Are we in a recession yet? Hmm!
Perhaps the economist are confused about what the definition of a recession is, but it has felt like one in any people’s personal economy since the beginning of the year. Finally, the talking heads, are acknowledging that we “may” really be in one. What?
Anyway the DOW falls below 8000 for the first time in 5 years. Keep in mind that in September 2002, the index closed at 7592 which was 6 years ago. Are we headed in that direction? How fast. After that, at 7539 which was the low in August 1998, we will see lows posted that we haven’t seen in X years. Here is an iPhone screenshot of the result.
Here are a few excerpts from MSNMoney explaining the losses yesterday. The entire article written by Charlie Blaine and Elisabeth Strott can be found — HERE.
Today’s selloff reflected three forces at work:
- A sharp decline in financial stocks. That was, in part, a show of investor unhappiness that the Treasury Department has junked its plan to take over the troubled assets of a number of financial institutions.
- Increasing worries that the recession will be much worse than anyone thought, with deflation problems growing. The Federal Reserve issued new projections today showing unemployment could jump well above 7% next year. Prior forecasts had seen jobless peaking at no more than 6%. The economy is “deteriorating faster than any time since the second quarter of 1980,” former Fed governor Lyle Gramley told Bloomberg Television today. Indeed, the Fed pledged at its Oct. 28-29 meeting to take “whatever steps were necessary to support the recovery of the economy.”
Cheers, it’s not the end of the world…yet.
Dow Closes at 9,955.50
For the first time in 4 years, has the DOW broken the psycological support level of 10,000. Where do we go from here? Economists portend, as do participants in the stock market, that what is going on today is a reflection of what we are likely to see in the future. Only the future is now. It is going to take longer than that to have all of this gut wrenching retirement plan wrecking market/economic activity to work itself out.
This is not a American problem folks, our friends across the Atlantic are going through the same pain and stabilization process to correct as we are. Even the Russian stock exchange halted trading twice today.
The market gave up $2.5 trillion in wealth today. That represents a lot of hopes for the future gone for now. Some of you were just recovering from the market collapse in 2001 and haven’t broken even yet. I read an article this weekend from a notable market analyst who said “buy and hold”. That may be fine for a young investor who has time for the market to turn around. For those who were relying on this for income because of a current or upcoming retirement, that strategy won’t do. If you are taking out money at the same rate of your portfolio as before the market collapse, you will find yourself depleting your retirement savings at a faster rate.
It’s time for a DEFENSIVE safe money portfolio review. Yes, there are still safe places to put your money and even get a 5% return guaranteed. Next you design the portfolio so you can never run out of money while receiving the highest income possible at lowest tax iiability. Call today.
