This Week in the Mercury
Thursday, October 9, 2008
News Wow, Dow.
Posted by Matt Davis on Thu, Oct 9, 2008 at 1:30 PM
Hold on to your hats:
The Dow has just plunged through 9000, which is unexpected and sudden, to say the least. It's at this point that you might be interested to know a little bit about how this might affect you, say, for example, if you're living in a house share in SE Portland, and have no retirement savings to worry about.
The Dow is an index of share values for publicly listed companies. People buy and sell shares in those companies and depending on how much demand there is for a given stock, the value of those stocks goes up and down. While stock valuations are dependent on objective factors like how much revenue those companies are generating compared to their costs, they're also influenced by market confidence as a whole. So: When the Dow plunges this much in a given day, it's a sign that market confidence is plummeting, too.
So: While it's unlikely you own, directly, or indirectly, any shares in Pfizer or investment banks, the companies listed on the Dow, it's likely that you do have a stake in the economy as a whole. Your job, for example, is provided by an employer who may or may not depend on market confidence to survive.
In a downturn like this, everybody's confidence is affected. Consumers cut back on luxury spending and stick to the essentials. Employers, too, may look to cut costs. So it's important that you make yourself indispensable.
Portland is, to a degree, insulated more than other cities from the knock-on effects of a national economic recession, because there are other factors driving people to come here, like the fact that it's cheaper than most other livable states and more hospitable than Nebraska. But it's not going to be all that much easier for us than it will be for folks elsewhere.
Personally, I'm terrified. You?
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I don't know about your assertion that Portland is more insulated, Matt. Like we have discussed often in the past, economic opportunity here, particularly for young people, is abysmal. With a lot of our economy based on hospitality, food and beverage I think we will probably see a local unemployment rate higher than the national, just like last time.
I'm thrilled! Ecstatic! This is EXACTLY the type of change we need in the system. It's opening people's eyes to the reality of the world around them. I don't know about you, but daylight came where I live today and it's raining outside and I'm alive. Good stuff. What more do you need?
Listening to the most recent This American Life right now - "Another Frightening Show About Money".
Plenty of non-gentry young people contribute to 401k or PERS plans through their jobs, menial or otherwise. So, you're hosed too. Asserting otherwise is totally misleading.
"The Dow is an index of share values for publicly listed companies."
I take it you didn't get your economics degree from LSE, Matt. "The average consists of 30 of the largest and most widely held public companies in the United States." That's from wikipedia.
It's true measure on the market is at best a psychological one.
It's time to buy on the cheap as Joe-six-pack panics and sells at a loss. Buy, buy, buy. Really, this is ex-cellent!
It's a natural process and inevitable given all the garbage economics going all the way back to Reagan. Now we have Shrub, who was Reaganomics on steroids. As he pulled the pin more than anyone else, I'm glad Bush was holding the grenade when it blew up. The market will find a bottom and then it will find it's true value. Next stop 7000. Best not to drag it out.
If we lost confidence in the value of our currency, now that would be very bad. Unfortunately, that appears to be inevitable.
Another bang-up job here by the Merc's most thorough "reporter". This is full of wrong information and stupid assertions. I know of one job that can be outsourced to the benefit of all!
Sirs:
For a cartoon character, Mr. Burns has it right.
For every panicked seller, there is a cold, calculating buyer who knows that this, too, shall pass. Personally? I'm buying every blue chip share I can grub up the money for.
If you had half a brain, you would too. It's glorious shopping out there, kiddies, with another million or two to be made probably by year's end.
And if you insist on selling -- you're just making me all the more wealthy. Thanks. I really appreciate your foolishness.
I remain in an aquiring mood,
Jacomus d'Paganus-Fatuus
t.k.
Exactly. It's a wonderful opportunity build equity and wealth.
Jacomus
I love how Matt has simply stopped responding to the critics. Lovely work, per usual, mate.
"So it's important that you make yourself indispensable."
I feel some irony coming on...
Some funny reading here:
Why the Real Estate Boom Will Not Bust - And How You Can Profit from It: How to Build Wealth in Today's Expanding Real Estate Market by David Lereah
Dow, 30,000 by 2008 - Why It's Different This Time by Robert Zuccaro
Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market by James K. Glassman and Kevin A. Hassett
Dow 40,000: Strategies for Profiting From the Greatest Bull Market in History by David Elias
Yeah, I just put an order in for Zap Motors (ZAAP). It's my first actual stock purchase so I hope I'm buying at a good time. If not, it's only $200 and I figure I could easily waste that much if not more with a good night at Sassy's.
Sifting through the bullshit and rolling with the punches makes me whole.
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