NOTE: Those graphs are the US market.
"The current bear market is already among the worst in history. Here is how it lines up - in losses and length - with those of the last 80 years." The New York Times, October 11 2008.
The chart linked below includes the 1987 crash, our current situation in Oct 2008, the depression of 1932, the war at 1942, all adjusted for inflation for a direct comparison.
NOTE: Those graphs are the US market.
Scary yet exciting times.
Im glad I got out of direct shares a couple of years ago.
Much of the problem has been because of panic trading. People think the sky is going to fall in and try to sell their shares. Money market investors try to redeem some of their money by selling off the comparatively stable $A and so it dives. I dont think were ready to compare to the Great Depression yet. Perhaps 1987.
There are a few events that will restore investor confidence.
!. Aus Govt has guaranteed bank deposits - other govts will need to follow suit to prevent savings being transferred
2. There are lots of share bargains to be had. Especially with banks because of point #1
3. We are cashed up because of the resources boom and regulatory changes made by the two previous governments
4. China and India are still growing. This might slow it down a bit but Aus. still has plenty of what they need - resources.
5. Probably other factors but too early on a Monday morning. Need more coffee.
I built up the courage and logged into my super account yesterday, I expected the worst and wasnt disappointed, but all we can do is ride it out and the market will turn again..................sooooooooooon I hope!!!
...or you will have to wait until you are 96 before you can afford to retire ::)Originally Posted by greenman link=1223804775/0#5 date=1223852128
Youre a braver man than I am Gunga Din.Originally Posted by greenman link=1223804775/0#5 date=1223852128
Despite having moved most of my Super into a cash option 6 months ago I still havent been game to look.
I know it will have lost less than it otherwise would have but atm I just dont want to look.
The beauty of the stock market is that it eventually turns, and goes up. ;) Even after a depression. The trick, of course, is to have invested in just the right shares to survive ;D without them becoming worthless overnight due to bankruptcy. And to have saved enough to buy more near the bottom.
Thought it was an interesting discussion point, even if it is US (the Aussie market often flows on, but I think the Aussie market has more underlying stability as a whole this time than the US does and therefore will survive the fluctuations better.)
Interesting chart Intellidepth.
I do wonder how responsible the banks will be with Mr Rudds blank cheque.Aus Govt has guaranteed bank deposits - other govts will need to follow suit to prevent savings being transferred
"Put it all on black at the casino and try and double-up?"
...The cannot end-up worse than even.
Yes but we can be all thankful that our banks are more regulated than the US ones. That picture of the CEO of one American bank claiming he was suffering too after collecting something like $240million over 8 years was criminal (17000 freaking dollars per hour).Originally Posted by Andy Freeman link=1223804775/0#9 date=1223939346
Will anyone learn from this?
As Winston Churchill once put it "Americans can always be counted on to do the right thing...after they have exhausted all other possibilities."
No offence intended towards our US-based CSers but it was Enron, sub-prime lenders and the lack of any intervention from the government that has us in this mess. Non-US banks banks arent innocent of course.
A good point about our banks being more regulated.
When I was a banker, lending policy was a lot stricter than lately and I find the attitude of US lenders abhorant.
I can honestly say that no loan I wrote ever went bad.
We didnt throw money at people that couldnt afford to borrow.
Banks aint the only culprit in this debacle.
Didnt Gordon Gekko sum up the essential workings of ruthless capitalist corporate culture in 1987? (yes, 1987) ...
Ahhh yep, "greed is good" ... until you get your credit-card statement, notice the exorbitant interest charged, notice the re-payment amount mounting each month, & have an enticing brochure attached from the bank to contact them to increase your credit limit!
Surely theres a bit of personal responsibility about all of this ... its deemed by the media as a credit crisis aint it? Its just that the card has been left out of the descriptive equation.
Hows your credit-card coping?
The difference between Oz lending institutions & US counterparts?
Not a lot I reckon - but this:
US banks [s]can[/s] could provide finance to any Jo-Blo off the street.
Oz banks can/could provide finance to any Jo-Blo off the street ... but only if they can assure a return to the bank of that finance via established continuous cash-flow (a job), or an asset comparable in value that the bank can re-possess if the mortgage is defaulted upon.
Once Im on their books, getting extra extra credit [equity on my property to attain it] is a breeze ::)
So ... whaddya reckon? Extend my limit 5k & get that plasma, or look & reflect on the bank statements required re-payment amount ... with interest?
Maybe I can sell this soapbox for a few quid, invest in some blue-chips at the mo, & my broker assures me that in 5 years I can actually buy a pedestal. :-?
When the Consumer Credit legislation came in a few years back my wife (a bank manager) and I both agreed that it was only giving protection to those people that shouldnt be given loans in the first place.
I remember back in the late 80s knocking back a loan for a bloke that couldnt afford to borrow any more.
Subsequently he went and got the money he was after from another financial institution.
They obviously had not done their homework.
I rang the manager of the said institution and filled him in on what had happened and also let him know that Id be expecting our payments first.
Not everyone understands finance and they need to be protected from themselves; not all lenders are responsible and only care about short term gain. Usually those cowboys are long gone with their bonuses before the sh!t hits the fan.
I thought that the Consumer Credit Regulation (legislation) was all to do with:
a) setting a maximum amount of interest that could be charged - 48% :o
b) providing a specific formula to be used as a means of calculating interest charges
c) disclosure by financial institutions of their calculations, etc.
Before the regulation it was open slather for the Banks - now they have to tell us when they are ripping us off.
Yes, we should all be responsible. The reality is that not all of us are or can be. Thats why laws are enacted, not just to do with finance, but all aspects of our lives.
... I remember back in the late 80s being a cynical young 18yr old bugger entering Uni! ;),Originally Posted by Thundergod link=1223804775/0#13 date=1223961744
Have never been guilty of owning or using Credit Cards.... If I didnt have the money, then I saved my pennies until such time as I had what I needed. I guess its all part of the "Must have it NOW" syndrome that seems to be predominating the way people do things these days and the various financial institutions and credit agencies are cashing in on this - Big time.... Business at corporate level seems rarely to operate with a conscience, just a focus on the bottom line. This has ended up with the creation of a vicious circle of spiralling debt, the results of some of which, we are seeing unfold now.
One thing about history though.... People never learn from it. This entire horrible scenario will probably rear its ugly head again in another 20-30 years, right in the middle of rampant global warming and energy shortages. Something to really look forward to and to thank our far-sighted politicians for.... Good one guys [smiley=thumbsup.gif]
It isnt a bad philospohy and the world would be a better place if fewer people had such a dependence on them. However....If I didnt have the money, then I saved my pennies until such time as I had what I needed.
if you know how to use them you wouldnt do without them. The trick is to always pay the balance before the interest free period expires. Never go into debt. Then you can enjoy the convenience of credit cards without the expense. Of course, if everyone did that then credit companies would go out of business quite quickly.
For the last 15-20 years or so, weve used Debit Cards on and off and couldnt really care less about "how" to use Credit Cards flynnaus... Know all about interest free periods and the myriad other so-called benefits that are attributed to various cards. A mortgage is about the only debt Ive ever been prepared to wear... just my personal preference, ;)
This is a recent report (Australian Conditions)
Titled When the Markets Bounce Back
Open and read the PDF
Has historical Australian statistics and good advice
Sent to me by my Investment Broker