Prepare for a U.S. Market Crash

[Herman Munster]

http://biz.yahoo.com/fool/060925/115919648505.html

We're heading into a recession. You've heard about it for months, even years, what with the housing bubble, the war in Iraq, overextended consumer credit -- you name it. A recent Merrill Lynch (NYSE: MER - News) report says that the U.S. economy will grow by only 1.9% next year, down from 3.4% this year, and slower than the global growth rate of 5.2%. Even slowpoke Europe should pass us at 2.1%, though the U.S. is ahead of the average European GDP growth rate of 2.7%.

If these numbers are even close to reality, your next course of action should be obvious: Invest somewhere else for a while. The good folks behind that report suggest Japan, India, and Brazil as eminently suitable targets.

What's more, they expect that interest rate differences will cause the dollar to lose value against the yen, Chinese renminbi, and Scandinavian currencies, which means that even mediocre businesses in those regions should produce decent share-price returns over here, thanks to the magic of currency conversion.

Investing guru Warren Buffett seems to agree with the Merrill team. His Berkshire Hathaway (NYSE: BRK-A - News; NYSE: BRK-B - News) just bought its first-ever foreign firm and dropped hints about looking for more. The insurance, fast-food, and underwear conglomerate (among other things) picked up an 80% stake in Israeli toolmaker Iscar Metalworking for $4 billion, and Buffett said that he's facing increased competition from global-minded private equity firms. "They may end up buying some businesses we would have liked to have bought instead," he said.

[BlueJazz]

1. The Good news is though, by Voting Republican....

...when we're all in the streets or in the Fucking Poorhouse we won't
have to worry about those Pesky Married Queers.


Grrrrrrrrrrrr!

[madokie]

13. ahh, you mean we will finally be able to let our guard down

:sarcasm:

[Jackpine Radical]

2. Be mighty careful about Japanese investments.

They've kept their market floating by the skin of their teeth for years. Their whole banking system is a house of cards, for one thing.

[atfqn]

10. You seem to think that

the Japanese have been built on a house of cards - care to take a look at our present situation? There will be no bystanders in this event so look closely.

[lectrobyte]

14. Talk about your pot and kettle. Got petrodollars? Know who holds

our debt?

[undergroundpanther]

3. Funny

Most people I know Including myself,WE are FUCKED, if the market crashes,because we live paycheck to paycheck.
There are many more folks who can not even save,let alone invest.

I hate articles with their"helpful" advisory tones like this one,because I have no hope, I can't shove a wad of money overseas and save my ass.Because I ain't got any money.

Most likely like the MAJORITY I will starve and die in the woods.Or on the street,be nuked to death in some protest,made into a guinea pig and injected with who knows what in some emergency room if my PSTD kicks my ass, Or I'll be worked or tortured to death by some petty asshole bully in some labor camp.
This is what the majority of Americans can look forward to. They don't have any thing to invest.

Unless we Eat the Rich.And we may have to do it to save ourselves from the rich psychopaths crashing the market to force the agenda of globalization..

[tbyg52]

4. Yep.

I have scraped up a little money to invest and am worried about some of it, but I certainly agree with you about the *really* rich. They don't care if we have a major depression--to them the 30's were a good time to snap up bargains.

[Leopolds Ghost]

8. 'panther - ever see the movie "Delicatessen"? :-)

:evilgrin:

[DireStrike]

5. Weren't we in a recession?

We never really came out of that last one...

[Wilber_Stool]

6. Found this this morning:

James Kunstler -- Clusterfuck Nation

Sept. 25, 2006 -- The story this coming week, I think, will be how much the collapse of the Amaranth hedge fund may end up infecting other "playas" in the big leagues of finance. Hedge funds being what they are -- rackets using "leverage," or other people's promises to pay, to make bets on "spreads," or differentials in other people's bets on the price of things -- there are a lot of other people out there who might get sucked through the event horizon of one big fund's black hole of bad betting.

http://worldnewstrust.com/index.php?option=com_content&task=view&id=214

So, we could all wake up one morning and find out we are all doomed.

[bagrman]

9. Three hots and a cot. Everyone can join the military.

They'll be running everything, as long as your a good solider you'll get fed.

Latr
Chris

[newyawker99]

12. Hi bagrman!!

Welcome to DU!! :toast:

[dickthegrouch]

7. Read/Watch Goldman Sachs on BRICs

Brazil
Russia
India
China
Will each overtake US in next 20 years

BRIC
Video

This will be third world nation then.

Long live Keynesian economics :sarcasm:

Edited to add link, and the video

[swag]

11. Tactical (short-term) asset allocation is a poor idea, but if one doesn't

have enough in international stocks (and most American investors don't, due to home-country bias, which affect investors and portfolio/fund managers around the world) in one's strategic (long-term) allocation, there are worse things to do than diversify internationally. Burton Malkiel recommended that at least 25% of one's stock allocation be in international in 1997. More recently, Jeremy Siegel has recommended 40% of one's stock portfolio be in international.

But pretending that one knows which way markets are going in the short run is a very bad idea. Look at the dollar shorts (Warren Buffett and Bill Gates among them) from late 2005 who lost their asses. Look at DU's gold enthusiasts from mid-May 2006 who have lost their asses.

Better to have a long-term strategic allocation among whose asset classes one calmly rebalances periodically, maintaining steady percentages among asset classes (though migrating slowly toward less risky, more income-producing assets as one ages), thus taking money from the overvalued asset classes in one's portfolio and shifting it into the undervalued asset classes on a more-or-less regular basis.

Better yet, invest in a low-cost target retirement fund that does it all for you.

[RB TexLa]

15. only 3 North American stocks owned since 9-11

Sold all none oil North American stocks as soon as the market opened back up, and haven't put one dime back in other than the three oil stocks. As long as any drop in North American markets don't pull other markets too far down, I'm fine.

[Xenotime]

16. I've been in recession for years.

Thanks to *, I have watched my paycheck dwindle year after year. I was much more properous in the 90s under Clinton.

[nonews]

17. Gas price drop

Billions of dollars will go back into the consumer pockets with the drop in gas prices. The consumer will out spend us out of any Recession. The only down turn I see is in the housing markets which is cyclical in nature anyways. Everyone relax.