[UPDATE - DOW CRASHES THROUGH 8,000 - THEN JUMPS. DID WE JUST SEE BOTTOM? OR DO WE HAVE FURTHER TO GO?]
If this isn't panic then I don't know what is.
You'll tell stories about these days for the rest of your life.
But how does the story end?
October 10, 2008
MARKET MELTDOWN SPECIAL OPEN THREAD - What, if anything, can stop the stock markets from crashing further?
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We will bring to you great amounts of very tasty exotic chocolate from afar!
Nothing. The ruling monkeys are clueless. You are on your own.
From Roubini:
"
The U.S. and advanced economies’ financial systems are now headed towards a near-term systemic financial meltdown as day after day stock markets are in free fall, money markets have shut down while their spreads are skyrocketing, and credit spreads are surging through the roof. There is now the beginning of a generalized run on the banking system of these economies; a collapse of the shadow banking system, i.e. those non-banks (broker dealers, non-bank mortgage lenders, SIV and conduits, hedge funds, money market funds, private equity firms) that, like banks, borrow short and liquid, are highly leveraged and lend and invest long and illiquid, and are thus at risk of a run on their short-term liabilities; and now a roll-off of the short term liabilities of the corporate sectors that may lead to widespread bankruptcies of solvent but illiquid financial and non-financial firms.
...
The crisis was caused by the largest leveraged asset bubble and credit bubble in the history of humanity where excessive leveraging and bubbles were not limited to housing in the U.S. but also to housing in many other countries and excessive borrowing by financial institutions and some segments of the corporate sector and of the public sector in many and different economies: an housing bubble, a mortgage bubble, an equity bubble, a bond bubble, a credit bubble, a commodity bubble, a private equity bubble, a hedge funds bubble are all now bursting at once in the biggest real sector and financial sector deleveraging since the Great Depression.
...
When in markets that are clearly way oversold, even the most radical policy actions don’t provide rallies or relief to market participants. You know that you are one step away from a market crash and a systemic financial sector and corporate sector collapse. A vicious circle of deleveraging, asset collapses, margin calls, and cascading falls in asset prices well below falling fundamentals, and panic is now underway.
"
Cant post an url because it came in an email. But it about sums it up. Keith, do you still wonder if panic is there ?
as far as i am concerned when i hear that some executive has "earned" 400 million (and i can't get my claim for my house distroyed in Katrina approved) there will be no end to this mess. as long as people remember Enron and those people loosing everything when they went out of business (all retirements gone) when i hear about 1/2 million dollars parties for people who were the best agents for an insurance company (code name for denying claims) this mess will never end. perhaps people should be left in the dark, but when they find out there will be hell to pay. also as a side issue if these other countries had not been so hell bent on getting rich on american workers (china japan middle east) a lot of their problems would not be as bad, so when we pulled the rug from under them their markets are worse than ours. so much for that free trade agreement being free.
Scary $hit, the Nikkei is again 9% down. Massive sell off in Asia.
Why is the new Brit Squawkbox program on CNBC so much better than the crappy American one? What a difference, the hosts get emotional, jump on each other's throats, hot British babes (that Rebecca is a fox)...great program. They just had Jim Rogers on saying that he's on Swiss franc and Yen, and calling Bernanke and Paulson morons, as usual. He also said that the G7 should go to the bar to have a beer and leave us alone...bwahahaha
Wow, German traders are calling DAX 2,000 by end of year. WTF?!?
Russia's market just hit the circuit breaker again. Marxist monkeys, I tell 'ya, Marxist Monkeys!
Have you noticed that I've been drinking French Bordeaux all night? Blogging from the balcony of my oceanfront condo...
Baby Boomers are getting f*cked in the arse. bwahahahaha
Wow, it's impressive. No doubt the current one is more alarming. I love charts...economics minor and b-school graduate here.
.
LIBOR TO DA MOON ALICE!
.
What, if anything, can stop the markets from crashing further?
nothing.................
No 1987 chart?
Here's Roubini's take:
http://www.rgemonitor.com/
Roubini: At this point severe damage is done and one cannot rule out a systemic collapse and a global depression. It will take a significant change in leadership of economic policy and very radical, coordinated policy actions among all advanced and emerging market economies to avoid this economic and financial disaster. Urgent and immediate necessary actions that need to be done globally include:
1) another rapid round of policy rate cuts of the order of at least 150 basis points on average globally;
2) a temporary blanket guarantee of all deposits while a triage between insolvent financial institutions that need to be shut down and distressed but solvent institutions that need to be partially nationalized with injections of public capital is made;
3) a rapid reduction of the debt burden of insolvent households preceded by a temporary freeze on all foreclosures;
4) massive and unlimited provision of liquidity to solvent financial institutions;
5) public provision of credit to the solvent parts of the corporate sector to avoid a short-term debt refinancing crisis for solvent but illiquid corporations and small businesses;
6) a massive direct government fiscal stimulus packages that includes public works, infrastructure spending, unemployment benefits, tax rebates to lower income households and provision of grants to strapped and crunched state and local government;
7) a rapid resolution of the banking problems via triage, public recapitalization of financial institutions and reduction of the debt burden of distressed households and borrowers;
8) an agreement between lender and creditor countries running current account surpluses and borrowing and debtor countries running current account deficits to maintain an orderly financing of deficits and a recycling of the surpluses of creditors to avoid a disorderly adjustment of such imbalances.
