Stocks are a HORRIBLE investment! I have held this belief for a long time. I have been rediculed and shunned by many "responsible" people. These responsible people also told me that people who rented were "losers." Who would be stupid enough to "throw" money away on rent? In my opinion the stock market is just a gambling racket. Like in Vegas the deck is stacked against you. Sure there are insider trading laws, but many people skirt this, and institutional investors can game the system and move numbers to their advantage. The system is not set up to make YOU money. It is set up to make THEM money on fees and other nefarious under the table things.
From the WSJ: Government Forces Out Wagoner at GMThe administration's auto team announced the departure of [General Motors Corp. Chief Executive Rick Wagoner] on Sunday. In a summary of its findings, the task force added that it doesn't believe Chrysler is viable as a stand-alone company, and suggested that the best chance for success for both GM and Chrysler "may well require utilizing the bankruptcy code in a quick and surgical way."
Neal here,
Well that was how many billions just wasted? The government needs to get the hell out of the way of the market system and let it work. It only took the government 6 months to figure out what we already knew; GM and Chrysler are insolvent! All the government is doing is dragging things out just like Japan did in the 90's and wasting trillions in the process. When do we get the epiphany about the banks. How long will the phony "stress tests" go on before we hear that bankruptcy would be the way to go. All the government should be doing right now is arresting the scammers at the banks -Mozillo from Countrywide- and setting up responsible regulations. This would include bringing back many of the laws that were dismantled during the Clinton and Bush years.
If you listen to the radio here in California there are commercials every 30 seconds advertising California bonds, they tout California's resiliency and bright future; I think California has its head up its ass. So does the rest of the nation:
"Anything that is too big to fail is too big to exist."
Nice chart from Morgan Stanley breaking down total U.S. credit market debt as a percentage of GDP since 1929. The differences in the debt’s composition from the 1930s to today are striking, with households, not corporates, being the credit problem children today. 
"The underlying problem is not the stock market. It is the credit (bond) market - that is, the underlying reality that there is too much debt out there in relationship to GDP, it cannot all be serviced, and as the economy contracts it feeds a vicious spiral where a default produces unemployment which drops both spendable income (and thus income available debt service) AND tax revenues, giving it to the credit market in all orifices. This is "deflationary destruction" and it is inevitable when government pushes off the normal cyclical cleaning out that recessions do, as our government has."
The bottom will be here when buying a house to rent out clearly makes money. At that point it's justified to buy because rent can cover the mortgage and all expenses if necessary, eliminating much of the risk. On the other hand, if you already have a mortgage, then refinancing at a lower rate does reduce interest payments, though refinancing does not reduce the principal. When house prices finally fall to affordable levels, and foolish lenders and borrowers are allowed to fail, then the economy will work again: there will be investment based on real production instead of on financial speculation, jobs will be created, and money will be earned and spent. Currently, we have none of that because the government is punishing savers and investors with policies that use their honestly earned money to cover the gambling losses of others. We also have legal contracts being modified to stop even well-justified foreclosures. No one was forced to borrow money. It was a choice -- a very bad choice, but completely voluntary. Grownups should be responsible for their own actions. To prevent a justified foreclosure is also to prevent a deserving family from buying that house at a low price, not to mention what this does to faith in contract law. No one in government or the press will even mention that everyone in foreclosure trouble got themselves into that spot by voluntarily borrowing too much money. Debt is the cause of massive evil. Should taxes be used to pay the debts of irresponsible borrowers, no matter how much they over-borrowed or overpaid for a house? Should savers be forced to pay the debts of people who cannot afford "their homes" no matter what price they paid or how far it is beyond their actual financial means? If so, go buy the most expensive house you can right now! Borrow as much as you possibly can and don't pay it back, knowing that Congress will force the real repayment obligation onto others, onto people who are living within their means. Banks happily loaned whatever amount borrowers wanted as long as the banks could then sell the loan, pushing the default risk onto Fannie Mae (taxpayers) or onto buyers of mortgage-backed bonds. Now that it has become clear that a trillion dollars in foolish mortgage loans will not be repaid, Fannie Mae is under pressure not to buy risky loans and investors do not want mortgage-backed bonds. This means that the money available for mortgages is falling, and house prices will keep falling, probably for another five years or more. This is not just a subprime problem. All mortgages