000 win-fall. THAT IS NOT FAIR! That is so wrong.

Wall Street is receiving a trillion dollars.

What do those who went without GET? A lousy $7500. The so-called “tax credit” that is paid back, therefore it’s actually a loan. $7500 is a PITTANCE compared to what all the perpetrators are receiving.

Unless the government puts $200,000 in my pocket, I SAY NO TO ALL BAILOUTS !!! I have to do for me. They can do for themselves.

There’s an economey the government and pundits should consider. A falling market and falling home prices is a PLUS for me. And, I am sure for many others.

PRICES ARE TOO HIGH!

WOW !! Mr. Buffet is doing well hearding his sheep !! I say to you people that think Mr. Warren Buffet is the God of Wall Street..Your head is the same place his is….and that is where the sun doesn’t shine….Who is Mr. Buffet or should I say Mr.Bagful of wind…Buffet has been buying for the past several months and he knows where his investments are heading….South of the border….so I say to you sheep listening to him Baaaaaa…shame on you…He wants you to buy and at the same time he will be selling…Mr.Shepherd doesn’t give a hoot for you or I only his greedy self !!! Mr. Buffet AKA the sheepherder knows that his investments are doomed…He says buy when Europe is unloading their American Investments in U.S. Securities…any fool knows the direction of the U.S. Stock Market without foreign investment…so I say to you Baaaaaa’s out there..WAKE UP..The U.S.A. used car salesman tricked Europe into investing and Europe won’t get burned twice…waite till they start dumping the U.S. Bonds…TO MUCH FOREIGN INVESTMENT WAS ALLOWED BY THE GREEDY FOOLS ON THE WALL STREET CASINO…AND NOW WE ALL MUST PAY…HEY I JUST FOUND OUT THAT THE AIG BOYS WON’T BE TAKING ANY MORE $400,000.00 TRIPS…OR ANY MORE $80,000.00 HUNTING VACATIONS…OH BOY WHAT A SHAME…ITS A DOWN RIGHT CRIME !!! BILLIONS TO AIG AND THE BIG BOYS STILL ABLE TO LIVE THE HIGH LIFE…COME ON SHEEP WAKE THE HELL UP…ITS YOUR HARD EARNED MONEY THE FEDS. ARE GIVING TO THESE CRIMINALS…I SAY STOP…STOP…STOP…ALREADY…

I’m not worried about the volatility index. I’m worried that the government thinks they can tame the beast they created. It was created by allowing too much debt and their solution is to create much more debt. One way or another we will pay for their recklessness. If you look at just what we know the government has appropriated for the bailouts and what they plan to appropriate and we add the expected expenditures for this fiscal year, I get the following:
$850 Billion for Bank bailout
$150 Billion for wars
$400 Billion just to repeat this year’s announced deficit
$480 Billion for FNM/FRE buying junk mortgages at the rate of $40 Billion/month
$122 Billion loaned to AIG
$200 Billion stolen from SS trust fund each year
$150 Billion for state and local government bailout
$200 Billion additional spending for Democratic agenda
$300 Billion homeowner bailout

Total = $2.852 Trillion and rising rapidly

So, how do we pay for that and how long do our creditors pay for it ?

Only fools and weaklings experience fear over market conditions. This country and wall street is absolutely full of fools.

I applaud Warren Buffet for being the one man – the ONLY man – with more sense than horse-*** – to make a public statement that shows confidence and leadership in this situation. Where are all the rest of the so-called leaders in this country? Nowhere to be seen or heard. Not one bank official, not one credit card official, not one investment firm leader has publicly said ANYTHING that could help the situation the market is in. They’re hiding under their rocks and by their silence are causing more fear and apprehension. As far as I’m concerned they’re all worthless, overpaid hacks.

I look forward to the day when our Government regulates the living hell out of these institutions for the good of the common people. The day can’t come soon enough.

