U.s. Banking Crisis: Capitalism "gone Wild"?

[flying]

If I had the answer, I'd be having my servant type this message.

I think it's a positive sign, however, I don't slightly believe the downward trend has finished.

Too True

I tend to think folks are fat in cash after the mass exodus.

In their minds the old prices still apply.

So the stocks at these prices look like cake to a fat kid.

Heck it works to keep all the lights on in Vegas year after year

they count on greed over riding common sense.

Then again I dont have a servant typing this so I could be wrong

[OriginalPoster]

Today is the 13th & the stock market is so happy today.......Why?

The Dow finished up 936 points(11%); largest gain in terms of points and fifth largest in terms of percentage in history.

Yes & I wonder why?? Nothing has really changed has it?? hmmmm

It's called a "Dead Cat Bounce".

[flying]

It's called a "Dead Cat Bounce".

I just figured folks saw last night Europe went up & they all thought...........

Better get back in there ASAP

My guess is it all goes to pot this week again.

We will see what the Feds plans is they release tomorrow

[OriginalPoster]

It's called a "Dead Cat Bounce".

I just figured folks saw last night Europe went up & they all thought...........

Better get back in there ASAP

My guess is it all goes to pot this week again.

We will see what the Feds plans is they release tomorrow

I'm finding the relatively poor performance of gold bullion recently, and the decimation in the price of gold mining stocks, to be harder to understand than a bounce in the overall equity market. Gold stocks only went up 2% today's bounce and bullion was down. On Friday, bullion was down 7% and gold stocks were down something like 13 or 14%.

Edited October 13, 2008 by OriginalPoster

[britmaveric]

nah look for another huge gain this morning.

[flying]

I'm finding the relatively poor performance of gold bullion recently, and the decimation in the price of gold mining stocks, to be harder to understand than a bounce in the overall equity market. Gold stocks only went up 2% today's bounce and bullion was down. On Friday, bullion was down 7% and gold stocks were down something like 13 or 14%.

Originally I had thought Gold would drop as folks pulled cash back out of there to re-enter the market. I would like Gold to drop a whole lot more. I have been meaning to buy & missed the boat. If it ever gets back to a reasonable level I would like to get in there. But not at current rates

[OriginalPoster]

nah look for another huge gain this morning.

Hope you're right. Though I don't hold stocks, I'd prefer that the whole economic system not be about to collapse as experts and clowns alike seem to be predicting. I do wonder if some of the end-of-the world hysteria might be driven by this being an election year in the US (I remember well how the Clinton campaign managed to paint the economy as being in dire straits when running against Bush I in 1992) but yet the blood tastes very real this time.

Edited October 13, 2008 by OriginalPoster

[Pakboong]

Today is the 13th & the stock market is so happy today.......Why?

The Dow finished up 936 points(11%); largest gain in terms of points and fifth largest in terms of percentage in history.

Yes & I wonder why?? Nothing has really changed has it?? hmmmm

It's called a "Dead Cat Bounce".

Beat a percentage gain record set in 1933 which could be a significant clue.

[lannarebirth]

http://www.sinfest.net/archive_page.php?comicID=2959

[Jingthing]

I heard on the tube that most of the biggest UP days in the history of the US stock market were DURING the great depression (the 1929) one. We don't know what this is yet, but the crash was at great depression levels.

[lannarebirth]

I heard on the tube that most of the biggest UP days in the history of the US stock market were DURING the great depression (the 1929) one. We don't know what this is yet, but the crash was at great depression levels.

The "crash" was no where near Great Depression levels. The lions share of the downmove was progran traded down and was about as orderly a selloff as you'll ever see. Great Depression stocks lost approx 90% of their value in a DJIA move from 381 to 41.

[Jingthing]

I heard on the tube that most of the biggest UP days in the history of the US stock market were DURING the great depression (the 1929) one. We don't know what this is yet, but the crash was at great depression levels.

