OT: US stock market set to crash Tuesday morning

[Ringfinger]

I'll stay put. However, I have cash if anyone can spot me a bargain!!

[The Black Hand ®]

If you're going to retire in the next year or two, you should have already been in a safe moneymarket. I fyou have another 5-15 years , no problem.

[JiveTurkeyMoFo]

Stock futures are one thing.....and not by themselves a valuable indicator of the final result of the trading day.

 

By tomorrow morning 9:29:59 am, Futures might be down 500 or up 200....a lot can happen between now and then, including, another bad day overseas, which will almost surely send the market south.

 

 

Only an interest rate cut before the market opens will save it from gapping down

 

Pardon me, but that's quite a statement. In fact, it's not true. There are thousands of things that could stop the market from opening down 500 points: foreign markets rebound, dollar unexpectedly strengthens, oil drops, gold drops, any of a hundred economic indicators could be rumored to be strong in their next report, etc. To say that only a rate cut can keep it from happening is quite frankly not entirely taking into account all of the variables.

 

Or people could just come to their senses and realize that the economy is not that bad and the subprime issue is nothing more than a small road bump.

 

Seems like months and months of the media howling about gloom and doom and beating the subprime war drum have finally turned into self-fulfilling prophecy.

For once, we agree 100%.

 

This isn't a "sub-prime" issue, and the media is entirely to blame when they portray it as such. Its kinda like calling the Titanic sinking as the "John Jacob Astor Tragedy". Sure he was probably the most well known of those who perished, but the enormity of the event transcended just one man.

 

Think of current events in the market as "the Great Unwinding" of the largest asset and credit bubble in history. Subprime is only the buzzword those who can't wrap their heads around the issue use to describe it....but it fails to address what is really going on.

 

Banks are going to fail. Pension funds are going to fail. Hundreds of Billions of dollars in capital will vanish virtually overnight. Foreclosures will skyrocket. Jobs will be lost by the hundreds of thousands. Stores and businesses will close.

 

If the DOW falls to 11,000 in the next couple of weeks, that will reflect a 20%+ drop from the October highs....that's not self-fulfilling prophecy, that's panic on a scale not seen since 9/11.

 

In the end, we are likely looking at a major deflationary event that will take several years to unfold.

[kimik]

Stock futures are one thing.....and not by themselves a valuable indicator of the final result of the trading day.

 

By tomorrow morning 9:29:59 am, Futures might be down 500 or up 200....a lot can happen between now and then, including, another bad day overseas, which will almost surely send the market south.

 

 

Only an interest rate cut before the market opens will save it from gapping down

 

Pardon me, but that's quite a statement. In fact, it's not true. There are thousands of things that could stop the market from opening down 500 points: foreign markets rebound, dollar unexpectedly strengthens, oil drops, gold drops, any of a hundred economic indicators could be rumored to be strong in their next report, etc. To say that only a rate cut can keep it from happening is quite frankly not entirely taking into account all of the variables.

 

Or people could just come to their senses and realize that the economy is not that bad and the subprime issue is nothing more than a small road bump.

 

Seems like months and months of the media howling about gloom and doom and beating the subprime war drum have finally turned into self-fulfilling prophecy.

For once, we agree 100%.

 

This isn't a "sub-prime" issue, and the media is entirely to blame when they portray it as such. Its kinda like calling the Titanic sinking as the "John Jacob Astor Tragedy". Sure he was probably the most well known of those who perished, but the enormity of the event transcended just one man.

 

Think of current events in the market as "the Great Unwinding" of the largest asset and credit bubble in history. Subprime is only the buzzword those who can't wrap their heads around the issue use to describe it....but it fails to address what is really going on.

 

Banks are going to fail. Pension funds are going to fail. Hundreds of Billions of dollars in capital will vanish virtually overnight. Foreclosures will skyrocket. Jobs will be lost by the hundreds of thousands. Stores and businesses will close.

 

If the DOW falls to 11,000 in the next couple of weeks, that will reflect a 20%+ drop from the October highs....that's not self-fulfilling prophecy, that's panic.

 

In the end, we are likely looking at a major deflationary event that will take several years to unfold.

