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French Bank freezes US funds;Stocks Plunge on Rising Credit Anxiety

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posted on Aug, 16 2007 @ 06:19 AM
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Originally posted by jefwane
Well, according to my math (and it's known to be wrong from time to time). The Dow is already down 8.9% and the S&P is down 9.5% from recent highs. So if this is just a correction shouldn't this be about over with?


The theory is a minor correction is about 10%, if it goes over that and starts moving towards 15-20%+ then things get abit worrying.

UK media was reporting that the American market is worrying about how much debt is in the US economy, not just sub prime, but in general.

BTW

have you guys seen the emerging markets in Asia? some of them are down 20%!




posted on Aug, 16 2007 @ 06:21 AM
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I don't know if it was mentioned in this thread, but the big drop at the end of the trading day yesterday on Wall Street was over worries about Countrywide, the biggest mortgage company in the U.S. There was even talk it might go bankrupt. That would mean the mortgage crisis is extending far beyond just the subprime market.



posted on Aug, 16 2007 @ 06:22 AM
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Originally posted by djohnsto77
I must say this is looking less and less like a correction and more and more like a major bear market or 1929/1987-like collapse.


djohnsto77

when a member like you says something like that, I get worried


you never cry wolf

(See it as a compliment)




posted on Aug, 16 2007 @ 06:31 AM
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okay, panic.

this is the first time, the UK media has interrupted it's general news to inform us about FTSE 100 falls.

It's just dropped 3.4%



posted on Aug, 16 2007 @ 06:33 AM
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Dow futures are down like 140 and S&P 500 futures down 19.



posted on Aug, 16 2007 @ 06:34 AM
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Yesterday's New York Times: Subprime Problems Spread Into Commercial Loans

When the sub-prime problems started back in March many (including the Fed) called it "contained" but it's looking more and more like a "contagion".

For the lurkers and other readers here's the background from March:

World Markets Continue their Slide

US Depression Tremors: Subprime Lenders in Meltdown

Notice that back then about 36 lenders had gone kaput. That number now stands at 121 with leaders like Countrywide in jeopardy!

I said it then and I'm saying it again. This ain't over, not by a long shot.
.



posted on Aug, 16 2007 @ 06:40 AM
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Looks like the stock made a textbook bounce off of first support at 12,800 yesterday (established back in February), to eventually close at 12,861. If the sell-off continues today, depending on the volume, first, I think traders will be looking to set-up and capitalize from another intraday bounce off 12,800. It's an opportunity to dump shares, and squeeze a few more $ out of unfortunate buyers before the next leg down begins. Disgusting, I know...but as Tony Soprano might say; It's just business.


If this is the-for-real break-down, and we get the 20% correction that some are predicting, that would give us a target of around 11,200. Can it get worse than that? Some think so.

The Fed does need to act soon imo, and as djohnsto77 intimated, it's gonna take more than buying bad paper from your depository banks, or handing out $ band-aids to solve the derivatives problem.

When those huge dollar drops began last week, here and in Europe, I suspected that some major banking interests must be hard up against it. So here's how I understand the situation today...in reality, the recent liquidity injections had to do with systemic banking problems, both here and in Europe. Private banks were independently driving-up the overnight lending rate (the Fed Funds Rate, or in Europe, it's called the LIBOR) beyond the central banks respective target rates. Banks experiencing liquidity problems, suspected that other banks were probably having problems, so they began asking higher interest as protection on intrabank loans. Naturally these increased expenses were being passed along to consumers in the form of elevated mortgage costs etc. Not good PR if the word gets out. Furthermore, it could ultimately expose the banking industry's current vulnerabilities...which in turn could destroy consumer confidence (see bank runs). The Fed had to take action. The central bank injections brought the rates back to normal levels by offering up more supply to meet the demand for cash. Here's a good piece that covers the LIBOR.

What has me baffled about this whole affair...is when does an economic problem, finally become a political problem for the sitting administration? It seems that everyone in Washington, and those in the upper echelon's of media, are either not taking this issue seriously, or they know and are intentionally looking the other way.

If any one's interested in learning more about credit derivatives, here's a link to more than you'll probably ever want to know...and then some.

Edit: BooBoo


[edit on 16-8-2007 by OBE1]



posted on Aug, 16 2007 @ 06:43 AM
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Yesterdays after-hours and todays pre-market trade aren't looking good. During this Dow has lost antoher 147.00, coming to 12774.00.

CNN money

And Federal reserves can inject all the money they want, that will ultimately make situation even worse. Not to mention the inflation. And Fed's are injecting billions just in order to make market look stable and encourage people to buy stock, thus enabling some big, fat rats to safely abandon the ship.
Shameful!!!



posted on Aug, 16 2007 @ 06:43 AM
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Originally posted by OBE1
If this is the-for-real break-down, and we get the 20% correction that some are predicting, that would give us a target of around 11,200. Can it get worse than that? Some think so.


I wouldn't be surprised if we test Dow 10,000 in the not-too-distant future. If it breaks decisively below that, I'd say all bets are off.



posted on Aug, 16 2007 @ 06:45 AM
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Originally posted by Gools
I said it then and I'm saying it again. This ain't over, not by a long shot.
.


Of course, this has a long way to go.

