Dow hits 2004 low

[tw]

Subtitle says oil, once bouncing at $50 per barrel and selling for only $30 some last year is now at $55. This is CBSMarketwatch.com . Take away the George Jr rhetoric, and the market has been bad for all four years. Bad - unless you are one of the executives raping America with big bonuses, golden parachutes, manipulated spread sheets - and an outright believe that "Greed is Good". Please name one major executive in jail for fruad or theft from Enron, Waste Management, Arthur Andersen, MCI Worldcom, Global Crossing, Tyco International (which moved offshore so that stockholders could not sue it), Xerox and their accountants KPMG who intentionally created a fraudulent audit, Dynergy, Rite Aid, and who remembers how many others. Please feel free to add companies to this list. It is quite long and I cannot possbily remember them all.

Where are the guilty managers who made hundreds of $millions - criminally. Remember that the Republicans- especially the LA senator - threatened to destroy the SEC if it investigated these suspects. Remember that Harvey Pitts - the George Jr SEC commissioner - refused an Congressional offer to double his budget. They don't want to prosecute corporate crime.

So again we go to that same CBSMarketwatch page:
Marsh & McLennan is the largest of the insurance companies. They intentionally rigged market pricing to maximumize their profits at the expense of America. Aon, the second largest is also part of the investigation. What investigation? The George Jr administration would not do this investigation. NY STATE Attorney General is doing the prosecution. Why is it that State of OK had to file prosecution papers against Enron before the Federal Government would even claim to prosecute Enron executives. They hope you forget about Enron - the #5 campaign contributor to George Jr.

Can we identify the campaign contributions that are bribing this George Jr administration? Of course not. But we do know that Davis Besse, a nuclear power plant outside Toledo OH with a potential 3 Mile Island failure, was allowed to keep running after First Energy ran a $450,000 campaign fund raiser for Bush-Cheney. Furthermore, the reactor was later found with a big hole completely through its 6 foot carbon steel wall. No problem. George Jr is president. There is no penalty for maximizing profits at the risk of Toledo.

Where are all these federal prosecutions against corrupt companies AND their getting richer executives. Don't forget who gets most from a George Jr tax cut. The same wealthy 1%. If you make $200,000, then you are not seeing anywhere near the tax breaks seen by Warren Buffet - an early and major critic of all this Richman Welfare. The tax cut was not designed to put new shoes on those working in poverty. The tax cuts are for the many who also don't get prosecuted.

These Corporate and Richman welfare systems assume you don't even read the newspapers (if the article in your newspaper is not as long as this post, then it is Oprah gossip - not news). 'New York State Insurance Department' had to file charges because the George Jr administration will not even prosecute Enron!

IOW the George Jr administration knows mainstream voters - ie those in the Cellar - will remain mute while religious extremists will vote nearly 100% for George Jr. They hope you have an MTV attention span. They assume you will remain dumb, bored, and uninformed. More corporate scandels that have no federal prosecutors - just as you did not notice how the Jersey girls had to fight George Jr to get a 9-11 Commission.

Reports on this Marsh & McLennan and Aon investigation indicts most every major insurance company. Those names should be familiar. Same companies that also lost many employees in the WTC (I think Marsh & McLennan took a direct hit). Well the employees could be replaced. And our well compensated friends in the administration will not investigate the price fixing. What a cozy relationship as the price of gasoline in CA climbs to $3 per gallon.

Get ready folks. The new innovative technologies that make America more energy efficient (and create new jobs) were not started four years ago. Instead those same administration officials solution to energy was to consume more. As a result, gas at $2.30 is a certainty. The real question is how close to $3 per gallon. Based upon America's always increasing consumption, that price will not decrease. It is better to let your campaign contributors get rich rather than demand that America innovate. Corruption that stifles innovation is also what this election is about. $3 per gallon gas means these are the best it gets and that recession is probable.

Dow at 9,753 is all the way back down where it was last November, below where it was Jan 2002 (three months after 9/11), and below where it was four years ago. Where is this booming economy? Only where crime, fraud, and massive legalized bribes (campaign contributions) are going to George Jr. How to undermine an economic recovery? Let your rich campaign contributors pilfer the profits.

If you are earning less than $30,000, then where is that tax cut? If listening to George Jr propaganda, then you believe the economy is booming and that corporate corruption is in jail. After four years, the story is completely different - if we review the facts and not listen to a lying president.