The "crash" was no where near Great Depression levels. The lions share of the downmove was progran traded down and was about as orderly a selloff as you'll ever see. Great Depression stocks lost approx 90% of their value in a DJIA move from 381 to 41.

Are you sure?????

This graph says differently. The text shows three phases nowhere near the levels you stated.

http://upload.wikimedia.org/wikipedia/comm...crash_graph.svg

Timeline

The trading floor of the New York Stock Exchange just after the crash of 1929.

The trading floor of the New York Stock Exchange just after the crash of 1929.

After an amazing five-year run when the world saw the Dow Jones Industrial Average (DJIA) increase in value fivefold, prices peaked at 381.17 on September 3, 1929.[19] The market then fell sharply for a month, losing 17% of its value on the initial leg down. Prices then recovered more than half of the losses over the next week, only to turn back down immediately afterwards. The decline then accelerated into the so-called "Black Thursday", October 24, 1929. A record number of 12.9 million shares were traded on that day. At 1 p.m. on Friday, October 25, several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor. The meeting included Thomas W. Lamont, acting head of Morgan Bank; Albert Wiggin, head of the Chase National Bank; and Charles E. Mitchell, president of the National City Bank. They chose Richard Whitney, vice president of the Exchange, to act on their behalf. With the bankers' financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As amazed traders watched, Whitney then placed similar bids on other "blue chip" stocks. This tactic was similar to a tactic that ended the Panic of 1907, and succeeded in halting the slide that day. In this case, however, the respite was only temporary.

Over the weekend, the events were covered by the newspapers across the United States. On Monday, October 28, the first "Black Monday",[20] more investors decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 13%. The next day, "Black Tuesday", October 29, 1929, about 16 million shares were traded.[21][22][23] The volume on stocks traded on October 29, 1929 was "...a record that was not broken for nearly 40 years, in 1968."[22] Author Richard M. Salsman wrote that on October 29—amid rumors that U.S. President Herbert Hoover would not veto the pending Hawley-Smoot Tariff bill—stock prices crashed even further."[18] William C. Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks in order to demonstrate to the public their confidence in the market, but their efforts failed to stop the slide. The DJIA lost another 12% that day. The ticker did not stop running until about 7:45 that evening. The market lost $14 billion in value that day, bringing the loss for the week to $30 billion, ten times more than the annual budget of the federal government, far more than the U.S. had spent in all of World War I.[24]

An interim bottom occurred on November 13, with the Dow closing at 198.6 that day. The market recovered for several months from that point, with the Dow reaching a secondary peak (ie, dead cat bounce) at 294.0 in April 1930. The market embarked on a steady slide in April 1931 that did not end until 1932 when the Dow closed at 41.22 on July 8, concluding a shattering 89% decline from the peak. This was the lowest the stock market had been since the 19th century.[25]

Edited October 14, 2008 by Jingthing

[lannarebirth]

I heard on the tube that most of the biggest UP days in the history of the US stock market were DURING the great depression (the 1929) one. We don't know what this is yet, but the crash was at great depression levels.

The "crash" was no where near Great Depression levels. The lions share of the downmove was progran traded down and was about as orderly a selloff as you'll ever see. Great Depression stocks lost approx 90% of their value in a DJIA move from 381 to 41.

Are you sure?????

This graph says differently. The text shows three phases nowhere near the levels you stated.

http://upload.wikimedia.org/wikipedia/comm...crash_graph.svg

Timeline

The trading floor of the New York Stock Exchange just after the crash of 1929.

The trading floor of the New York Stock Exchange just after the crash of 1929.