will be harder to get. A return to traditional lending standards means a return to traditional prices, which are far below current prices. It's worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6% because of the realtor lobby's corruption of US legislators. On a $300,000 house, that's $18,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less. The government keeps house prices unaffordably high through programs that increase buyer debt, and then pretends to be interested in affordable housing. No one in government except Ron Paul ever talks about the obvious solution: less debt and lower house prices. The real result of every "affordability" program is to keep you in debt for the rest of your life so that you have to keep working. Lower house prices would liberate millions of people from decades of labor each. I never see anything in the press about the millions of people that were hurt and continue to be hurt by high house prices. The government pretends to be interested in affordable housing, but now that housing is becoming affordable, they want to stop it? Their actions speak louder than their words.If you plan on retiring in the next house you buy, you may not care that you could be overpaying by 25-30%. The price you pay today may not be seen again for 7-10 years. It will take at least that long for prices to rise back up to the levels they are today, because they are going to continue to fall. Real California unemployment is near 17%! Who is going to buy all these empty houses for 250,000? I am on the side of patience; its only another year or two until things will finally bottom and it will probably stay that way for a number of years. People on the radio who make their money in real estate have a vested interest in people believing that real estate is a good investment, I just ask that you consider your sources. Of course someone who has hundreds of millions invested in real estate would want people to think that now is the time to get a steal. People were saying the same things one and two years ago, and if you had bought then you would have been slaughtered. Here is a list of the reasons it is a REALLY bad idea to buy right now. I highlighted the parts I feel are extremely important. Without further ado; a few points to consider....Thank you to Patrick.net for the 14 points....
I was reading Reuters today and ran across these two stories. If the U.S. loses reserve currency status, literally we are finished....
Reuters
China backs talks on dollar as reserve -Russian source
By Gleb Bryanski
Thu Mar 19, 2009 11:24am
MOSCOW, March 19 (Reuters) - China and other emerging nations back Russia's call for a discussion on how to replace the dollar as the world's primary reserve currency, a senior Russian government source said on Thursday. Russia has proposed the creation of a new reserve currency, to be issued by international financial institutions, among other measures in the text of its proposals to the April G20 summit published last Monday.
Calls for a rethink of the dollar's status as world's sole benchmark currency come amid concerns about its long-term value as the U.S. Federal Reserve moved to pump more than a trillion dollars of new cash into the ailing economy late Wednesday.
Russia met representatives of China, India and Brazil ahead of the G20 finance ministers meeting last week, as the big emerging powers seek to up their influence on decision making globally. Their first ever joint communique did not mention a new currency but the source said the issue was discussed.
"They (China) did not formally put forward their position for the G20 summit but unofficially they had distributed their paper regarding the same ideas (the need for the new currency)," the source told Reuters, speaking on condition of anonymity.
The source said the Chinese paper envisaged the International Monetary Fund's Special Drawing Rights (SDRs) being first assigned a role of a clearing currency on some transactions and then gradually becoming the main global reserve currency. "They said that the role of reserve currency should be given to SDR," the source said.
A U.N. panel of experts is also looking at using expanded SDRs, originally created by the International Monetary Fund in 1969, but now used mainly as an accounting unit within similar organisations as a new reserve currency instead of the dollar.
Currency specialist Avinash Persaud, a member of the U.N. panel, told a Reuters Funds Summit on Wednesday that the proposal was to create something like the old Ecu, or European currency unit, that was a hard-traded, weighted basket.
The SDR and the old Ecu are essentially combinations of currencies, weighted to a constituent's economic clout, which can be valued against other currencies and against those inside the basket....
Not so fast....
Bear Market Rallies
Some people think that stock market rallies only happen in full on bull markets. That is not the case. In fact, some of the fiercest short term jumps happen when the economy is in utter disarray. Let us take a look at the Great Depression for example:
From November of 1929 to September of 1932, the Dow saw 5 rallies over 20+%. One hit 72% and one hit 48%! In fact, the 72 percent rally happened right after the market hit the abyss. Yet as we all know, the Great Depression caused fundamental problems in the economy that lasted the entire 1930s. So only looking at the stock market as an indicator is problematic. And keep in mind the rally occurred right on the heels of thousands of bank failures in the 1930s and unemployment spiking to 25%.
