I agree. We are in uncharted waters now, and even the conservative talking heads at CNBC, the WSJ, etc., admit it. That means even the "experts" are in over their heads.

I don't think I'd give the "experts" any more weight than the average Joe, at this point.

It seems to me that a lot of your argument about dividends vs. interest depends on government tax policy -- which is another completely unpredictable term in the financial equation.

Way back in the mists of history, dividend yield was an important consideration.

Why should that be any different now -- it certainly makes sense, considering the original reason for the development of corporations and stock companies. But politics change, and there is a whole class of people (investment bankers, stock brokers, regulators, tax attorneys....) trying to carve out a living between the investors and their companies.

Maybe the market will rocket into the stratosphere.

Well maybe-- but it seems like only another wildly successful Ponzi scheme could do that, given the current prices, earnings, debt levels and values of various currencies. People will be off Ponzi schemes for a while -- it will take nearly a generation (long enough for the memory of having been burnt to evaporate) before the sleeze merchants can pull it off again.

Most people are assuming either a "V" or a "U" - a recovery on the way, either sooner or later. Not me: I am assuming an "L" - a leveling out with no real recovery - folowed by further "Ls" in a stairstep path downward over the next few decades.

Yeah, I agree with this, with a slight modification: the bottom of each L could have a little upward bump in it, but nowhere enough to bring it back up to the top of the L.

But I'm not so much talking about the stock market as the real economy. As far as investing is concerned, I think energy is undervalued now. Other things that are in the pits are still overvalued, auto and all related, airlines. It's a matter of figuring out what will still have value in a greatly shrunken and relocalized economy. (Energy because it is still needed on the way down, and the supply cannot but shrink.)

But beyond that, we are in deep doo if we aren't able to think beyond our investments (those that still have). Our only real security is collective, that is a social structure and ethic with a supportive gov't that let's no one starve or not have a roof over their head and lets everyone have a role to play in restructuring. We won't survive as a bunch individualists with society collapsing all around us.

Given what we know about oil (and all other non-renewable resource) depletion, there IS good reason to believe that the long-term trend will be downward.

People appear to be driving as much as before the crisis. Even if consumption is cut a few percentage points, there are still 19 million barrels of oil disappearing forever ... every day.

Driving more might be 'good for stocks' and 'good for the economy' ... but, for how long?

A return to the SUV couldn't come soon enough for Detroit:

http://www.latimes.com/business/la-fi-autos28-2008oct28,0,1118586.story

The government will do its chicken act and prop up the tottering auto giants for few more desperate quarters at astronomical cost.

Another problem:

http://www.bloomberg.com/apps/news?pid=20601009&sid=aorUd4dpNb3Y&refer=bond

I keep hearing from serious types on C-Span about the $1 - 2 - 3 Trillion dollar deficits beginning now and ending ... when.

Where is the money gonna come from?

"Borrowing."

Who pays it back?

"You do."

How can you pay it all back?

"I don't know, it's your problem."

Markets look great ...

D dog – I agree with you and am inclined to just dismiss the financial shenanigans however it is MONEY that determines who lives and who dies at this juncture and for the foreseeable future.

One must first be wealthy enough to make it to the point where we all wear gloves with the fingers cut off and fight over the dead rat carcass.

While I agree that no one knows what the markets are going to do and that those who follow charts and models which project the past into the future are delusional, there are nonetheless common seasonal patterns in markets just as in weather. It gets cold in the winter and markets tend to bottom in October.

By Thanksgiving Day the scary demons of October have usually been banished by time and the short attention span of market participants who are always ready to chase the next new trend. In commodities, the grains seem to be tired of going down although they may try some more of course. Soon most of them will be safely in the bin which is the usual signal for the beginning of the uptrend into spring.

Obama will be elecgted along with Democratic majorities in Congress. The scary prospect of a unfocused, senile President McCain and a scatter brain President Palin if he became incapacitated will vanish like an Halloween ghost. While Democrats can not perform miracles, they will have a different tone than the brain dead President we have now.

By Christmas the mood probably will be upbeat and the stock market will end the year on an uptick, although still lower than before the Neo-Con coup.

All you people focused on your charts & graphs and what the markets may or may not do are delusional... You fiddle around with your projections & predictions & models within a wholly BAU paradigm. That paradigm is collapsing by the very minute.

So true. This point really hit home for me after reading Dmitry Orlov's book:

So what has become of these Soviet mavericks, some of whom foretold the coming collapse with reasonable accuracy? To be brief, they faded from view. Both tragically and ironically, those who become experts in explaining the faults of the system and in predicting the course of its demise are very much part of the system. When the system disappears, so does their area of expertise and their audience. People stop intellectualizing about their predicament and start trying to escape it - through drink or drugs or creativity or cunning - but they have no time for pondering the larger context.

pp. 128

Reinventing Collapse

I guess one gets tired of rat after a while.

Horray! for the interconnected global system!

Boo! for trying to dissect the parts and name things and measure them and then thinking we understand the whole thing at the end of it!

Maybe, except that oil price is plunging right now.

And as far as I can tell the people running scared seem more intent on propping up the old economy than working toward change.

I'm from Canada and I can see this happening before my very eyes right now. The latest example is that, now, it looks like our (British Columbia) carbon tax will be scrapped to prop-up the economy. We will also have "more government spending to boost the economy". Not evolving in the right direction if you ask me.

The latest federal election is another example where people apparantly "run back to mama" (i.e. the conservatives), and away from things such as the liberal's "green shift plan". After been clobbered on the elections, now the liberals are also backing out and vowing solemnly to help work on the economy as "priority number one". I don't recall the exact words, or even what politician it was, but the liberal politician I heard right after the federal election on the radio news said something like "this is not even up for discussion" because it is just "plain obvious" we have to try help Canada's suffering auto industry.

I'm sorry, but I can only conclude that the current crisis is doing anything but get people to think in the right way. Quite the opposite in fact.