After an amazing five-year run when the world saw the Dow Jones Industrial Average (DJIA) increase in value fivefold, prices peaked at 381.17 on September 3, 1929.[19] The market then fell sharply for a month, losing 17% of its value on the initial leg down. Prices then recovered more than half of the losses over the next week, only to turn back down immediately afterwards. The decline then accelerated into the so-called "Black Thursday", October 24, 1929. A record number of 12.9 million shares were traded on that day. At 1 p.m. on Friday, October 25, several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor. The meeting included Thomas W. Lamont, acting head of Morgan Bank; Albert Wiggin, head of the Chase National Bank; and Charles E. Mitchell, president of the National City Bank. They chose Richard Whitney, vice president of the Exchange, to act on their behalf. With the bankers' financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As amazed traders watched, Whitney then placed similar bids on other "blue chip" stocks. This tactic was similar to a tactic that ended the Panic of 1907, and succeeded in halting the slide that day. In this case, however, the respite was only temporary.

Over the weekend, the events were covered by the newspapers across the United States. On Monday, October 28, the first "Black Monday",[20] more investors decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 13%. The next day, "Black Tuesday", October 29, 1929, about 16 million shares were traded.[21][22][23] The volume on stocks traded on October 29, 1929 was "...a record that was not broken for nearly 40 years, in 1968."[22] Author Richard M. Salsman wrote that on October 29—amid rumors that U.S. President Herbert Hoover would not veto the pending Hawley-Smoot Tariff bill—stock prices crashed even further."[18] William C. Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks in order to demonstrate to the public their confidence in the market, but their efforts failed to stop the slide. The DJIA lost another 12% that day. The ticker did not stop running until about 7:45 that evening. The market lost $14 billion in value that day, bringing the loss for the week to $30 billion, ten times more than the annual budget of the federal government, far more than the U.S. had spent in all of World War I.[24]

An interim bottom occurred on November 13, with the Dow closing at 198.6 that day. The market recovered for several months from that point, with the Dow reaching a secondary peak (ie, dead cat bounce) at 294.0 in April 1930. The market embarked on a steady slide in April 1931 that did not end until 1932 when the Dow closed at 41.22 on July 8, concluding a shattering 89% decline from the peak. This was the lowest the stock market had been since the 19th century.[25]

[Jingthing]

OK. Good. But we are now in the MIDDLE of it. The fact there was a huge VOLATILE gain in one day is in many ways a bad sign, suggesting we may indeed MAY be in times similar to the depression times. I think with the global banking guarantees this can be prevented.

[lannarebirth]

OK. Good. But we are now in the MIDDLE of it. The fact there was a huge VOLATILE gain in one day is in many ways a bad sign, suggesting we may indeed MAY be in times similar to the depression times. I think with the global banking guarantees this can be prevented.

What ever is politically acceptable to call it, make no mistake, America has just nationalized it's major banks. That is not "bullish" IMO. Bureaucrats and bankers deciding arbitraily which businesses survive and which fail is a whole new kind of risk element. Can probably get a nice bounce for OpEx week though.

Edited October 14, 2008 by lannarebirth

[flying]

Bureaucrats and bankers deciding arbitraily which businesses survive and which fail is a whole new kind of risk element.

This scares the Beejeezus out of me You know everyone is paralyzed with fear IMHO

Half of this stuff would never have passed if folks were thinking straight. But fear heaped on us by the Gov has made people numb & helps them just nod their head to anything the Gov tells them will help.

All this talk even on CNBC about folks getting letters about their credit line on cards being reduced or canceled. ( they dont show any actual folks ) I have asked everyone I know. Folks with good & bad credit. Not one of them has received any letters or change in their ability to use their credit cards...LOC's etc.

Edited October 14, 2008 by flying

[lannarebirth]

Bureaucrats and bankers deciding arbitraily which businesses survive and which fail is a whole new kind of risk element.

This scares the Beejeezus out of me You know everyone is paralyzed with fear IMHO

Half of this stuff would never have passed if folks were thinking straight. But fear heaped on us by the Gov has made people numb & helps them just nod their head to anything the Gov tells them will help.

All this talk even on CNBC about folks getting letters about their credit line on cards being reduced or canceled. ( they dont show any actual folks ) I have asked everyone I know. Folks with good & bad credit. Not one of them has received any letters or change in their ability to use their credit cards...LOC's etc.

