Global Correction

[lannarebirth]

VIX surpasses 1998 and 2003 highs (pointed to market lows at those times). This time could very well be different (I don't know and will not be catching a falling knife here myself), just FWIW:

[pkrv]

Can one of the more financially astute readers explain why Oil also lost so much today?

They always say oils high price is not driven by speculators but by demand.

So why does oil drop 11 USB/barrel on news?

Just curious

Sure - if you can turn a light bulb on in the next year or so you need to close the curtains - it will be seen - there is the concept of revenge - I think the French did it best - 'Off with their heads' though they may have taken it a bit too far, but at least blamed themselves and didn't invade other countries at the time.....

[LaoPo]

OK, New York is closed and the results are as follows:

Dow 10,532.39 -610.74 (-5.48%)

Nasdaq 1,983.73 -199.61 (-9.14%)

S&P 500 1,124.22 -88.79 (-7.32%)

In a few hours the SUN will rise in the Far East...

LaoPo

and a number of Samurais are polishing their swords and daggers. who would want to commit seppuku with a rusty blade?

... ...and I bet you're laughing so loud that they can hear you in Hua Hin................with your Bonds....

LaoPo

[flying]

and a number of Samurais are polishing their swords and daggers. who would want to commit seppuku with a rusty blade?

Wow your up very early

Couldn't wait to see the show

[cclub75]

Can one of the more financially astute readers explain why Oil also lost so much today?

They always say oils high price is not driven by speculators but by demand.

So why does oil drop 11 USB/barrel on news?

Just curious

If the bill fails the world falls into recession and therefore demand for oil will drop. That's the way i see it.

Other commodity prices have also slid today.

I think there is a much easier explanation : cash.

With a DJ at -600 points, some financial operators would sell their mother, father, children to get some cash. Precious cash. At any cost.

In such panic mode, they need to sell everything that -still- has some value. Oil is certainly a good candidate for that.

During a day like the Super Black Monday, I don't believe operators are thinking "ahead", with supply/demand equation in case of recession.

They just need to get cash.

[lifeisrandom]

Its over welcome to a recession

ITS GOING TO BE A fuc_kING BLOODBATH

see you in 2011

[lannarebirth]

Can one of the more financially astute readers explain why Oil also lost so much today?

They always say oils high price is not driven by speculators but by demand.

So why does oil drop 11 USB/barrel on news?

Just curious

If the bill fails the world falls into recession and therefore demand for oil will drop. That's the way i see it.

Other commodity prices have also slid today.

I think there is a much easier explanation : cash.

With a DJ at -600 points, some financial operators would sell their mother, father, children to get some cash. Precious cash. At any cost.

In such panic mode, they need to sell everything that -still- has some value. Oil is certainly a good candidate for that.

During a day like the Super Black Monday, I don't believe operators are thinking "ahead", with supply/demand equation in case of recession.

They just need to get cash.

Market was in backwardation last I checked. These pension funds that are "investing" in commodities aren't going to go on taking a negative roll yield indefinitely. No way can they make that money back.

Edited September 29, 2008 by lannarebirth

[scyriacus]

OK, New York is closed and the results are as follows:

Dow 10,532.39 -610.74 (-5.48%)

Nasdaq 1,983.73 -199.61 (-9.14%)

S&P 500 1,124.22 -88.79 (-7.32%) In a few hours the SUN will rise in the Far East...LaoPo

you are a liar or an optimist.....which title do you choose?

[LaoPo]

"How rejecting a $700 billion plan cost us $1 trillion"

"In total, more than $1 trillion was wiped off the value of the entire U.S. stock market Monday, as measured by the Dow Jones Wilshire 5000 Index. Asian markets will certainly plunge tonight, followed by the European markets Tuesday morning -- and many of the latter suffered their worst losses ever Monday."

From:

http://www.marketwatch.com/news/story/how-...mp;dist=SecMKTW

LaoPo

[LaoPo]

OK, New York is closed and the results are as follows:

Dow 10,532.39 -610.74 (-5.48%)

Nasdaq 1,983.73 -199.61 (-9.14%)

S&P 500 1,124.22 -88.79 (-7.32%) In a few hours the SUN will rise in the Far East...LaoPo

you are a liar or an optimist.....which title do you choose?