U.S. President George Bush will take the unusual step of meeting at the White House on Oct 11 with G-7 finance ministers and the heads of the International Monetary Fund and the World Bank.
Current EU President Sarkozy: ``Only coordinated action by central banks and governments is able to stop the systemic risk and ensure the financing of economies,'' said Sarkozy, who now holds the EU's rotating presidency.
At some point, enough people are going to refuse to participate in activities that create deeper problems, instead questioning the system as it is. Like Tom Dart, Sheriff in Cook County, in the recent news story refusing to just blindly evict renters from houses. Really, does an eviction actually make the community better and solve real problems, or does it trade one kind of problem for another possibly bigger problem?
Has all effort to contain the TED SPREAD from widening failed.
TED SPREAD currently at 4.23 basis points.
http://business.theage.com.au/
business/will-world-come-back-
from-the-brink-20081009-4xlg.html
It took 2½ years for the Dow to lose 89% from its peak in 1929.
In between time, the Dow gained and stabilised in the first six months after the initial drop, and it was viewed as a normal correction from over-exuberance just as had happened before.
The real cause of the Great Depression was a collapse in consumer spending. That is happening now.
The TED spread - the purest indicator of confidence, measuring the gap between US Treasury notes and the rate at which banks lend to each other - blew out to 403 basis points while overnight and three-month Libor widened too.
In other words, even a round of global rate cuts could not lure banks back to the money market. Unless this radical collective effort begins to stem the losses and restore some stability, we will soon descend into sovereign risk territory.
It will be time to bury gold under the backyard barbie, quaff the wine cellar and stack the shelves with tinned food.
Have you noticed that I've been drinking French Bordeaux all night? Blogging from the balcony of my oceanfront condo...
I like your style.
Baby Boomers are getting f*cked in the arse.
LOL
Anybody buying more gold/silver?
I just dumped $35K I had in a CA Muni-bond fund--a "safe" place for your money. Sorry, Arnold, Kalifornya is screwed.
There is a resistance by this government to let the market playout, to let prices fall where they must in order for sustainable demand to pickup.
As long as the government keeps messing with the markets, the economy will take that much longer to come back again.
Panic strangles Asia stocks; yen firm
By Kevin Plumberg 35 minutes ago
HONG KONG (Reuters) - Asian stocks plunged on Friday, with Japan's Nikkei down more than 10 percent, while the yen and U.S. Treasury debt prices rose, as panic set in after global efforts so far failed to unlock credit markets.
A synchronized cut in borrowing costs by central banks around the world this week was seen as too little, too late, and investors doubted a meeting of the Group of Seven rich nations later on Friday could achieve much, with fears growing that the global economy is headed toward recession.
U.S. government debt and the yen have become refuges from the worsening financial crisis that overnight knocked the U.S. S&P 500 stocks index down 7.6 percent to a 5-year low. But cash was ultimately king, with even Japanese government bonds being liquidated for funding.
The 'firewalls' to protect the wealth of the ruling class have been reinforced by Hank and the Gang.
They'll let the situation burn until the suffering masses readily accept a New World government and monetary scheme.
What is going on with "Downey Financial Corp" and "BankUnited Financial Corporation"
http://money.cnn.com/news/newsfeeds
/articles/djf500/
200810011602DOWJONESDJONLINE
000766_FORTUNE5.htm
Of all the large lenders that wrote Option ARM, or so- called Pick-A-Pay mortgages, only two notable names - Downey Financial Corp and BankUnited Financial Corporation remain independent.
http://www.ocbj.com/article.asp?
aID=22036445.62838902.1691742.
5219864.2415171.170&aID2=130125
Downey Looks To Sell HQ to Generate Cash
Struggling savings and loan operator Downey Financial Corp. is looking to sell the posh Newport Beach office buildings that long have served as its headquarters in an attempt to raise cash amid the ongoing financial crisis.
http://www.palmbeachpost.com/
business/content/business/
epaper/2008/10/05/
a1f_bauer_1006.html
Bank safety ratings fall as housing slump takes toll
Integrity Bank wasn't the only institution that became less safe during the second quarter.
BankUnited of Coral Gables, Florida Capital Bank of Jacksonville, Oculina Bank of Fort Pierce and Orion Bank of Naples fell from three stars, or "adequate," to two stars, or "problematic."
The problem is that folks are now having a run on Mutual Funds. Folks, that's alarming and a huge lack of confidence.
THE NEXT PRESIDENT NEEDS TO ANNOUNCE SOME SORT OF NEW MANHATTAN PROJECT AND BRING INDUSTRY BACK TO US...AND CUT SPENDING. (Good luck with that)
I think the only way to get out of this Bull$h!t cycle is to have the government repossess the dollar and invert the procedure for the creation of money: It should be issued by the government only (not the banks and their crooked 3% fractional reserve and the criminal federal reserve), and only to purchase capital projects. So when the government issues money, it uses it to buy infrastructure.
