What does S&P downgrade mean for average joe?

SnakeEYE · Aug 8, 2011

Quote from Humpy:

3. planned a bolt hole far enough away

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I could organize a couple of bolt holes in the boreal coniferous forest somewhere near Kamchatka Region.

(Expensive! Fishing rods,matches,salt,tents etc..are included)

GrandSupercycle · Aug 8, 2011

Clearly the S&P500 head and shoulders 1,172 target on the weekly
chart didnât provide support as expected but itâs extremely oversold now.
stockmarket618.wordpress.com

SteveNYC · Aug 9, 2011

Quote from Britheron:

What does S&P downgrade mean for average joe? People that have house mortgages, student loans, car loans or etc. When they say interest rates will go up, does that mean my student loan interest rate will rise? I'm confused.
Thanks for the help. Tough times for everyone..
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Sh*t & P**P downgrade probably means bend over for the average joe.

Illum · Aug 9, 2011

Quote from lindq:

Because, unfortunately the fathers of our nation didn't anticipate that financial interests could so overwhelm our representatives that our voice has been lost and ignored now for decades.

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Not true. They warned in very strong words that we could lose our freedom to it.

I think it perplexes some as to the tea-party, not giving two shits about big govt or how it survives. Well because they don't, they want their freedom.

Ticktaker · Aug 9, 2011

Didn't read any of the comments to the OP. Nah, not really. I'm about to re-fi @ 4.0 fixed over 30. Two cars...both payed off. Make sure you do that. You're good to go, my friend...depending on where you live.

Ticktaker · Aug 9, 2011

Quote from Lojanica:

Long story short is the equities market is about profits and psychology. USD strength is about relative value to commodities and other currencies. Unless interest rates go up, or the gov't raises taxes and cuts spending the dollar will continue its slide. A couple of interesting factors though is that given the state of affairs globally and in particular Europe there are few bastions of safety and that is one factor that has continued to support the USD. As turmoil hits foreign sovereignties pour cash into our Treasury!?! The politicos know they're a bit screwed (those that are behind the curtain and actually understand economics) in so far as QE has gone through its ability to gain much traction anymore---more priming will not likely do as much. Curves show the decreasing ability of 1 trillion in QE's effect to stimulate the economy but do produce inflated bubbles as liquidity looks for a roost.

Likely intermediate term and over the next decade we go down and sideways in the equities markets. But as always the markets are forward looking which means we may go up first as Washington grapples wiith the petard thrown by their brothers from S & P. Honestly it's a gift because DC is the enemy of business. Business always does best when you have gridlock in Washington but now a warning shot has been fired. The worst thing that can happen is for the Politicos to go off the deep end. They will do the wrong thing for the economy. The good news as described by S & P is they can't do anything---gridlock.

Some things are for sure----Volatility in the market will persist. Volatility has a memory and we are feeling the ripples from 2008 where vix hit 100 (more or less) VIX of 100 means options market makers have priced in a 100% price swing in equities for the 500 largest US companies over a 12 month period. We hit 40 in the markets yesterday. If Vix continues to expand and it very well may then that means our price swings in all instruments will be wide. BUY and Hold is dead. Nimbleness is important.

Given the markets are largely psychologic and profit driven anything can happen especially since corporate profits have been expanding. One big strike against any real upside with New Highs is that psychologically many people are "Too scary for me" I'm buying X (insert instrument of choice sans the stock market which is now viewed as a rigged casino). Human nature is do the wrong thing around extremes in price--hence the classic puke, or buying the top. If we started another ramp up it could gain momentum as everyone at some point of the price increase will be saying oops missed another rally I need to get in as they watch everything crumble around them. That's volatility in a nutshell.

Listening to individuals with credibility illustrates the conundrum. That is to say we are walking on eggshells. If we do lapse into another recession (we are on the brink now) then the mass psychology is so bad that the driver for this economy which is 70% consumer related dries up and you have a self-fulfilling prphecy. That is one reason DC is spinning the S & P downgrade as overblown. They are trying to not spook the herd. Obama and his team of financial wizards are cooking this weekend I can assure you. What's in the stew---? Their menu has been the same forever. Maybe this time it will be cooked goose? If that's the case then yeah hit the panic button.

Takeaway: Scary stuff to average Joe. Even Dr. Econophysicist, phD is a bit perplexed. Sometimes ignorance is bliss. What kinda irks me is when on the news you hear these politicos who flunked high school math telling us we need to do X.......
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Cool self-recommendation letter for a MBA program. Good luck, kid.

Humpy · Aug 9, 2011

The average Joes here in the UK have rioted for 4 nights in a row.
London looks like Baghdad with smoke and wreckage everywhere.

Yeah thanks to Odumbo, Bernanke, bankers. oh and angry Joes I suppose. They don't bend over so easily this side of the pond !!

SteveNYC · Aug 9, 2011

Quote from Humpy:

The average Joes here in the UK have rioted for 4 nights in a row.
London looks like Baghdad with smoke and wreckage everywhere.

Yeah thanks to Odumbo, Bernanke, bankers. oh and angry Joes I suppose. They don't bend over so easily this side of the pond !!
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You guys need to outsource police/security to the Chinese.

They WILL TAKE CARE of your hoodlums professionally.