Wall Street has biggest plunge of the year

[sabra]

Source: MSNBC/AP

Index falls more than 400 points amid mortgage, credit market anxieties

NEW YORK - Wall Street suffered its biggest plunge of the year Thursday, leading global markets lower as investors fled stocks amid increasing uneasiness about the mortgage and corporate lending markets. At one point, the Dow Jones industrials fell more than 430 points, while Treasury yields plunged as investors moved money into bonds.

Investors who had been able to shrug off discomfort about subprime mortgage problems and a more difficult environment for corporate borrowing appeared to finally succumb to those concerns. The Dow surpassed the 416 points it lost on Feb. 27 after a nearly 10 percent decline in Chinese stock markets.

Feeding the selling were concerns that higher corporate borrowing costs will curb the rapid pace of takeovers that have driven major indexes this year. Investors also feared the sluggish environment for home sales and continued defaults in subprime loans would spur debt defaults and weigh on corporate earnings.

Read more: http://www.msnbc.msn.com/id/3683270/

[DS1]

1. at -320 now

percentage-wise, not a huge amount

[Kolesar]

5. 2.3% -- We're ruined !!

[TechBear_Seattle]

2. Dow plunges 400 pts on credit concerns

Source: Associated Press via Yahoo News

NEW YORK - Wall Street suffered its biggest plunge of the year Thursday, leading global markets lower as investors fled stocks amid increasing uneasiness about the mortgage and corporate lending markets. The Dow Jones industrials fell more than 430 points, while Treasury yields plunged as investors moved money into bonds.

Investors who had been able to shrug off discomfort about subprime mortgage problems and a more difficult environment for corporate borrowing appeared to finally succumb to those concerns. The Dow surpassed the 416 points it lost on Feb. 27 after a nearly 10 percent decline in Chinese stock markets.

Feeding the selling were concerns that higher corporate borrowing costs will curb the rapid pace of takeovers that have driven major indexes this year. Investors also feared the sluggish environment for home sales and continued defaults in subprime loans would spur debt defaults and weigh on corporate earnings.

While stocks skidded lower, investors poured money into the safe haven of the bond market. The soaring price of Treasurys pulled yields lower, and the rate on the 10-year note plunged to 4.78 percent from late Wednesday's 4.90 percent.


Read more: http://news.yahoo.com/s/ap/20070726/ap_on_bi_st_ma_re/wall_street

---

This is not necessarily anything to worry about, unless there is a similar drop tomorrow. Still, it is worth keeping an eye on.

[roamer65]

3. Treasury notes a "safe haven"???

LOL.:rofl:

They're junk bonds.

[A HERETIC I AM]

15. Are you planning on not going to work tomorrow?

Are any of your friends? Do you know anyone who is not going to pay taxes anymore?

Junk bonds?

I'll assume you are either joking or you are commenting on a subject you don't really know anything about.

[ozone_man]

7. Why worry about tomorrow?

I'd be worried about more than tomorrow as the collapse of thee housing market begins to accelerate. We're not even to the edge to the economic precipe yet. Wait another year or two and we should be.

[Up2Late]

4. Welcome Home Chickens!

Stocks sink on housing, credit concerns

Thu Jul 26, 2007 2:49pm ET148

By Caroline Valetkevitch

NEW YORK (Reuters) - Stocks plummeted on Thursday, with the Dow industrials tumbling 400 points, on more signs of deterioration in the U.S. housing market and problems in financing corporate takeovers.

Earnings reports also weighed on stocks. A drop in quarterly profit at Exxon Mobil Corp. wiped out more than $16 billion in market value of the world's largest publicly traded company. Exxon's stock slid 5.4 percent to $87.72.

Worrying news on housing came from home builders D.R. Horton Inc and Beazer Homes. Both posted quarterly losses. Financial shares took a beating on concern that the problems of the battered subprime mortgage market will spread.