Nationalizing "energy companies" and "media" in the interests of national security would be a seemingly natural followup. All terror, all the time.

[flying]

Nationalizing "energy companies" and "media" in the interests of national security would be a seemingly natural followup. All terror, all the time.

You know speaking of terror/terrorism

I heard the stats of Americans killed by terrorism

Iraq war 4000 as of March 2008

So say 5000 now?

9-11 WTC

Total count 2976

minus foreigners -236

American 2,740

So WTC & Iraq = say 8000

Cost of War in Iraq Alone? = $509745061240 on the morning of April 9th, 2008

Headed for 600 Billion

Now think of how many die a year of Heart problems or Cancer or HIV etc. & look at what we spend towards research or cures for those?

I am not saying the lives lost on 9-11 or iraq were cheap. But I am saying all the Gov needs to do is use the word Terrorist & its like a blank check gets issued.

PS Yearly totals for USA alone

Heart disease: 652,091

Cancer: 559,312

Stroke (cerebrovascular diseases): 143,579

Chronic lower respiratory diseases: 130,933

Accidents (unintentional injuries): 117,809

Diabetes: 75,119

Alzheimer's disease: 71,599

Influenza/Pneumonia: 63,001

Nephritis, nephrotic syndrome, and nephrosis: 43,901

Septicemia: 34,136

http://www.cdc.gov/nchs/FASTATS/lcod.htm

Edited October 14, 2008 by flying

[lannarebirth]

Anyone waiting for the financial industry to return to the glory days of 2006 may have a long wait. As a credit-fueled boom turns into a bubble, it takes more and more lending to produce an additional increment of GDP growth. In the real boom years after WWII, it took about $1.40 worth of credit to produce $1 worth of GDP growth. The ratio rose sharply after the Reagan Revolution…and now stands at about $6 of credit to every extra dollar of GDP. Of course, that is why Wall Street made so much money - it was selling credit. But it's also why that story is history; that show is over. As the cost of growth - in terms of credit - rises, so does the cost in terms of debt service. Even at 5%, the cost of $6 of credit is 30 cents per year. If it produces $1 of GDP growth, that extra output would need a 30% profit margin to break even. Not very likely

I believe the "war on terror" has nothing to do with terrorism and has everything to do with spending as much money as possible in the shortest amount of time. War is really good for that. This bailout scheme would seem to be another fine example. It's Greenspan's ego blowing up for all to see as he fed a credit market frenzy so he could be the first person in history to halt the Long Wave. Colossal ego, collosal idiot.

[Naam]

nah look for another huge gain this morning.

the shorters have covered their butts. the huge gains are DOW in the red and Asia as well as Europe will follow today.

[Naam]

I believe the "war on terror" has nothing to do with terrorism...

and its major side effect is that taxmen all over the world are kneeling down every evening before they go to bed and pray

"Dear Almighty, thank you for bin-Laden, al-Qaeda and whatever their names are. I now can spy, sniff, probe, twist arms as i please and no court of law will dare to say anything no matter what human, civil or constitutional rights i violate."

[lannarebirth]

OK. Good. But we are now in the MIDDLE of it. The fact there was a huge VOLATILE gain in one day is in many ways a bad sign, suggesting we may indeed MAY be in times similar to the depression times. I think with the global banking guarantees this can be prevented.

Probably. I don't think anyone's going to starve or anything. But will people continue to pay 20 P/E's or even 15 or 12 for companies that yield a 1% or 2% dividend? Don't ask me, I don't understand the logic in it.

http://nytimes.com/interactive/2008/10/11/...AR_MARKETS.html

Edited October 15, 2008 by lannarebirth

[lannarebirth]

A decade late and a Trillion dollars short....

Bernanke Weighs Limiting Consolidation, Asset Bubbles

By Craig Torres

Oct. 15 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the central bank will consider discarding its long- standing aversion to interfering with asset-price bubbles and warned that the banking business may be concentrated in too few companies.