Optimist because "when there is blood in the streets...." quote by Warren Buffett I believe.

It's the same when the Generals tell their respective Governments that a war is needed to fight the enemies... ... and after they bombed the enemies and countries, the war-going countries make BILLIONS, rebuilding the bombed countries. THIS time however the war-going country -the US- forgot that they were spending more BILLIONS ($ 700 Billion + I believe) than they planned to receive in return...IF they will receive (or take) enough in return -in oil-.

Economy....it's like what Napoleon said: l’Histoire se répète - History will repeat itself.

Above all, this whole crisis is part of shifting of the Powers, from West to East....

LaoPo

[bdenner]

TTF Common sense is prevailing. I for one do not want to see a public bail out, "Golden Parachutes" and the like.

Republicans - Democrats are both divided on this issue and it would appear that main stream Americans are unsure as well so IMHO all should step back, take a deep breath and do some serious thinking not just throw a heap of cash into a black hole.

OK, I'm hurting like most of you but prepared to ride the storm.

[PeaceBlondie]

Nearly 800 point drop in the Dow-Jones last night. Nearly ten percent drop on my European fund. Sounds like a global correction

[BEENTHEREDONETHAT]

Can someone explain why when

6% mortgage loans are in trouble

Unemployment highest in 5 years and rising

Credit is crisis

Stock market on it's butt

THE U.S. DOLLAR IS UP?????????

[LaoPo]

Nearly 800 point drop in the Dow-Jones last night. Nearly ten percent drop on my European fund. Sounds like a global correction

Nice title for a thread

Biggest Point Drops in the Dow

Date Close Point Drop Percent Decline

Sept. 29, 2008 10,365.45 777.68 -6.98%

Sept. 17, 2001 8,920.70 684.81 -7.13%

Apr. 14, 2000 10,305.77 617.78 -5.66%

Oct. 27, 1997 7,161.15 554.26 -7.19%

Aug. 31, 1998 7,539.07 512.61 -6.37%

Oct. 19, 1987 1,738.74 508.00 -22.61%

On Monday, the blue-chip Dow Jones industrial average fell 777.68 points, or -6.98%, to 10,365.45.

The broader S&P 500 index dropped 106.85 points, or -8.81%, to 1,106.42.

The tech-heavy Nasdaq composite index tumbled 199.61 points, or -9.14%, to 1,983.73.

http://www.businessweek.com/investor/conte...+temp_top+story

LaoPo

[LaoPo]

Can someone explain why when

6% mortgage loans are in trouble

Unemployment highest in 5 years and rising

Credit is crisis

Stock market on it's butt

THE U.S. DOLLAR IS UP?????????

Basically because there is a mis-trust momentum in the Euro because of the Banking problems in Europe and a few Governments needed a lot of Billions of Euro's to either bail banks out or nationalize them, like in Iceland, UK, Belgium/Holland and Germany.... (as if there are no problems in the US... )

But, that can change tomorrow since the markets in Europe close earlier than in the US. Depends what Asia/Oceania is going to do, but I suspect not very good....

LaoPo

Edited September 29, 2008 by LaoPo

[Naam]

Nearly 800 point drop in the Dow-Jones last night. Nearly ten percent drop on my European fund. Sounds like a global correction

what i don't understand PB is that the majority of investors (i am talking of us little people) did not react although the writing is on the wall not only since end of june last year when the shÍt hit the fan publicly. i already had a bad feeling end of 2006 when i saw bond emissions of "B" rated and rather unkown corporate debtors paying paying peanuts yields in USD and EUR. but... mea culpa... holding already a more than adequate ratio of cash in my portfolio i was too greedy, thought i could afford the risk and made some "interesting" picks.

result: whatever i bought (i sold most of it with a loss a few months later including AAA rated corporate bonds!) is available now much cheaper and has yields one could only dream of two years ago. but under prevailing circumstances not even in my wildest dreams i'd buy anything but AAA government bonds and today is the day when my remaining cash flows into them.