Just another whole group of companies doing massive corporate fraud - and the George Jr administration will not even prosecute. Dow is dropping. As I noted back when they were advocating tax cuts, history says you get a short term boom followed by a recession. The boom is over. Welcome to paybacks - how the economy demands you now pay for those tax cuts. Apply for new jobs at those those innovative companies that sell efficient uses of oil. Oh, they were never created. George Jr tax incentives instead favored more consumption.

[lookout123]

while some improprieties will be found in Spitzer's latest investigations it is important to remember that Spitzer is preparing for a future political office, most likely the governor's mansion. (normal path for the AG) that isn't to say that M&M are without problems, but let's remember who is going after them. it is the same man who has spent vast amounts of time and energy going after mutual fund companies and brokers by targeting 12b-1 fees. he has spent incredible time and energy championing the idea that they are designed to screw the client, when in reality the exact opposite is true.

and as far as the DOW's current standing proving there hasn't been economic recovery? this wasn't exactly an unexpected pre-election slide. most of us have been warning of this temporary movement for 6-8 months. corporate earnings continue to climb at a respectable pace, stock prices (which comprise the DOW) always trail corporate earnings by at least 12-18 months. small and midsize companies feel the upswing first but amateur investors wait to believe in the upswing until the see large companies reap the benefits. large companies affect the DOW. when corporate earnings peaked in the spring of 1998 we didn't see the DOW tumble for quite some time. it is all part of the normal economic cycle with a nasty political race thrown in for good measure.

no matter who is elected, stocks will climb again within a couple of weeks(of a winner being announced). i expect we'll be somewhere around 10,500 by the end of the year and closing on 11,000 by 2Q 2005.

as far as your claim that a lot of white collar folks should have been prosecuted - you are absolutely right. the downside to that process is that it leaves story above the page one fold for a very long time, and that has a very negative affect on the market. although profit and earnings drive the economy, mass psychology have a very meaningful impact on the day to day market.

[Happy Monkey]

Thank goodness for ambitious lawyers looking to make a name for themselves. Nobody else seems interested in holding massive corporations to account. If massive warchests weren't the advantage they are in lawsuits, I might have some sympathy for the anti-trial-lawyer position.

And I'm speaking as the subject of a frivolous lawsuit.

[xoxoxoBruce]

"In one 22-year study tracking the careers of 1,500 men and women, 83 of whom became millionaires, the researcher found that not a single person in the study became wealthy investing in the stock market. in fact, most of the people in the study were still struggling financially after 22 years of work, and one of the main reasons was because they had lost so much money investing their savings in stocks recommended by financial advisers." - Brian Tracy, Getting Rich Your Own Way

[lookout123]

Bruce, does the author have an agenda? He is obviously selling a book telling people interested in investing about HIS way of making money. i'm not familiar with his book, so he may have valid strategies, but i think it is important to remember that he benefits from convincing people that another way of investing isn't as profitable as his way. as always, you can find a study to support any theory you might have.

BUT, i would caution anyone who thinks they are going to become wealthy by being involved in the stock market. the purpose of investing is not to create wealth from nothing. it is to manage funds in a manner that will encourage growth over the long term. investors looking for get rich plans are generally the ones who lose A) the greatest amounts and B) more often. the market is useful for asset maintenance and growth with a view for the long term. it is no more suitable for wealth creation than the lottery or roulette wheel.

as i've said before, the average investor is best served by holding most of their $$ in quality mutual funds. while it is true that there is a greater potential for gain in individual stocks, unless an investor has enough cash to build a quality, diversified, and balanced stock and bond portfolio they run a greater risk of loss than is prudent.

of the 41 clients that i handle with more than $1Million in the market not a single one has less than $200,000 in quality mutual funds. they also own stocks and bonds but they will all tell you that they started with the bulk of their money going into Funds because they needed the relative stability early in their investment plans. (also, funds may be more costly in the short term, but much more cost effective in the long term because once an individual has invested within a fund family they can rebalance and move money around within all of the available fund choices at no further cost.) they are not the Trumps or the Soros's of the world. they are men and women who worked hard in a normal career and followed the advise of an honest broker.

there are brokers and investment advisors who are less than scrupulous - just as there are teachers, lawyers, doctors, etc who don't always have their clients' best interest in mind. you will also find brokers who just don't know what they are doing or have been trained improperly. but the majority of brokers take their responsibility very seriously and provide the best possible advise. as i tell my clients, no matter how good a broker or investor is - they will be wrong about 20-25% of the time on individual stock picks. we don't carry a crystal ball.

and before tw even shows up to yell from the mountain tops that you don't need a broker because we are nothing but "shined up sales whores", always remember you can invest on your own.

there are plenty of wire houses in existance. a layperson can research and learn to do very well by picking their own investments. they may do better or worse than they would have if they had used a broker - results will vary. one of the biggest benefits of using a full service broker is simply having someone between you and your money. people who handle their own money often make decisions that are more motivated by emotion or feeling than on logic and facts. a broker has the ability to ask "why?" and provide an outside, unbiased opinion before placing questionable trades. the broker will also push issues that the individual investor would ignore. (proper balance and diversification)

[xoxoxoBruce]

Bruce, does the author have an agenda?