 

Exactly! (thumbs u

 

What we need the SEC to do to really spice things up is require complete transparency of CDS exposure for all financial institutions.............

 

Besides, we are not quite in a bear market yet according to Wikipedia but are due for one any time now (highlighted in red to reflect the markets today!):

 

Bear market

A bear market is described as being accompanied by widespread pessimism. Investors anticipating further losses are motivated to sell, with negative sentiment feeding on itself in a vicious circle. The most famous bear market in history was 1930 to 1932, marking the start of the Great Depression.[5] A milder, low-level long-term bear market occurred from about 1967 to 1983, encompassing the stagflation economy, energy crises in the 1970s, and high unemployment in the early 1980s.

 

Prices fluctuate constantly on the open market; a bear market is not a simple decline, but a substantial drop in the prices of a range of issues over a defined period of time. By one common definition, a bear market is marked by a price decline of 20% or more in a key stock market index from a recent peak over a 12-month period. However, no consensual definition of a bear market exists to clearly differentiate a primary market trend from a secondary market trend.

 

Investors frequently confuse bear markets with corrections. Corrections are much shorter lived, whereas bear markets occur over a longer period with typically a greater magnitude of loss from top to bottom.

[Dale Roberts]

In case you haven't seen today's financial news, the European markets crashed today with Paris down 7%, etc. It was the worst day in Europe since 9/11.

 

It gets worse.

 

According to this news story the DOW JONES futures are down 500 points, even though the US markets are closed for the holiday.

 

This means the US market will likely open down 500 points tomorrow morning.

 

It is time to take all of your money out of stocks and invest it in comics.

 

 

Come on, you don't take your money out when stuff goes down, you buy more. Settle down before you on yourself.

[TupennyConan]

I *spooned + + * myself already last week.

 

I am in bonds/munis too but the 60 of the 100 in stock is killing me with each violation number...

[RickHigh]

Thank goodness I have all of my retirement funds invested in comic books!

[The Question?]

 

 

There is a TON of $$$ to be made in bad/down stock markets, even during recession times

 

 

 

 

[The Troll King]

Stock futures are one thing.....and not by themselves a valuable indicator of the final result of the trading day.

 

By tomorrow morning 9:29:59 am, Futures might be down 500 or up 200....a lot can happen between now and then, including, another bad day overseas, which will almost surely send the market south.

 

 

Only an interest rate cut before the market opens will save it from gapping down

 

Pardon me, but that's quite a statement. In fact, it's not true. There are thousands of things that could stop the market from opening down 500 points: foreign markets rebound, dollar unexpectedly strengthens, oil drops, gold drops, any of a hundred economic indicators could be rumored to be strong in their next report, etc. To say that only a rate cut can keep it from happening is quite frankly not entirely taking into account all of the variables.

 

Or people could just come to their senses and realize that the economy is not that bad and the subprime issue is nothing more than a small road bump.

 

Seems like months and months of the media howling about gloom and doom and beating the subprime war drum have finally turned into self-fulfilling prophecy.

For once, we agree 100%.

 

I was thinking the exact same thing!

[TupennyConan]

 

There is a TON of $$$ to be made in bad/down stock markets, even during recession times

 

 

 

 

Fiddy cent books on the boards

[TheShadowKnows]

In case you haven't seen today's financial news, the European markets crashed today with Paris down 7%, etc. It was the worst day in Europe since 9/11.

 

It gets worse.

 

According to this news story the DOW JONES futures are down 500 points, even though the US markets are closed for the holiday.

 

This means the US market will likely open down 500 points tomorrow morning.

 

It is time to take all of your money out of stocks and invest it in comics.

 

 

Come on, you don't take your money out when stuff goes down, you buy more. Settle down before you on yourself.

I believe that was tongue in cheek Dale.

dennis

[delekkerste]

Where's Gene

 

I was in Vegas at a friend's bachelor party this weekend.