The Dow Jones industrial average was down 375.23 points, or 2.72 percent, at 13,409.84. The Standard & Poor's 500 Index was down 45.75 points, or 3.01 percent, at 1,472.34. The Nasdaq Composite Index was down 75.12 points, or 2.84 percent, at 2,573.05.

(more at link) <http://today.reuters.com/news/articlenews.aspx?type=topNews&storyid=2007-07-26T190604Z_01_L12504893_RTRUKOC_0_US-MARKETS-STOCKS.xml>

[AX10]

6. A bunch of rich pricks.

Young and privledged, old and stodgy, it's just so horrible to see them lose money.

:sarcasm:

[Tansy_Gold]

8. you're too kind

I'd have left off the :sarcasm:

As my late husband was fond of saying, "Aw, my heart pumps purple panther piss for 'em, greedy bastards."

[0rganism]

13. and a bunch of normal folks who don't get pensions anymore

This isn't even going to affect the "rich pricks" all that much, they've got portfolio diversity and the smarter ones may even have some hedge funds set up for just such an occasion. The wealthy investors view this kind of drop as a sale, not a permanent situation. If things get really lousy here, they move their holdings into metals or foreign currency markets. Ultimately, these are people who could easily lose 20% of their assets without a noticeable degradation in lifestyle.

Who's really getting slammed by this? Working people, people who tied their retirements to 401k's and stock options from companies that are about to get scrapped, people who are going to lose their jobs and health insurance when the big fish gobble up the little fish in the inevitable consolidations that follow. That same 20% drop in assets the fat cats just shrug off might just translate into a fresh batch of unpaid bills and maybe a foreclosure for a few hundred median-income workers. Corporate America has done a fantastic job of tying everyone's well-being intimately to the stock markets, it's folly to think that only the wealthy are affected.

[AndyTiedye]

16. Some "Hedge Funds" Have Dropped to about 0

http://www.consumeraffairs.com/news04/2007/07/bear_stearns.html
http://money.cnn.com/2007/06/20/news/companies/bear_stearns/index.htm

[Occulus]

35. That would be why I do not invest in the stock market.

I work too damn hard to gamble with my money.

[hack89]

14. And all the teachers, cop and factory workers

whose pension plans are heavily invested in the stock market. Or all the average joes like me with a 401K. Are we all pricks too?

[ProudDad]

23. Nope

just conned by the fucks at the top...our capitalist masters...

[hack89]

24. So do you relish our misfortune too? nt

[ProudDad]

25. I'm not relishing your misfortune

I'm asking you to realize who is conning you, who is ACTUALLY robbing you, who does NOT have your welfare at heart but only their own personal greed and avarice.

If you lie down with dogs, expect to rise with fleas...

[hack89]

28. How am I being robbed

when the value of my portfolio has steadily increased over the past 25 years? Have you ever considered that there are other educated, intelligent people in the world besides yourself?

[ProudDad]

29. Congratulations

You are one of the very small minority of winners in the capitalist lottery!!!

:bounce: :bounce: :bounce: :bounce:

As for those of us without health care, no retirement (except that nasty old Socialist Social Security -- extracted from the capitalist masters when capitalism totally failed), no job "security" over the years so we couldn't "invest in a portfolio that has steadily increased over the last 25 years" -- no, we had to fucking pay rent and buy food and leave our homes 'cause we couldn't afford rent during long periods of unemployment...

Us LOSERS in the capitalist lottery salute you -- OH GREAT WINNER!!!!

It took hundreds of us losers so you could "win".

Happy to help :sarcasm:

[hack89]

30. So you're bitter

doesn't make you right. But if it makes you feel better to be a victim then go right ahead. I succeeded through education and hard work and if that makes me evil in your eyes then so be it.

[AX10]

33. I didn't say that.

The post was a direct comment on a number of young pricks I know who are on Wall Street making 200K+ a year who think the gravy train will go on for ever. A cousin of mine is one of these. He has bought into the Milton Friedman bullshit of the "free market". He doesn't like Bush but he loves the tax cuts because he has the $$$$$$ to invest in tax sheltered funds.

