World Markets Plunge - DJIA Futures Down Nearly 500 Points

Originally posted by ThatsJustWeird

Originally posted by JacKatMtn
What should us nonmarket savvy expect from today?

I'm guessing no more than a 3% drop.
I wouldn't be surprised at all if it finished positive

I see people are making the mistake of thinking the Stock Market is our economy. While sometimes usually a good indicator of how the economy is doing it certainly isn't the only indicator nor the best one. The economy is still growing, our GDP is still growing, unemployment is stable and still fairly low.
Economic slowdown? Likely. Recession? Certainly a possibility. Depression?

We didn't even have a depression in the '70s or late '80s when the economy was doing worse. I know the doom and gloomers like coming out at times like this, but reality is a full blown depression is very unlikely.

Statistics like the markets can be manipulated. I think your rosy picture is far from the truth. The U.S. is under attack -- from within.

What's different about this time is the dollar is no longer strong, and as things become more expensive the standard of living drops. And I predict that it will effect a lot of people.

Welcome to post industrialisation.

reply to post by deessell


I find it interesting how determined people are to paint a bad picture of the economy. Its now a "rosy picture" when we look at economic indicators as a whole to gauge the status of the economy, instead of looking at selected indicators that only validate what we want to happen. Whenever the evidence say otherwise, its "being manipulated" - whenever it says something is bad, it all of a sudden turns true. Do you have any evidence that the sky is falling on the economy right now, since all of the evidence that says this is exactly what was predicted (a mild recession)?

Sure the dollar is weak, it should be during a recession. Else it wouldn't be a very good recession.

Some people just LOVE to be prophets of doom and gloom...and I admit, it is much more fun than being a prophet of "look, everything is happening as predicted and is no reason to freak out."

[edit on 22-1-2008 by LightinDarkness]

Originally posted by LightinDarkness
reply to post by marg6043

 

Sorry no..this is a cyclical mild economic recession that has been predicted since as far back as 2005. As happens EVERY TIME, people will freak out and cash out, at huge losses. Then they will buy back in, at high prices. This happens without fail. That is because the average "joe" small time investor can't time the market, and trying to time the market results in you losing money over the long term.

There is nothing sinister going on here, except that the federal government is too busy pandering by offering worthless economic packages (when they should not be interfering at all) to get votes rather than staying out and let the cycle do its thing. That's not sinister though....that's just the federal government playing politics - as it always does.

The only people who should bother timing the markets are people who devote their lives to doing it - and even then, they lose often. Any amateur investor who plays into the media hype during these periods will find over their life time - they lose big. If your diversified right now, your fine. If your not, big mistake. Get diversified. But running into cash/gold/oil does not equal "diversified." Some of those things, yes, those things only just ensure you a loss over the long term.

I have a little bit of money in a retirement account that is aggressively invested. I'll lose $2,000-$3,000 tomorrow. I *could* pull out, sure, and take a noticeable loss. And then I'd have to buy back in at a higher level. The chances of me being able to pinpoint the bottom of a recession - as with all amateurs - is about 0. While I may get lucky, I'll most likely lose by trying. So I'm leaving it in there - its got 40 years to grow.



[edit on 21-1-2008 by LightinDarkness]

I don't know if it could be related but this is a conspiracy site

I usually have FNC on for most of the day and it usually has a rotating graphic in the lower right which shows up to the minute DJIA, NASDAQ, S&P on a constantly rotating basis.

Miraculously this morning it is missing

They have popped in some figures now and then on the scroll bar at the bottom but I wonder if SOMEONE asked them to take it down for the day?

Ive been listening to c2c lately and they said most of these economic woes could be traced to Alan Greenspan when he was with the fed. I just hope this isnt a way to gain support for NAU.

Originally posted by Escrotumus
Fed funds rate just lowered by 3/4 point. Helping out the banks I see and giving the old stiff finger to the people. Wrong choice at this time.

This is the only thing that is keeping the DJ from falling 600-800 points. There's still some hope that maybe other central banks will cut rates and that the Fed will cut rates around a 1/2 point next time they meet (or maybe sooner if market trends look bleak).

Though the trading hour is still young. The DJ should probably close anywhere from 200-400 points lower because of the rate cut which is worrying because there WAS a surprise and considerable rate cut today.

reply to post by RetinoidReceptor


I just got done reading that story. Personaly, I dont think it is going to do a darn bit of good. It might slow it down for a day or two, but I really dont think this whole situation is reversable.

reply to post by RetinoidReceptor


Exactly this people were on emergency meetings last night trying to figure out a way to make the markets bounce back and fast.

But this is just a desperate move so far and one that will make investors antsy trying to figure out why the fed desperate move to .75.

How bad really is that they have to yet again bail out on banks behave.

The insurance mess is going to hit no matter what, more right outs to come.

Will the global buy into it? that is the question.

Still massive lay off by financial institutions and our low wage job makers no doing very good when it comes to their job making.

