Will the stock market hold...or is the bubble ready to burst?

[brucelee]

The stock market has been overvalued ever since the 'irrational exuberance' days of Alan Greenspan - the former Federal Reserve Board chairman, IMO. Good for us, it has so far withstood all the crisis ever since that time, beginning with the Asian crisis, to 9/11 and Iraq war continuing up to now, primarily because of the safeguards that the government and the market have instituted over the years. We are facing a real crisis now and the situation is far worse than any of those previous crises, one of the worst in the recent times. Will all the safeguards put in place over the years help now? But the real questions is, if the safeguards were really in place, would the subprime crisis happened? Time has shown over and over that easy credit is a no-no for the health of any economy. The government and the market's decision to allow the stock prices to soar to unprecedent level even after Greenspan's famous warning puts to doubt if there indeed were adequate safeguards put in place, which makes the stock markets condition eerily similar to the loan market condition just before the subprime crisis. Without some form of intervention, the stock value can go up and up as long as there's fuel (money) to feed it. Once the money that feeds the prices up starts to dry up, the price will start to collapse and the long bubble would finally burst. The subprime loan crisis and the record-breaking oil prices are putting enormous pressure on those money that supports the stocks. So my friends, you may not be aware of it but there is a serious possibility that the long overvalued stocks could finally crash, putting the whole economy into a real crisis situation that we haven't seen in the recent years. Are we ready for this

So you know some concepts in financial management pacfan. What I'm more concerned is the increasing price of fuel. It's very alarming.

[Douglas]

The stock market has been overvalued ever since the 'irrational exuberance' days of Alan Greenspan - the former Federal Reserve Board chairman, IMO. Good for us, it has so far withstood all the crisis ever since that time, beginning with the Asian crisis, to 9/11 and Iraq war continuing up to now, primarily because of the safeguards that the government and the market have instituted over the years. We are facing a real crisis now and the situation is far worse than any of those previous crises, one of the worst in the recent times. Will all the safeguards put in place over the years help now? But the real questions is, if the safeguards were really in place, would the subprime crisis happened? Time has shown over and over that easy credit is a no-no for the health of any economy. The government and the market's decision to allow the stock prices to soar to unprecedent level even after Greenspan's famous warning puts to doubt if there indeed were adequate safeguards put in place, which makes the stock markets condition eerily similar to the loan market condition just before the subprime crisis. Without some form of intervention, the stock value can go up and up as long as there's fuel (money) to feed it. Once the money that feeds the prices up starts to dry up, the price will start to collapse and the long bubble would finally burst. The subprime loan crisis and the record-breaking oil prices are putting enormous pressure on those money that supports the stocks. So my friends, you may not be aware of it but there is a serious possibility that the long overvalued stocks could finally crash, putting the whole economy into a real crisis situation that we haven't seen in the recent years. Are we ready for this

So you know some concepts in financial management pacfan. What I'm more concerned is the increasing price of fuel. It's very alarming.

Eventually the gas will start going down. Just pray and have faith, and do as little driving as you can.

[Salty]

Eventually the gas will start going down. Just pray and have faith, and do as little driving as you can.

I highly doubt that mate, as right now we would be getting pretty close to peak oil. But I'm glad my dad is not on this site, he would be writing a 20 page essay on this as we speak. But basically many western economies along with the world will probably be screwed over by this. With that level of debt and people living beyond there means people's standard of living is going to fall eventually and take with them not only the US but dent the world's economy. Although Aus will be fine with our plentiful supply of natural resources

[Kirkland Laing]

Fed auctions $75 billion to banks to ease credit stresses
Tuesday May 6, 1:27 pm ET
By Jeannine Aversa, AP Economics Writer
Fed auctions $75 billion to banks to ease credit woes, total is $435 billion since December WASHINGTON (AP) -- Battling to relieve stressed credit markets, the Federal Reserve said Tuesday it has provided a total of $435 billion in short-term loans to squeezed banks since December to help them overcome credit problems. The central bank announced the results of its most recent auction -- $75 billion in short-term loans -- the 11th such auction since the program started in December.
It's part of an ongoing effort by the Fed to help ease the credit crunch, which erupted last August, intensified in December and January and took another turn for the worst in March.



Fed auctions $75 billion to banks to ease credit stresses: Financial News - Yahoo! Finance


While the Fed keeps printing money on this scale to deal with the results of Bush's disastrous presidency, oil prices are only going to remain high. If you think gas is expensive now, just wait till the summer.

[Douglas]

While the Fed keeps printing money on this scale to deal with the results of Bush's shitty and pathetic presidency, oil prices are only going to remain high. If you think gas is expensive now, just wait till the summer.

It already IS summer.

[pacfan]

So you know some concepts in financial management pacfan. What I'm more concerned is the increasing price of fuel. It's very alarming.

No, I'm just a boxing fan who dabbles in everything.

Seriously, I wanted to involve myself in local socio-econo-political discussions but just don't have the time to do so. You probably know we got lots of mess to clean up.

[luvfightgame]

Unfortunately whenever a topic like this comes up everyone gets wrapped up in the details and the side effects of the real problem.

We have debt money. There is perpetually more debt than money. This is because of the way the system is designed. There is no way to get out of debt unless the system is changed. There is too much debt owed to people who do nothing. Money is simply to exchange things between people, the people who provide the money get too much out of it.

For a house... you borrow $100k but you pay back $300k. The person who built, sold, and lived in the house get paid out of the $100k. Then the other $200k of interest is payed out the rest of your life. To put it simply we have economic leeches that are sucking the system dry.

Don't believe that there's lack in this world. We have plenty of food, water, shelter, for every human on the planet. But it's being held back for money. One fastfood chain's waste for a day could feed all the starving people. The major hotels have enough empty rooms, the newly built houses that are empty, etc. Don't believe the hype. There's plenty for everyone, but millions starve so hundreds can have so much they couldn't spend it in their life times.