Stocks Wipe Out As Fears Grow

Washington Mutual has put itself up for auction...

Washington Mutual, the struggling savings and loan, has put itself up for auction, people
briefed on the matter said Wednesday.

The unsurprising announcement comes as the bank, which has suffered badly from losses on mortgages it had made, continues to stumble. Shares in Washington Mutual fell nearly 10 percent on Wednesday to $2.09; they have plunged 94 percent over the last 12 months. This week alone, investors have been frightened by Standard & Poor’s cutting of the bank’s debt rating to junk.

www.cnbc.com...

There goes the next one.

Already posted but yep...It's gone. Guess only tomorrow will tell, with all these predictions of September 18, 2008 being the day the stock market crashes.

The market cannot "crash" completely as in lose all of its value at one time or during one day. There are what are called "circuit breakers" in place to halt trading or close the market entirely should the drop be severe enough.

Some general info can be found here:

www.sec.gov...

More specific details on this quarter's circuit breaker levels can be found here:

www.nyse.com...

Of course, it would certainly still be horrendous to see such levels reached but I just wanted to clarify exactly what occurs with the market for those who may not be aware.

News about the finical world seems to be getting worse by the hour. Could this all just be fear mongering?

Originally posted by trek315
The market cannot "crash" completely as in lose all of its value at one time or during one day. There are what are called "circuit breakers" in place to halt trading or close the market entirely should the drop be severe enough.

Some general info can be found here:

www.sec.gov...

More specific details on this quarter's circuit breaker levels can be found here:

www.nyse.com...

Of course, it would certainly still be horrendous to see such levels reached but I just wanted to clarify exactly what occurs with the market for those who may not be aware.

Well, what would be considered a "stock market crash" then? And why didn't they use those 'circuit breakers' when the DOW dropped 504 points today?

[edit on 17-9-2008 by MatrixBaller04]

Ron Paul is a genious:

reply to post by MatrixBaller04


There can no longer be a "crash" as people think of it going back to the Great Depression or even the big drop that occurred back in the 80's. That's why circuit breakers were created in fact.

In response to the market breaks in October 1987 and October 1989 the New York Stock Exchange instituted circuit breakers to reduce volatility and promote investor confidence. By implementing a pause in trading, investors are given time to assimilate incoming information and the ability to make informed choices during periods of high market volatility

As to why halting wasn't traded with the 500 plus drop on Monday, it is because no circuit breaker levels were reached. This quarter, the first level is set at 1,200 points which could result in a trading halt depending on what time it is when the drop occurs. The rest of the levels and procedures for halts and market closing are listed in my second link above.

So what would you say to my prediction of the stock market 'crash' tomorrow?

Monkey see, monkey do.


When one goes, they all go,


Some people really believe there is nothing bad going on in the financial market, and that makes me laugh, real hard.

The bubble is bursting, and you'd better find cover, cause ur goin' down. Waaaay down.


Oh yeah, if you really think this crisis is just about bad year figures, you are wrong.

The financial market abused you Americans for decades, and no-one can pay for it anymore sooner or later. Its all about the debt...

I's so happy to be living in the Netherlands, banking @ Rabobank. They don't do allot with American funds etc. So im safe. My dad also has a custom video software and IT services company so money isn't a big problem either.


I'm hoping the best for everyone, i'll be watching from the sideline.,

10% is a market crash, but breakers stop trading after a double digit decline.

The Russian stock market crashed yesterday and was suspended today after their Central Bank [Russia] injected $44 billion into the banking system.

This financial crisis will not end until European central banks start cutting rates, which isn't likely yet. China is started to ease rates and are addressing methods to restart their stock market (63% decline YTD)

Originally posted by MatrixBaller04
So what would you say to my prediction of the stock market 'crash' tomorrow?

Impossible.

A 15-20% drop in a day can never happen again. India had a 15% drop recently, but the breakers suspended the system and the Indian stock exchanged closed -7% in the end.

People need to remember there is a thing called a plunge protection team, that makes sure wall street does not plunge and crash. It is there to stop others manipulating wall street and crashing it.

Pretty obvious to have one. So on your predictions we will see.

Originally posted by infinite

Originally posted by MatrixBaller04
So what would you say to my prediction of the stock market 'crash' tomorrow?

Impossible.

A 15-20% drop in a day can never happen again. India had a 15% drop recently, but the breakers suspended the system and the Indian stock exchanged closed -7% in the end.

But is it possible for these 'circuit breakers', as mentioned above, to not stop the crash of the markets?

I thought the tech crash was worse in 2000 as we lost 20 percent of the market.
There was a 5 trillion dollar loss in the market compared to the billions now. I remember it well because I am the unluckiest person on the planet,lol

We were buying a house and could not sell the stocks to pay for it until the day of closing. That day happened to be the very same day and we lost like 10k. It really sucked.

Though there is a difference here with this one. What worried me the most are the lack of jobs and companies moving out coupled with this. I really do not see how they can get out of the hole without just letting the whole system go down.

But I do not think it will. I think we will be bled dry slowly. Eventually countries who hold our debt are going to do something about it .

Ama

reply to post by MatrixBaller04


I think it's certainly possible that the market could see its worst, or one of its worst days ever tomorrow, Friday, or even next week sometime. I remember the drop in '87. It was 25% of the DJIA at the time and shocked everyone. However, I do not recall the same level of concern over banks and mortgages back then plus the market regained all of its losses and then some from that day before the quarter even ended that year. I doubt the same will happen here. We will need much more time to heal and recoup.

Originally posted by MatrixBaller04
But is it possible for these 'circuit breakers', as mentioned above, to not stop the crash of the markets?

Yep it is possible, the ppt did not come into today for some reason. We will see what happens.

Originally posted by MatrixBaller04
But is it possible for these 'circuit breakers', as mentioned above, to not stop the crash of the markets?

No.
When the markets expect a bad day, the system is tested to ensure the breakers are working. Remember, there is a delay in trading so the system can operate.

An example is trading after 9/11. Breakers came into place after a 600-800 point drop.

The breakers are, also, used numerous times everyday. Why? not to stop a crash, but to deal with large volumes too.

reply to post by Raist


Sorry but not this time. The bubble is just beginning to pop and this time next year people will look back and remember the days the Dow was anywhere near 10,000. Just listen to the Austrian Economist, everything they predicted is now occurring.

Originally posted by infinite

Originally posted by MatrixBaller04
But is it possible for these 'circuit breakers', as mentioned above, to not stop the crash of the markets?

No.
When the markets expect a bad day, the system is tested to ensure the breakers are working. Remember, there is a delay in trading so the system can operate.

An example is trading after 9/11. Breakers came into place after a 600-800 point drop.

The breakers are, also, used numerous times everyday. Why? not to stop a crash, but to deal with large volumes too.

Well, I guess all we can do is wait and see what happens. Either way, this is bad and it's only going to get worse. If the Dow keeps dropping 500 points every day, the stock market will 'crash'.

I don't know a lot about the stock market, but I have been reading up on it and I have a couple questions.


How much of an impact is short selling having in this decline?

What would be the pros and cons of banning it?