Stock market speculation?

[forgop]

You hear all the gloom and doom about the ramifications of not raising the debt ceiling (not getting into a political debate here), but is anyone hearing about the stock market taking a dive if something isn't done? Just curious what speculation is made in anticipation of that happening, if anyone will be moving to a particular type of sector/fund out of more volatile types.

Thanks.

[Devanmc]

personally unless your trading in like European, Chinese or Japanese markets. I think your pretty well screwed if our gov screwed up the whole national debt thing. Because other then commodities everything else would plummet. I believe.

[Apoco]

personally unless your trading in like European, Chinese or Japanese markets. I think your pretty well screwed if our gov screwed up the whole national debt thing. Because other then commodities everything else would plummet. I believe.

Bingo (with the exception of the European market - they are probably in worse shape than we are)

An even more imminent concern is that S&P/Moody's could downgrade US Treasury Bonds from a AAA rating. Moody's has stated that unless there is clear evidence of the debt-ceiling issue being resolved they will downgrade US Gov't Bonds from AAA to AA. That would have huge impact on the governments ability to raise capital quickly and cheaply. To be fair - right now the yield is at historic lows (note: the price of the bond that people are willing to pay is inversely proportionate to the yield of the bond) meaning that demand is still high even with the speculation occuring. Maybe it won't have as big of an effect as "Chicken Littles" like me think it might.

Not to mention that then the world has to figure out what the RFRR (risk-free rate of return) is in place of the Treasury Bills...that will be interesting to see from a financial/scholarly point of view.

EDIT: To answer the OP's question more directly - Commodities are the safest bet if the EU and/or the US should happen to have a financial collapse that is worse than what they already have had.
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[elderboy02]

Look into precious metals such as gold/silver/platinum :tu

[Devanmc]

Bingo (with the exception of the European market - they are probably in worse shape than we are)

An even more imminent concern is that S&P/Moody's could downgrade US Treasury Bonds from a AAA rating. Moody's has stated that unless there is clear evidence of the debt-ceiling issue being resolved they will downgrade US Gov't Bonds from AAA to AA. That would have huge impact on the governments ability to raise capital quickly and cheaply. To be fair - right now the yield is at historic lows (note: the price of the bond that people are willing to pay is inversely proportionate to the yield of the bond) meaning that demand is still high even with the speculation occuring. Maybe it won't have as big of an effect as "Chicken Littles" like me think it might.

Not to mention that then the world has to figure out what the RFRR (risk-free rate of return) is in place of the Treasury Bills...that will be interesting to see from a financial/scholarly point of view.

EDIT: To answer the OP's question more directly - Commodities are the safest bet if the EU and/or the US should happen to have a financial collapse that is worse than what they already have had.
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:noon now i feel smart. this is what i get for reading wsj. So far i only have 1 year into business college. the rest in the army.

on another note. it really would affect the economy two fold(atleast). because not only do businesses and people no longer have actually/valuable money to buy things. Commodity prices go up during the collapse. so not only are you poor with a room full of hundreds, you cant buy food or anything else. it has the potential be a horrid domino affect.

[OLS]

I say buy land and buy seeds and pray for water in the form of rain. Hoard silver and gold. Find a good spot under
the freeway overpass and scrounge a child-size mattress. Let's make one thing clear, We are not just "getting there"
now, this has been a foregone conclusion since Lehman Brothers collapsed, and actually, more like ENRON a decade ago.
People who saw it THEN, and started buying gold THEN, really did well. Of course, they can't take advantage of it now,
because what's $1600 dollars for one of your ounces of gold when you will be paid in useless paper money? I would
suggest getting a helmet..and a gun or two.

[Apoco]

:noon now i feel smart. this is what i get for reading wsj. So far i only have 1 year into business college. the rest in the army.

on another note. it really would affect the economy two fold(atleast). because not only do businesses and people no longer have actually/valuable money to buy things. Commodity prices go up during the collapse. so not only are you poor with a room full of hundreds, you cant buy food or anything else. it has the potential be a horrid domino affect.