Officials should review how supervision and interest rates can minimize the ``dangerous phenomenon'' of bubbles in housing, stocks and other assets that risk bringing the financial system and economy down with them when they burst, Bernanke said.

``There is no doubt that as we emerge from the current crisis that we are all going to look very hard at that issue and what can be done about it,'' he told the Economic Club of New York in his broadest remarks on future regulatory changes since the credit crisis deepened last month.

The comments signal that the 54-year-old chairman, while trying to quell the worst market turmoil since the 1930s, is crafting an agenda for greater oversight. Policy makers will toughen their response to ``excessive leverage,'' give more weight to financial stability in economic analysis and examine ways to strengthen the system of trading and settlement behind complex derivative securities, he said.

The U.S. faces ``a very serious too-big-to-fail problem,'' in which the insolvency of a large financial company could threaten a market collapse, Bernanke said in reply to an audience question. ``There are too many firms that are in some sense systemically critical.''

[LaoPo]

A decade late and a Trillion dollars short....

Bernanke Weighs Limiting Consolidation, Asset Bubbles

By Craig Torres

Oct. 15 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the central bank will consider discarding its long- standing aversion to interfering with asset-price bubbles and warned that the banking business may be concentrated in too few companies.

Officials should review how supervision and interest rates can minimize the ``dangerous phenomenon'' of bubbles in housing, stocks and other assets that risk bringing the financial system and economy down with them when they burst, Bernanke said.

``There is no doubt that as we emerge from the current crisis that we are all going to look very hard at that issue and what can be done about it,'' he told the Economic Club of New York in his broadest remarks on future regulatory changes since the credit crisis deepened last month.

The comments signal that the 54-year-old chairman, while trying to quell the worst market turmoil since the 1930s, is crafting an agenda for greater oversight.

Policy makers will toughen their response to ``excessive leverage,'' give more weight to financial stability in economic analysis and examine ways to strengthen the system of trading and settlement behind complex derivative securities, he said.

The U.S. faces ``a very serious too-big-to-fail problem,'' in which the insolvency of a large financial company could threaten a market collapse, Bernanke said in reply to an audience question. ``There are too many firms that are in some sense systemically critical.''

hmmmm.....IF the US and the EU do not implement very strict rules and limits to the extreme paychecks in the banking industry very soon, these bankers will invent new products and the same disaster will happen again, one day in the future.

Extreme paychecks like the $ 70,3 Million in 2007 for another 54 year old.... Mr. Lloyd Blankfein, CEO of Goldman Sachs...a bit more than Paulson, who earned $37.8 million in 2005, his last full year as Goldman's CEO...

http://www.bloomberg.com/apps/news?pid=206...refer=exclusive

LaoPo

[lannarebirth]

A decade late and a Trillion dollars short....

Bernanke Weighs Limiting Consolidation, Asset Bubbles

By Craig Torres

Oct. 15 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the central bank will consider discarding its long- standing aversion to interfering with asset-price bubbles and warned that the banking business may be concentrated in too few companies.

Officials should review how supervision and interest rates can minimize the ``dangerous phenomenon'' of bubbles in housing, stocks and other assets that risk bringing the financial system and economy down with them when they burst, Bernanke said.

``There is no doubt that as we emerge from the current crisis that we are all going to look very hard at that issue and what can be done about it,'' he told the Economic Club of New York in his broadest remarks on future regulatory changes since the credit crisis deepened last month.

The comments signal that the 54-year-old chairman, while trying to quell the worst market turmoil since the 1930s, is crafting an agenda for greater oversight.

Policy makers will toughen their response to ``excessive leverage,'' give more weight to financial stability in economic analysis and examine ways to strengthen the system of trading and settlement behind complex derivative securities, he said.

The U.S. faces ``a very serious too-big-to-fail problem,'' in which the insolvency of a large financial company could threaten a market collapse, Bernanke said in reply to an audience question. ``There are too many firms that are in some sense systemically critical.''

hmmmm.....IF the US and the EU do not implement very strict rules and limits to the extreme paychecks in the banking industry very soon, these bankers will invent new products and the same disaster will happen again, one day in the future.