 

For my thoughts, venture out to the no-man's land that is The Water Cooler and check out the last few months of posts in the "Gold Price Hits $500/oz." thread. A necesary correction has been coming for some time, but Federal Reserve Incompetent-in-Chief Ben Bernanke has mismanaged the housing/credit crisis to such a shocking extent that the markets are simply not functioning properly and now the good, the bad, the ugly and the baby is all being thrown out with the bathwater indiscriminately.

 

The last straw was his shockingly clueless testimony in front of Congress last week where he appeared nervous, sent out confusing messages and appeared to have no grasp at all of the problem at hand. Now the markets are in a full-blown panic and will test the will of this bumbling academic by plummeting until he blinks and slashes short-term interest rates (which he should have done long ago; check out my indisputable reasoning in the WC thread).

 

This mess is going to spill over into the art, comic & collectibles markets as well, with a time lag. People are losing money from both their houses and stock portfolios at the same time credit is too tight and the adjusted monetary base is shrinking. These are much different circumstances than the 2000-2002 bear market in stocks, during which comic prices rose as the Fed force-fed liquidity into the system with negative real interest rates, causing all tangible assets to skyrocket. Back then you had a Fed Chairman fighting a "phantom deflationary menace" and now you have one fighting a "phantom inflationary menace" (yes, prices are rising, but because of commodity price shocks, not because of too much money in the system). You saw hugely unwarranted asset inflation as a result of the former policy and now you are seeing asset deflation as a result of the latter policy.

[shadroch]

Sell low. Buy high.

 

 

Buy sheep,sell deer!

[Bonds25]

Well, the foreign markets crashed yet again (2 days in a row of 5-8% losses), so watch out below!!

[Flaming_Telepath]

Well, the foreign markets crashed yet again (2 days in a row of 5-8% losses), so watch out below!!

 

Yeah, Tokyo was bloody and London's opened well down and is still falling. This is going to get very, very messy.

[AussieRuss]

Well this is what happened in Australia today.

 

Get ready folks......

 

 

ASX suffers biggest fall in 10 years

January 22, 2008 - 7:11PM

Blue chip stocks have plummeted, a major online broking website crashed and investors raced for the exit door as the Australian stock market suffered its worst one-day fall in more than 10 years, losing $96 billion.

 

Fears of a recession in the US, and the likely downside effect on global economic growth, has panicked markets from London to China and prompted a repricing of stocks.

 

Treasurer Wayne Swan believes Australia can ride out the wave of turmoil that has swept the globe, following the US sub-prime mortgage market crisis that began in August last year.

 

"I note we are well placed to ride out the turbulence that flows from events in the United States even though we are not immune from it," he said.

 

However, brokers said the Australian market may have turned the corner into a bear phase after years of bullish returns and growth.

 

The Australian benchmark S&P/ASX200 index lost 7.05 per cent - or 393.6 points to 5186.8 - to mark its biggest one-day fall on record. The index fell 6.79 per cent on October 29, 1997.

 

The 7.26 per cent drop in the broader All Ordinaries index was the biggest in more than 20 years, the fourth worst one-day fall on record and shaved $96 billion from the market's value.

 

The All Ordinaries plunged 408.9 points to 5222.0, the worst performance since October 29, 1987, when it fell 7.52 per cent.

 

The market has lost $282 billion since January and $388 billion since its intraday record peak in November.

 

The slump on Tuesday also extended the Australian market's losing streak to 12 straight sessions - the longest since January 1982.

 

Colonial First State head of investment markets research Hans Kunnen said the market had turned bearish, with the All Ordinaries now down by more than 20 per cent since November.

 

"Judging by the mood of the market today, the bears are certainly winning," Mr Kunnen said.

 

The website of Australia's largest online share broker, CommSec, crashed for half an hour today as investors traded at unprecedented volumes.

 

Mr Kunnen said it was too early to pick the bottom of the market because there would be more bad news out of the US.

 

But investors should soon realise they could re-enter the market at a 20 per cent discount to late last year.

 

CommSec chief equities economist Craig James said the sell-off was an overreaction and "a clear case of the heart ruling the head".

 

"There would be reason to be worried if our economy was weak and our companies were experiencing lower sales and earnings. But that is far from the case," he said.

 

Mr Kunnen said as the market heads into the February/March company profit reporting season, investors may get further encouragement from expected good returns.