Don't feel TOO smart - I'm not an economist and I've only had my Finance & Accounting degrees for a year ;)

Looking back to yesterday - the Dow had it's best day of the year. So what do I know.

We have a better chance of a deal coming through as more American citizens (read: voters) become more concerned. The increasing pressure on politicians to not be seen as the one that is standing in the way makes them become more likely to bend.

TL;DR version - some big things have happened in the last 24 hours. Check back tomorrow.
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[elderboy02]

I say buy land and buy seeds and pray for water in the form of rain. Hoard silver and gold. Find a good spot under
the freeway overpass and scrounge a child-size mattress. Let's make one thing clear, We are not just "getting there"
now, this has been a foregone conclusion since Lehman Brothers collapsed, and actually, more like ENRON a decade ago.
People who saw it THEN, and started buying gold THEN, really did well. Of course, they can't take advantage of it now,
because what's $1600 dollars for one of your ounces of gold when you will be paid in useless paper money? I would
suggest getting a helmet..and a gun or two.

Well said :tu

[Devanmc]

Don't feel TOO smart - I'm not an economist and I've only had my Finance & Accounting degrees for a year ;)

Looking back to yesterday - the Dow had it's best day of the year. So what do I know.

We have a better chance of a deal coming through as more people become concerned. The increasing pressure on politicians to not be seen as the one that is standing in the way they become more likely to bend. Their minds are on the next election and are very cognizant of how people see them. This could all be a moot point in the coming days as talks continue and deals are reached. The WSJ has an article on Obama's backing of the latest bargain plan - his influence may swing the acceptance of this deal from "snowballs chance in hell" to "likely".

TL;DR version - some big things have happened in the last 24 hours. Check back tomorrow.
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yeah im reading that article right now. its on the front page of todays paper.

[elderboy02]

If you purchase precious metals, be sure to get a safe deposit box. It would suck if you bought gold/silver/etc. and you kept it at home and you got robbed.

[Devanmc]

thats what guns are for

something like this should sufice
http://i792.photobucket.com/albums/yy201/fatjaws09/weapons.jpg
maybe this
http://i607.photobucket.com/albums/tt152/Lannair/ModernWeaponsroom1.jpg

[elderboy02]

thats what guns are for

something like this should sufice
http://i792.photobucket.com/albums/yy201/fatjaws09/weapons.jpg
maybe this
http://i607.photobucket.com/albums/tt152/Lannair/ModernWeaponsroom1.jpg

Yep :) :gn :tu

[Apoco]

If you purchase precious metals, be sure to get a safe deposit box. It would suck if you bought gold/silver/etc. and you kept it at home and you got robbed.

Or in a safe that you've bolted into your foundation if possible. That way you have access to it in a worst case scenario.
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[shilala]

I say buy land and buy seeds and pray for water in the form of rain. Hoard silver and gold. Find a good spot under
the freeway overpass and scrounge a child-size mattress. Let's make one thing clear, We are not just "getting there"
now, this has been a foregone conclusion since Lehman Brothers collapsed, and actually, more like ENRON a decade ago.
People who saw it THEN, and started buying gold THEN, really did well. Of course, they can't take advantage of it now,
because what's $1600 dollars for one of your ounces of gold when you will be paid in useless paper money? I would
suggest getting a helmet..and a gun or two.
Seeds, check.
Overpass, check.
Mattress, check.
Gold, that one got by me.
Gun or two, check.
I'll have to take the land by force.
Can you suggest a make/model of helmet? I have a motorcycle helmet, but it'll cut out my peripheral vision substantially.

Funny, I was just thinking the other day of how few kids learn any survival skills nowadays. We lived in the woods for weeks at a time when we were kids, by ourselves. The old man took a lot of time to teach us good stuff, too. I'd rather sit in the air conditioning, but we'll be okay if worse comes to worse. I'm not gonna sweat it. I'd still like a comfortable helmet, though. :tu

[elderboy02]

Or in a safe that you've bolted into your foundation if possible. That way you have access to it in a worst case scenario.
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;):tu

[dave]

Seeds, check.
Overpass, check.
Mattress, check.
Gold, that one got by me.
Gun or two, check.
I'll have to take the land by force.
Can you suggest a make/model of helmet? I have a motorcycle helmet, but it'll cut out my peripheral vision substantially.

