maybe tomorrow the stock market will rebound and all who OWN stock will rich. lol

Grambler, thank you for injecting such much-needed sense into this thread. Those who see this pre-planned crash as something that one party is somehow not responsible for should buy stock in Kool-Aid.

The Hegelian Dialectic is synthesizing...

European and australian markets took a hit too. Look at the ASX All Ords almost down to 3000 from a healthy 8500 a year ago.

Originally posted by jam321
In the last year or so we have come to realize that houses and just about everything else were overinflated. Isn't it possible that the stock market was also overinflated? Couldn't it be possible that the stock market is falling to represent its true value?

Just a thought.

I agree. THe market has been overinflated since the Dot Com crap. Its about time we came back to reality. Look at gas prices now. $1.67 in my city. Prices on store shelves will have to start dropping as well.
These will be interesting times and although I don't think its the end of the US by a long shot, it is a much needed correction.

8000 DJIA/825 S&P are indeed MAJOR support levels. This is the first closing below these levels since 2003; we hit intraday lows below those numbers, but the closing numbers kept sentiment as stable as it can get in this environment.

Don't be surprised to see us above the support numbers again soon. It may be tomorrow, it may be a month from now, but don't expect the markets to go straight down from here. We'll see a rally or three above these levels, but now that the proverbial seal's been broken, there stands a very good chance that we're going lower in the long run.

Of more interest to watch right now are the yields on the 10yr T's and 13wk T's. Flight to safety. The stock markets are such a lagging indicator right now that one shouldn't look only at them to gauge where we're going; that shows where we've been at this point.

Originally posted by wdkirk
Prices on store shelves will have to start dropping as well.

While lower food prices are good on the pocketbook right now, a huge drop is, in the long term, not something we want to see. That's when deflation will hit Main Street full-force, and all the fun that comes with deflation will follow.

[edit on 11/19/2008 by anachryon]

Originally posted by jam321
In the last year or so we have come to realize that houses and just about everything else were overinflated. Isn't it possible that the stock market was also overinflated? Couldn't it be possible that the stock market is falling to represent its true value?

Just a thought.

Very true that this is a possibility. The only problem is that then people find out their true value and worth. What people don't understand is that they are paid too much for what they do. We live in luxury, face it even a poor person lives good in the US. People are going to have to live with less income and less entertainment. Gone will be the days of charging up the credit card for over priced name brand clothes and electronic devices. Time to wake up people it is about to get ugly.

And when the truth comes out that the US treasury bonds are worth junk instead of AAA? The US is bankrupt? Or it's just impossible to happen because those who declare this, like Bershire are gonna have a contract on their head... or it's planned.

No?

Originally posted by Vitchilo
And when the truth comes out that the US treasury bonds are worth junk instead of AAA? The US is bankrupt? Or it's just impossible to happen because those who declare this, like Bershire are gonna have a contract on their head... or it's planned.

No?

If our bonds/T's ever get to the point that they're viewed as junk, we're pretty much done for as a country. We'd have no means of "making money" other than, well, making it ourselves via unabashed, raw printing. I'm not talking normal printing to expand the monetary supply, I'm talking Weimar Republic, or Zimbabwe. Complete collapse at that point.

Could it happen? It's a remote possibility. I'll let you know when we see the real balance sheet, see what our true debt is, and how much the interest payments alone are on that. If we can't make interest payments (y'know, yields...), that's a default and we're done.


BTW, just got a breaking via Bloomberg - 2Y T's have dropped to a record low yield of 1.052%...that's per year. Market's starting to price in a 2 year timeframe for deep recession.

If it breaks that 10th October low, we are screwed.
You can see them trying to keep it from doing that.
But as I can see its a fight they seem to be losing.

Originally posted by Benarius
European and australian markets took a hit too. Look at the ASX All Ords almost down to 3000 from a healthy 8500 a year ago.

I am pretty sure the ASX All Ords did not get near 8500. Pretty sure they peaked at 6700 or so. Our markets have halved though. 3332.6 today, falling another 150 odd points.

Originally posted by realist00

Originally posted by Benarius
European and australian markets took a hit too. Look at the ASX All Ords almost down to 3000 from a healthy 8500 a year ago.

I am pretty sure the ASX All Ords did not get near 8500. Pretty sure they peaked at 6700 or so. Our markets have halved though. 3332.6 today, falling another 150 odd points.

I'm pretty sure the All Ord peaked at 7300 last November
Glen Stevens said we (Oz) should be careful not to talk ourselves into recession which I think is a fair comment. But to honest investors here are like sheep they follow the US even when there is no reason to do so.