So, the government OWNS its own goddam currency (how's that for radical eh?).
Cut fractional reserve banking to 100% (only lend money you actually fucking HAVE, wow, another radical concept - like loans are in CASH - remember, all the cash is issued by the government in this model).
Make constitutional safeguards on how much money the government can create - DUH, like the founding fathers of the US. This is 250 year old shit man, I didn't invent this.
Hoooweeee, Europe opened and it's a carnage. Black Friday ahead! DAX is down 10%! Wow.
A fundamental restructure of our governing system is likely the only cure for this mess. This includes balancing the federal budget, shifting taxation from productivity towards consumption, and then time.
Government is quickly losing credibility. Financiers the world over know that America's balance sheet is in dire straights. Further budget deficits will further erode confidence to the point of dollar devaluation, credit requirements increasing (rate increases for gov't borrowing), and ultimately default of debt payments. This will be nationally catstrophic and needs to be prevented while there is still a chance.
Taxation needs to promote productivity and dampen consumption. American society has proven that it cannot temper its appetite for overspending, so the tax system should focus on a variant of a sales tax, leaving income and capital taxes alone. Making America globally competitive is what is needed.
Let's act like adults, stick to a budget, and incentivize the right behavior!
"The real cause of the Great Depression was a collapse in consumer spending. That is happening now."
If this spreads from the "toxic debt economy" to the real economy we're toast. 2 major car manufacturing plants in Germany were just shut down because of a lack of buyers. GM and Ford are on the brink. If they go so will about a million jobs in the entire economy. Several states are facing insolvency. Teachers, police, firemen, etc.
Pension funds may face insolvency given the recent drops in the market.
I STILL have a good paying job. Saving every penny right now. Not sure when the gravy train will reach the end of the line. Also pulling $$ from bank accounts. I have the feeling THEY might pull an Argentina on us and freeze all accounts.
The housing bust with flippers flopping was all fun 'n games, but this is getting very scary now.
Mostly in cash but did ride some of the UltraShorts along the way...
I've been buying into gold and silver over the past 18 months (especially silver) and I think it'll prove wise.
Watching CNBC with the Brits right now. Great conversation going on. An opinion that seems to be gaining consensus is that nothing will stop the carnage until the CDS's/Derivitives (from Lehman etc) get out in the open and evaluated. Equities are getting hammered because it is the only way to raise liquidity quickly. Everyone is seeking liquidity and equities are the easiest asset to liquidate. This is not about fundamentals, its about cash.
George Bush, Dick Cheney and the entire Bush Gang chained and shackled and on a plane to the Hauge would restore confidence to the markets. Otherwise it is still a cynical theft of billions.
Bruce Willis
What, if anything, can stop the markets from crashing further?
Number zero.
The Seventies? The DOW is already at 1997 prices. I think that we already have that one beat.
Government revaluation (and confiscation) of gold at $50,000/oz.
People could pay of their debt with their "bling" and the central banks/governments would get what they wanted all along.
The Gold.
Remember the golden rule.
He who has the gold makes the rules.
WW III
``The wheels of commerce have effectively seized up,'' said Kate Schapiro, who oversees $250 million in equities at Sentinel Asset Management in San Francisco.
``Trapped by the fear of losing everything, we're seeing one-sided selling.''
Money is to be made during panics HP'ers, for people with calm heads and cash.
That would be us.
But I don't think any of us have the guts to get in there yet and start buying.
Do you?
I'm going to be looking at Janunary '10 calls on companies with tons of cash, no need to borrow, great management and sticky products or services that work even in recessions.
Anyone with me? Are there any stocks you want to buy today?
This is panic folks. Fundamentals do not matter right now (like on the upside they didn't). This is not efficient pricing. This is market panic to raise cash or go bankrupt.
It's the opportunity of a lifetime that will never come again. That said, the market could go down another 50% in the next few days. But 10 years from now, these prices will be a dream. It's about timeframe.
I wish I had the courage to buy with both fists right now but I don't. Not yet. And I think any short term rally will get sold as people are relieved to get out at any higher price.
But watch. If you have cash and timeframe, these are exciting times.
Obama will destroy the country. The stage has been set.
Markets need to return to levels of the pre-bubble days, like 1994. I say DOW 4000. Nobody wants to lend nor invest recklessly like we had done in the past decade. The govt nor the Fed can change that mindset.
Furthermore, govt spending is out of control at both federal and state levels. International confidence in the dollar will soon be tested. The Dollar crash will make headlines in late '09 or early '10.
Keith, you have seen a chart of the Nikkei over the last 28 years right?
``We have reached the panic stage,'' said Espen Furnes, an Oslo-based fund manager at Storebrand Asset Management, which has the equivalent of $48 billion. ``This is worse than 1987 because then it was largely confined to the stock market, with limited effects on the underlying economy. Fundamentals don't count anymore.''