+1

But, I'll add.....Cigars. check. At least enough to last through an apocalypse or two....

[Apoco]

TL;DR version - some big things have happened in the last 24 hours. Check back tomorrow.

I said to check back in today, so time for an update!

There's a quote in the WSJ today that really nails this topic on the head:

"'It's not the bad news, it's not the good news. It's the uncertainty,' said Steve Quirk, senior vice president of the active-trader group at TD Ameritrade. 'As soon as it becomes evident that there could be a deal, then [traders become] unfrozen.'"

The absolute knowledge of a situation is fairly easy to respond to. The lack of knowledge on a situation is crippling.

The markets have posted massive gains today. The S&P is up 1.44% as of 3:35pm eastern. The dow is in the process of its third triple-digit gain this week. Things are looking pretty good at the moment. This is true because there are rumors of Obama and Boehner coming close to a deal on our debt ceiling. The thought of having things ironed out by the end of the month is driving investors to try to buy in now before the market rebounds.

Have no doubt - these market gains are still based upon speculation. Until the names are on the paper and the debt ceiling has been lifted we will be in a constant state of speculation and rumors. (Although to be fair - the stock market is pure speculation all the time)
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[massphatness]

I am hoarding cigars. In the days after the financial apocalypse, I'll be trading a couple cigars for a tank of gas or a 5'er for a week's groceries.

[Tyler]

We are all going to die!

[baddevildog82]

If a deal is worked out, my guess is the Dow rolls past 13,000.

[icehog3]

If a deal is worked out, my guess is the Dow rolls past 13,000.

In what time frame?

[baddevildog82]

about a day! If it was finalized today, I think it would roll past 13000 tomorrow. This is my opinion and I am not a financial adviser by any means, so take it with a grain of salt.

[Apoco]

about a day! If it was finalized today, I think it would roll past 13000 tomorrow. This is my opinion and I am not a financial adviser by any means, so take it with a grain of salt.

While a resolution of the US issues would cause a large rebound (13,000 within a week of the resolution would seem reasonable to me) - don't expect miracles. We still have Greece/Italy to make people scream "OH TEH NOEZ" and run for risk-averse investments.
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[baddevildog82]

I figure that a day is a good amount of time for people to forget about the other bad things going on. If a deal were finalized tomorrow (Friday), then there would be a whole weekend for people to remember the other bad things and in that case, I don't think it would hit 13000 on the following Monday.

[b.morales99]

We are very cautious nowadays of the what's happening in the US since it would greatly affect our stock market other than that analyst predict a five year bull run.

[Apoco]

Been 5 days now. We've seen 2 days of market freefall since then and Exchange rates have dropped quite a bit. The USD has been losing against the EUR for nearly 3 weeks now (keeping in mind that the EUR is also in danger - it is the most realistic comparison to gauge how the world sees the USD debt crisis vs. the EUR debt crisis).

The S&P 500 has gone from 1,345.02 to 1,313.07 in 2.25 days. That's a loss of 31.95 points or a 2.4% drop. Yikes.
The DJIA hasn't done much better - going from 12,681.16 to 12,399.54. That's a loss of 281.62 points or a 2.2% drop.

In short - OH GOD THE SKY IS FALLING.
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[bobarian]

Invest in cats, the new white meat. :banger

[Apoco]

Debt ceiling bill has officially passed through. Still a lot of tension regarding where the budget cuts will hit and what amounts. I'll be watching the stock market today to see what the knee-jerk reaction is.

EDIT: Already spiking up. Look to see what happens on August 2nd, 2011 from 1:00PM (eastern time) and on. A lot of fear regarding imminent melt down has been resolved but there is still the possibility of a downgrade from Moody's and a likely downgrade from S&P (they've stated a $4 trillion budget cut would be required for the US gov't to maintain its AAA rating).

Whether or not the increase will sustain, continue to increase, or resume decreasing is honestly a crapshoot in my mind.
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