As our nation falls under low employment rates and jobs been created in service jobs the foreclosures on housing will have a no end until America can find a way to provide new wealth builders for the nation.



[edit on 22-1-2008 by marg6043]

Originally posted by mrsdudara

I just got done reading that story. Personaly, I dont think it is going to do a darn bit of good. It might slow it down for a day or two, but I really dont think this whole situation is reversable.

There are deeper problems in the U.S. and other economies (especially China) that really need to be corrected eventually which rate cuts just can't solve.

But I just don't know how the markets will react or anything anymore. The markets seem to have gone beyond reason and moved into psychological. You can't even predict some of these things...(Retail and Bank stocks are in the bull market yet tech stocks are in the bear while their [tech] sales is supposed to be announced tonight with a lot of positive figures). Oh and did I mention that retail and financial figures are not good?

Does that make any logical sense? I know people may think that financials and retail stocks hit rock bottom but investors usually wait to make sure.

It just doesn't make sense.

i think everyone is breathing a big sigh so far as the market has bounced from an early 450 pt. loss to something about 100 points down.

We shall see how the markets respond the rest of the week, but bernanke and "the gang" might have actually stopped the market free fall for now.

although i'm betting we will see more wild swing before the day is over .

and by "the gang" i mean the president's working group (that hillary urged action from during a comment in the debate's) i.e the Plunge Protection Team

Originally posted by cpdaman
i think everyone is breathing a big sigh so far as the market has bounced from an early 450 pt. loss to something about 100 points down.

How does this .75% cut help the credit ratings infinite's thread was discussing which was to blame for much of the sell off?

Savers hit by new property fund plunge, freeze on withdrawals, Ambac lose AAA rating

Does this cut do anything besides stop the bleeding? A false bottom?

Is this just a move to save the financials, who are in deep trouble?

I don't know, trying to learn different triggers for market movement so forgive me if I sound elementary.


[edit on 1/22/2008 by JacKatMtn]

Originally posted by Rilence
I would be more than happy to wager the Dow does not end in positive territory on Tuesday...I am certain you would not be prepared to wager it does...

Prove me wrong, eh ?

lol, I said in my post I wouldn't be surprised if it does, not that it will.
Though as I type this, it is currently less than 1% down and continuing to rise.


deessell

Statistics like the markets can be manipulated. I think your rosy picture is far from the truth. The U.S. is under attack -- from within.

What's different about this time is the dollar is no longer strong, and as things become more expensive the standard of living drops. And I predict that it will effect a lot of people.

Welcome to post industrialisation.

1. I didn't exactly paint a rosy picture. We are in an economic downturn and a recession seems very likely at this point.

2. You are correct about the dollar, but it wasn't like the dollar was particularly strong during previous recessions like this. The dollar has not been "strong" for quite some time.
But worldwide demand for it is still strong (depite the strong push by the Euro) and it is still the major reserve currency worldwide and it'll be quite some time before the Euro catches up.

3. A Post-industrialized economy/society is the main reason why we haven't had a depression since the 20s

Originally posted by JacKatMtn

Originally posted by cpdaman
i think everyone is breathing a big sigh so far as the market has bounced from an early 450 pt. loss to something about 100 points down.

How does this .75% cut help the credit ratings infinite's thread was discussing which was to blame for much of the sell off?

Savers hit by new property fund plunge, freeze on withdrawals, Ambac lose AAA rating

Does this cut do anything besides stop the bleeding? A false bottom?

This cut is just perpetuating the problem began by Greenspan in 2001. It's cheapening our dollar value, flooding the market with more money, risking inflation like never before.

The powers-that-be are trying to shore up some sort of confidence, or more likely, trying to prevent this rollarcoaster from falling off the cliff.

There is a sense that if the Fed could drop the rate, ultimately, to 2.5%, this may give struggling homeowners the chance to refinance at low fixed rates. What's being tremendously overlooked are many, if not a majority, of those struggling homeowners don't have the credit score or financial stability to lock in fixed rates without some sort of federal backing.

Is this just a move to save the financials, who are in deep trouble?

This is a move to save international emerging markets from crashing into immediate and shocking economic depressions.

I don't know, trying to learn different triggers for market movement so forgive me if I sound elementary.

You don't. A little 101 for everyone: When the Fed cuts rates, it makes it cheaper for banks to borrow money from it. Cheaper interest rates means banks will borrow more money, which eventually empties into the open market through new loans and financing deals.

The end result is always the same though: More American dollars out in circulation.

And like anything else, when you have a growing supply of something without a growing demand, what happens? The price drops. And that's been happening with the dollar for months.

We're already at historic lows compared to other currencies. This will only set the bar lower. And this also means that inflation will likely return (i.e., Parmalot $2.50 gallon milk is now costing the equivalent of $3, so they will up the sticker price to reflect this. Do that on a grand scale of every consumer good, from chicken stock to flat screen televisions).

Are there silver linings?

