Poll | 09/08/2008 12:00 am

Are you worried about the stock market?

Read more about: Economy, Finance, Meltdown, Money, Stock Market

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While the market has a way of correcting itself, I would have to say for now I’m worried.

By Brooklyn Gal on 09/08/2008 12:06 am

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I would love to have Kitty O’Keefe explain this to the bond market, and why it is causing concern. I never can get it straight, the bond market. The stock market has its ups and downs and hiccups, but averaged over time since 1929, it has had a constant increase, and one should not worry about it all the time. I meet with financial adviser about once a year. But, right now, while I don’t worry about the stock market, I worry more about a “perfect storm”, that is the combination of unprecedented events that can get us in big trouble. There are too many different problems and out of control borrowing that I worry about.

By Diana T on 09/08/2008 12:46 am

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Hi Diana, Wow! Have you ever looked at CNBC an hour before the stock market opens and seen those screaming boys in the bond pits (the ones in the ugly jackets)? I doubt anyone could explain anything to them. The bond market usually moves in a negative corrolation (the opposite direction) to the stock market. When you think about it, it makes some sense. The stock market is trading at about its historic average (you pay $15.75-ish for every dollar of earnings), but the dividend rate is a little low (2.3% now vs. 3.5% long term average). Everybody is pretty nervous, as the probability of recession is currently increasing. Recessions result in lower earnings, and stock markets hate that. The 10 year Treasury is paying about 3.8%. So, investors are saying, “Do I want to get a 2.3% yield in this wonky stock market and hope against hope that it goes up, or do I want 3.8% on a Treasury note and be sure of what it’s worth?” Lots of people are buying bonds. So yields SHOULD be going down because of higher demand - and they’re not. This anomaly exists because of the effect of bond traders. To make a very long and boring discussion short, the direction of the 10 year Treasury note is the bond market’s perception of the existence of inflation, and the 30 year Treasury bond is the bond market’s perception of the probability of increase in the national debt. That’s a simplistic, but relatively accurate explanation for why the market is down AND bond rates are staying up. About this national debt issue, yes it’s high. Way too high, but is about 37% of the national debt. It’s ranged from 25% - 80% of the national debt (80% was in 1940) from the 20th century to now, so we’re not in uncharted territory there. We do have much more international ownership of the debt - primarily Japan and China - so that’s of some concern. Hope this helps answer your question.

By K O on 09/08/2008 11:42 am

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Thank you, Kitty. I do think I will call the financial advisor and discuss my bond position because I think I need to be in a more conservative position while we see how this is going to play out. Besides, what’s the old saying? Don’t worry, be happy. http://www.cnn.com/2008/TECH/09/08/lhc.collider/index.html This could solve the whole dilemma for us if we all get sucked up in a black hole. And, it would solve any problems we have with the political atmosphere. I am going to have to take time with your information here before I know the next question I may want to ask you.

By Diana T on 09/08/2008 1:05 pm

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I’m more worried about losing my house. Green-energy stocks and biotechnology would be good long-term growth funds, though, I’m sure. I do believe that our money is not safe in the banks, regardless of accounts being “FDIC-insured” up to $100,000.

By James the Game on 09/08/2008 1:50 am

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James, I’m worried about the banks also and spent some time Saturday on line looking at ratings. I found that the bank i have been using for the past 40 years, National City, is rated D, and also found that there are no banks in my area (Bloomington-Normal, IL) rated higher than B…… But I found a good credit unions in my area that I’m moving my funds to. I agree with you about the FDIC and it probably applies to the insurance backing credit unions. Those could probably be totally wiped out if things get too bad. I found information on banks and credit unions on bauerfinancial.com —- there is a list on the home page click on Banking or Credit Unions if you wish and go from there. I intend to move to CEFCU credit union.

By elaine oland on 09/08/2008 10:46 am

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Right, Elaine. I remember, in 1974, my mother started stocking up on canned goods big-time, and had us save quarters pre-1965, because they contained less copper. She lived through the Great Depression, and knows that history can repeat itself, no matter what anyone says, especially the government. A mass panic could cause such a run on the banks that it would make your head spin, as well as the carousel doors entering them. A lot of banks already are closing.

By James the Game on 09/08/2008 11:38 pm

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How about this question instead? Would you be concerned to work at the top of the tallest building in the world, built over the San Andreas fault in low-lying reclaimed Bay Area landfill? We all saw in the 1991 SF quake what liquefaction did in the Marina District. Buildings just pancaked. It was stunning to walk through that beautiful, safe, affluent area afterwards and see the widespread destruction. In fact even today walking through that area, having seen all the people who lost everything, even their lives, you feel certain that nothing bad could ever happen there. I guess kind of like people feel about 1929. That’s so over. Our world economy since 2000 has been built over financial landfill. $700 trillion dollars worth of unregulated derivatives when the world economy is $50 to $60 trillion and of course the Bush Admin has cleaned out Fort Knox. So when the shaking starts and you’re at the top of that building with it’s foundations subject to liquifaction….how secure do you feel? And people are going to vote for McCain who can’t do simple math in his head or understand the “Internets” so conceptually he can’t even brainmap derivatives or their import. POW is all he ever says. And his sidekick left a small town $27M in the hole. Our local economy is great. But we all exist in a new and fast-changing world in a country run by criminal dim-wits. So, no I don’t ‘worry’ because that solves nothing and might make my skin break out. But am very aware that our financial ground isn’t solid…no matter the spinning of the tricksters. As Rousseau said, “The money powers will always fool the masses into enslavement.” Not only that. People here clamor for it.

By Suzanne de Cornelia on 09/08/2008 2:03 am

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How about this question instead…. The stock market? Are you joking? How about 157 dollars in food stamps a month……Got recipes? Got strategeries? (‘member George and his strategeries?) I think somebody’s missing a good bet by not calling McCain George the lll….that would be third….. Learned helplessness

By georgia fatwood on 09/08/2008 2:23 am

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Georgia, McCain George III. Good one.

By Suzanne de Cornelia on 09/08/2008 3:09 am

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Thank you for stamping my cyber parking ticket, doll…….If next you see me here…pseudonyms not withstanding….it’ll be Ginger Peachy or Peachy Keene or Labelle Penn or Pearl Barleigh….(you have to say Labelle Penn out loud)

By georgia fatwood on 09/08/2008 3:28 am

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Who could have invented a name like Doris Kearns Goodwin? And she is so excited about what she knows.. so enthusiastic… Just reminds me that boredom is in the eye of the beholder….Now there’s a veep for you….you know, a sense of history…. I thought General Honore should have been somebody’s veep…Cajun accent and all…. Ooh……. I digress and happy about it….

By georgia fatwood on 09/08/2008 3:40 am

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Georgia…Who are you? So clever…you make my snapses jump up to do a little jig.

By Suzanne de Cornelia on 09/08/2008 5:53 am

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Speaking of jumping “snapses” and market trembles, did any of you watch the interview on 60 minutes last night with Bob Woodward? If not go to Huff Post and see the video. Now that’s scary stuff and until King George is actually OUT and goes back to the ranch I worry.

By phyllis Doyle Pepe on 09/08/2008 9:07 am

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Phyllis—-Saw it this am…very scary…it doesn’t end with Bush back in Crawford or fleeing the country to his set-up in Paraguay to avoide criminal prosecution. McBush-Palin equal 4-8 more years of the same brutalizing insanity.

By No Kill and Drill Palin on 09/08/2008 2:19 pm