Jim Crammer Predicts 2000 Point Stock Market Drop

[Cruentus]

I just saw Jim Cramer a few minutes ago on MSNBC and he was saying something along the lines that if the government didn't bail out the mortgage insurers that we were looking at a 2000 point drop in the Dow at some point.

This is pretty much what I was telling this one buddy of mine who is only a few years from retiring who insists on putting GINORMOUS amounts of money in the equity choices of his 401(k) and then comes to me sounding suicidal when the market drops a couple of hundred points.

I think Cramer's right.

I think we're looking at hundreds of billions of dollars worth of exposure that only something the magnitude of the federal government can even attempt to bail out.

Unfortuantely with the political pressure, you can't bail out the home owner's without also bailing out the bond holders so that whole thing will probably be allowed to implode and then we're looking at real 1930's-type conditions - real starvation, real hopelessness.

Crying shame the power won't probably be on often enough to even blog about it when it hits ...

(credit to Blogspot)

 

[seddy]

well here is what worries me.. my retirement fund is with washington mutual.. if they tank.. i am screwed.. even t hough i know i am only 27 and i have less than a a thousand dollars put into it, but still. i woudl lose that money and would have to start a new with a different company.

aprt of that news article is true and part isn't. see iw ork in teh realestate sign industry. and we have been watching this happen for quite some time. the biggest reason fro all this is 2 factors 1) greedy lenders: they will lend you money no matter what , if you can or can't afford it.. a double edged sword on thier part and 2) the mornic hoem buyer who's eyes are bigger than thier wallet.: they are buying up homes that they cannot afford and racking up massive debt on credit cards.. thinking they have to "one- up" the neighbors.

really the federal govt. should be doing, is helping out the major lenders. (morgan stanley, aig, wash. mutual, ING..etc..) as they have more assets and fewer predatory lenders. making them quicker to fix and work out and help thier lenders and lendees get out fo debt.

also the fed. govt. needs to prosecute the hell out of the predatory lenders. what they are doing is extorsion and a form of loan sharking. and make all new home buyers take a class (yes this exists too) on buying a home and working out an AFFORDABLE mortgage. this class i know heer in pittsburgh is availabel at any local community college or job center. so i assume its this way in other states as well.
and when these peopel buy houses and get a mortgage. they need to go with a fixed rate loan, yes teh interest is usually higher, but you rate is locke din and will not go up.. it can only go down, as you build credit and yoru core goes up, your monthly payment will go down over time. people don't see the big picture, they go for the a.r.m. loans,which is based on what happens with teh lenders stock..well those are the onses getting screwed. an a.r.m. loan yoru payment is small, but can fluxuate. a lender who is good with teh mouth can talk any first tiem buyer into this. and this is what is screwing everything up. i say do away with this loan all together. the other is a balloon mortgage. in my opinion you need to be ablithering retard to do this option. unless you hit teh lottery..this mortgage isn;t worth talking about.

then start to work at the smaller lenders. these are the ones who offer higher interest rates, but will finance you more money. these have the higher % of predatory lenders. thus an idea would be to have the irs step in and help sort through these to cacth those lenders.

so the market implosion is unlikely right now. as the market has already slumped. now its the mortgage companies looking into the fourth quarter and saying "oh shit we ripped too many people off!" and now they are running for help. come tax time tehhoem owners will get a decent return, due to filing bakruptcy fo couorse, but if they were smart, they woudl use that money to clear up thier debts, an dthe ball to recovery will get rolling faster.. but thats on the people.

teh housing marjet is getting better. its gonna be another 5 years till it gets high and thriving again. but it will get there. your gonan see alot fo mortgage comapnies mergingand buying each other out.. but thats just them doing what they have always been doing in the pqast. its only making headlines now because teh fe. govt. had to step in this time.

 

[Cruentus]

BEcause of all of these banks failing, there has been an 800 point drop in the last three days. THis country is seriously in dire need of help.

 

[seddy]

it rebounded though. and trust me, teh stock market has dropped way lowere before.. think back to 1984 i believe or was it 1987? not sure gonna have to look it up. but yeah . it slammed low, alot of rich people lost alot of money as it is now.

what i am seeing in teh real esate industry now, is auction companies poping up. now this is smart. they are buying up forclosed proerties and selling them auctioning them off to pre-qualified buyers. I.E. when yous ee one of these signs up, you call teh number and they send you a form to fill out. if you meet teh criteria for this form, then you can go to teh auction. now all this form is . its a form stating yoru credit score, and it pretty much determines if you can afford the property or not. now the one auctcion company here in pitts. will do, if you fuill outa form and you don't qualify for that particluar property, they will show you ones that you can afford. so in a major way, these auctions are gonan be really successful, yes yoru gonan see dips in the stock market until these auction comanies make alot more progress.

mark my words..next year thinsg will rise, in 2 years it will be higher, and in 5 years.. this will be looked upon as a learning point when teaching people about how to properly run an economy.

