Dow dropping ...again.

9:43 pacific coast time

Source

Dow off: 270.94 (-2.1%)

NASDAQ COMPOSITE off:43.76 (-1.84%)

Guess the rate drops did not help that much???

Yeah that is the first thing I saw this morning ( amid the giants NY celebration)

How much can the fed lower the interest rates in an effort to bail out the markets . . . how low can you go . . .

[edit on 5-2-2008 by marg6043]

I heard the markets were already counting on 2.5% ...

I've also heard that by 2nd Quarter the markets want it down to 2%.

Should be some interesting times ahead...

Source

Investors are already betting that there are more rate cuts to come. A futures contract tied to the federal funds rate is projecting that rate could get down as low as 2 percent this summer.

Is just ONE of the things I've read...

[edit on 2/5/08 by Angry Danish]

I have read articles saying the fed rate drop may take the interest rate "BELOW" inflation numbers.

The problem is, IMO, that the rate drops will help the rich-big bus/banks and do very little for the average person.

I had to go to my banks and demand my interest rates be cut, since their rates were cut 1.5%.

They did do so, you just need to make the point and take the time to demand your rights.

reply to post by mrmonsoon


I agree, just because they are lowering the rates, this is not necessarily for the benefit of the consumer, but rather for the banks to be able to borrow from each other cheaper but still they will push their higher interest to the consumer.

Like you said you have to demand the banks to lower your rates.

Stock Markets have to be considered over the longer term and not just months or even the odd year.

Typically in 20 year cycles which I feel is a fair time frame, global stock markets have continued to rise and which will continue to rise.

In this current market adjustment, and I think it is fair to call these downturns, market adjustments, those who deal and trade in shares which are used as the cornerstone of a great many of the investments we have, are taking profits.

It does not help that many of us and the businesses we depend on have higher levels of debt to service. Some parts of the marketplace have made it too easy in my opinion to get credit, and now we have having to pay the piper so to speak for the money we have used.

And just think about this....interest rates are very low, and we have had a sustained period of lower interest rates coupled with an expanding economy across the world.

The bad news of being the world's largest economy is the impact any downturn has around the world and economics is about cycles and we are in a down cycle for the time being.

Drops in interest rates around the world should help us service the debt we have more easy, it just that is takes time to ripple down from the marketplaces to our pockets, and just how long are we prepared to wait before we start pestering our Governments to change something else as things are not happening fast enough.

The fed dropping the interest rate is not good for any one in the long run
it leads to inflation which is bad particularly bad for the consumer..


Respectfully
GEO

10:47 am Pacific standard time

Dow down: 298.49 -2.36%

Nasdaq down: 57.21 -2.43%

Not so good.

reply to post by geocom


You touch on an interesting point Geo, and in the shorter term, a drop in interest rates will relieve some of the pressure of us paying for credit, and may see some more income being spend outside of the basics, which should in theory lead to the economy growing.

I accept your point that a growing economy typically leads to inflationary pressure on prices and this is where we need our leaders to have the skill and judgement to balance the needs of our local economices

Well now we hit 300, so it will be worst before the bell closes.

I believe that tomorrow we are going to hear from the fed and probably president Bush will come out to re assure that everything is peachy.

I will not be surprise if as we speak the fed is on close doors planning the next move.

After all it is election year and the stimulus package will not hit until the summer.

1:19 pm Pacific Time

Dow down 370.03 2.93% down currently 12,265.13

Nasdaq down 73.28 3.08% down currently 2,309.57


Ok, now what???

That is to say, what can we do to stop the freefall?????

Personally, I am clueless.

reply to post by mrmonsoon


I know! Let’s all go shopping with whatever money we have left of our hard earned pennies to help boost the economy. Yeah, that’s it: This means we all should spend whatever rebate may be handed over by our friendly government on anything, not saving or paying down debt; buying up any foreclosed houses and investing in stocks and hungry bonds.

But spending to pay the bills on the already rising cost of living – putting food on the table, clothing our on backs, keeping shelter over our heads, etc. is almost next to impossible when someone has no job (due to being disabled, laid-off, let-go, laziness, etc…). Gosh: I’m stumped here too.