I am not afraid because I am diversified and because I am over 20 years from retirement. Time heals all wounds. Feel bad for others who don’t have much time to recover. Of course, this could all happen again in 20 years, right before I retire…….Anyone got some gold I could buy???

Good comment as usual Sybil.

But besides the gov’t that doesn’t get it, surely the Fed does not yet get it. And I’m not too convinced that the Wall Street “pros” get it. And if they do, then why are so many of them looking for a quick bottom (first around Dow 12,000, then surely 11,000 and now it appears they are jumping back in at anything below $9,000) and then they seem to think it is off to the races again.

I don’t doubt that Warren Buffett is finding some beaten up value plays, but he is smart enough to play with this “falling knife” this “train wreck” this “manic market” this market which hasn’t begun to see the masses of ordinary, long run investors capitulate yet. And if this is really another BIG ONE, then they will ditch stocks big time, and that will mark the horrible bottom.

As strange as it may sound, I am finally breathing a sigh of relief as I feel the easing of fear.

As John from IL pointed out, we have been falling into depression since the Crash of 2000. Somehow we have managed, like While E. Coyote, to keep staying airborne as long as we kept running fast enough.

I have been watching this train wreck coming for a decade and I have constantly been stunned and terrified by the ability of everyone – general population, civic leaders, religious leaders, corporate leaders – to continue to repeat variations on the mantra “don’t worry, its fine”, and thus do nothing to mitigate the coming disaster.

At last, people are noticing. At last, people are spending less, borrowing less, tightening their belts. At last the value of the stock market is starting to reflect reality and not hope. At last we stopped building more houses people couldn’t afford to buy.

True, our government doesn’t “get” it yet. They are always slow. And they will continue to power dive into debt until they hit ground. But I have faith that the general population is finally battening down the hatches for a hard run.

And I am breathing a sigh of relief.

Paul, I do not worry about the volatility and the uncertainty because I understand the root causes of them both. The volatility of the market is driven from our central banking system and the fiat currency that enables it. Our booms and busts are made more severe, in part, because of unbacked, unchecked fiat money and the out of control monetary policy fueled by the Fed.

As far as uncertainty, I think we are seeing the end of an ideology, the vaunted neo-conservative movement and the unbridled monetary policy that enabled its short term “success”. The real problem is that we are falling back on the disproven Keynesian policies of the New Deal to fill the void left by neo-conservatism. The Fed, Secretary of the Treasury and the president are finding out just how weak their outdated and outmoded Keynesian and Monetarist policies are. As we move toward “New Deal” themed policies, we will see the erosion of out liberty, the marketplace and our country’s leadership in the world. I have no uncertainty about our direction and gives me some solace.

The VIX, a predictive indicator? That is pretty funny.

Doesn’t it seem much more likely that it is a COINCIDENT indicator. It will hit short term tops just as the market hits short term bottoms. And the two events will occur within a couple days of each other. THE market bottom is as likely to predict THE VIX top as vice versa.

So how many false market bottoms have we had so far anyhow? I am losing count.

Asking if the market volatility is making one afraid is analagous to asking if a “gun” makes one afraid. NO! – My fear is based upon the factors that create the volatility – not the actual yings and yangs – just as my fear would be of a deranged individual with access to a gun – not of the gun itself.

Our entire society in the USA has become a vast pool of entitlement expectations ranging from that of assuming never-ending prosperity to the assumption that our vaunted government would always “be there” in order to create a safety net. Unfortunatley neither scenario is true, and perhaps never was. I wrote, in response to a column several months ago, that in my opinion, based solely on my years on the planet, was that we were heading for a slow-motion repeat of 1929, with different reasons and causes. Nothing has ameliorated this view!

My concern is that our government does not “get it” and that the thugs and crooks are already at work to capitalize on this situation via continued market manipulative maneuvers.

Save your money – whatever you have remaining – as this ride is just starting and will probably be at least 10 years in duration.