Circuit Breakers Get Hit This Week

[The Swordsman]

PTF is correct, credit is the life blood of this "well oiled machine" that is the US. Take credit away and everything comes to a crashing halt. And all the events that follow are devastating to people and to average long portfolios.

You are deluding yourself that everything is ok because you don't want to take real losses. Paper losses can always come back (at least one can rationalize that) but they can also get much larger.

This period in time is very scary, you need to snap out of your delusions and face the facts. No one said it would be easy.

 

[stock_trad3r]

Consumer spending is still very strong. it is true that home prices in some areas are falling, but wages are rising. Credit cards and small business/personal loans drive the economy, and those show no signs of slowing. Unemployment is still in single digits. Although the charts may allude to a crisis the numbers just don't add up. If Americans started saving like the Japanese or Germans then we'd have a real serious problem versus a mental one.

 

[smilingsynic]

stock_trad3r promised that he would be GONE if the S&P closed in bear market territory (down 20%). Of course, I knew he'd be back, so I have kept him on ignore, and I'd suggest others do the same.

 

[dtan1e]

Quote from The Swordsman:

PTF is correct, credit is the life blood of this "well oiled machine" that is the US. Take credit away and everything comes to a crashing halt. And all the events that follow are devastating to people and to average long portfolios.

You are deluding yourself that everything is ok because you don't want to take real losses. Paper losses can always come back (at least one can rationalize that) but they can also get much larger.

This period in time is very scary, you need to snap out of your delusions and face the facts. No one said it would be easy.

if the machine grinds to a turtle pace, the "money supply" will contract several times

 

[ProfitTakgFool]

You're beyond help. Wait til people can't make their credit card payments. At least now when people default on their house and car payments the bank can repo either and book it as an asset. What will a bank repo when a consumer defaults on their credit cards? Credit cards are unsecured and people are using them for day to day expenses such as gas and food. They are backed by nothing and the bank will get exactly that -- nothing.

The banking system is shaking in their boots because the Ponzi Scheme they built is coming crashing down.

Quote from stock_trad3r:

Consumer spending is still very strong. it is true that home prices in some areas are falling, but wages are rising. Credit cards and small business/personal loans drive the economy, and those show no signs of slowing. Unemployment is still in single digits. Although the charts may allude to a crisis the numbers just don't add up. If Americans started saving like the Japanese or Germans then we'd have a real serious problem versus a mental one.

 

[stock_trad3r]

In a real crisis people have to change their lifestyles. Nothing seems to have changed for most Americans between October 2007 and now unless you happen to work at an investment bank or in the mortgage industry. Millions of people still logging into facebook and myspace for example. Iphone and ipod sales still rising. Google click ad growth showing no signs of slowing. When there is actual evidence of a financial or economic crisis I'll capitulate, but I don't see it.

 

[ProfitTakgFool]

I see. And the massive drops in GOOG, RIMM, and AAPL mean nothing to you? You are one of two things and I'm not sure which - 1. either very stupid and naive, or 2. you are sitting behind your computer having a good laugh. If it is number 2 then good for you. If it is number 1 then I feel very sorry for you.

Quote from stock_trad3r:

In a real crisis people have to change their lifestyles. Nothing seems to have changed for most Americans between October 2007 and now unless you happen to work at an investment bank or in the mortgage industry. Millions of people still logging into facebook and myspace for example. Iphone and ipod sales still rising. Google click ad growth showing no signs of slowing. When there is actual evidence of a financial or economic crisis I'll capitulate, but I don't see it.

 

[stock_trad3r]

Quote from ProfitTakgFool:

I see. And the massive drops in GOOG, RIMM, and AAPL mean nothing to you? You are one of two things and I'm not sure which - 1. either very stupid and naive, or 2. you are sitting behind your computer having a good laugh. If it is number 2 then good for you. If it is number 1 then I feel very sorry for you.

Do keep in mind that in these market conditions even the most fundamentally sound stocks get punished. When the market does rebounds tech stocks will lead the way higher, while financials, homebuilders, consumer, and transport stocks will lag.