Thread: Economic Meltdown...

Well, those posts were fun. Senseless and meandering fun, like our fiscal policy.

For those of you that do care, you know that markets are cyclical. We enter into a major correction / recession every 7 to 10 years.
If you bother to look, the signs prior to the correction are obvious. Maybe the Fed chief will use terms like 'irrational exuberance', and the T.V. will be flooded with neophytes making a killing 'flipping houses'. Subtle signs like that.

You can get bogged down in P/E ratios, surplus inventory etc., but it ain't that hard. Right now, unemployment is stuck above 9%, and manufacturing output is stagnant. Surplus real estate is hardly moving, even with mortgages under 5%.

Ya ever ride a roller coaster? You know that sound as the chain grinds, carrying the cars to the top? Then, you know what happens after the chain disengages. There's that feeling in the pit of your stomach, right before...

No need to listen to me. I'm just a blue collar laborer, with a degree in Criminal Justice. Yet, how was I able to see the '08 mess and move my 401k into cash back when the DJIA was over 14K? I bought back in after it bottomed out (around 8800, a bit off the floor). I moved back into cash at the end of last year, when it was obvious that the market was going nowhere. I just heard the chain disengage. Down we go.

Here's the takeaway: In almost every aspect of our lives, we have delegated our power to some 'expert'. No one bothers to see what's going on right in front of them, because some 'expert' has told them not to trust their own God-given sense. This ain't Rocket Science. Yet, we're now a nation of people standing on rooftops with cardboard signs reading help. We all learn that someday, the calvary may not come.

When / if it ends up being worse than anyone expected, my family has a fully stocked pantry (including Spam). And yes, I have those other things as well, if someone tries to steal the Spam. We also have good neighbors, and we help each other. They have the above mentioned items as well.

I'm glad everyone had a good laugh. I hear inappropriate humor is a coping mechanism for hiding fear. I'm sure that's not true in your situation.

Originally Posted by Winston

For those of you that do care, you know that markets are cyclical. We enter into a major correction / recession every 7 to 10 years.

Isn't it a bit early then & wasn't the US just getting out of it's last trough?

Right now, unemployment is stuck above 9%, and manufacturing output is stagnant.

I just heard the chain disengage. Down we go.

I'm sure America is looking forward to its next round of criminals. I predict law enforcement to be America's biggest employment growth sector in 2012.

Originally Posted by Rustgold

Isn't it a bit early then & wasn't the US just getting out of it's last trough?

My key word was 'about' every 7 to ten years. Recent history: '81 to '82, then '90 to '92, next '00 to '03 and now '08 to....?

If you're looking for patterns, these corrections are coming more frequently and lasting longer. Possibly the end of the Boom / Bust cycle.
Now, it's the Meh / Bust cycle.
IMHO, this is why the traditional 'buy and hold' model for stocks (and retirement savings) may be outdated. Again, I'm no expert. But paying attention is a pretty cheap insurance.

BTW, how did everyone enjoy S & P's little weekend send-off? Monday will be interesting.