[edit on 2008-2-5 by pikypiky]

The 'DOW' is only 30 'industrials' (whatever-that-means) ... as MicroSoft
is in there, along with several others that are not what one would
consier an 'Industrial' component of the USAs economic 'infra-structure'


Let's watch as Google and other Web-centered companies are classed
into the 'DOW'...
without going into lengthly explainations about how all these Tech stocks
arenot a fundamental piece of the real economy....
I say the DOW watch is a rip.....

look instead at the 'NYSE'... a broader base of all stocks being traded


who knows just when -
but i expect a low of DOW 10,500 for this 'correction'


DOW components: money.cnn.com...

(do you agree that some are stupid 'components')

[edit on 5-2-2008 by St Udio]

reply to post by St Udio


I agree that we may see another down fall tomorrow, but no to worry the fed will come to the rescue as usual.

like I posted on another thread is been talks that the rates will deep this year as low as 2.00 before is over.

Hate to burst the conspiratorial bubbles here; but today's fall was due to the first drop in service sector jobs in five years.

MSNBC


Furthermore, St Udio brings up a very good point that should be considered.

Irrational exuberance has a cost. I sincerely hope noone bought GOOG near its alltime high.

Well taking into consideration that yesterday was low also I wonder if the markets was just getting ready. for today.

Sorry but this ups and downs are part of the mess that the sub prime is causing on the domino effects, the service jobs is not new because I read about the coming report a week ago.

So no bubbles been burst here.

4 days ago

WASHINGTON (AFP) — The US economy suffered 17,000 job losses in January, marking the first monthly losses since 2003, according to a government report Friday which highlighted fears that America is sliding into recession.

afp.google.com...

So the markets new alredy the jobs lost.

Jobless claims surge in latest week
First-time claims jump back to 375,000, the loftiest level since October
By Greg Robb, MarketWatch

Last update: 11:42 a.m. EST Jan. 31, 2008

www.marketwatch.com... stRead

I think a lot of people are worrying about nothing here. I think Freedom ERP has it right using a 20 year cycle. Where were we 20 years ago? Coming out of the mess "Black Monday" caused. And, if you remember correctly, that was a banking problem that caused that mess. So, you can see some trends there and now. But honestly, I feel and have felt that stocks where overvalued. Now you're having the correction mainly caused by the sub prime loans. Back in September or so, maybe earlier, a few of us on ATS, me included where speculating the market was overvalued; some members thought as high as 30% or so. I tend to be more opptomistic and said roughly 10-15% overvalued. I think since all of this mess hit its actually in that range, but I could be mistaken, I'm just going off of memory.

Just think if the Sub-prime lenders hadn't of been "caught"; how big a mess would we be in then? You could have seen the market lose half its value or more. I mean we're talking billions of dollars just vanishing. The problem is, these banks and lenders didn't write it all off at one time instead pushing it out and dragging this out further. Now they've made the Fed cut rates which is good for the market, I like it there, but its horrible in real life; it does the average person no good.

So what the Dow dropped today. It's no big deal, the market will come back; you just have to be patient. Now's the time to buy.

Well 20 years ago I was in Quantico VA, and my husband was on Duty in Okinawa.

And I don't remember the economy been so bad at that time.

We had manufacturing jobs, we didn't have a trillion dollar a year war and we didn't have a trillion dollar defecit, America was the property of the American people now we have been sold piece by piece to foreign nations and they hold our debt.

Yes those were the good old days.

Originally posted by marg6043
So the markets new alredy the jobs lost.

Marg, You are talking about new jobless claims; which is different than ISM service sector numbers. Last week's info was that jobless claims were higher in January for the first time in four years. Today's info was that the service sector contracted for the first time since March 2003.

Those are two totally different metrics.

Like I said, irrational exuberance has a cost. You eventually reach the point at which there is noone left to hold the bag. The latest buyer of something speculative (stocks or real estate) may have to sell for a loss because there is noone willing to pay any higher for said item.




Another bubble bursted ...

For two pretty opposite takes on the market I would recommend Ben Stein at Yahoo Finance and the Mogambo Guru at Asia Times Online.
Stein is long term positive, the Mogambo Guru is very negative. Without offering my personal perspective, I feel that the Momgambo Guru is a more entertaining read.