The stock market had its biggest losses in three years yesterday, and is continuing to lose today. Is this the sign of an impending recession and real estate crash after the relatively economically normal mid-'00s?

About a week ago I kept hearing about how well it was doing, now it's doing badly again. I think it will probably pick up again, but you never know. The real estate boom definitely seems to be over though.

Meh, the stock market rises and falls in cycles. The only people who really get hurt are the penny ante players.

In the winter, in the summer,
Don't we have fun?
Times are bum and getting bummer,
Still we have fun.
There's nothing surer:
The rich get rich and the poor get poorer
In the meantime,
In between time,
Ain't we got fun?

--Kahn/Egan (1921)

Maybe 2006 is another 1990 ...

Meh, the stock market rises and falls in cycles. The only people who really get hurt are the penny ante players.


Exactly.  In fact, after big gains, it is usual for stocks to dip afterwards.  This is the "profit taking", those selling their stocks in order to make a fast busk on the higher prices.  This brings it down briefly.

In fact, let me pose one of my favorite questions in here, just to prove the point.

How much money was lost in the Stock Market Crash of 1929?

Exactly.  In fact, after big gains, it is usual for stocks to dip afterwards.  This is the "profit taking", those selling their stocks in order to make a fast busk on the higher prices.  This brings it down briefly.

In fact, let me pose one of my favorite questions in here, just to prove the point.

How much money was lost in the Stock Market Crash of 1929?

I think I heard the actual figure once before, but I can't remember it. How much?
???

i think they were saying it was because the CPI went up. so it's not tied to recessionary pressures so much as inflationary ones?

Maybe 2006 is another 1990 ...


I swear 2006 can't be anymore like 1990 if Vanilla Ice were to come back. Wait he is, he changed his name to Kevin Federline. This year is lame! Not to mention how much money I'm losing in stocks.

I don't think 2006 is anything like 1990, it's more of a 1987, with a heavily localized, rich-focused boom ending slowly with a stock market slowdown. It's more of a new '87.

I don't think 2006 is anything like 1990, it's more of a 1987, with a heavily localized, rich-focused boom ending slowly with a stock market slowdown. It's more of a new '87.


I felt that 2003 was more like 1987, especially with the stock market trend. Also, the pop-culture, fashion trends, and politics were similar between 2003 and 1987. The other similarity is that both years had a girl named Jessica that was rescued, and got a lot of media attention (in 1987, a baby girl named Jessica was rescued from a well in Texas, and in 2003, a soldier named Jessica was rescued from a P.O.W. camp in Iraq).

The stock market had its biggest losses in three years yesterday, and is continuing to lose today. Is this the sign of an impending recession and real estate crash after the relatively economically normal mid-'00s?

No and maybe and wotthehell, in that order:

No, not a recession.  Merely a slowdown in economic growth, and/or an adjustment to a US dollar that's barely worth the paper it's printed on. 

Maybe.  Real estate won't _crash_.  But it won't go up.  Interest rates will go up.  I wouldn't buy real estate in the coasts of the US today.

Wotthehell?  The mid-00s were economically-normal?  We had a 50% bear market in the early-00s, we had a war (which was a fantastic buying opportunity -- they practically rang the bell at the bottom 72 hours after the shooting started by saying "quagmire" in the middle of a snowstorm), and now we've got a protracted money sink in Iraq because it turned out none of the three Iraqi factions has any interest in either Western-style democracy or capitalism, resulting in *squat* for oil production out of a region that should be pumping a million barrels a day, a major city (New Orleans) wiped off the map due to bad timing, and it took so long to get into this hole that it looks like the Chinese'll be able to industrialize their 1B+ peasants to the degree that they may (MAY, not WILL - if I knew, I wouldn't be telling!) no longer need  300M US consumers to support their economy.

Fortunes are made and lost in environments such as this. 

I'm invested 94% in stocks (heh, not all of these companies get their revenues in $USD, and some of the companies that do - sell things that can be purchased in currencies other than the $USD), 6% in cash, 0% in US bonds as of tonight.

I have yet to make more money in the markets than I'm paid at work.  But I've made enough to live off of for the past few years.  Assuming I don't screw up too badly, I expect to continue to do so.  The only parallel to be made with 1987 is that it's a *very* easy environment in which to screw up badly :)