[RDANGELO]

9. My gut tells me this is the beginnings of a recession.

It's going to be a very bad one because of all the debt.

[humbled_opinion]

40. Or a Depression stand by for soup lines...n/t

[SayWhatYo]

10. So is this good or bad?

[Turbineguy]

11. This is good.

Whenever people lose value in their pension funds, it is good. We all want to be poor. All those Enron employees really have it made. They lost everything.


Oh, almost forgot::sarcasm:

[olddad56]

12. It is all good.

People will be easier to control when they have no money. Urban camping will become much more popular.
Price of gas won't matter. It's all good.

[ProudDad]

26. It's a win-win

for our corporate capitalist masters.

The market goes down, they win 'cause they are the first to sell -- they CAUSE it to go down... And, as you said, the working class is easier to control.

The market goes up, they sucker the small guys in to donate to the next time they cause it to fall...and they con the people into thinking that the market going up actually fucking helps them...Folks don't seem to notice that when the market goes up you can bet that there's bad news for workers -- layoffs, outsourcing, downsizing, globalization, all that great pro-capitalist-fuck stuff that screws the worker.

Win-Win for the capitalist masters...

[LanternWaste]

39. I wouldn't go so far as to say "Our corporate capitalist masters"--

I wouldn't go so far as to say "Our corporate capitalist masters"; rather, how about we use "your corporate capitalist master", instead.

[FastHorizon]

17. Uhhh

I really hope that's not a serious question.

[SayWhatYo]

18. Well...

I don't want to be ignorantly labeled as anti-american, so I'm not going to list possible reasons why it may be a good thing... Then discuss anything about weighing the negative affects vs the possible positive affects, and if it's worth it or not.

[hack89]

19. Depends on when you need the money

if you don't need it any time soon, it is an opportunity to buy stocks at a lower price - they are only paper loses. If you need it tomorrow, you are hurting.

[ozone_man]

20. It's necessary.

What goes up unsustainably must come down. There has to be a huge adjustment in this bubble economy to bring it down to reality. The bad is what the government has done with our inflated dollar and excessive national debt by pumping up the economy for the past 6 or 7 years. Now we have to pay it back and it's going to be hard, and probably will cause a severe recession or even a depression. The bigger the bubble, the bigger the pop. The home equity loans were fueling the economy and now the cheap credit is drying up. All in my opinion.

It will be bad for those caught up in it, losing their job or their house. It will be good for those that are on the receiving end, and those companies bailed out because they're too big to fail.

[bemildred]

21. Had to happen.

Things have gotten pretty silly the last couple months. If the "correction" is under, say, 15% I won't worry about it too much. In fact I'll be pleased because it will be a good buying opportunity. If it goes over 20%, I may have to stay on the sidelines until things settle down.

[Yupster]

36. There hasn't been a 10 % drop in 3 1/2 years

That's very, very unusual. This was overdue.

[bemildred]

38. Yep. Money for nothing.

Just like the real estate market.

[ProudDad]

22. Time to relieve the Widows and Orphans from some

more of their money.

I had a good buddy in the early to late 80s. He had an MBA from St. Mary's, not a slouch school. He played the market some, mostly for fun and to keep sharp. He was "old fashioned" and checked the companies he bought shares in, their margins, P&E all that "reality based" crap.

He finally got out just before the crash of '87. He called it a ponzi scheme that robbed Widows and Orphans of their hard earned money. Stock Prices had NO relationship to any rational basis any more.

He was right!

They pump the market up, suck in the little guys and the pension funds, then the cognicenti "all of a sudden" sell of their shares at a big profit, robbing those widows and orphans.

Rinse, Wash and repeat.

It's a scam. When the market goes down, I rejoice -- that means something good for the working class has to have occurred...since that's the kind of thing they use as their excuse for pumping cash out of the slush fund...