Sell today no matter what... or you'll be sorry.
The difference in Japan is that their government fought and fought to hide the problem, and their market didn't have an epic fast crash like ours - stocks or houses - so it took a decade to wash through
I'm starting to think bernanke and our government now understands the imbalance, and they're taking the medicine and letting the markets crash - housing and stocks - swiftly, so that we can rebuild.
Or they're just monkeys and it's working out that way.
Regardless, to avoid a lost decade, home prices and stock prices need to be wiped out. And that's what we have now. Capitalism is doing its thing. The free market, although the government has tried to intervene, is doing its thing.
This is terrible short term news for investors, but good long term news for the nation and world.
Remember this quote from the Great Depression?:
"Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate"
Well, that's what we're doing. Not by choice, but that's what we're doing.
In a short time (perhaps as much as a couple hours) there is going to be a document posted regarding the situation we now face. We literally have 24-48 hours before complete Armeggedon world-wide.
OFFICIALLY CALLING ECONOMIC MELTDOWN!
FINALLY!! This is capitulation today and monday. Look for a technical snap back rally for a day or two afterwards. After next week, I expect the PANIC in the markets will be over. On to the next phase. Western world wide leaders will lower rates to near 1%. Gov'ts will spend, spend, spend and will buy depressed assets too. And slowly the BIG money will come to scoop up the crumbs. It's ALMOST time to BUY. Seriously. But there will be no quick recovery. It will take 10 years to recover. I expect DOW 14,000 in 15 years. I pray all you HPs sold most equities a while ago and are sitting on a pile of cash. The key is jobs. JOBS JOBS JOBS. If companies massively cut jobs, then that's the worst case scenario. BEST OF LUCK TO ALL!!!! If you raised that cash last year, and have a 10 year time horizon, you could make a killing. Don't worry, this worst is almost over.
Unless we can freeze time, reverse gravity, or eat a strange magical mushrooms that make everything really lovely, then I think Alice is going all the way down this time...
"Americans can always be counted on to do the right thing...after they have exhausted all other possibilities." Winston Churchill
No more lies, manipulation or hiding the sausage.
Futures point to a lower open as world markets get hammered!
Within 24-hours the United States will follow Iceland and worse.
Anonymous dogcrap green said...
Obama will destroy the country. The stage has been set.
October 10, 2008 11:07 A
Stage is set??? Dude... We are well into the 2nd act... It's almost intermission...
Moody's is reviewing Morgan Stanley for a downgrade in credit rating - breaking on CNBC.
NOT a good sign!
I fear by Monday it just might be time to start the Global Meltdown "My Story" thread, to see where we all stand.
After watching a few of the financial news programs, you can just FEEL it. Capitualtion process now underway. People just throwing their hands up and walking away from the markets. They're just selling, NO MATTER WHAT. This capitulation process should be over in a few more business days. Now is the absolute WORST time to sell. I hope you raised enough liquidity before. Not just to exploit the low prices, but to ride out the storm. GOOD LUCK ALL!!
http://www.youtube.com/watch?v=j7MCohPgkXo
It is a panic situation at this point.
We are at War, and we have been hit with what may very well turn out to be a fatal blow.
Destroy an nation's economy, and you've destroyed its ability to influence the rest of the world; you have thus, effectively, in today's world, destroyed the nation itself.
Without actually firing a single shot.
"Wars" are not fought the way they used to. We've become much more sophisticated than that.
And so have our opponents.
BLACK FRIDAY OCTOBER 10th 2008
****WARNING WARNING******
WARNING WARNING
WARNING WARNING
WARNING WARNING
Moody's Investors Service has warned it may cut the long-term debt ratings of Morgan Stanley and Goldman Sachs as well as those of their units, in a sign the global financial crisis is deepening.
The rating agency said it had placed Morgan Stanley's A1 rating on review for a downgrade while assigning a negative outlook to the Goldman Sachs Aa3 rating.
Lower ratings would increase the cost of borrowing for the two banks.
Money is a faith based system, and the majority of the people's faith has been lost.
We are all atheists now!
you sayed in the market in 1929, it would take untill 1952 just to break even. If this is even half that bad, stocks are the worst place to be.
need to watch and bide our time.
closed my 09 puts this week. still holding 10 puts on some real dogs.
i agree we need to start looking "post panic" and agree good companies, with cash and strong business models.. but i think the elevator is still rolling down..
Well I'm sorry, this is not panic. Every single person involved in the stock market is still convince it will bounce back big time. Panic comes when everybody wants his money out.
Keith,
The Monkeys "Daydream Believer"
Wish I could edit congress/stock exchange pictures with this as the soundtrack.
(Palin = Homecoming queen)
The following statements from "investment consultants" and/or "financial advisors" lead me to believe that we still have a way to go down before the drop stops. Listening to their various statements and concerns, the theme remains the same:
"This is a great buying opportunity for the market!" "Try to get that account funded, this is the time to buy!"
