View Full Version : NSS: Stock Market
I'm a huge player in the stock market and lately I've been incredibly happy with the way my portfolio has responded to the fluctuating economy...that I decided to cash out on a few holdings.
What do I invest in you ask? For only $19.95 and your soul I will divulge the secrets to my success. Just kidding. :p
Hopefully the NYSE will hit the 10,000 and remain above that point heading into the new year. This morning, Jobless claims were reported at an all time low since 2001, which is great news for the overall economy.
Has anyone else noticed that the stock market has steadily increased in the past 6 months, despite the fact that our interest rates still remain very low and inflation is almost ready to burst? I think the "recession" state of the economy is nearing an end. Viva America!
*Disclaimer: this post is not investment advice from a licensed broker, trader, SEC, etc. It is only the opinion of one avid stock market trader and these opinions are based on speculation and complete bull$hit. Trade at your own risk*
Merlin
11-06-2003, 11:17 AM
Since approximately March/April the market has been very strong. Worldwide.
Yes, interest rates are still low but most likely that will change soon. The reserve bank in Australia just put up rates the other day and most likely the British will do so in the next couple of weeks. As for inflation, thank China for exporting so much deflation to the rest of the world. Keeps our prices low despite the tremendous increases in the money supply.
But yeah, lets enjoy an up market while we have one!
cheapie
11-06-2003, 11:32 AM
it sucks for me. i'm going to build a house for me in the next year or so. jobless claims going down generally means higher mortgage rates. crap.
and yes, it's all about me!
Originally posted by cheapie
it sucks for me. i'm going to build a house for me in the next year or so. jobless claims going down generally means higher mortgage rates. crap.
and yes, it's all about me!
Yes, the prime rate and mortgage rates will subsequently increase with a stronger economy.
However, this is the way I look at the housing market, since I am actively looking for my own house.
With low interest rates, everybody has been trying to purchase a house and get low mortgages...however, the downside of this is that every realtor knew that people would be buying so they subsequently raised prices on houses. Here in Los Angeles, I look at these houses that are valued at $400,000 and they are utter pieces of crap. Why is it priced so high? Because the demand is so high right now and it doesn't help that mortgage rates are so low.
What is the advantage of higher mortgage rates? There will be less demand for houses, thus bringing the housing market down and housing prices down. More savings to you.
Think about it this way:
Piece of crap house now = $400,000 mortgage rate 6%
Piece of crap house in 1-2 years = $325,000/$350,00 mortgage rate 10%
Your savigns on the price of the house, in most cases, will far outweigh the increase in interest expense that you will incur.
cheapie
11-06-2003, 11:40 AM
Originally posted by lilbigblue
snipped
you're correct. except...i'm going to build my house. i've already purchased the land and will most likely general contract it myself. so i'm not worried about property.
Originally posted by chosenfool
shhhhhhH!!!! dont say it out loud dammit! you'll jinx it!!!
i too have been watching the steady increase week after week. but yeah, shut up about it already! :dodgy:
:D
The Mojo told me to do it! He's the devil! :rolleyes:
Originally posted by cheapie
you're correct. except...i'm going to build my house. i've already purchased the land and will most likely general contract it myself. so i'm not worried about property.
Oh, okay. Hey, after you build your house can you build my house?
Merlin
11-06-2003, 12:23 PM
Remember that while nominal interest rates are currently low, real rates are at normal levels thanks to very low current inflation.
Originally posted by chosenfool
shhhhhhH!!!! dont say it out loud dammit! you'll jinx it!!!
i too have been watching the steady increase week after week. but yeah, shut up about it already! :dodgy:
:D
No kidding....SHHHHHHH! :)
johnnymk
11-07-2003, 05:50 AM
Originally posted by Merlin
Since approximately March/April the market has been very strong. Worldwide.
Yes, interest rates are still low but most likely that will change soon. The reserve bank in Australia just put up rates the other day and most likely the British will do so in the next couple of weeks. As for inflation, thank China for exporting so much deflation to the rest of the world. Keeps our prices low despite the tremendous increases in the money supply.
