Debt Ceiling talks getting ugly

[f3lix]

Let's join Washington and just throw our hands up saying, "Who gives a fuck?" We haven't before and we won't start now!

Seriously, how bad do things have to get before we make REAL changes?

[f3lix]

Great to see the USPS ask Congress for help in paying their bills. It's not like the average salary of $63,771 needs to be attending. But I'm sure cutting every employee's salary by 10% to pay their bills would be "catastrophic" because they are "real people" and have to "feed their families."

What other business can lose $10B per year and keep getting away with this nonsense?

[angry pancake]

Originally Posted by f3lix

Let's join Washington and just throw our hands up saying, "Who gives a fuck?" We haven't before and we won't start now!

[color=black]Seriously, how bad do things have to get before we make REAL changes?]

It's hard to give a fuck about Moody's or S&P when they've fucked up so bad in the last few years that the only explanation was essentially 'don't listen to us.' They gave Lehman a thumbs up the day before it collapsed. Gave subprime mortgages and CDOs AAA ratings. And all they can say was "don't listen to us." why should anyone now?

[DJ FC]

Originally Posted by Ugly Bastard

It will be strange to me if the markets care about this S&P downgrade. The info with which S&P decided to downgrade U.S. was same info everyone already knew. Why should their arbitrary decision to downgrade or maintain really matter in a vacuum?

S&P didn't tell us anything we didn't already know. But what people keep forgetting is what everybody knows isn't always what matters. Let me explain.

There may be some long-only pension funds out there who are mandated (by law) to only hold AAA rated debt. Will they be forced (by law) to puke their holdings Monday morning? The question isn't whether this will happen, but how much it will happen.

[Ugly Bastard]

Nice point. At any rate, I'm rooting for a dip tomorrow. I bet the DJI to drop 77 points or more.

[DDTempest]

Originally Posted by Ugly Bastard

Nice point. At any rate, I'm rooting for a dip tomorrow. I bet the DJI to drop 77 points or more.

Looks like you undershot your drop ... by about 475 points

[Cocktooth]

You would think as much as some of you know, you should run for office. Maybe instead of bitching on here F3lix, you should run for a political office. Not some bullshit campaign for Sheriff of a podunk town. This is why I hate coming to this site more and more. We know your stance. You aren't going to convince people that don't agree with you. It's the same political bull shit time and time again.

[Ugly Bastard]

I can't wait to see middle America hillbillies (rightfully) overthrow the U.S. government when they bail out the banks again. Shit is hitting the fan, folks. Stock up on popcorn. Going to be an interesting several years. There will be little lulls (like the one we've experienced over about the past 18 months) where you're tricking into thinking everything is okay, but it's not. Down, down, down.

[DJ FC]

Originally Posted by Ugly Bastard

I can't wait to see middle America hillbillies (rightfully) overthrow the U.S. government when they bail out the banks again. Shit is hitting the fan, folks. Stock up on popcorn. Going to be an interesting several years. There will be little lulls (like the one we've experienced over about the past 18 months) where you're tricking into thinking everything is okay, but it's not. Down, down, down.

I'm calling the bottom within the next few days. Maybe not today or tomorrow but this week.

Why?

Because the economy isn't that bad. Companies are hiring again and making profits. Inflation will be high and so people will need to buy more stocks.

[Cocktooth]

Right now is actually the first time that I've been interested in buying stock. I'm not an expert on the situation, so I will defer to a few older relatives. I'm in a position where I have a little money to throw into something that has a possibility in growth. I won't unload much, but just a little bit to wet the whistle.

[Saint DH]

Originally Posted by Dirty Harry

What do you think about gold mining companies, specifically EGO?

El Dorado Gold, one of the few stocks that were up today.

[Ugly Bastard]

Originally Posted by DJ FC

I'm calling the bottom within the next few days. Maybe not today or tomorrow but this week.

Why?

Because the economy isn't that bad. Companies are hiring again and making profits. Inflation will be high and so people will need to buy more stocks.

Offer me an over/under on the Dow Jones Index for whatever it closes at on 8/9/2014? (If that's a weekend or holiday, the bet, if there is one, is settled on whatever the index closed at on the most recent trading day).

[DJ FC]

Originally Posted by Ugly Bastard

Offer me an over/under on the Dow Jones Index for whatever it closes at on 8/9/2014? (If that's a weekend or holiday, the bet, if there is one, is settled on whatever the index closed at on the most recent trading day).

I'll take the over for 9250. I think this is roughly the expected value in the market (forward value of an index is lower than current spot value because of dividends).

[thekremlin]

There's no carry on the dow?

[Ugly Bastard]

Originally Posted by DJ FC

I'll take the over for 9250. I think this is roughly the expected value in the market (forward value of an index is lower than current spot value because of dividends).

Oh hell no. I was expecting the line to be higher than whatever the market closed at yesterday.

[DJ FC]

Originally Posted by Ugly Bastard

Oh hell no. I was expecting the line to be higher than whatever the market closed at yesterday.

I don't think you understand. I am picking the same level.

Dow futures trade (roughly) 250 point discount to Dow cash for each year you project out. The reason for this is that there will be dividends paid between now and then and you expect the stock market to drop by the amount of the dividends. Thus if the cash is currently trading 10000, a 50/50 bet for 1 year from now will be 9750.

Ya dig?

Stock market index future - Wikipedia, the free encyclopedia

Pricing

Forward prices of equity indices are calculated by computing the cost of carry of holding a long position in the constituent parts of the index. This will typically be
The risk-free interest rate, since the cost of investing in the equity market is the loss of interest
Minus the estimated dividend yield on the index, since an equity investor receives the sum of the dividends on the component stocks. Since these occur at different times, and are difficult to predict, estimation of the forward price can be difficult, particularly if there are not many stocks in the chosen index.

[Ugly Bastard]

I dig that you've probably set an accurate line. I was hoping to catch you in a moment of optimism where you'd set the line at 13,000 or something.

[thekremlin]

UB, he also tried to use his finance powers to jew you.

[THEINCREDIBLEdork]

TIL marginal tax rates in the US were around 70-90% for incomes ~100,000+ prior to 1980. I never new they ever went above 50.

[Ugly Bastard]

Yea tax rates are at lowest levels of all time basically. During WWII, when our society had an "in this together" attitude, the tax rates were through the roof to raise money to support the war.

[DJ FC]

Originally Posted by Ugly Bastard

Yea tax rates are at lowest levels of all time basically. During WWII, when our society had an "in this together" attitude, the tax rates were through the roof to raise money to support the war.

Not true at all.

There was a time before payroll tax.

[THEINCREDIBLEdork]

Do you have asperger's or something? It's like someone has created the smallest gasoline powered engine and you say "no that's not the smallest gasoline engine there used to not be any gasoline engines."

[DJ FC]

Well the US government used to get almost all (if not all) of it's revenues from import tariffs. As long as you weren't importing goods you weren't taxed. So it's not as if we didn't have taxes, we just had much lower taxes.

[angry pancake]

Misto, I think FC just told you there were steam engines before gasoline engines.

Edit: FC is kinda right though, maybe by accident. Income taxes existed off and on before the 16th Amendment. I think the first time an income tax imposed was the civil war era. Later to be abolished and reinstated. I believe there was also a time that wages were taxed, that's not the case now.