Sound familiar? This is what I was told when the Dow was lingering at the 10,000 level not so long ago. Hmmm . . . .
One last comment,
Vanguard is limiting their liability/exposure on MMKT funds as of September ?, 2008 (check the date). In other words your balance as of that date is your protection. Anything else is free game for unrecoverable losses. So, if you are with Vanguard and want to put your cash in the MMKT, you have no protection. Sorry 'bout that, bitches.
No I disagree, it's not panic. Well, sure there's panic, but that's not the reason people are selling. People are selling because there is no liquidity. As Peter Schiff says, people borrowed and consumed more than they made, they've maxed out their savings and everything they can borrow, and there is nothing left.
Deflation is the only answer, and we're seeing it. Oh, but we're not done yet. As T.O. says, "Get yo' popcorn ready!"
And get out of dollars too. This temporary up-tick is a screaming opportunity to move into Swiss Franc or Chinese RMB.
Nothing. Gravity is taking it's course in the world market casino.
Just get out of the way, and have some popcorn on hand.
8600 - check
8500 - check
8400 - check
8300 - check
8200 - check
8100 - check
8000 - ???
maybe we just needed to touch 8000?
funny, that's the # I predicted two years ago. Didn't feel like it would ever happen. And then it did.
I can't see it going much lower. But of course, it can.
Media induced "crisis". 95% of people's lives are no different today than 6 months ago. And will be no different 6 months from now.
If you want to invest for the future then sell your stocks, get your money out of these crack house banks and buy rice, batteries, guns, ammo, gold and silver. Anything that does not have utility or intrinsic value is not worth shit.
What a fitting and inevitable end to the George Bush/Dick Cheney era. No, George, you will not be able to get out of town before this bomb explodes and the shrapnel hits you. You will be picking lead out of your ass til you die.
I will buy after I see a 2-3 month period without wild swings in the market. Then I will start buying in slowly, $5-10K every two weeks. I'm 34 so if I'm wrong I have time to recover. But no way in hell I'm jumping in right now.
we will close higher today, i guarantee it.
Well, if you're keeping score at home, we hit 7,888, blowing through the 8,000 and 20% fall that Cramer predicted - AND IT CAME IN ONE WEEK!
He nailed it folks. He totally nailed it.
And now that we got there, will we see it again? Or was that it?
I'm feeling more bullish. That was a big moment. Looking at healthcare stocks right now.
How do you stop a popped balloon from popping?
Are you frigin serious?
It's already popped.
Might as well ask how to restore your virginity after just having sex.
How will it end?
Badly.
Sort of like when you realize the guy had VD, and aids.
And yes... you are the beeotch who just got screwed!
I just keep thinking of that song...
"OH MY GOD! I woke up with a snake tatoo. OH MY GOD! And I think that my tongue's pierced too. OH MY GOD! OH MY GOD! And baby, who the hell are you?"
This is what happens when you act irrationally. And people have been doing that for some time now.
This weekend Georgia is playing Tenn. The cheapest ticket available on stubhub is $115. And that is for the nosebleed section. Any decent ticket is $200 an up. There will be 90,000 people there, each paying for a ticket, parking, gas, beer (lots of beer) and the pre and post parties.
Some depression!
Anonymous 2:51, I'm guessing, perhaps conservatively, that 25% to 30% of people's lives will be the same in six months except for one glaring difference: they won't have jobs.
I wouldnt buy stocks at any price. Doesnt matter if they are durables, or stock relating to beer, cigarettes, or anthing else depression related.
Simple truth of the matter is all stocks are selling to either cover a loss, margin calls, and/or selling to have cash on hand-to for survival, not investing.
It's outright panic. Cash is king, and will be for a very long time.
Credit is dead, and should have been a long time ago because extending credit for large purchases is what got us into this mess decades ago.
I remember back in 1979, my brother got a credit card, took out cash advances and maxed it out. So what happened then? Some other company gives him another credit card and he does the same thing to them.
He actually got a call from a debt collector last year if you can believe that. I think the creditor finally wrote my brother off in 2008. Almost 20 years later, do they think someone's going to pay? Forget about it.
This game has been profitable in the past, but I believe it's now as dead as a doornail.
This is the problem with our country - living beyond our means. Giving credit to the wrong people creates primarily greed, defaults, forclosures, and bankruptys for individuals even corporations.
I my mind, credit cards are evil, and no one should have them usless they have stellar credit scores and a job. But wait....how can the credit cards make money????
My point: greed.
Hey Keith, if you had 'the nerve', what would you buy?
What's your take on stocks which will be valuable in 10 years?
Kieth,
Remember back in Oct or Nov 07 you reported that the NYSE had done away with trading curbs?
Can you please repost the article?
RayNLA
sorry to spoil the party everyone...naz is up 1.5%
You know the answer Keith. I know you know the answer.
The stock market will stop falling when all assett classes are "MARKED TO MARKET". PERIOD.
By that time, the DOW will be alot lower than it is right now.
