Stocks Stomped in Financial Freefall

www.abovetopsecret.com...

This is the first of multiple posts I made in another thread, full with information and likely paths that our economy is going to take in future. I think it is definately worth taking a look at.

I decided not to repost them in here, because I would be wasting space.

The worldwide public is being pushed into believing the worst. It is about perception. Also, it seems to me that it is just too convenient, for this financial crunch to be happening just as there is a presidential race. Everyone will be looking for someone to solve their problems. Maybe Barack Obama's followers, financed by George Soros, are dreaming of themselves in the White House. After all, the followers claim Obama is the messiah.

Here is what presumably REALLY happened - a crisis intentionally provoked by European interests to bring the Bush Crime family to its knees:

www.worldreports.org...

The German Finance Minister seems to acknowledge at least part of this scenario, and it is unfortunately the only theory to date which stands up to economic analysis. The level of secrecy behind the scenes is unfortunately representative of an absolute absence of straightforwardness of world leaders. Of course, if the over 400 assassinations to prevent leaks are confirmed, then one can more easily forgive politicians who fail to transmit what they know. It would be nice to discover that this is not going on, but it explains the otherwise inexplicable rise of the dollar and fall of the euro during the crisis, precipitated presumably by selling off US assets into dollars, the subsequent rise in the euro possibly being attributed to the later transfer of these dollar sale proceeds back to conversion into euros for European destinations.

Read with critical caution, but give it a fair chance.
Christopher Story may be quite extreme, but aren't the circumstances also extreme?

Ahh, stocks. The most superficial thing within our economy, yet can act as a signpost for the worlds financial status. I don't post here often, but I am around because I like to keep up with both reported and unreported news.

As far as our financial situation, I thought it might be appropriate to post a piece of information from a friend on another board. It is as follows:

"So, let's see what all the criteria are, for what spurred the great
depression in the US through the 30's (and subsequently through the
world):

Massive national debt, check.
Lack of attempts to manage said debt, check.
Emergency lending to banks via Federal Reserve, check.
Bubble economies caused by irresponsible business practices (eg,
subprime loans for people who obviously cannot afford them), check.
Massive inequality in national wealth? Hellacheck.
Deregulation of banking industry coming back to bite us in the ass?
Check.

It is obvious to me that the people who are in office and those
supposed to be keeping our country running fairly smoothly failed to
ever read a history book. These are frightningly identical
conditions to what spurred the 1930's great depression. The DOW has
already plummeted a bit already, but that just may be a bit before
the storm, like the crash in 1929.

The bailout it's self (back on track, now) is effectively a bandage
over a stump where a limb previously was. Back in 1927 when the
Federal Reserve (it, in it's self, a horrible idea) bailed out the
banks like they just did now, it sent a message: Don't worry, if you
make bad ('toxic') investments, just give them to us, we've got your
lobbist friends here, they'll make us give you the money to buy off
your crappy investments in full. So what do they go and do?
Continue with the practices that caused similar problems in the
1930's and now again here.

Now, here's what the bailout does, effectively. It is a bandage in
the sense that it's going to help for the next three years or so
(sound familiar?). Then, things are going to collapse due to the
national debt being insanely high. Credit dissolved, people couldn't
afford many things, and 25% of the working force was subsequently
laid off as a result of decreased spending and also the disappearance
of short-term, cheap credit on the part of businesses. The market
crashed and there wasn't a single safety net that could have been
created to soften the blow.

By telling the banks they can keep making the same mistakes, and keep
going on like business as usual with the same practices that have
caused these problems in the past, we're just bailing out a boat that's already full of holes."

So that's it in a nutshell. The same mistakes are being repeated, and the (real) depression comes when the bailout money is used up and no changes have been made. The government by that time may not have any more money to help.

What's worse, the middle and lower classes will get the worst of the blow, like it has always been.

Good Lord! This thread has been going for almost two weeks and
the U.S. Stock Market never fully recovered. It's still dropping as of
October 22nd. I thought the Bank Rescue package was supposed
to have kicked in by now. Was it too little too late?

reply to post by carewemust


It never should have happened at all. Monetizing Debt leads to even worse outcomes. It's Common Sense. 'There is no free lunch'!

What they are doing is making the problem infinitely worse by destroying the 'Credit' of the United States.

But what's nasty here is that right now we're seeing a flight INTO longer-term bonds (the 10 in particular), which means the market is anticipating another stock panic, and with good reason.

1. If they issue all in the short end of the curve (as they're doing now) they flatten the banks, as the entire point of a bank is to borrow in the short-term market and lend in the long term. When you compress the yield curve you destroy their capacity to make money off their ordinary business model.

2. If they issue in the long end of the curve (e.g. 10s and 30s) then the long end will skyrocket in yield. Anyone remember 18% mortgages? They could reappear. This, of course, will destroy what's left of the housing and consumer credit markets.

market-ticker.org...


[edit on 22-10-2008 by HimWhoHathAnEar]

I have a question for all you financial gurus here. I asked this on another thread too, but unfortunatly did not get an answer. I was looking into some information on the stock market yesterday, and noticed that they stopped trading what looks to be about 15 min before the market closed Friday. The 10 yr bond looks like it stopped 30 min prior. I checked to make sure it wasnt just a yahoo thing, and they all do show the same.

What happened?

[edit on 27-10-2008 by mrsdudara]

reply to post by mrsdudara


The main problem, that I see, is that I am powerless to do anything or change anything that will influence the markets so why bother to worry about it. What will be will be.

Tweakie.

Originally posted by mrsdudara
I have a question for all you financial gurus here. I asked this on another thread too, but unfortunatly did not get an answer. I was looking into some information on the stock market yesterday, and noticed that they stopped trading what looks to be about 15 min before the market closed Friday. The 10 yr bond looks like it stopped 30 min prior. I checked to make sure it wasnt just a yahoo thing, and they all do show the same.

What happened?

[edit on 27-10-2008 by mrsdudara]

It's common practice in market to stop trading stock exchanges for 15 minutes for ... reasons. That's not the first time .

reply to post by Vojvoda


AH I see.

Thank you very much. I had never noticed it doing that before.

Originally posted by Tweakie
reply to post by mrsdudara

 

The main problem, that I see, is that I am powerless to do anything or change anything that will influence the markets so why bother to worry about it. What will be will be.

Tweakie.

Just because you cannot change the Wind does not mean you cannot adjust your Sails. No Problems, merely Solutions!