 

[Cruentus]

In my lifetime the largest drop was 508 points when 9/11 happened. This was the biggest drop since, 500 points down 1 day. up 150 the next day, down 400 the day after. the way everything is going, our futures dont look to bright.

 

[Nitz]

I'm happy being in Canada. Our dollar is worth more than the US dollar. Our econemy, was "supposed" to fall with the USA, but it apparently is doing pretty good.

Countries are not investing in US shares now and more in Canadian shares. Our taxes have gone down a lot too.

I'm happy here, knowing funds are in good health here. It sucks for the states, everything is just crumbling.

USA will dig it's self out, but it will be a pretty deep hole to climb out of.... =\

 

[Cruentus]

Well harry, get off your highhorse, you are leaving canada soon anyway

But yes, the Euro(i know not canadian) is now worth 3.21 US Dollars. Their taxes have gone down as well. Here taxes are up and up and up. Gas is up to almost 4.75$ a gallan here, and im told thats cheap

 

[seddy]

wow gas heer is is only 3.67.. was 3.47 till the hurricane.. this time last year was 2.47

 

[Cruentus]

LUCKY BASTARD. Here 4.75 is cheap. Up in Chicago you are seeing 4.89-4.92 its outrageous

 

[Nitz]

Well harry, get off your highhorse, you are leaving canada soon anyway

But yes, the Euro(i know not canadian) is now worth 3.21 US Dollars. Their taxes have gone down as well. Here taxes are up and up and up. Gas is up to almost 4.75$ a gallan here, and im told thats cheap

I'm leaving Canada for 2-3 months

As for gas, it's actually gone down here... not sure why. But it went down by a bit.
All I can say is the new president will have a lot to clean up...

 

[Cruentus]

Right now, I don't think we could get worse. Obama McCain. The question isn't who will help us. The question is who will do it better.

 

[Nitz]

Right now, I don't think we could get worse. Obama McCain. The question isn't who will help us. The question is who will do it better.

Everyone is saying things will get worse.

As for helping, neither of them can do much. It's going to take a long time for the US economy to heal and boom. No one wants to invest in the US... people are scared it's a country that's falling and no one wants to fall with it. That's why lots of investments were going to europe.. and now it's slowly stopped and coming to Canada...

Most people NEED to invest via USA, but at this point there is no use.

 

[seddy]

everything gets worse. this is all politics. notice last election atthis time. the war in iraq got really bad. what i find funny is we talk economy.. how bad it is. car companies liek toyota and honda are opening plants here in the states. it is gonna take a longtime. i stand by saying it will 5 years before we boom again. if you think about it. we had a similar issue in teh 70's.. it took a presidential election for things to turn around. anyone here over 18 knows of teh steel mills going down and the gas shortage stories.

its a godo thing things are getting taken care of now. ha dteh govt.just let all this slump into nothing ness.. this country would be on teh verge of becoiming third world..lol as for canada investors.. its coming full circle again. literally, investors in teh 70's did this as well. invested in europe, asian markets, and then canadian. so if the ctcle consists, investors will be coming back this way.

its a game of patients, and smarts. are we as peopel smart enough to stop stupid spending. i mean bush spends wayy too much on iraq. that is teh no.1 thing hurting us. i got into an arguement withs ome one, they were saying we need more war..it booms teh economy.. i told him longterm it doesn't look at vietnam. similar situation. its not that we need investors to come heer and invest. we need business to come here and build and establish. yes we in teh united states have a corner in wheat and other agricultural industries, but we need a good market here. walmart can't be the only company expanding here.

its a matter of who will step up and bring something new. i still thing bush was an asshole for not letting that company form ottowa come here and build ethanol plants back in 2003. he shot the idea down,saying theer was no need for it. he waited until 2006 to allow one company here to build. there only a handful of plants up too.. ethanl plants woudl have surged teh eocnomy because ethanol, would also build bio deisel plants. and this would take our dependncey off foriegn oil away. causing lower gas prices, then lower gas prices would lead to lower supply costs. than would lead to people going out and spending more. and we all know what that means.. a better economy.
now that teh housing market is low, smart peopel with good crediit would be wise to buy houses cheap and pay them off fast. that would also help out big as well, as peopel who are smart about mortgages, woudl pay thier payments and not defualtm casuing a low rate of forclosure. that % will go down and down. thus bringing teh economy up..


nitz, cru, i wish peopel thought like we did.. this country and this world would be alot better


seddy and cru '08! lol

nitz will be our secretary of state