Anybody Buying Yet? Where’s the Bottom?

[VikingsGuy]

4) Are we becoming Japan? A mature developed economy with 1% real growth in a good year, almost zero inflation, an aging, thrifty population that prefers to save. Bond market thinks so.

Your post is spot on, but one thing I can say comfortably, the US is a long way from becoming a nation of thrifty savers - for good or for bad, we are a nation of spenders at our collective core.

 

[schmalts]

Im glad I took my profits from BP and VZ on friday morning. Might be sorry i sold the VZ since it's one product no one will stop using in this crisis

 

[TXinTN]

Dollar Cost Averaging. I’m buying every 15th and 30th and rebalancing yearly. It’s not rocket surgery.

 

[VikingsGuy]

Dollar Cost Averaging. I’m buying every 15th and 30th and rebalancing yearly. It’s not rocket surgery.

Studies show it is not the strongest investment strategy on pure numbers, but it tends to encourage more consistent and larger saving over time while reducing the risk of an average investor chasing market swings that rarely end well for the lay investor.

 

[Jasher]

I bought some $1.95 gas does that count?

 

[NEWHunter]

I don’t think it’s the Russians vs. the Saudi’s or the Russians trying to bury the Americans as I’ve seen some speculate, rather it’s the Saudis trying to bury Iran. Hopefully none of this turns in to anything more than a price war.

 

[Jasher]

Considering the only part of the gas and oil industry I'm a part of is standing next to my truck watching the pump, I hope it continues to go down. Then I can spend my money on more important things like tags.

 

[Jasher]

In 2004 the average cost of diesel fuel hit $1.50 a gallon. In 2009 it was almost $4.00 a gallon. If they are looking for someone to feel sorry for them don't look this way.

 

[Trial153]

30 a barrel oil about puts domestic production in the red, watch for extended hold on the toilet handle. There is lots of debt to flush.

 

[SAJ-99]

In 2004 the average cost of diesel fuel hit $1.50 a gallon. In 2009 it was almost $4.00 a gallon. If they are looking for someone to feel sorry for them don't look this way.

You know, the government post the stats on that kind of stuff so you don't have to make up numbers.

 

[SAJ-99]

Your post is spot on, but one thing I can say comfortably, the US is a long way from becoming a nation of thrifty savers - for good or for bad, we are a nation of spenders at our collective core.

You might be surprised. Boomers? Spenders, definitely. Part of that was because there were/are a lot of them and part is because in their peak earning years there was a second wave of "industrialization". Things like TVs and modern appliances became common in almost every household. Boomers are now largely retired and not spending any more. Millennials grew up expecting free stuff, so they are cheap as hell.
GDP is Money Supply x Velocity. The V never rebounded after the financial crisis. Hence why real GDP growth is 2%. The US is a consumer driven economy, but the world of today is not the same as it was in the 60's and 70's and we are not going back.

 

[homers]

About half way down

 

[VikingsGuy]

You might be surprised. Boomers? Spenders, definitely. Part of that was because there were/are a lot of them and part is because in their peak earning years there was a second wave of "industrialization". Things like TVs and modern appliances became common in almost every household. Boomers are now largely retired and not spending any more. Millennials grew up expecting free stuff, so they are cheap as hell.
GDP is Money Supply x Velocity. The V never rebounded after the financial crisis. Hence why real GDP growth is 2%. The US is a consumer driven economy, but the world of today is not the same as it was in the 60's and 70's and we are not going back.

I accept the economist stats, I just don't buy that consumer frugality is the reason - savings rates are still very low and debt relatively high. There are many reasons to believe the future economic reality will look different than the past (including some in your post), but I don't see evidence that excessive savings is one of those key drivers in the US.

 

[Jasher]

You know, the government post the stats on that kind of stuff so you don't have to make up numbers.

I drove my own truck for a living. I know what prices were. It effected my bottom line. As the price kept climbing in 04 and the pay didn't I said enough of this. I went and got a 9-5 job. I got laid off in 08 and went back to driving only for myself so I controlled the price I would move stuff for and it wasn't for the .82 I would get paid for one way and free to come back like in 04 it was minimum 1.00 every direction. You can look up whatever you want but unless you are the one stopping and paying for it you don't know chit.

 

[SAJ-99]

I just don't buy that consumer frugality is the reason

Agree, certainly not solely the reason. I think that part of the problem is that the stats typically measure the average and the economy has become more and more bifurcated into the haves and have nots. The Haves are savers. The Have Nots are spenders. There are a lot more Have Nots so they can tilt the spending data, but the Haves save a lot of the discretionary income. Mostly because there isn't much to spend it on, at least that is required. We see that in the frugality of corporate america. Corporations last big spending push was on the personal computers in the 90's. Ever since they have been on upgrade cycles.

 

[VikingsGuy]

Agree, certainly not solely the reason. I think that part of the problem is that the stats typically measure the average and the economy has become more and more bifurcated into the haves and have nots. The Haves are savers. The Have Nots are spenders. There are a lot more Have Nots so they can tilt the spending data, but the Haves save a lot of the discretionary income. Mostly because there isn't much to spend it on, at least that is required. We see that in the frugality of corporate america. Corporations last big spending push was on the personal computers in the 90's. Ever since they have been on upgrade cycles.

As an aside, I felt just like @wllm1313 when I posted those big statistical charts

 

[SAJ-99]

I drove my own truck for a living. I know what prices were. It effected my bottom line. As the price kept climbing in 04 and the pay didn't I said enough of this. I went and got a 9-5 job. I got laid off in 08 and went back to driving only for myself so I controlled the price I would move stuff for and it wasn't for the .82 I would get paid for one way and free to come back like in 04 it was minimum 1.00 every direction. You can look up whatever you want but unless you are the one stopping and paying for it you don't know chit.

There is a lot things I don’t know chit about, so thank you. I will let the EIA know their data is bad.

 

[Southern Elk]

So, does anyone want to predict where the bottom is?

 

[VikingsGuy]

-24% S&P (a complete swag - past performance is not predictive of future results)

 

[brymoore]

So, does anyone want to predict where the bottom is?

Swag? 2050ish if the US starts quarantining of areas.