[BEENTHEREDONETHAT]

I don't claim to be a fiancial whiz or even well informed about the markets. But what really bothers me is I have not heard of any plan at all to fix the problems that caused all this, what is to keep it from happening again?

Who is really going to end up with this money (assuming it is passed), my impression is most of it will end up with the bankers that caused the problems in the first place. The bankers get to cherry pick the mortgages and give the worst ones to the tax payer and keep the best for themself.

The reason the bankers were making trillions is because of the huge leverage and risk they were taking. They should not get the rewards and then let others suffer the consequences of their actions. If the money is a absolute necessity make it a loan and stop all bonuses and dividend payments until it is repaid in full with interest.

[flying]

The reason the bankers were making trillions is because of the huge leverage and risk they were taking. They should not get the rewards and then let others suffer the consequences of their actions. If the money is a absolute necessity make it a loan and stop all bonuses and dividend payments until it is repaid in full with interest.

I think most non financial folks feel the same way as you do......robbed

Also all they keep saying is "Dont' *YOU* folks understand"

"If we dont do something credit dries up & business will fold"

Yes I am not a millionaire & run my company mostly with my own money.

Of course I know the OPM ( other peoples money ) creed. I have worked for many companies that operate on credit lines only.

But when they speak like this to the common man I wonder what the common struggling man thinks? Does he think oh boy we better give them what they want or we may lose jobs/ pay checks.

Or does he think welcome to my world?

If credit dries up it wont be forever will it? Yes suffering is the forcast but that is nothing new to most.

Beats me

[OlRedEyes]

Problem is, even if you run your own company without much credit, your customers are going to disappear.

[midas]

Who is really going to end up with this money (assuming it is passed), my impression is most of it will end up with the bankers that caused the problems in the first place. The bankers get to cherry pick the mortgages and give the worst ones to the tax payer and keep the best for themself.

The reason the bankers were making trillions is because of the huge leverage and risk they were taking. They should not get the rewards and then let others suffer the consequences of their actions. If the money is a absolute necessity make it a loan and stop all bonuses and dividend payments until it is repaid in full with interest.

Agreed ! I hope the FBI doesnt drop the ball with its investigation of these people.

Did you see todays news that the CEO of Wachovia Bank issued a public statement

to the market only a week ago that they had more than adequate funds so they could pacify the markets !

But now the truth has come out and - GUESS WHAT - yes he is due for yet a ANOTHER MULTI MILLION

dollar payout Never mind about a bailout - put them behind bars for fraud.

Edited September 30, 2008 by midas

[PeaceBlondie]

As flawed as the American democracy is,maybe they heard the voice of mad voters. This took place seven weeks from a big election, and both major candidates kept their distance, except that McCain seemed to stir up his Republican congressmen. The vote came out strangely: 60% of Democrats voted for the bailout, and something like 33% of the Republicans. The president's own party rejected his pleas, ahd the opposition delivered most of the bailout votes, in vain. They will try again, but apparently millions of disgusted, outraged American voters clogged the switchboards of Congress to say HE11 NO!!

[flying]

Problem is, even if you run your own company without much credit, your customers are going to disappear.

Very true in my business ( building homes )

If folks cannot get credit I would rely on cash buyer & not many of those

It will be interesting to think which sectors would be affected.

[JimsKnight]

Looking at this from an expats perspective not yet in LOS i can see this having the potential to ruin plenty of older dudes relying on banks and pensions for monthly interest payments and the clunking into their banks here in LOS.

But that is only a possibility, at the moment.

[OlRedEyes]

Problem is, even if you run your own company without much credit, your customers are going to disappear.

Very true in my business ( building homes )

If folks cannot get credit I would rely on cash buyer & not many of those

It will be interesting to think which sectors would be affected.

Cannot really think of any sector that won't be affected. Think depression.

Gambling maybe?

Edited September 30, 2008 by OlRedEyes

[BEENTHEREDONETHAT]

The reason the bankers were making trillions is because of the huge leverage and risk they were taking. They should not get the rewards and then let others suffer the consequences of their actions. If the money is a absolute necessity make it a loan and stop all bonuses and dividend payments until it is repaid in full with interest.