Extreme paychecks like the $ 70,3 Million in 2007 for another 54 year old.... Mr. Lloyd Blankfein, CEO of Goldman Sachs...a bit more than Paulson, who earned $37.8 million in 2005, his last full year as Goldman's CEO...

http://www.bloomberg.com/apps/news?pid=206...refer=exclusive

LaoPo

To tell you the truth Lao Po, of the 3 groups of principals (shareholders, executives, government), I blame the executives the least (except the outright criminal ones). Everyone knows they're vermin, and ridiculous schemes and greed could be expected. It is the shareholders and the government who failed to curb these excesses I hold most responsible. I guess we know why the shareholders didn't care, but I don't understand why the govt. failed to discharge it's oversight duties. Lobbyists, campaign contributions? Chump change and see what it's wrought.

[LaoPo]

New York Attorney General Andrew Cuomo, talking about AIG executives' ``unwarranted and outrageous expenditures'' at American International Group Inc., which received an $85 billion federal bailout last month.

``The party is over,'' Cuomo said today at a press conference on Wall Street in lower Manhattan. ``No more hunting trips. No more luxury resorts. They are not going to have the party and leave the hangover for the taxpayers.''

http://www.bloomberg.com/apps/news?pid=206...ik&refer=us

LaoPo

[lannarebirth]

I.O.U.S.A

http://www.youtube.com/watch?v=0NM5Q5VDpnA

[LaoPo]

I.O.U.S.A

http://www.youtube.com/watch?v=0NM5Q5VDpnA

Thanks Lanna !

ONE NATION. UNDER STRESS. IN DEBT.

I wrote about that movie on August 21 & September 24, and asked if someone watched that movie. I was ridiculed by a member who always knows better then the rest... for posting about I.O.U.S.A......

You know, it's not the time now to ridicule others, it's time to listen and see if we can help each other by supplying information others may not have seen or read yet or are not even aware that info exists................... BECAUSE if our governments would have been aware of the bloody mess the bankers/financials created we would not have been in this mess in the first place !

http://www.thaivisa.com/forum/World-Leader...01#entry2235401

http://www.thaivisa.com/forum/Where-s-Us-H...06#entry2158406

LaoPo

[hyperdimension]

Extreme paychecks like the $ 70,3 Million in 2007 for another 54 year old.... Mr. Lloyd Blankfein, CEO of Goldman Sachs...a bit more than Paulson, who earned $37.8 million in 2005, his last full year as Goldman's CEO...

http://www.bloomberg.com/apps/news?pid=206...refer=exclusive

Paulson, who now earns $191,300 annually

Paulson sure took a big pay cut when he became a Treasury Secretary. I wonder whether he regrets it; It's probably not any less work. Maybe he was after power and fame and not fortune. Well he certainly is famous... or infamous, depending on your perspective and how things turn out. Most people around his age (62) would prefer to wind down... instead he got the opposite, with the entire world now on his shoulders.

Edited October 16, 2008 by hyperdimension

[lannarebirth]

You know, it's not the time now to ridicule others, it's time to listen and see if we can help each other by supplying information others may not have seen or read yet or are not even aware that info exists................... BECAUSE if our governments would have been aware of the bloody mess the bankers/financials created we would not have been in this mess in the first place !

LaoPo

Check this out Lao Po. A CEO's forced margin liquidation drives his companys stock price lower. Why isn't he in handcuffs?

http://www.bloggingstocks.com/2008/10/11/c...s-entire-stake/

OK, thats my CEO slam. Now look at this:

http://finance.aol.com/quotes/chesapeake-e...oration/chk/nys

The company has fallen well over 75% in price, yet still only yields 1.8% dividend in a cyclical business, and hasn't even touched it's 52 week low. What are these shareholders thinking?