Bankruptcy is starting to become a daily event now, I'd be very surprised if this doesn't spill over into the economy. Some reckon it already has.



posted on Aug, 16 2007 @ 06:50 AM
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Originally posted by djohnsto77
I wouldn't be surprised if we test Dow 10,000 in the not-too-distant future. If it breaks decisively below that, I'd say all bets are off.


If we test 10,000 in a few months. It would result in panic.

What worries me more, about today, if the Dow drops another 200-300+. That could create major panic.



posted on Aug, 16 2007 @ 06:53 AM
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Originally posted by OBE1
What has me baffled about this whole affair... It seems that everyone in Washington, and those in the upper echelon's of media, are either not taking this issue seriously, or they know and are intentionally looking the other way.


Maybe not in public but there are signs that all eyes are on the ball: The "Plunge Protection Team" Working Overtime


...the PPT cannot afford to sit back and watch both the US housing market and the stock market sinking at the same time. That might spell the dreaded "R" word, - Recession. Recognizing the huge risks to the US economy, President Bush called for a special meeting of his economic advisors on July 27th, to discuss the stock market, which had plunged as much as 456-points the previous day.

Speaking from the Roosevelt Room, just 20-minutes after the opening bell of the NYSE on July 27th, President Bush said the US and world economy were strong after American gross domestic product jumped 3.4% in the second quarter. "The world economy is strong and I happen to believe one of the main reasons why is because we remain strong. The US economy is large, flexible and resilient."


Expect a repeat performance sometime soon.

Jawboning is about the only thing they have left to "restore confidence".
.



posted on Aug, 16 2007 @ 06:57 AM
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French Pres. Sarkozy Urges Vigilance on Markets





French President Nicolas Sarkozy has written to German Chancellor Angela Merkel, saying authorities must be "very vigilant" over financial market corrections, according to the letter released on Thursday.

Sarkozy said he did not expect current market volatility to affect the real economy but hoped for a discussion about markets with the Group of Seven (G7) countries, central banks and the International Monetary Fund in Washington in October.

Please visit the link provided for the complete story.


www.cnbc.com...

FTSE 100 is down 224 points



posted on Aug, 16 2007 @ 07:09 AM
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Originally posted by Duby78Fed's are injecting billions just in order to make market look stable and encourage people to buy stock, thus enabling some big, fat rats to safely abandon the ship.
Shameful!!!


That just sums up the position nicely, look after there own, while giving he impression they are helping everyone.

[edit on 8/16/2007 by andy1033]



posted on Aug, 16 2007 @ 07:16 AM
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The Federal Reserve now is just adding liquidity so it's possible for people (anyone and everyone) to trade. It's really a stretch to say they're propping up the market to allow the fat cats to get out or whatever you're alleging.

As I said in the other thread, the only thing worse than a falling market is an illiquid market.



posted on Aug, 16 2007 @ 07:20 AM
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Originally posted by Duby78

Yesterdays after-hours and todays pre-market trade aren't looking good. During this Dow has lost antoher 147.00, coming to 12774.00.


Well, 12,774 is still in the 12,800 support zone Duby78. But will it hold long..or even give-up a brief rally from here? Those sneaky day traders and scalpers are pretty good working off pivot points & shaking every last penny out of unsuspecting longs like me
But then again, from what I'm hearing from you guys we might gap down 200pts on the open...haven't turned on the tube yet...too scared.



posted on Aug, 16 2007 @ 07:39 AM
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Originally posted by djohnsto77
The Federal Reserve now is just adding liquidity so it's possible for people (anyone and everyone) to trade. It's really a stretch to say they're propping up the market to allow the fat cats to get out or whatever you're alleging.

As I said in the other thread, the only thing worse than a falling market is an illiquid market.


I disagree with you, but only time can tell. Anyways, who do you think fat rats (I prefer to call them that way) are? They will (and are) make their escape in the most discreet manner possible, but that is way complex to explain, and I'm sick and tired of this all. If they did it quickly and loudly - that would mean practically an instant crash, panic and rush for the banks. I would describe this situation as creeping doom, but that is just my opinion.

And by the way djohnsto77, I honestly hope that you're right and I'm wrong on this one.

Edit to add: Injecting Fed's billions only makes ILLUSION that market is liquid, when in fact it isn't liquid.

[edit on 16-8-2007 by Duby78]



posted on Aug, 16 2007 @ 07:45 AM
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Originally posted by OBE1
Those sneaky day traders and scalpers are pretty good working off pivot points & shaking every last penny out of unsuspecting longs like me
But then again, from what I'm hearing from you guys we might gap down 200pts on the open...haven't turned on the tube yet...too scared.


You know what they say... bulls earn money, bears earn money, but hogs get slaughtered. I hope you're not a (market) hog



posted on Aug, 16 2007 @ 07:48 AM
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Originally posted by Duby78
And by the way djohnsto77, I honestly hope that you're right and I'm wrong on this one.


Well if the Fed didn't act at all, we'd be seeing skyrocketing short-term interest rates, and in extreme cases, closed banks, empty ATMs, and bounced checks because banks could no longer give out money and meet their reserve requirements.

Those things aren't good for the little guy either.



posted on Aug, 16 2007 @ 08:08 AM
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Stocks are tumbling again. FTSE below 6000




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