Anyone watching the markets?

[Sheherezade]

I've been curious about how this "bail-out" or "rescue" operation is going to play out in the financial system. From what I've read, it is just their best guess at how to stop the bleeding in the markets and unfreeze the credit market. I've also been watching with interest to see what the results of the meltdown foretold will be. Apparently, there was a global sell-off last night? Today, our markets look like they are going down as well.

Anyone else following this? Or am I the lone financial news geek? Predicitions?

[ladymoreta]

Re: Anyone watching the markets?

I've been watching, too. Things are not looking good... I don't think anyone outside of Congress every really believed that the bailout would work. I can just picture them all standing around Washington scratching their heads saying "Huh?" :huh:

My prediction is that credit will stay very limited for awhile, maybe 6 months or a year. Since they can't get new loans, people and businesses will start paying off some of their debt, so the banks will have more cash on hand. Then the banks will notice that they are making money again, but it's just piling up and they're not making any money off of it. They'll tentatively start lending a little bit to each other again, but with higher restrictions and more oversight. The people and businesses who need credit and have shown that they are reliable will start getting loans with nice interest rates again, but the people and businesses who have been irresponsible will not be able to get loans as easily, and their interest rates will be much higher.

I also think that home prices will continue to decline. We have way too many homes right now compared to the people who should buy them at the current prices. There have also been too many construction companies focused on home building. They will need to shift some of their focus to apartment complexes and commercial buildings, which will take time. Some of those companies will probably fail, too, if they can't compete in that kind of market.

I don't think we'll end up in a depression by any means. I think that if our government would just leave it alone for a little while we'll have a year or two of rough economy, then it will be over. All this meddling by the government is just preventing that from happening.

[ladymoreta]

Re: Anyone watching the markets?

I'm so glad we bought last year. We used the BoA MD no PMI/no money down loan that has disappeared.

We also ended up with a no money down, no PMI loan (not BoA though) back in May, right before banks started freaking out. We'd considered renting for a few months, but I'm so glad we went ahead and bought. There's no way we could get what we have now if we'd waited! But I'm optimistically thinking that we might end up with an awesome house when DH finishes residency in four years, if prices do go down. Of course, we'll probably stay in Oklahoma or move to Texas, and they're not expecting a housing crisis around here... Oh well!

[GrayMatterWife]

Re: Anyone watching the markets?

. . . Anyone else following this? Or am I the lone financial news geek? . . .

I'm working from home on maternity leave right now, so FOXNews and CNN (alternating) are on, pretty much 24/7 when DS is at school. I'm watching. I am not surprised. I am surprised at what people tend to obsess about though--the real story is not the stock market; it's the credit market. Looking only at the Dow is like looking at an unsightly skin blemish that has changed color and worrying about its cosmetic appearance...but missing the cancer underneath that caused the discoloration. At least, that's my 2 cents...

[Vishenka69]

Re: Anyone watching the markets?

DH has been religiously glued to CNBC for a few weeks now. We're actually thinking of putting our house hunting on hold for a couple of months because prices are still falling around here. Yes, banks no longer give 0 down mortgages but houses that we're looking at are about $200-250K less than they were a year ago, so that means 20% is much less than it used to be.

We're also thinking of scaling down some of our spending, I'm not comfortable not having a rainy day fund. On the other hand, our IB friends in NY are still spending like they always did. DH is hoping they know something we don't, but I doubt it.

The only positive thing from all this is that the euro will be less for our upcoming trip to Europe.

[GrayMatterWife]

Re: Anyone watching the markets?

. . . On the other hand, our IB friends in NY are still spending like they always did. DH is hoping they know something we don't, but I doubt it. . . .

They don't. IBs are just like that. They'll go to their graves with nothing in savings but dressed to the nines and buried in their Porches. And with really great haircuts, high-end shoes, and stomaches full of expensive sushi and imported wines.

[Sheherezade]

Re: Anyone watching the markets?

-568.....

I think the Dow is just an easy indicator to watch. How many people would respond if I posted "Jeez! Can you believe the LIBOR today??"

We are also holding cash now -- well, it is in CDs. I keep wondering when to get in. Not today! I wonder how far it will fall. I was bumming I didn't buy Apple when it was downrated and fell last week because it gained 8% the next day. Of course, that's probably lost now.

*sigh* My neighbor is a financial fund manager. Stressful job these days. I should probably drop them off some wine.

[Sheherezade]

Re: Anyone watching the markets?

Oh....yeah. I was going to buy today....but I'm chicken. My dad has advised me to put in 10% cash when I think it is bottoming out and follow with another 10% the next month etc. :huh: I've been watching the LIBOR and the 3-month T bill rate. At least the T-bill rate is getting a little better....but it is still low. I think that means that money is still fleeing the market.

So glad I procrastinated on investing the bonus money. Yeah! Procrastination works on very rare occasions!

[PrincessFiona]

Re: Anyone watching the markets?

Well, do share. What are you going to buy? I'll ride on your magical, money-making coattails! LOL

[SuzySunshine]

Re: Anyone watching the markets?

Yep, one of the stocks we own has dropped from a high last week of $50 to $36, I knew we should have sold it when we had the chance $50 was a lot higher then it had ever been. Then another stock that I own was about $70 last Christmas and is now down to $4 - yep, they're talking bankruptcy or someone buying them, unbelievable.

If you have the guts to buy into this, more power to you.

[Rapunzel]

Re: Anyone watching the markets?

One of dh's friends is a former IBM exec who cashed his stock out before this all happened. Lucky, smart man!!

He's watching the market and is planning to buy (with all the cash he got from selling his IBM stock ) when he thinks it is bottoming out as well.

It is intriguing to dh and I to consider who is losing a LOT of money and who will most likely make a killing from this recent turn of events. We have friends that fit into BOTH groups. And, it's a weird place to be in....

[PrincessFiona]

Re: Anyone watching the markets?

My mom really seems to be losing here, and she was hoping to retire within the next year. I don't know how she will survive financially now in retirement. Thomas and I have lost a boatload in our investments...and some of these we had hoped would fund our kids' college. I know that they are saying to give it 5 years +, but...wow.

Can you imagine what would have happened had we privatized social security? Egads!

Re: Anyone watching the markets?

I think there is a lot of fear and uncertainty, understandably. Who knows when it is going to settle out. I agree with GMW that the underlying credit market is the real concern. How is this going to turn around? I think it will...eventually but hard to say how that will look.

I did put a little extra in each kids college account today. Just smoothing out the losses. I don't want to a whole lot more than that right now. I wish we had more to put in, a la Angie's suggestion from her dad but we have some other big expenses coming up that we have to save for. Maybe that is a better place for money right now. :huh: Oy.

Re: Anyone watching the markets?

I have been glued to CNN and CNBC lately. I was sick as the markets opened and it immediatly fell 660 points I was afraid it would sink fast but luckily it went back up in a more postive negative ground but it is fluctuating so fast it is hard to keep up with. I would love to buy now if I had more money to invest, they say it is a scary time but that seems to be the best time to take the risk.

[DCJenn]

Re: Anyone watching the markets?

Someone (and I don't remember who) said on MSNBC last light that CNBC is like ESPN for people with checking accounts. I thought that was pretty funny...

J.