Dny
I picked up 6 of the stocks that I've wanted today, buy to hold (5 years time horizon) plus a healthcare fund.
time will tell
8,000 was a big moment
I don't understand because everyone says credit is dead, but I just got 2 credit cards with $5,000 balances apiece. Now, I am not going to use them, but why would they give me more credit (now) when I at the very least am in the middle of the road as far as score, risk, etc...?
Bottom? Since when does a stock market crash only last a week? We gotta be at LEAST 2-3 months from the bottom (whatever that is).
Keith: "It's the opportunity of a lifetime that will never come again. That said, the market could go down another 50% in the next few days. But 10 years from now, these prices will be a dream. It's about timeframe."
Agree completely Keith. It's my opinion the stock market has been in a 'dream' for more than 10 years. Never again will the dow be 7000, let alone 8000.
Happy birthday to me! We need to start buying things that are made locally.. and wean ourselves off of the globalism party a bit. (not saying we'll not buy/sell abroad.. but in uncertain times we need to know locally what we can get (food, merchandise ).. what can we barter with if all else fails?
It's amazing to watch the stockmarket bounce up and down. thankfully my aging parents only now have annuities... maybe I'll still get an inheritance.
Dopes said:
Vanguard is limiting their liability/exposure on MMKT funds as of September ?, 2008 (check the date). In other words your balance as of that date is your protection. Anything else is free game for unrecoverable losses. So, if you are with Vanguard and want to put your cash in the MMKT, you have no protection.
I'm not surprised they are doing this now. Everyone must be selling out of mutual funds and jumping into MMF. Its just plain brutal out there.
Question. if Vangard monies are in CD's with interest sweep features back into MMF monthly, and were previously in MMF before Sept 2008are these monies covered for loss?
Third Wave?
"8,000 was a big moment"
Only in the same way that going below 10k and 9k were big moments. It is just another number at this point.
I don't see anything at all that suggests that this would be bottom. For example, the Lehman CDS auction still hasn't been covered in the news yet.
"Like Tom Dart, Sheriff in Cook County, in the recent news story refusing to just blindly evict renters from houses."
Dart needs to be arrested and removed from office immediately forfeiting, salary, retirement and any other accrued benefits.
When the person responsible for enforcing the law publicly refuses to do his job, he must be punished.
Who does he think he is, George Bushco or Dick Cheneyburton?
What will Datrt do when your wife is raped and mutilated? Refuse to look for the perp?
“What, if anything, can stop the stock markets from crashing further?”
-------------------------------
Good question.
With everybody opening up their 401K statements this week, confidence in the markets will only drop lower.
Having ZERO confidence myself, yesterday I pulled my entire 401K out of the money market fund it was in, and asked for a check. Yes, the fund was not losing money, but at this point in time it seems prudent to just pull it out of the ‘system,’ just in case the roof caves in, which it may.
And I must admit, this is my vote of no confidence; my way of telling the ‘system’ – the moneychangers and banker – “F*ck You, I do not want any part of you.”
So, the question of the moment is now – What to do with this nice lump?
Buy more Gold?
Convert it into cash and stash it away?
Hold onto it and wait like a buzzard to dive in and pick at the bones?
Pay off a good-sized chunk of the mortgage on the property? (Another way to tell the bank to F*ck Off.)
So much opportunity if one only makes the right choice at this critical point in time.
But to answer the original question, only good old-fashioned capitulation will end this crash. But I do net see this happening for a while.
Good luck, everyone!
-Mammoth
Arrest Mozilo for starters.
David Tice of Prudent Bear predicts Dow 6000.
I'm starting to think about getting into some stocks for the next few years but it's tough for me to commit to that 5-year horizon. And I would like to feel more confident that we've hit the bottom.
I'm trying to figure out sectors that look good and then companies that look good in that sector.
Regardless of the economy we are still going to hit peak oil - even if demand is falling, if supply of oil is falling even more then prices rise. All energy companies should do well when this happens ie: Cameco which virtually controls the whole uranium and nuclear energy industry.
Anyone else have recommendations? I agree that with aging boomers health care should be a good sector but what companies should I research?
Wait for the turn. Finding the exact bottom -- like throwing darts.
Get a piece of paper and cover the right of the chart on a historical downturn. Pretend you are on a particular day. Now is that the bottom on that day? Hard to tell before hand. Easy to tell afterwards.
What's the point of selling now?
The technicals are showing you that this bear market has a deep- cut mauling all its' own.
One side note, Keith and all: I heard Bush's speech today, and it really worried me. Bush said that the government will aggressively pursue those who are spreading false rumors for financial gain. This really concerns me, because the government can go into blogs and start searching for "naysayers". This is not a good sign.
Isn't it amazing that they'll agressively pursue people who they say spreads false rumors, but they won't aggressively pursue the MILLIONS of KNOWN lawbreakers - ILLEGAL ALIENS and their EMPLOYERS.
That FoxBiz chick McDowell (the southern accent chick) just flashed Kindelberger's "Manias, Panics, and Crashes" to the audience. She said she dug it out of the closet and just re-read it.
