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This is either the greatest buying opportunity of the decade, or we will all be in soup lines this time next year.
A lot of good industrial companies have been wacked. I like Boeing. I think GE is a good company, their capital portfolio not withstanding. With gas prices continuing to fall, I wonder if GM can extract itself from the current doom. It’s cheap to pick up a couple hundred shares.
These are companies that actually make things that we need, unlike, say, Yahoo.
BTW, I notice that the peak oil weirdos have crawled back under their rock. I have said for over a year now that oil will crash below $50. I say it will level out between $20-$30. Which companies will benefit most from this? I think those will be the best investments.
It’s Monday here in New Zealand, the NZX-50 is up 1.5% on early trading after being down every day last week. Not that this is a World trend, but it looks hopeful.
Thanks John! I was mulling this exact question a couple of hours ago.
I just heard an interview on ABC News with George Soros, and he was cautiously optimistic and supportive of our administration’s latest plan to prop up the banking sector by taking equity stakes.
It seems that as much as we’ve come to loath the bankers, we really can’t do without them. Therefore, we should refrain from crucifying them, and merely torture them instead.
Soros probably has money to make. He probably helped to tank the markets. He got rich tanking the pound.
So is the European collapse all Bush’s fault too?
What is going on there? They don’t have sub-prime loans.
I think we’re just busy analyzing the peaks and troughs of a larger problem.
The dollar only looks good now because the Fed has tossed out untold trillions into the market. The massive devaluation is yet to come, and it will be far more painful than the european currency downturns. Many nations will manage to survive and do well because they didn’t play Las Vegas with their banking system. Notables are Australia and Canada.
“The dollar only looks good now because the Fed has tossed out untold trillions into the market.”
That makes no sense. The dollar should be weaker since the Fed has “tossed out untold trillions into the market.”
The real issue is most of the world is in deeper doodoo than the US, and there are no more safe havens. The dollar is simply the least bad. For example, you wouldn’t know this from the headlines, but did you know the commercial and residential real estate markets in much of the world are far more overvalued and bubble-prone than the US? Look at Dubai. Look at Shanghai. Look at Dublin. Look at Amsterdam.
The euro? It won’t exist in 2 years. So that leaves the yen and the dollar.
Considering the mess we are in I have to agree my first reaction is wonder just how big a mess the rest of the planet is in when the dollar is strong when by rights it ought to heading for the celler.
For the gass is and will be cheap guy I told a friend last summer that the only way I could see gas coming down was a world wide recession. I know this may be hard for him to imagine but we have one.
I don’t know if we have hit peak oil or not. You can’t get honest answer from the major producers. I do know demand is way down most likely because a lot of people can’t afford to buy gas. That is most likely the only reason gas is cheaper.
I’d say this is only good news if you still have a job and the money to buy gas.
Lou, the dollar is up due to trading. The US Fed is borrowing 10’s of billions of dollars everyday (from the bailout) and converting them into US currency. Once that’s over, the US greenback will back off.
Make your money in the forex market while you can.
Again I ask the Dvorakies – where do you think the markets will (if ever ;-)) bottom out? I’m guessing 7500.
Why is it that Americans are so unwilling to admit that it’s not the bankers and the politicians but admit that it’s the American people that caused the problem? First they allowed, and even encouraged, their elected representatives to deregulate, or refrain from regulating, the financial industry.
But far more important, those NINJA loans and subprime mortgages would have gone nowhere if there were no takers.
Instead, there were millions of American citizens who thought they could get something for nothing. That they could take the loans and mortgages, buy the goodies and then simply walk away from them when they couldn’t afford the payments. Sounds to me like the root cause is simple unchecked greed on the part of the populace.
Or are all those millions of Americans truly that stupid and gullible?
#12 – I’m hoping they bottom out at 0.
A world economy based on legalized gambling will always run the risk of coming up snake eyes.
At least in casinos they are obligated to put up signs with a 1-800 number to the gambling addiction hotline.
The real power behind the dollar are the eleven active U.S. Navy aircraft super carriers and tons of nuclear weapons.
Have a nice day rest of the world đ
Reassuring to see our resident neocons absolutely haven’t a clue. Whether it’s equities, currency as commodity, whatever? Listen to someone more than Bill-O or Rush, guys.
Meanwhile, I’ve been making money since Thursday. My bottom-feeding budget is spent.
“Instead, there were millions of American citizens who thought they could get something for nothing.”
You do realize that Americans are not unique in this regard, right?
How’s that Spanish real estate market working out for you, Europeans? You dreamed of a warm, sunny retirement climate, and now Spain looks like California on steroids. But at least Spain has something going for it: It is close by and Spain is a democracy. You idiot Europeans who “invested” in the Dubai cesspool are sooooo massively hosed.
Of course, with a last name of “minatti”, you are NOT of “idiot european” descent, right?
#15
I see you understand the crux of the situation. Even a friend of mine at the GAO (PhD economist) lives in theory / fantasy land when it comes to the green stuff.
FWIW anytime I see Soros mentioning anything about markets I get a little worried — does the term “Asian tigers turned into sick kittens” ring a bell?
I’m not too worried about the situation getting worse… my CalPERS account sucks anyway, and I know how to grow my own food.
Bring on the collapse!
“Of course, with a last name of âminattiâ, you are NOT of âidiot europeanâ descent, right?”
Most Americans have European surnames, so you don’t really have a point. But judging from your reaction it seems that I’ve struck one of your sore points. Are you one of the sucke… I mean real estate investors who gambled on European real estate and then laughed as US markets tanked? Looks like the joke is on you.
I was taught economics by an adviser to the EU at university…he used to say:
“And why do we call it the line of equilibrium??”
And the class would respond:
“Because a horse is a horse, of course.”
Up and down. Up and down. Real long term investors don’t panic…they ride these things out.
#3, Lou:
“BTW, I notice that the peak oil weirdos have crawled back under their rock.”
I assume that you accept that planet Earth has a finite supply of oil? Once you accept that the supply is not infinite, then you have to reach a point where you have extracted half and that production goes into decline thereafter.
The US reached its peak oil production in 1973. Presently, some 55 producing countries are producing less than in the past suggesting that they have passed their peak.
“I say it will level out between $20-$30.” Who knows whether oil will dip to that range. It might but whether it does or doesn’t will have nothing to do with the actual geology.
While the long run price of oil will be dictated by peak oil the short run price will be influenced by many other factors. No surprise that oil prices are down in the face of the worst economic crisis since 1929.
>have to reach a point where you have extracted half and that production goes into decline thereafter.
No you don’t. If your technology is getting better, or you keep increasing your finds, then you could just keep increasing and increasing production, until it’s all gone instantly.
Of course, it could be that oil is not finite at all. What if it’s being produced in some fashion? I don’t buy this theory that all this oil comes from dinosaurs, and somehow their fossils decomposed way underground, and their mass was so much more than anything that came later enough to create these vast oil fields.