 

"The outlook for Australia is not bad," he said.

 

"It's just that sentiment is poor, and people think a US recession will lead to an Australian recession.

 

"I disagree," Mr Kunnen said.

 

Asian share markets retreated by between four and nine per cent today as the ramifications of the negative US outlook hit home.

 

The declines mirrored falls overnight on Monday in European markets, which had set the tone in the absence of the US, which was closed for the Martin Luther King public holiday.

 

All sectors in the Australian market were affected, with the financial and mining sectors especially weak.

 

Mr Kunnen said the punishment of the financial sector was unwarranted because Australia had different lending patterns to the US and the major local banks should still perform well in the current economic climate.

 

The mining sector was pummelled because investors fear a US recession could mean lower demand and prices for Australia's major commodity exports.

 

The unsettled environment has also raised doubts about whether global miner BHP Billiton can proceed with a $US100 billion-plus formal takeover bid for rival Rio Tinto.

 

But exports to Asia are growing and growth in the region should sustain the Australian economy, observers say.

 

"Even if the United States has a recession, growth in China will be robust for quite a few year simply because of industrialisation and urbanisation there," Mr Kunnen said.

 

"That should flow through to the banks, the supermarkets, the media companies, as we ride off the wealth generated from that trade."

 

Mr James said a circuit-breaker was needed to halt the selling frenzy across the world.

 

"The global sharemarket slide has its genesis in US recession fears, and it is up to the US authorities to take action," he said.

 

 

[delekkerste]

BERNANKE CAPITULATES, PROVES HIMSELF TO BE EVEN MORE INCOMPETENT

 

Fed cuts 75 bp, market still getting hammered - the guy is weeks too late and trillions of dollars (in losses) short. Bumbling Ben couldn't give us an extra 25 bp last month, but, 9 days before the next FOMC meeting, he gives us 75 bp? What was he waiting for? And he cuts before the market opens instead of letting the capitulation occur? THE GUY LITERALLY CANNOT DO ANYTHING RIGHT. He needs to resign, immediately...

 

OK, going to be locked in hand-to-hand combat in the market trenches...good luck, all.

[Mac Man]

I've got my mortgage set with a 30-year locked interest rate, both my wife and I have steady income, marginal debt (aside from the house), and slowly (but steadily) putting a little bit away each month (just some CDs and a mutual fund, and an IRA- and not counting her pension plan). The only effect I see this having on us is that it will cut away at our disposable income with increased cost for other items (i.e. gas, utilities, heating, groceries, etc).

 

Is there anything else I am missing here that I should be worried about? :shrug:

[lizards2]

I've got my mortgage set with a 30-year locked interest rate, both my wife and I have steady income, marginal debt (aside from the house), and slowly (but steadily) putting a little bit away each month (just some CDs and a mutual fund, and an IRA- and not counting her pension plan). The only effect I see this having on us is that it will cut away at our disposable income with increased cost for other items (i.e. gas, utilities, heating, groceries, etc).

 

Is there anything else I am missing here that I should be worried about? :shrug:

 

War over the world's remaining tangible resources

 

Seriously though, it sounds like your situated well. I'm in a similar situation, having removed myself from the market about four months ago. The tricky thing will be when to buy back into the market. It sounds like even if it still has a ways to go downwards, anytime from now forward will be a winner in the long run...., but I think I'm still going to wait awhile for re-entry....,

[That Ron Dude]

An art history degree doesn't quality me to talk about the economy but it won't stop me either.

 

I don't think the economy that underlies the American Stock Market is healthy. Your dollar has dropped dramatically. Your debt and your recent deficits, both nationally and individually are very high. Canada didn't do well in that situation (from the early 70's up until about about 12 years ago) and I don't expect America will either.

 

It is not as though these problems are beyond repair, but whoever gets in office next will have to deal with them.

 

Do comic sales decrease in economically troubled times or are they "must have" items like alcohol and cigarettes that continue chugging along no matter what the economy does? Do people sell their collections to pay the rent and to pay for shoes for the kids? Will there be glut and devaluation? Stay tuned...