Her co-host, some blowhard, said "i can't believe you're reading a book called manias, panics, and crashes"...like he thought it was ridiculous.
Too bad she didn't read it a year or two ago.
Too bad he still doesn't get it.
Thanks Keith for recommending this one way back!
Sound like the plutocrats are heading toward a little global socialism, what with meetings of world leaders at eh White House and etc.
Let it burn. Let the rich get a little less rich and lets rebuild this bitch on a firm foundation, heading into post-Peak Oil economies.
So which bank does the FDIC walk into this evening?
i would say there is panic in the stock market. We have never witness such a prolonged selling pressure. it is panic, plain and simple.
The stock market panic has not yet reached main street but it will, give it time. perhaps it will once paulson declares a shutdown of the stock market for a week in an attempt to break the positive feedback loop it is currently in. Perhaps there will be a big announcement from treasury this afternoon, they do love to make big announcements on fridays.
But Bob Toll says there is pent up demand for houses. Fucking idiot. The stories I could tell as a former employee of TBI for over 10 years.
I'm confused. Is that the Dow Jones, or an unfinished picture of a porcupine?
Nothing can stop the crash. Nothing can stop the destruction of the dollar, either. The following book is a must-read for all Americans who want to survive this crisis: http://tinyurl.com/63ejyy
The Bush Team is all over this Wall Street Crisis.
With their extensive experience in reacting to emergency situations, we can expect quick action to remedy this meltdown.
At this very moment, truckloads of ice are making their way to Wall Street to be distributed to traders on the floor of the NYSE by Treasury officials...
ZOMG I'm panicking like a noob Mammoth said...
So you just pulled your "entire" 401k out, thus not only subjecting it to a 10% penalty, but forcing it to be taxed at - unless you're young and exaggerating the implied value of your holdings - some absurd %-age? Good job...smart, rational, definitely better than finding a safer place to put it, take an immediate 43% hit! (boggle)
To make matters more entertaining, you're contemplating taking the remaining 57% and dumping it into a different rapidly depreciating asset (IE your house)? Wow...your investment prowess and decisions make me moist with their foresight and planning...
Way to drink the kool-aid, Mammoth.
The thing to keep in mind is that both the Dow and housing prices are about where they were just 5 or 6 years ago.
With the double-whammy of lost "wealth", people are simply going to stop spending money, and for a long time.
We're in for 3-5 years of continued drops, imho. It is going to take a while (read: 5-10 years) for minds to recover. History will repeat the "depression mindset."
I am tracking deflation news on http://deflationwatch.blogspot.com.
Carry on.
Boy you Fucked Savers are even more fucked than us Fucked Borrowers. While we are living in our fancy houses, condos and townhouses you are living in a shit hole apartment. You had the chance to party and you didn't. I feel sorry for you!
Bean-less Coffee
2qts wheat bran
1pt corn meal
3 eggs
1 c. molasses
Mix wheat bran and corn meal and then add in 3 well beaten eggs and molasses. Beat well and spread on pan to dry in oven on low heat (no temperature given). Take care to stir often while browning. A handful makes enough for two people.
Poor Man's Bread
1 cup flour
1 teaspoon baking powder
Water
Stir in enough water to make a batter and pour into greased skillet.{ use a cast iron skillet. Fry until brown on each side like a pancake. Taste great with homemade butter and jam.
BON APPETIT!
I don't know what i should think about all this yet, Rush hasn't told me what to think! Can anyone here tell me what I think?
Until there is reform, there will be distrust. That's why, as a past McCain Supporter, I now support Obama.
We need severe financial and housing reform in this country and a Democratic Congress and a Republican President don't get hard laws passed. We need a slam dunk when it comes punishing the greed.
First It is obvious that Soc Sec is here to stay. Self funded SS is out the window, so old SS is back in. So let's up the SS witholding threshold to unlimited salary and bonuses. I once read that would solve the SS funding problem. The rich are weak right now. Let's do it.
Second, nationalize the real estate and mortgage processing industry to heavily regulate agents, & mortgage brokers, with criminal penalties and accountablility after closing. This will somewhat happen with the number of Govt owned houses to be transferred over the next few years.
The voters will punish the Republicans heavily at the polls to send a message of demanding change.
That's why
Right now folks, you have to ask yourself this question:
* Is the world economy going to be destroyed, to not recover for years and years?
or
* Are we seeing crazed panic, which will make desperate sellers feel even worse in a few more days or weeks when markets bounce back?
I could argue both ways. We truly may be heading to the abyss, where banks, companies and governments now collapse. Where social order breaks down. Where millions who have no savings and no job have nowhere to turn. A true Depression 2.0, maybe even worse
Or,
I could argue that the world governments are going to flood the zone with capital, rescue the failing banks by nationalizing them, and act as the direct lender of last resort to businesses, at favorable terms. And that this market slide is halted within days.
So, which way do you bet? Or do you sit it out on the beach with popcorn and not risk it either way?
My strategy is to take nibbles right now with a long term view. But the beach and liquidity feels good. Really good.
What should we end up calling this week in market history?
HELL WEEK
Any other names to consider?