Don't know? I found that quote on NSFW http://domai.com/ under the "Thought for the Day" and didn't want to miss the opportunity to rattle your cag.....er...uh.......clarify it.

Nicely done, by the way.

[Griff]

Originally Posted by Happy Monkey

Thank goodness for ambitious lawyers looking to make a name for themselves. Nobody else seems interested in holding massive corporations to account. If massive warchests weren't the advantage they are in lawsuits, I might have some sympathy for the anti-trial-lawyer position.

And I'm speaking as the subject of a frivolous lawsuit.

Don't drag the warchests into this, they pretty much mind their own business.

As an aside, I've noticed that the price of gold is the highest it's been in 10 years. In a very general sort of way, the price of gold increases as people begin to feel anxious about the general economic/ political outlook. I realize that gold bugs often tend to be on the wonked out side, but it is an interesting correlation that seems to prove true more often than not. My ex-step father was a gold bug which was what got me interested in the whole thing. He was descended from a family of Armenian Jews who fled all the way across Russia to end up in LA around 1915 or so. They made their escape by means of the proverbial gold coins stashed away in their belongings. When I got my small windfall earlier this year, I bought 8 gold American Eagles to help pay my future rent. At the time I bought them gold was going for $385.00/oz; now its at $424.00.

[russotto]

The only way you're going to get wealthy directly from the stock market is out-and-out speculation, with a good deal of luck. Oh, and you have to start with decent seed money too. Even good, sound investing won't make you rich starting from non-rich.

Much of my money is being handled by 1-800-MATTRESS (actually ING Bank), which looks like a good "investment" nowadays, particularly compared to the index funds the rest is in...

[lookout123]

just remember that the deeper a market dips, the safer it is to get in. it isn't just a cheesy slogan. we don't know how low the market will go on any given dip, but the people that increase their wealth usually do pretty well in down markets. they buy all the way down secure in the knowledge that the economy is a cycle and it will come back up and they will have purchased more shares at a lower cost and have reaped the rewards that the individual who pulled out missed.

"in a recession dis-investors lose, investors win" Mr Buffett

he was interviewed a few years ago, but i can't find a link to the article. the interviewer asked him how he could remain so unshakeable knowing Buffett had just lost $6million on one holding. Buffett calmly responded that he hadn't lost one penny. you only lose if you sell.

Russotto - like i said, the market isn't the tool for wealth creation. it is an excellent path to wealth accumulation, though.

i don't know what funds you have, but i generally don't recommend index funds. a well managed fund will outperform an index fund.
i only maintain my license in a couple of states so i can't give you specific recommendations but i would suggest that you visit:
Lord Abbett
American Funds
Van Kampen

you can build a very nice portfolio in any one of the families or an exceptional one by mixing certain funds from the three.

[Clodfobble]

Hey lookout, what was that favorite conservative fund you were referring to? Just wondering.

All this reminds me of a silly dirty joke that my mother liked to tell. I had to hear it so now I get to inflict it on anyone reading this thread. My Mother grew up in the era of more formal ball room style dancing. Here's her joke: A man saw a beautiful blond across the danceroom floor and asked her to dance. She accepted and after the music for the dance had ended the man said to the blond, "I can tell you're not a real blond." The blond looked at him in surprise and asked, "How did you know that?" The man replied, "I keep my shoes shined." (*ducks to avoid flying objects*)

[jaguar]

That guy is a touch fuzzy with his number comparisons and way, way too positive, to try and claim that the level of household debt is not an issue by comparing it to household assets in not my idea of good analysis. There are some big ugly problems floating around and the situation at the moment seems to be a very delicate balance of a huge number of factors just about balancing each other out, it's only going to take a domino or two for something really messy to happen. Short term isn't too bad, damoclean swords aside but the long term - particularly if bush is re-elected - is well, I'll be looking at gold, put it that way.

Originally Posted by jaguar

Short term isn't too bad, damoclean swords aside but the long term - particularly if bush is re-elected - is well, I'll be looking at gold, put it that way.

Gold is now at $426.00/oz, up $2.00 from Friday. Gold can be a roller coaster, but for the last 4 months its over-all trend has been up. I'd say people are worried.