Courtesy: Doctorhousingbubble.com
Its getting MUCH WORSE! Global Trade COLLAPSING. Worse than GREAT DEPRESSION
Global trade collapsing
Commentary: U.S. exports falling at 49% pace as customers fade away
By MarketWatch
Last update: 12:37 p.m. EDT March 13, 2009Comments: 21
WASHINGTON (MarketWatch) -- For a while, some analysts held out hope that the rest of the world would be spared the devastation of the collapse of the great American credit bubble. The global economy had de-coupled, they said. America's problems were her own.
No one is saying that any more.
In fact, the latest evidence shows that global trade flows are plunging at an alarming rate.
The Commerce Department reported that the volume of U.S. imports from abroad fell 4.6% in January while exports declined 8.6%, the most since the monthly trade figures were first collected in 1992. See full story.More
Over the past five months since the credit crunch intensified, real exports have plunged at a 49% annual rate, while real imports have fallen at a 30% pace.
The pace of the decline is unprecedented in modern times, economists say. "We doubt even during the Great Depressionthat trade collapsed with such ferocity," said David Greenlaw, an economist for Morgan Stanley.
The Great Recession, as the IMF calls it, has severed a crucial link in the global economy. U.S. consumer spending has been the main engine of growth for the whole world, but that spending was based largely on phantom gains in asset prices that were inflated by that cheap money from abroad that has now been disrupted.
The profits that foreign producers made from selling to America, in turn, created millions of jobs in places such as China, Southeast Asia and the Persian Gulf. That was then: China reported its exports plunged 25% in February compared with a year earlier.
Those jobs are disappearing, sparking a great reverse migration back to rural China, the Philippines and South Asia. In China, an estimated 20 million workers have lost their jobs. It's not just the American economy that needs to adjust to the new reality. The rest of the world will have to re-examine just where growth comes from
A little rant here; What was ever wrong with simple interest? Banks for centuries made plenty of money off of what is called in the industry as the "spread." They took deposits, paid interest on it, and lent it out to businesses and individuals for a premium usually around 2%. If enough people deposit their money and enough people borrow it, you have capitalism ad infinitum. Our country was built on this; how do you think the 50's, 60's and part of the 70's happened? Money was deposited and lent out to businesses who invested the money in businesses who produced jobs, which paid workers who saved more money and deposited it. It is a beautiful cycle and did not need to be broken. But it was. Many charts point to around 1979- 1980 when things start to change. Instead of being savers we became spenders and we financed our habit (debt). Then wall street got smart and securitized it. Who is to blame in all of this? Good question I was only a babe in 79', but I do know we need to change our ways, laws and society if we want this century to be another "American Century." We can blame the bankers all night long, but in the end if it wasnt for our appetite for debt they would have little to play with. Blame can also be heaped on the government they helped this caboose seperate as well. Another source of all this capital wall street has to play with is our 401k's. These evil little "retirement accounts" were created by the IRS to replace employer funded pension plans. While pensions are inefficient and costly, the replacement is TOXIC. We can debate all day long about free markets and laisse fair economics, but when it comes to retirement we as a race have a responsiblity to ensure that older people are not destitute. Now this does not mean giving hand outs. What it means is that there should be regulations in place that protect retirement savings and make sure that the public's savings are in instruments that are safe. If people who had put their money in 401k's had only invested in certain things like cd's orgovernment bonds they would have made a killing. 3% - 4% a year was scoffed at for the last 20 years, but people who made that, are WAY ahead of those who invested in the stock market. I am certainly not in favor of onerous regulation, only smart simple regulation. With this administration and the last "simple regulation" may be a oxymoron. But this is my rant and I can be as irrational as I like. Now a separate point. Our government is about to spend 1.7 trillion dollars bailing out rich bankers and fools who bought houses they could not afford. I have to admit I getting really angry about this. They should let these idiots FAIL. It will be painful for everyone, but in the end necessary to move on. The money being spent on these losers should be spent on things like education. We are the richest country in the world because of investments made in the 40's, 50's and 60's on education. The baby boomers had cheap and high quality education available to them. My generation (GEN X) got the shaft. Teachers unions have a huge part in this but also society and government bear a lot of responsibility. Education is always the first thing to get cut. Needed improvements to infrastructure, curriculum and modernization have been set aside, while teacher pay and job security have gone up. We rank near the bottom in industrialized countries in education. This cannot last. Eventually our uneducated public will drag down the economy. You could say it is already happening. A naive public bought into snake oil salesman on wall street without doing their homework, because they didn't know how to do their homework...