Our financial system is crumbling this week.

[TimeForGuinness]

Another interesting read: http://www.huffingtonpost.com/2009/03/1 ... 73824.html

[ghostrunner]

Wow, I just found this thread while looking something up:


Are We Headed for a Recession?

http://gatewayredbirds.com/forum/viewto ... 67&start=0

[Michael]

awesome find, gh.


Sooo... is it a good time to put your money into the stock market now?

[KyCardinalFan]

I did a little search myself and found thi from Wiki:

In simple terms, increased consumer confidence indicates economic growth in which consumers are spending money, indicating higher consumption. Decreasing consumer confidence implies slowing economic growth, and so consumers are likely to decrease their spending. The idea is that the more confident people feel about the economy and their jobs and incomes, the more likely they are to make purchases. Declining consumer confidence is a sign of slowing economic growth and may indicate that the economy is headed into trouble.

Each month The Conference Board surveys 5,000 U.S. households. The survey consists of five questions that ask the respondents' opinions about the following:[2]
Current business conditions
Business conditions for the next six months
Current employment conditions
Employment conditions for the next six months
Total family income for the next six months

Survey participants are asked to answer each question as "positive", "negative" or "neutral". The preliminary results from the Consumer Confidence Survey are released on the last Tuesday of each month at 10am EST.

Once the data has been gathered, a proportion known as the "relative value" is calculated for each question separately. Each question's positive responses are divided by the sum of its positive and negative responses. The relative value for each question is then compared against each relative value from 1985. This comparison of the relative values results in an "index value" for each question.

The index values for all five questions are then averaged together to form the Consumer Confidence Index; the average of index values for questions one and three form the Present Situation Index, and the average of index values for questions two, four and five form the Expectations Index. The data is calculated for the United States as a whole and for each of the country's nine census regions.

I guess I never realized it was actually based on people's feelings rather than how the economy was doing numerically. I figured it was based on retail sales vs. expectations and then throw in some other numbers to make it seem official.

[Arthur Dent]

I think consumer confidence is generally considered to be a poor economic indicator. It's more of a reflection of what's already going on than a predictor of anything.

[ghostrunner]

awesome find, gh.


Sooo... is it a good time to put your money into the stock market now?

Glad you asked, Michael. And the answer is yes. Buy! Buy! Buy!

Seriously though, I probably would buy some mutual funds right now if I had the money to spare. We haven't changed my wife's 401K arrangement at all.

[TimeForGuinness]

awesome find, gh.


Sooo... is it a good time to put your money into the stock market now?

I still think we are heading lower, but if you think that in 10-15 years that we will be back around 8,000 - 10,000 for the DOW, then why not do dollar cost averaging if you can afford it...and ride it out?

[GatewaySnayke]

Eh, I kind of agree with this in general. In small doses, it's funny. But it got kind of old as schtick a few years ago, IMO. It's Dane Cook's job to make a face and get a Pavlovian response. I'd rather Stewart just focus on saying funny things.

I think Stewart has always done it.

Same goes for the bits they used to do where they'd interview a bunch of small town hicks and edit the video to be as unflattering as possible. I'm not sure if they still do it, but I quit watching because of that.

I don't ever remember that, but I only started watching regularly about three years ago.

[Leroy]

Freddie Mac reported yesterday that its liabilities now exceed its assets, in part because the fair value of its loan portfolio declined by a massive $120 billion. It has said it will need to draw another $30.8 on the loan facility established to keep it afloat. All told it lost just a smidge under $24 billion in the fourth quarter.

Those a mind-boggling numbers. Regular readers know we have a special way of breaking these down to more comprehensible numbers.

Freddie Mac Losses By The Calendar

Full Quarter: $24. billion
Each Day: $265 million
Each Hour: $11 million
Each Minute: $184,000
Each Second: $3000

Each and every day in the last quarter of 2008--including weekends Thanksgiving and Christmas--Freddie Mac lost $265 million. That beats out General Motors, which lost just $85 million a day. It means that every second, Freddie Mac lost more than two weeks worth of the average American's income. Every 90 seconds, Freddie Mac lost as much as the average home price in the most expensive region in the country.

The main skill required to run Freddie Mac seems to be the ability to light three one thousand dollar bills on fire every second of every day. If these guys keep it up, they may even be able to get a job at AIG one day.

[ghostrunner]

Freddie Mac Losses By The Calendar

Full Quarter: $24. billion
Each Day: $265 million
Each Hour: $11 million
Each Minute: $184,000
Each Second: $3000

Not picking on this article in particular, but people need to stop doing this. It's a [expletive]-load of money, I get it. If you can't comprehend that $24 billlion is a lot of money, I doubt breaking it down into smaller increments is going to help.