And man, watching the dow is like watching an action thriller
will we see under 8,000 again today? Or will we get the 3pm PPT bounce?
And oh, what a weekend it will be. And then around the corner, in mid-October, just days away, comes...
hold for it...
Monday
So many companies are trading right now like we're going back to the stone age. Like there will be 50% unemployment and world wars. Like capitalism is dead.
I can't believe what I'm seeing. When Manias, Panics and Crashes described the selling of assets at greater and greater losses and the rush to cash, he was describing this week.
It's stunning to watch.
This is panic. Pure, unchecked panic.
look at the headline on drudge - clos the markets!
So many companies are trading right now like we're going back to the stone age. Like there will be 50% unemployment and world wars. Like capitalism is dead.
I can't believe what I'm seeing. When Manias, Panics and Crashes described the selling of assets at greater and greater losses and the rush to cash, he was describing this week.
It's stunning to watch.
This is panic. Pure, unchecked panic.
-----------
Why are you surprise? You called it, you knew it was coming!
Keith,
Can you open a thread on Gold Price Manipulation?
Gold down $59.60 (1:32pm est 10/10)
I've spent the afternoon reading about it...and it's really scary and worth talking about.
"But Bob Toll says there is pent up demand for houses. Fucking idiot. The stories I could tell as a former employee of TBI for over 10 years"
DO TELL!!! When are they going BK?
People, please protect yourselves. Buy some gold, buy some extra food, keep some money (1 to 2 months worth) close to home. Do not listen anymore to the whores on Wall Street.
Eco-millionaires see boom times ahead:
http://www.reuters.com/article/inDepthNews/idUSSHI06327720070820?feedType=RSS&feedName=inDepthNews&rpc=22&sp=true
I saved this article from a while back.
Seems like if I had a clue, I would invest in this.
"Destroy an nation's economy, and you've destroyed its ability to influence the rest of the world"
I think our education system failed first; Our teachers still think they're at the center of the universe intellectually and it's time to modernize our system!
It is always in October, isn't it? I thought that it would happen last year. But I never expected this much of a fall.
DOW now down 600 points, below 8000 AGAIN. Apparently this morning was just a preview of things to come.
Also of note, markets are down 7.0%. Will it hit the 10% level?
Oct. 10 (Bloomberg) -- Italian Prime Minister Silvio Berlusconi said political leaders are discussing the idea of closing the world's financial markets while they ``rewrite the rules of international finance.''
``The idea of suspending the markets for the time it takes to rewrite the rules is being discussed,'' Berlusconi said today after a Cabinet meeting in Naples, Italy. A solution to the financial crisis ``can't just be for one country, or even just for Europe, but global.''
We're witnessing another neocon-planned 'emergency' event.
This one is a controlled demolition of the stock market.
And oh, what a weekend it will be. And then around the corner, in mid-October, just days away, comes...
hold for it...
Monday
Which is Columbus Day and all banks are closed.
"keith:I could argue both ways."
on patrick.net there was an article that noted that when folks defaulted on debt, the savings created from that debt also has to go puff.
So unless you know how to create more debt, there won't be more savings.
i.e. the corporations laughed all the way to the bank as 401k'ers threw money at them.
I'm not sure what the next ponzi scheme will be. Probably fewer jobs, higher prices and lower salaries.
A restructering of our entire system here is required, but like an oil tanker that requires 15miles before it can actually stop, restructering our system here can only occur once the rot has worked its way out - which takes time.
By next year, we have more rot in the housing market that must work its way out in the form of Alt-A, Prime and Jumbo loans - subprime will no longer be the issue here, since these loans went to many highly paid professionals - who also gambled and lost.
Here in HB Ca., and other coastal cities (Seal Beach, Belmont Shore, Newport Beach, Laguna, etc...), we're going to see some losses in housing like we've never seen before by next year.
We have a long way to go folks with the freefall in the markets and housing - it's just the natural order of things at this point.
DID I HEAR RUSSIA HAS GUARANTEED ICelands deposits.... in roubles?.. one shot fired...er my savior has come??????????????
paid a buck plus for an orange yesterday without realizing it...10 years back it was 20 for a dollar
"...you stayed in the market in 1929, it would take until 1952 just to break even..."
In nominal dollars yes, but in real(inflation-adjusted) dollars it took till 1987.
Fifty-eight years.
And now, a contrarian analysis:
"...This weekend Georgia is playing Tenn...
...Some depression!"
all brown fiber grains need to find their way into the kitchen very soon including rag weeds.............process into food stuff................
too bad you never learned farm/feild processing and oast drying of crops and fibers...should have planted pot....... now you starve...................
Mamoth said:"So, the question of the moment is now – What to do with this nice lump?
Buy more Gold?
Convert it into cash and stash it away?"
Better stash it all away to pay that 40% early withdrawl, and other fees.
Note to Nick - At least the F*cked Savers didn't have to mow the lawn or buy a new roof. And got a free health spa/clubhouse/pool to hang out at!
Never a borrower or a lender be.
- Benny
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