But yeah, lets enjoy an up market while we have one!
Anytime I see a rapid rise in the market, I smell a rat: the rat of speculation fever.
And the thing about little inflation really surprises me. Housing prices are up dramatically, food prices are way up, fuel prices and medical costs are ridiculous and of course local and State taxes(which are unfortunately not included in the CPU), are increasing.
Just because computers and TV sets are cheap doesn't mean inflation is dead. The Fed is lying big time about this. Sooner or later, real live economics is going to force interest rates up to where they should be.
cheapie
11-07-2003, 05:55 AM
fuel prices are up. but they aren't up a whole lot. they have fluxuated and have hit some pretty high numbers, but put them in a historical perspective. we have some of the cheapest fuel in the world.
medical costs are killing us. specifically, insurance costs are. insurance costs in every industry is driving prices up. i'm in the trucking industry and MANY firms have gone out of business because of interest rate hikes.
Merlin
11-07-2003, 06:23 AM
That is a brilliant observation and indeed you had right on the money. Basically anything that you buy that is manufactured in China, which is much more than you might think, has been rapidly decreasing in price. They have a real problem with overcapacity and are very quick to export its resulting deflation to other markets. Just look at Japan for confirmation of this as they've had this problem for the better part of a decade. Anything that is domestic/service oriented has been increasing in price. The things you mentioned, medical and food are great examples as are insurance, entertainment, etc. Yes, house prices have gone up rather dramatically but this is more a function of interest rates than anything else. With a very aggressive housing market over the last couple of years we could see a lot of pain should interest rates start to go up. At the very least house prices will stall.
nickel
11-07-2003, 06:55 AM
Originally posted by Merlin
Remember that while nominal interest rates are currently low, real rates are at normal levels thanks to very low current inflation.
Thank you Mr. Greenspan :P
Originally posted by johnnymk
Just because computers and TV sets are cheap doesn't mean inflation is dead. The Fed is lying big time about this. Sooner or later, real live economics is going to force interest rates up to where they should be.
Alan Greenspan and the Fed have been continually warning everybody about the imminent threats of inflation. Just read any one of the articles recently written that discusses interest rates. The Fed is not lying about anything. The general public is just ignoring it.
johnnymk
11-07-2003, 09:22 AM
Originally posted by lilbigblue
Alan Greenspan and the Fed have been continually warning everybody about the imminent threats of inflation. Just read any one of the articles recently written that discusses interest rates. The Fed is not lying about anything. The general public is just ignoring it.
In the past, the Fed was procative: When the inflation rate was starting to creep up, they intervened and raised interest rates to try to choke inflation at the root. I know that it probably never worked, but by keeping interest rates at such incredibly low levels, the danger is that instead of incrementally raising rates, when the time comes, there will be dramatic rate increases within a short period of time. And the Fed will be forced to raise the rates. The external circumstances will leave them no option.
That's just my prediction. I could be very wrong about this.
Originally posted by johnnymk
In the past, the Fed was procative: When the inflation rate was starting to creep up, they intervened and raised interest rates to try to choke inflation at the root. I know that it probably never worked, but by keeping interest rates at such incredibly low levels, the danger is that instead of incrementally raising rates, when the time comes, there will be dramatic rate increases within a short period of time. And the Fed will be forced to raise the rates. The external circumstances will leave them no option.
That's just my prediction. I could be very wrong about this.
Yes, the Fed is keeping interest rates low, but that is because they would rather boost consumer spending than choke inflation. I think we are already seeing some short-term effects of inflation, but I would much rather see the overall economy pick up in 2004 and have to deal with inflation.
It's obvious that it would be difficult to have an economy where interest rates were moderate and inflation was at a moderate level...especially in a semi-recessionary state to begin with. The Fed seems to be looking at the economy as a whole, and trying not to focus on one problem such as inflation.
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