Seattle Bubble

I'm working on finding corroborating stories, and so far I've got this from the year after.



Here's a November 2006 reportwith similar numbers.



And another story corroborating on $10/hour.



That last story also talks about slightly better jobs (like drivers for food delivery) seeing 20% pay increases on average, but wages still significantly below $20 an hour. So, did it ever happen? Don't know. Maybe in one or two particularly bad parts of town it did, but the general stories seem to suggest wages spiked to half of that ($10/hr). In general, it's clear $20/hour is a gross exaggeration, which means it's not a valid example as proof that people are eager to take small handouts rather than work for much larger salaries.

Also David, what's the point on dissing everybody in the Pacific Northwest with the suggestion that A) they've never left the West Coast, and B) they are unqualified to ask or answer questions about events which have taken place outside of the local area. In crime, eye witnesses are notoriously inaccurate. "Being there" doesn't mean you have more accurate knowledge of an event.

If you look back at what I posted, I predicted at 300 pt rally on monday -- but that was before the citi announcement.

I called for an 8500-9000 top before the end of the week, and it looks like we've basically hit that range already, so it should be mostly sideways for awhile, although I wouldn't totally discount some highly volatile swings monday/tuesday next week. Early Q4 tea-leaf reading next week might be cause for pessimism and drive the markets down some.

Here's the thing, though. Obama largely had nothing to do with this rally. The citigroup announcement might have helped the market, and I think it certainly fueled the strength of the folllow-through on monday and added some gasoline.

If the markets want to give a positive verdict on Obama they need to break through the 9500 level to the upside and set a new intermediate term high which is above the high of nov 4th. So far I'm just seeing more of the same market behavior that existed before. Obama wasn't responsible for the selloff that occured right after election day and led to the 2003-low levels, and he's not responsible for this rally.

Stop watching the day-to-day motion of the market and assuming it explains anything going on with the headlines. It never does. There's always waves of pessimism and optimism that occur in the markets. We bottomed out on pessimism on a short-term basis last thursday and the tide turned. The telling indication will be how much strength there is in this round of optimism -- how long it lasts, how far it reaches, etc.

I also think that its more likely that before the market punches through 9500 to the upside, it needs to top out lower around 9000, then fall back and retest the 7500 level and set a new higher low, before it attempts a higher high. We might be able to one day look back and say that the low on thursday indicated the point when market psychology shifted very slightly to being 50.0001% optimistic and marked a low driven by Obama-driven improvement in investor psychology, but I doubt we'll be able to call that for another 2 months or so.

Well, I included enough wiggle room with the "I wouldn't totally discount some highly volatile swings monday/tuesday next week" that I might be able to declare victory, but I didn't quite expect something so violently negative today. I was expecting more sideways motion. Today's action so far looks more like the kind of down days which have ended positive swings and led to downwards legs.

If we get an equally positive day tomorrow and move sideways in the 8500-9000 range over the course of the week I would say the market is attempting some repair. If we plunge down again and start testing the 7500 range by the end of the week then its just more of the same...

And in the Ho-Hum department, 680 pt sell off today. Is it a good sign or a bad one when volatility is so great in the markets that near double digit dives in all the major indexes isn't that big of news?

Yeah, and a 230 pt up day so far today and I'm thinking that the markets are lacking conviction in this rally so far...

Might be right, 160 pt gain now with 90 minutes to close.

looks like yet another pennant continuation pattern again around ~8400 on the dow which is approaching its resolution. should breakdown soon (0-3 days) and retest 7200-7500 again soon... today's selling action isn't really a continuation yet, but if we get another fairly strong down day tomorrow it should be pretty brutal all next week -- and either way by next friday we should have either hit 7200-7500 or be fully involved in another plunge down...

i was expecting dow 10,000 to be violated by the end of the year, but i wasn't expecting to spend Q4 below that level bouncing off 7000-8000....

i've been thinking, however, that with stocks off 50% and back to 2003 lows, that i should start making new contributions to my 401k into stock funds and start dollar-cost-averaging...

even if the bottom is still a year away with another 50% to fall from here (dow 3500-4000), that at a maximum wipes out 50% of new contributions over a year and will catch the bottom at some point and the money that catches the bottom will ride the next bull market....

i'm not sure about buying stocks while looking at a tsunami of jobless claims just starting to hit the headlines, though...

blew that one.

although my broader "trading range" prediction still holds and we still haven't violated 9000 to the upside.

the good news is that the market is showing a little more spunk. there has been a couple down days in this rally and the indexes have actually fought back instead of immediately plunging.

i doubt we've put in "the" bottom, but maybe there's some technical repair going on.

i'm still calling for the trading range to hold and expect it to plunge shortly and revist the recent lows. if the dow climbs convincingly above 9000 that'll be interesting...

intermediate-term indicators are moving towards neutral from oversold and this rally is sputtering against its 50-DMA resistance.

its going to have to do better than this next week. so far this is better than the near free-fall which started in september, but its not signaling bull market to me.

Sooooo.....

BAC and Citi need billions more in capital and......BAC is up 11%?

The market was expecting trillions and the life of every first born son in NY state. I guess it's all relative?

3 days of news that would bankrupt any other company, and BAC is on a 3 day 40% rally. Apparently it is all relative. C, BAC, and AIG are all still in big trouble and likely to need to raise capital in a manner which may dilute shareholders...

I think you guys are worrying too much. I glanced at the Times this morning and saw a headline that asked the question: "Is the recession coming to an end?" so I guess we're already at the bottom.

Personally, I think we haven't even begun to see the worst yet, but some jobs number will come out tomorrow and the market will go up 300 points. 9.8% unemp instead of 9.9% or some other garbage....

Really? Seriously?