Investors know the price of everything and the value of nothing!

[gavinmccallister]

Investors know the price of everything and the value of nothing!

"The Dow is playing palsy-walsy with 11,000 – an old friend not seen in years."
-WILL DEENER, Dallas Morning News

It seems the financial media is in search of pundits with "safe bets" in 2005 for the stock market. I guess it's no secret that investing in the 21st century has come to resemble gambling so much, that there's just no hiding it anymore. But no amount of window dressing, public perception management or anything else can cover up the fact that "2005 is going to be a tough year for stocks" Don Hayes tells CNBC.

Now, as the Dow approaches the magic 11,000 threshold, Wall Street bulls are again searching for visions of grandeur, despite the fact that the last time the Dow finished above 11,000 was four years ago in June 2001.

The fact is that since the market peaked in 2000, millions of people have suffered large losses, discovering that notions like stock splits and Internet companies ultimately do not yield profitable results. And yet today, too many people still know the price of everything and the value of nothing. I think investing is about buying value and building a margin of safety. The Dow at 11,000 offers neither.

The problem is that stock indexes tell investors very little about the individual stock and virtually nothing about it's true value. Stocks in general are "priced for perfection" in a world that's far from perfect.

Seven undeniable economic facts that Wall Street bulls like to ignore;

1) Confidence in the U.S dollar is faltering, the euro is becoming 'world money'.
2) Commodities like oil are skyrocketing, with no end in sight = inflation!
3) Interest rates are rising, which may be a pin in the real estate bubble.
4) The U.S. borrows about $1.8 B per day, totaling about $7.7 Trillion.
5) Nuclear proliferation is the major threat, as Iran, N. Korea illustrate.
6) U.S. government debt is $44 Trillion -- between Medicare and Social Security.
7) The U.S personal debt has grown to $9.3 Trillion, yet savings is only 1%

"We the people" have about $60,000,000,000,000 (Trillion) in acknowledged U.S debt. Divided by roughly 100,000,000 employed U.S households and you get about $60,000 debt per household - up from $25,000 just a few short years ago.

My point is that Wall Street is famous for whistling by the graveyard, pretending that we are "Donald Trump" wealthy -- that is, for appearance sake only. Borrowing endless "equity" from our homes to maintain the image.

The Wall Street club responsible for pulling the big money strings may pretend that they (and we) are above the laws of economics. But they (and we) are not. It is just this type of pride that has a history of bringing nations down.

[VJW]

There may well have been something “magic” about the 11,000 threshold back in 2000, but now the Dow would need to be close to 13,000 in inflation-adjusted dollars, just to get back to where it was on election day in November 2000 (10,952.18).


In addition to the “Seven undeniable economic facts that Wall Street bulls like to ignore”. I would add:

8) Inflation-adjusted wages of the vast overwhelming number of Americans has gone backwards every year of the last five years

9) There are fewer workers in the national workforce now, as a percentage, than there were in 2000

10) Bankruptcies are at historic record high levels

11) Home foreclosures are at historic record high levels

12) National Poverty has increased every year of the last five years

#

[Sticking It to the Man]

So what are you doing to prepare for the coming economic collapse?

[sweeps]

I'm hoarding canned goods, duct tape and bullets at my bunker in Montana.

[jmjj215]

Room for a family of three Sweeps?

[acezz4e_tish]

i think everyone gets to much of a frenzy going. why i try to avoid the news. if all the news channels would get together and do a 15 min segment of whats good in the news, then id watch more. i dont follow the market, after all people who work in the market, bloody ulsers and suicide, hello? problem there? whats wrong with going to the post office and buying plain old savings bonds. i mean is that a forgotten thing? if more were bought would it value our money back up again? im not saying i know anything about this subject, but i know i dont have ulsers and headaches and want to pack it in.lol the last real time i watched the news, i cried for days. deanna seifert was missing, andrew trombley held in jail for not saying whos got his van, her parents begging him in court to tell them where she is, even if shes dead, so they can give her a restfull burial, and he gave them a raspberry, right on tv, thats how much he didnt care. i have a daughter, i was 30 miles from where it happened, and it just hurt me a way nothing else can. i would love to see segments on the cab drivers that deliver healthy babies in thier cabs, or something samartan and nothing but good stuff, for just 15 mins of the show. its all so depressing, give us some good hype eh.

[Fern]

Originally Posted by acezz4e_tish

i think everyone gets to much of a frenzy going. why i try to avoid the news. if all the news channels would get together and do a 15 min segment of whats good in the news, then id watch more. i dont follow the market, after all people who work in the market, bloody ulsers and suicide, hello? problem there? whats wrong with going to the post office and buying plain old savings bonds. i mean is that a forgotten thing? if more were bought would it value our money back up again? im not saying i know anything about this subject, but i know i dont have ulsers and headaches and want to pack it in.lol the last real time i watched the news, i cried for days. deanna seifert was missing, andrew trombley held in jail for not saying whos got his van, her parents begging him in court to tell them where she is, even if shes dead, so they can give her a restfull burial, and he gave them a raspberry, right on tv, thats how much he didnt care. i have a daughter, i was 30 miles from where it happened, and it just hurt me a way nothing else can. i would love to see segments on the cab drivers that deliver healthy babies in thier cabs, or something samartan and nothing but good stuff, for just 15 mins of the show. its all so depressing, give us some good hype eh.

You will like www.happynews.com

[VJW]

* HOME FORECLOSURES SURGE

Last week, RealtyTrac published its January U.S. Foreclosure Report. According to the company, the report includes homes in all three phases of foreclosure: pre-foreclosure (notice of default), foreclosure (notice of sale) and real estate owned (properties that have been foreclosed on and repurchased by a bank).

In January, 103,540 homes were in foreclosure, up 27% from 81,290 in December and 45% above last year. January's foreclosure total was the highest level since RealtyTrac began releasing monthly reports in May 2005.


* EXISTING HOME SALES: SLIP 5TH CONSECUTIVE MONTH

Sales of existing homes fell in January for the fifth straight month, and the inventory of unsold homes rose, providing more evidence of weakening in the housing market.

The National Association of Realtors said sales of existing homes, which account for about 80% of the residential market, fell 2.8% from December to an annual rate of 6.56 million units. While prices were unchanged from December, the number of unsold homes increased 2.4% to 2.91 million, a 5.3-month supply that is the largest in almost eight years.

Compared with a year ago, the annual pace recorded in January was 5.2% slower, prices were up 11.6% and the supply of unsold homes jumped 43.2%. The recent trends indicate that the balance of power in the housing market, which clearly tipped in favor of sellers over the last few years as home values soared, is gradually shifting to buyers.


* NEW HOMES SALES: 4TH DROP IN 6 MONTHS

New-home sales fell for the fourth time in six months during January, while inventories of unsold new homes climbed to another record. January new-home sales fell 10.8% in the Midwest, 14.9% in the Northeast, and 10.3% in the South.

There were an estimated 528,000 homes for sale at the end of January, which was a record. That represented a 5.2 months' supply at the current sales rate. In December, an estimated 515,000 were for sale, a 4.8 months' inventory.

#

[JBinKC]

Why even consider this the Dow represents only 30 mega cap stocks with very little growth potential. The Nasdaq still remains at over 50% off of its high. The United States market is in for a very long period of underperformance and I believe for the most part represents very little value. Most of my money has been in Canada and Russia for over 18 months now and I still see nothing to change that.