:bounce: :bounce: :bounce: :bounce: :bounce: :bounce:

[Psephos]

27. The crash of '87

Took the Dow down 500 points to around 1800.

It's currently near 14,000.

Do the math. Anyone who held onto their stocks was fantastically enriched. Anyone who sold before the crash and then bought afterward got an even sweeter reward. Do you know how many millions of people in the US own stocks?

Try this on for size: twenty million. IN THEIR OWN COMPANY.

"The National Center for Employee Ownership (NCEO) reports on a recent survey from the 2006 General Social Survey that 20 million American workers own stock in their company through a 401(k) plan, ESOP, direct stock grant, or similar plan, while 10.6 million hold stock options. his? That means that 17% of the total workforce own stock through some kind of benefit plan, while 9.3% of the workforce hold options."
http://www.retirementplanblog.com/employee-stock-ownership-plans-new-survey-reports-20-million-us-workers-own-stock-through-their-benefit-plans.html

Now how about the number who own stocks in general (either through direct ownership or through vestiture in a benefit funded by stocks)?

Try 50 PERCENT OF AMERICAN HOUSEHOLDS.

Here's a Congressional report on the social effects of broad participation in stocks.
http://www.house.gov/jec/tax/stock/stock.htm

You rejoice when the market goes down, even though nearly everyone with personal or private-sector pension and retirement medical benefits depends on it. Because the health of the U.S. and State Treasuries also depend on a healthy market through tax receipts on capital gains and dividend income, even those with State and US plans are also affected by it. Especially States. Come here to Michigan and collect some evidence.

WTF? You like it when tens of millions of working people are harmed so that you can enjoy schadenfreude for the rich fucks? You're worse than the rich fucks.

[ProudDad]

31. Tell that to the folks at Enron

"Try this on for size: twenty million. IN THEIR OWN COMPANY'

Yeah, right, risky 401K's so they don't have to give pensions...

I'd rather have a decent DEFINED BENEFIT PENSION!!!! Oh, that's right, you can't fucking get one anymore. They cut into profit increases too much. They cut into CEO salaries too much...

"even though nearly everyone with personal or private-sector pension and retirement medical benefits depends on it."

What fucking pensions and medical benefits... Your capitalist masters are getting rid of those as fast as they can...


SINGLE-PAYER NOW and a decent minimum guaranteed income would solve that problem!!!


Sorry, you've got this fucked up economy backwards, when "tens of millions of working people are harmed" the market GOES UP...

What the fuck does that tell you???


Well, you continue smoking that shit your capitalist masters are selling you until the Chinese decide to foreclose...

[Psephos]

32. I work for myself

so I guess that makes me my own self-exploiting capitalist master, huh?

Meanwhile, J. K. Gailbraith, just how do you think DEFINED BENEFIT PENSIONS are funded? From that sock under grandma's mattress?

Clue: they invest in stocks.

So "what the fuck does that tell you?"

PS you kinda ignored that part about what happens when tax revenues plummet as markets decline. Maybe you think deficit spending is a good way to finance benefits for State workers.

[Yupster]

37. Defined Benefit Plans are for sure

better for the workers, but they don't make sense for the companies, so they're going away.

Soon only government employees will have them.

[ozone_man]

34. Do the math.

I think the '87 plunge was a 20% drop, which would be about 2,700 points in today's market, coming from 13,300. That brings us down to 10,600. It depends whether you think the '87 adjustment compares to what we might be seeing in the next few years. 40% or even 50% is definitely possible or even likely depending on which economist you talk to. Just a reminder that the Nasdaq dropped by almost 80% a few years ago, so 50% on the Dow is not out of the question. And there is always 1929.

The question I would ask is whether the economic health of the country is at a good point right now or is perilously close to collapsing due to excessive national and private debt (my opinion).

Widows and orphans need to invest in safer investments that fortune 500 stocks. ;)

[lakeguy]

41. add in the fact that inflation and the drop in the value of the

dollar and the market hasn't really gone up (in value) in the last few years anyway.