OT - Dow plunges 1,175 - worst point decline in history

[paredown]

I do think there are things to worry about though. If I had anything to protect I would be moving into a cash/Tbill/liquidity position,--I think the crash is just around the corner:

1) Estimated $6 Trillion dollar unfunded government pension liabilities, or roughly $18k for every person in the US--this despite the relative good performance of the economy. At some point the bill will be paid out of raised taxes, or state and local governments will have to declare bankruptcy:
https://www.heritage.org/budget-and-...n-liabilities;

2) Spiraling student debt, especially since the recession as more marginal households have been unable to fund tuition by borrowing against home equity. Estimates are in the $1.5 to 1.6 trillion dollars--more than credit cards and auto loans. The knock on effects are millennial are delaying marriage/starting families/making babies and will not be stepping into the housing market any time soon:
https://www.cnbc.com/2018/06/07/peop...f-control.html

3) The sputtering Chinese economy, Trump's jawboning (and actual action) on tariffs on Chinese goods (and others)--have already having an effect on world trade volumes;

4) Stagnant wages/lack of full time employment for the bottom third of the economy, who have already been unable to make back what they lost in the "Great Recession". Especially the older cohort who simply have been unable to find employment and who dropped out of the labor market.

Here's a cautionary tale about what this looks like:

https://www.nytimes.com/2018/10/23/n...-new-york.html

5)BREXIT is going to be catastrophic for the UK economy and will have untold effects on the Euro block.

[echappist]

Originally Posted by paredown

I do think there are things to worry about though. If I had anything to protect I would be moving into a cash/Tbill/liquidity position,--I think the crash is just around the corner:

1) Estimated $6 Trillion dollar unfunded government pension liabilities, or roughly $18k for every person in the US--this despite the relative good performance of the economy. At some point the bill will be paid out of raised taxes, or state and local governments will have to declare bankruptcy:
https://www.heritage.org/budget-and-...n-liabilities;

2) Spiraling student debt, especially since the recession as more marginal households have been unable to fund tuition by borrowing against home equity. Estimates are in the $1.5 to 1.6 trillion dollars--more than credit cards and auto loans. The knock on effects are millennial are delaying marriage/starting families/making babies and will not be stepping into the housing market any time soon:
https://www.cnbc.com/2018/06/07/peop...f-control.html

3) The sputtering Chinese economy, Trump's jawboning (and actual action) on tariffs on Chinese goods (and others)--have already having an effect on world trade volumes;

4) Stagnant wages/lack of full time employment for the bottom third of the economy, who have already been unable to make back what they lost in the "Great Recession". Especially the older cohort who simply have been unable to find employment and who dropped out of the labor market.

Here's a cautionary tale about what this looks like:

https://www.nytimes.com/2018/10/23/n...-new-york.html

5)BREXIT is going to be catastrophic for the UK economy and will have untold effects on the Euro block.

thanks for sharing that. I have been staying away from the NYT for quite a while (though i'm still a subscriber), not b/c of "liberal bias", but b/c I felt it was doing a few too many fluff pieces, especially those in the real estate section. We need stories like this to be told, in the seemingly vain hopes that some would listen and pay attention.

Years ago, I remember a Simpsons episode in which a widow lost most of her assets after passing of her spouse, and that particular segment went, "and she went to Harvard Medical School, as a cadaver..." Dark humor at the time, but quite a bit closer to reality now...

[GregL]

Originally Posted by paredown

4) Stagnant wages/lack of full time employment for the bottom third of the economy, who have already been unable to make back what they lost in the "Great Recession". Especially the older cohort who simply have been unable to find employment and who dropped out of the labor market.

Here's a cautionary tale about what this looks like:

https://www.nytimes.com/2018/10/23/n...-new-york.html

A truly sad tale, but a close read reveals the subject left two jobs. He left Oracle because he "...viewed (it) as a lateral move at best" and Dell because the required travel "...proved a burden." In a bad economy, you can't be too choosey. Shortly after my wife and I got married, my company imploded due to mismanagement. I had to take a step back in my career, taking a position that paid less and had less opportunities. My wife had already committed to completing her college degree. Our income dropped 60% and we took on the debt from her student loans. At the end of some months, we had to decide between groceries and rent. It took four painful years to get out of that situation and into a better path forward. My point? When faced with economic difficulties, you can't be picky. You have to accept a change in lifestyle and deal with the hand life gives you. While I feel very badly for the subject of the story and his family, his choices were part of his downward spiral.

Greg

[echappist]

Originally Posted by GregL

A truly sad tale, but a close read reveals the subject left two jobs. He left Oracle because he "...viewed (it) as a lateral move at best" and Dell because the required travel "...proved a burden." In a bad economy, you can't be too choosey. Shortly after my wife and I got married, my company imploded due to mismanagement. I had to take a step back in my career, taking a position that paid less and had less opportunities. My wife had already committed to completing her college degree. Our income dropped 60% and we took on the debt from her student loans. At the end of some months, we had to decide between groceries and rent. It took four painful years to get out of that situation and into a better path forward. My point? When faced with economic difficulties, you can't be picky. You have to accept a change in lifestyle and deal with the hand life gives you. While I feel very badly for the subject of the story and his family, his choices were part of his downward spiral.

Greg

none of us knows enough to make a statement. he's also been through a divorce; perhaps his wife took him to the cleaners

one thing that is deeply alarming is how job opportunities may leave one behind. Have a friend making a good salary in an East Coast city; his company got acquired, and then the parent company laid off a bunch of people. That was quite a few years ago, and he's very experienced (and was in his early 40s), but he's been having trouble finding a position giving him similar level of remuneration...

Life in the U.S. can be so brutish

[gasman]

Originally Posted by echappist

Life in the U.S. can be so brutish

It’s all relative. Compared to much of the world we have it pretty dang good here.

[echappist]

Originally Posted by gasman

It’s all relative. Compared to much of the world we have it pretty dang good here.

but amongst industrialized nations, the U.S. is sub-par for its lack of a safety net. Even when compared to countries with a similar ethos (viz. Australia, Canada, and New Zealand), the U.S. is a worse place to live for those without means.

[zap]

Originally Posted by echappist

but amongst industrialized nations, the U.S. is sub-par for its lack of a safety net. Even when compared to countries with a similar ethos (viz. Australia, Canada, and New Zealand), the U.S. is a worse place to live for those without means.

True, but what better place than the USA to make a go of it.

Trust me, I know.

[Jeff N.]

DOW down over 600 10/24.

[sfo1]

Another less than encouraging day. I still have to park my '17 SEP $. I guess a cash account is not so bad after all (for the time being).

[Ken Robb]

Originally Posted by sfo1

Another less than encouraging day. I still have to park my '17 SEP $. I guess a cash account is not so bad after all (for the time being).

I see CDs paying 2-2.75% for 10-14 months which may be a good place to put some $$ at least for the time being.

[Tony T]

Originally Posted by Jeff N.

DOW down over 600 10/24.

…and all indexes at a loss for 2018

[sfo1]

A good suggestion. I was thinking 3% is not far off.

Originally Posted by Ken Robb

I see CDs paying 2-2.75% for 10-14 months which may be a good place to put some $$ at least for the time being.

[Louis]

Originally Posted by sfo1

A good suggestion. I was thinking 3% is not far off.

Not too bad, as long as inflation doesn't ramp up again. (And with all this talk of trade wars, I wouldn't count on that not happening.)

[mtechnica]

Originally Posted by Jeff N.

DOW down over 600 10/24.

Are we tired of winning yet?

[Louis]

Originally Posted by mtechnica

Are we tired of winning yet?

The country gets what it votes for...