Yes, a few. Good credit Homeowners will be able to fix mortgages in conservative, lower cost loans. Gas will continue to drop; it's already below $90 a barrel, and I suspect we could see a return to $60-ranged barrels by the end of the year. True fiscal conservatism may actually return to Congress and the White House.

And perhaps most importantly -- there is now a growing public awareness of where the blame for this whole mess lies, and that is with the Fed: An unregulated, appointment-only body of economists and power brokers who work for the elite financial institutions and NOT for the average consumer. But an organization who controls our destinies a lot more powerfully than the president or Congress ever will.


[edit on 1/22/2008 by JacKatMtn]

reply to post by JacKatMtn


That is the problem already it was a big fall out in Europe with the AAA and the Ambac, but they are not the biggest fish that one has not show jet how much they have lostwhat people do not understand is that if the default completely is not interest rate big enough to stop it from hitting US as they are all part of the Global market.

Bush Stimulus package is nothing than a physiological illusion for people to go and spend on retailers, so the numbers and GDP can looks good for two quarters so some political candidates can win some votes from the generosity of the give away.

Still the jobs rates keep falling the low pay jobs are not looking very good either and is massive lay off do the the economy woes.

Yes the future looks peachy already.

[edit on 22-1-2008 by marg6043]

mod edit: formatting

[edit on 22-1-2008 by sanctum]

business.timesonline.co.uk...

Once again we live in a "global community", those who gloat at the fall of the dollar or wish to bring about its demise, reap what they sow.

We need to have one another's backs, not stab one another's backs.

[edit on 103131p://bTuesday2008 by Stormdancer777]

.75% Emergency rate cut and look at this, Fed watchers are calling for more in the next week when the FED meets.

Fed isn't finished by a long shot

Tuesday's surprise interest-rate reduction by the Federal Open Market Committee doesn't mark the end of U.S. rate cuts by any means, Federal Reserve watchers say.
"Don't take today's move ... to mean that the FOMC is through," said Richard Moody, chief economist at Austin-based Mission Residential, in a note to clients. "We expect another funds rate cut at the scheduled January 29-30 meeting, with possibly more to come in the spring."
Investors seemed to agree. Wall Street showed broad losses in U.S. stocks, although key equity benchmarks had come well off their worse levels of the post-holiday session. See Market Snapshot.

I don't see how this begins to FIX the problems, it just seems more of the same band-aid activity.

I don't see it helping Ambac or MBIA and their rating's.....but

the market was panicked .......the market is irrational some times also

so even if the market was spooked by bond insurance agency's going under.....perhaps it will be a more orderely spook now

The president's working group may have helped orchestrate a bounce this morning.....i don't know...........plus we still have 4 and 1/2 hours of trading.

edit down 180 lot's of uncertainty going forward but the Plunge protection team was doing the best it could do with fed rate cuts to make sure the emerging markets get a postive sign from the u.s. They can't let foreign markets crash either. Foreign markets get their signals from the U.S and the U.S needs to have a better than expected day to stop the panic.



[edit on 22-1-2008 by cpdaman]

I wanted to pop in and thank all of the members for participating in this discussion. I have to step into the FOIA vault to get some new threads started but didn't want anyone to think I didn't appreciate responses to my questions.

I am grateful to everyon for helping to educate me in the workings of the market, the economy, cycles, FED cuts, etc.

I am sure that you have heard the phrase..

"knows just enough to be dangerous"

Uh..... That would be ME!


Last update on today's market 12:16PM EST

DJIA 11,977.69 -121.61 -1.01%
NASDAQ 2,299.96 -40.06 -1.71%
S&P 500 1,308.37 -16.82 -1.27%


Be back later, and thanks again

Forgot to add this in last response;

there has been a tremendous amount of short-covering this morning after the fed rate cut's.

everyone and their mom was attempting to make money on the tanking market and when Bernanke and the Plunge protection team facilitated a bounce those that went short had to cover their butts before they lost even more.

the market is very unstable and needs to be watched for further tanking episodes, since rate cuts (before today) have done nothing but slow the fall and the credit crunch (insolvency crunch) appears to be deepening.

There are several reasons I dont think anything, or at least anything they have tried so far, will work. One reason, the reason that sets this apart from all other hard times we have had in the past is the internet. Everyone has access to the internet now days. They cant fart without half the world knowing about it before the day is over. Also, if people dont understand something, they can look it up on the net. People are more knowledgable today then they were 10 - 20 years ago. You cant just tell people some info and insist it will fix everything. Most people are smart enough to judge for themselves. The second reason I think nothing will work right now ties into the first. The current financial system has lost all meaning to people. The dollar bill has become worthless. People buy items, houses, whatever without any actual money, or backing of any sort. People can live on credit with out ever actually paying it off. My generation is the 'you can have anything you want if you set your mind to it' generation. The actual dollar has become worthless, and so has credit. People are educated on how the bank system actually works, and they dont agree with it. The "more for you means less for me" mind set is sweeping not only the country but the world. Trust that people are actually going to pay is gone. Ignorance is quickly fading.