Look we all have benefited from the massive party that has been going on in this country for the last generation. The expansion of credit had most everyone participating. You can say that it could have been traced to the lowering of rates during Reagan's first term that started the whole insane run. Yea, cutting rates from 21% to 5% unleashed the wonderful world that most of us only know. That allowed all of us to buy all the stuff we have enjoyed in our childhood and early adult hood, ON CREDIT for the majority of Americans. If you look back at a chart when we still saved for something we wanted and paid cash for it there wasn't too much wealth being created other than people receiving good wages.
The Dow was 616.59 on 1/4/1960 and only increased to 758.75 on 1/2/1980 Not too much of a boom for the long term investor. Then again there wasn't the rapid inflation until the late 70's that would have complicated life. Look to 2,707.21 on 1/2/1990 to the run we had at the high of 14,164.53 at the all time high of 10/8/2007 and see the parabolic run that we have had. Think of all the desginer clothes, multi room TV's, SUV's, McMansions, foreign luxury cars, designer handbags that everyone had to have during that time. We all benefited, especially if you had money in the market. It was all LEVERAGED with DEBT on DEBT. Yea many companies have have cooked the books and such but if you owned any NASDAQ stock in the 90's you made a killing if you cashed out before March of 2000.
The problem is that now we have had the ultimate margin call. It's kind of what happened to the oil speculators that everyone was decrying a few months ago. They raised the margin on Oil, well the market/world debt holders raised the margin on the American Lifestyle. An example of leverage is controlling an asset with only a fraction of the money down. I could get the benefit of the movement of $100,000 Canadian dollars for only $2,020. The Canadian $ moved up a cent, I make $1,000, It drops 1/2 of a cent I have to pay the exchange $500 at the end of the day or my position is liquidated and I am returned $2,020-500=1,520.
The trouble is that Wall St has played this game for 27 years by paying their margin losses with more debt. The game has finally stopped, mostly from the consumer not paying back their own debt, ironically to Wall St by defaulted mortgages and credit cards.
They kind of brought it on themselves by passing the 2005 Bankruptcy reform act. Banks though that they had people by the balls & that they could never default since Sen Joe Biden brought back the Victorian "Debtor's Prision" through the MBNA/Capitol One version of the bill.
Basically when I'm saying is it was a bipartisan effort to screw the average Joe, ironically. Well they just felt that they could bury you up to your eyeballs in debt & even if you could never pay it back, they owned you. So that may have been the whole reasoning why most lenders showed no mercy to anyone that was behind on on a mortgage or bill for the last 3 years. That's why all these firms with these really smart people that went to the best schools were all wrong. They thought that they could own the average person through debt. Somehow the plan backfired.
Am I scared? Actually No, I have been screaming this for quite a while. Just check out some of my favorite links over on the right. Never fear, this shit is all a zero sum game. Someone is making $ out there on all this stuff blowing up. Unfortunately it's at the expense of the people's 401k plans but some hedge fund trader needs another mansion on the coast or a bigger one in country with a nice tax shelter. I just say go short as well. The market may give off a sucker bounce like we had at the end of July/August but this has to even it self out. There was just too many people playing with credit that they never should have had in the first place. Buy a Put option for an index or buy an ETF that makes money as the market goes down. I bought the SDS (Ultrashort S&P 500 Index) this morning before I went to work, I'll most likely cover or place a close stop just in case the Fed cuts rates again.
What I'm basically saying is this, we are all going to get a hard check of reality as a country for many years to come. The market most likey won't do jack for years, maybe decades. Just look at the long term charts. Either now try to make some money on the downside (because for every dollar lost, someone gains one) or just park it in a good safe bank that isn't going to be taken over by the FDIC...
I Never saw that movie but I don't get if Tow Motors Plug in, and Mister Pizza Cars used to be all Electric why that hasn't taken off more. If you know how to make the alterations a car can run on Pure Alcohol, I remember when I went to see Monster trucks Years back they ran on Noxious Oxide, that is right Laughing Gas!!!!!!!!!!!
I saw the documentary movie "Who killed the Electric Car?"
:::link:::
It was somewhat depressing. :/
Of course, when we can drill big holes all over Alaska and the rest of the land, who wants alternative fuel??