The blue one is the current bear market and the gray one that goes way down to -89.2% is the great depression. 

The decline in the market has recently hit a point that is about equal to bad previous bear markets. As you can see in the green and red, once the market reached about a 50% decline it was the bottom. 

What is also obvious in this chart is that we have reached this point in near record time. So if this bear market is in the process of coming to an end, it will be a rather short bear market. Another thing that I noticed from this chart is the steep -47.9% decline that happened in 1929  looks very similar to the decline that we recently saw in October and November of 2008. One last thing to note is that the market often retests the lows (as seen in the green and red) once the recovery rally has started. This is an excellent time buy into the market, on the retests. As long as we aren’t heading for another great depression, this should be a sure strategy to get back into the markets and very low levels.

The chart is from dshort.com, they also have a lot of other really neat charts. Be sure to check it out.

This time of year most people make new year’s resolutions. For many it is to lose weight, or to make more money. The thing about these resolutions is that most people forget about them a few weeks after the new year. This is sad, I don’t think most people realize that if you really want to change something, you really have to focus on it almost every single day and track your progress.

I rarely make a new year’s resolution, however this year I decided to make a small one. I want to be much better at micromanaging my finances. Whenever I managing or think about my finances, it is always about the big things. I’m always asking myself how I can bring in more money or sell assets off that take too much time to manage. By spending all my time thinging about the big things, I often ignore the small things such as fees and the rate of return I’m getting on my money in the bank. Another examle is paying a little too much for things that I don’t need each month. If I cut things back to where they should be, I could save a substaintal amount of money over time.

Hopefully I will be better at this in the new year. I plan on paying more attention to the small things, without losing sight of the big picture.

That’s about it! If you an interesting new year’s resolution, feel free to comment or write in to us about it.

One website where you can download a whole bunch of audio books is www.music-clubs.com. You can simply pay once to download whichever book you need, or you can pay a subscription fee to download a number of books. 

This site has over 50,000 audio books in just about every category. Some of the main categories include fiction books, non-fiction books, business / careers / self help books, books for kids, and religion / spirituality books. Basically anything you are looking for you should be able to find.

If you are like me and can never find the time to sit down and read for a few hours, or you spend way too much money buying a hard copy of every good new book, definitely check out this website.

The white house agreed to give GM and Chrysler a total of about $17 billion with a number of strings attached. To me, this just looks like money to survive until Obama gets into office and can provide them with much more money.

There are a lot of different aspects to this problem, however I think the best route is to do some sort of organized bankruptcy. I understand that there are tons of jobs linked to this industry and that a bankruptcy would mean many job losses, much lower car sales, and probably another down leg in the economy. However, it makes no sense to continually give money to a company that is basically already bankrupt and hasn’t been profitable in a long time. Some are saying GM and Chrysler will need around $100 billion to make it through 2009.

I can understand the government working with large and about to fail banks such as Citigroup, but to spend billions on company that just makes cars makes no sense to me. There have been a number of instances in the past were industries have collapsed. It happens and people move on. 

Another frustration that I have with the automakers is that there haven’t been any significant advancements in automotive technology. I think it’s about time that we get a flying car or at least an electric one. How about one that drives itself? How about a decent normal sized and safe car for just a few thousand dollars? The only thing that these companies have done is make cars bigger and more expensive. Take a look at Chrysler.com. On their main page there is a picture of a gigantic mini-van and it says “make your house jealous.” UGH, GIVE ME A BREAK! People should not be driving around miniature houses. Someone needs to make affordable cars that last a very long time and there needs to be a lot more innovation in the automotive industry. I think this can be achieved by allowing these companies to fail and allowing new ones to form.

• Pay off debt
• Know where your money is going
• Eliminate Waste
• Buy smart and used
• Understand your investments

Read the full article here:
http://consumerist.com/5113811/top-9-good-habits-for-a-deep-recession

How low will it go? $20?, $10, Free?  

Here is a one month chart of the DOW. It has rallied substantially from the lows.

Here is a six month chart of volatility. Clearly decreasing after hitting extreme highs.

So does this mean the stock market has bottomed? It’s possible, but nobody knows. The market generally goes back to retest lows before moving higher. It’s also true that historically there is a “Santa Clause” rally around this time of year. So if you are planning on getting back into this market for the long term, I don’t think this would be a good entry point since we are about 20% up from the lows.

Joyce Greenberg is a former stock broker and even she was fooled by Madoff’s scheme. This is quite scary and many are placing blame on the SEC for allowing it to go on for so long.

Joyce Greenberg’s advice near the end of the video clip below was to not put all your eggs in one basket. She also said that she thought there was nothing that she could do to prevent herself from becoming a victim. Joyce Greenberg also said that she didn’t “put all her eggs in one basket” and she seemed very calm and much less angry than most of the other victims. 

I have heard a number of other stories where people have lost the majority of their net worth due to Madoff. This is very sad and shouldn’t happen, but when investing almost anything can happen. Some people have to learn this lesson the hard way it seems.

Here is a link to the video:
http://www.cnbc.com/id/15840232?video=967457561 

So what does this mean for you? It means that you will likely earn little to no interest on your bank account balances. Therefore, it would be a wise move to start buying CDs immediately (like now, or before the end of the week). On the other hand, this will take the interest rate down on most other loan products.

The market reacted positively to this news and was up almost 400 points on the DOW (December 16).

Here is a historical chart of the rate, to show how low the rate currently is:

The Treasury Department is contemplating a proposal that would cut mortgage rates for new loans for homes, according to the Wall Street Journal.

The plan would employ Fannie Mae and Freddie Mac to offer mortgages with rates as low as 4.5%, roughly 1% lower than current rates.

The measure is under consideration as part of the Treasury Department’s continued effort to limit foreclosures, which has been at the core of the financial crisis. The plan would seek to revitalize the financial market without bailing out homeowners and lenders, the Journal reported.

http://www.marketwatch.com/news/story/treasury-may-set-mortgage-rates/story.aspx?guid={2997E462-B056-43E3-AF13-70EB82403632}