Here's another unsettling leading indicator for the stock market: a large 50.8 oz. bottle of organic, extra virgin, first cold pressed olive oil that I managed to cram into our cupboard with about 1/8 inch to spare.
I usually buy another brand. In a smaller bottle.
But yesterday, on my weekly natural food store shopping expedition, I noticed that Napa Valley Naturals was on sale. I figured I could save almost ten dollars by buying super-sized olive oil.
This isn't like me. Not to that extent.
Laurel is picky about the taste of olive oil. We'd settled on Spectrum as a brand we liked. When I brought home the Napa Valley Naturals bottle, she said "Maybe it won't taste as good."
"But we saved ten bucks," I told her.
All over the country, I'm sure, people are acting similarly. I've always looked for a good deal, but never before have I felt so anxious about preserving our money -- because the stock market and housing bust has taken away such a big chunk of our net worth.
When I go to Starbucks now, usually I ask for a grande Pike Place cup of coffee rather than a venti skinny vanilla latte, my habitual drink. I'm saving $1.50 or so every time I feel a need for a caffeine fix.
That doesn't make a huge difference in our household budget, but it gives me a sense (illusory though it may be) of having some control over our financial future when I read headlines like today's "Markets dive in last hour, carving new lows."
Checking the New York Times web site a few hours later, I saw that the story had been replaced with "Stocks drop sharply and credit markets seize up."
Oh, thanks for the news. I was under the impression that the $700 billion bail-out was doing something to reassure the credit markets. Guess not.
As a new bout of fear gripped the financial markets, stocks fell sharply again on Thursday, continuing a months-long plunge that has wiped out the gains of the last decade.
The credit markets seized up as confidence in the nation’s financial system ebbed and people rushed to put money in Treasuries, the safest of investments. Some markets are now back to where they were before Congress approved the $700 billion financial rescue in October.
Not to depress the spirits of the auto industry further, but I'm rethinking our car purchase plans.
A three-year lease on our Toyota Highlander Hybrid is up in January. We'd envisioned turning the car in and either leasing or buying a 2009 model, maybe the spiffier Limited version this time.
However, now I'm not sure that even 0% financing (which isn't available on Toyota hybrids, but is on other models) would entice us to get a new car.
The financial meltdown is just too damn scary. I feel like circling the household budget wagons, not going out on any unnecessary limb.
Our current car is fine, just not ideal.
"Fine" is sounding, well, just fine -- compared to forking out the bigger bucks that it would take to do anything other than keep our present vehicle. Multiply us by millions of other scared shitless consumers, and you've got the makings of a dismal selling season.
I've been investing, seriously and semi-seriously, for over twenty-five years. I've never felt so uneasy about our portfolio -- and we're not major risk takers.
Retirees that we are, we're about 50-50 in equities and fixed income, with a healthy percentage of index funds in each category. So however much the stock market has dropped, our investments are down only about half as much (bonds and Treasury bills are increasing in value, as investors snap them up).
"Only," though, is still a hell of a lot.
Amazingly, I read in the first NY Times story about the market decline:
And a new report that jobless claims had crested to their highest levels in 16 years reminded investors that the frail economy continues to weaken.
“We think it’s going to continue to go lower,” said Ryan Detrick of Schaeffer’s Investment Research. “We don’t think people are scared enough. They’re just not showing enough fear. People are numb to this, they’re almost immune to it.”
Well, I beg to differ.
It's more that people know they can't do anything about it, so when I learned that yesterday the market was at its lowest point in six years, and today it's down to the 1997 level (below earlier bear market lows), I was as much resigned as fearful.
What will be, will be. And whatever happens, I can buy cheaper bottles of olive oil and less expensive coffee, plus hold onto our car instead of getting a new one.
I just wish that somebody competent was handling the federal government's response to this crisis, instead of the Bush administration bunglers.
Where is George, by the way? Has he headed off to his ranch early? He sure isn't doing anything to reassure people that the economy won't be completely melted down by the time Obama takes office.
Which can't come soon enough for me. And, I suspect, for the stock market.