I think most non financial folks feel the same way as you do......robbed

Also all they keep saying is "Dont' *YOU* folks understand"

"If we dont do something credit dries up & business will fold"

Yes I am not a millionaire & run my company mostly with my own money.

Of course I know the OPM ( other peoples money ) creed. I have worked for many companies that operate on credit lines only.

But when they speak like this to the common man I wonder what the common struggling man thinks? Does he think oh boy we better give them what they want or we may lose jobs/ pay checks.

Or does he think welcome to my world?

If credit dries up it wont be forever will it? Yes suffering is the forcast but that is nothing new to most.

Beats me

Interesting points flying. Long ago when I ran a company it was not on credit. You don't spend all your income and then borrow for the next payroll. New equipment, new employees and bonuses all come from generating a profit. If you aren't generating a profit you have serious problems anyway.

But then credit in the US appears to be an addiction. I know one of our daughters could not survive without her credit cards. She and her husband both are hard workers, but they have to have every toy known to man. 3 snowmobiles, 2 quads a travel trailer to go hunting and figure the future is solved by their 401K, house and social security. But I don't think they could survive in the short term if they lost their jobs. I think this is a very common problem with all of the US if you don't have at least 7 credit cards you are underprivledged.

So if the banks are not giving out credit is it the end of the world or do people and businesses then need to learn to live out of their pocket rather than out of someone elses and pay exorbinate interest rates.

So I for one am not sure if throwing money at the problem really fixes it or if it just prolongs it. I certainly don't claim to know the answer or even really understand the problem in depth. I do understand that the politicians are not necessarily doing what is best for the country. But you can be sure that are doing what is best for them and what will get them re-elected, if that happens to help the country thats good but if it dosen't it was the other party that did it.

[midas]

Problem is, even if you run your own company without much credit, your customers are going to disappear.

There is nothing wrong with credit if it is used in a business sense

to generate more money. The problem in American is it has been used on such

a wide scale just to purchase consumer goods that instantly start to depreciate in value.

You would not find many Asians that do that and yet they were quite happy to provide

the money to US citizens to keep doing it.

[VegasVic]

Can someone explain why when

6% mortgage loans are in trouble

Unemployment highest in 5 years and rising

Credit is crisis

Stock market on it's butt

THE U.S. DOLLAR IS UP?????????

BTDT, Its actually the variable rate ARM's that account for most of the foreclosures not standard fixed rate loans. Unemployment is indeed up from 4.5% to 6.1% over the last year in the states, but the average unemployment rate over the last 35 years is actually 6.3% so the U.S. is still slightly below the average unemployment rates (this will likely change especially if the Congress doesn't do anything)! The Dollar is up and will continue to rise for two primary reasons, the first is that oil is priced in Dollars and as oil continues to drop the Dollar will rise, the second is that in times of crisis money gravitates to safe havens and the world apparently still sees U.S. Treasury instuments as a safe haven

[BEENTHEREDONETHAT]

Thanks for the input Vic I guess when you think about it it is hard to come up with a safer place than the US $ wise. Crappy return though.

[VegasVic]

Thanks for the input Vic I guess when you think about it it is hard to come up with a safer place than the US $ wise. Crappy return though.

BTDT, True, but when the dust settles you know that all of your principal will be intact.

[Wrong Turn]

OK, I'm hurting like most of you but prepared to ride the storm.

Some people are hurting. These are the people that need to draw from their financial market portfolios and/or get dividends.

My "losses" are only on paper. I have not sold anything. And yes, I bought sizeable amounts in the Summer of 2007, before the start of the declines that started in October 2007.

I bought then because of timing and visiting the US.

I am not concerned for the long term.

The market needs to be cleaned out. Further drops may happen as predicted by Vibe's articles and interview vids from Fabar, Rogers, and Paul.

Fear is a very strong emotion in the markets. Just like greed and "irrational exuberance."

And I also add the "sheople" factor. These sheople are people that started jumping into financial investing for the first times in their lives in the 1990s, when it became "cool" and became "easy money."

That's not the way it works.

The market needs to go down further, to clean itself out, IMO.

Edited September 30, 2008 by Wrong Turn