Worldwide Global Selloff Before Stockmarket Opens Today...

[Blackhatjack]

Every major market, and the futures market for the DOW, are DOWN significantly.

People think this does not affect them because they own no stock.

Wrong. WHat affects companies that provide goods and services WILL AFFECT YOU.

Hold on to your hat, we may be in for a wild ride --on the tails of yesterdays 387pt drop.

[hobbit709]

1. I'm already at the bottom.

[IndyOp]

2. By Worldwide Global Selloff are you refering to Asia and European markets?

Deep breath.

We've been headed this way for a long time...

[zanne]

3. Do you think the market will keep going down?

I don't know anything about the markets, but I do know that these extreme "down" numbers can't be any good. What I've noticed is that the next day, the numbers always seem to go up again to cover the loss of the previous day. What's up with that?

[NewJeffCT]

4. The Bush economy at work

interest rates that were kept artificially low, coupled with little to no oversight of the financial industries, has caused this.

Bush will use the past few weeks of the Dow going down to call for more tax cuts.

[screembloodymurder]

10. Bush's first week in office he called in Alan Greenspan and

demanded lower rates. Greenspan capitulated and lowered rates to levels not seen in years. The real estate bubble and the inevitable collapse is directly due to GWB and his neocon enablers.

[leveymg]

5. The Dow is 30% overvalued. Lots of froth and churn to work out, yet.

The underpinnings of the American economy are debt, war spending, and speculative overvaluation.

That's no way to run an airline.

[CrispyQ]

6. That is a great photo!!

:rofl:

:thumbsup:

:hi:

[DemocratSinceBirth]

7. The Dow's Been Overvalued Since 1996 When Alan Greenspan Opined About "Irrational Exuberance" But

It Keeps Going Up...

[leveymg]

9. At least during the tech bubble there was real growth and technological progress.

Now, the only ones doing well are military contractors, global hedge funds, and vulture capitalists.



Picked clean.

[raccoon]

14. There was also a lot of way overvalued stock. nt

[leveymg]

18. Way.

[Blackhatjack]

8. The problem is companies that provide necessaries need liquidity to operate...

... and the credit market is drying up. It has to affect companies and their ability to provide goods and services we all need. The costs will rise for all of us as a result.

[Wilber_Stool]

11. I wouldn't be surprised

if trading was halted today.

[DemocratSinceBirth]

15. Won't Happen...

http://xent.com/FoRK-archive/jun99/0371.html


World markets have dropped about 2% to 3%...


I put the floor at a 400 point drop...

[IndianaJones]

12. the economy is strong. carry on. nt

[ProfessorGAC]

27. Of Course

Yep, you're right, as long as one doesn't look at pesky things like both C and GS being fueled by debt in 12 of the largest 20 nations in the world. And, the median household income falling in real terms for 5 straight years in an economy based upon consumption, right here in the ol' U.S. of A.

Other than that; great!
The Professor

[IndianaJones]

28. thats the problem...too much reading and research. just sit back and enjoy the boom. nt.

[ProfessorGAC]

30. Now Why Didn't I Think Of That?

Sheesh! You've made things much simpler now!
GAC

[IndianaJones]

31. Trust my friend. Don't believe your lying eyes. nt.

[DemocratSinceBirth]

32. Why Are You Here And Not On The Phone With Your Broker

The famed investor and fund manager , John Templeton, said the "time to buy is when there is blood in the street."

Actually, this too shall pass for as Keynes said "in the long run we will all be dead."

[IndianaJones]

33. My broker jumped out a window...depressed for some reason...looking for a new one. nt.

[Squatch]

13. The Chinese use the same word for "crisis" and "opportunity"

"Crisitunity?"

Seriously:

- Have your investment goals changed?
- Of the stocks you own, has their VALUE changed?

If these things have not changed, then don't sweat it. This may actually be a good time to buy some solid stocks at a discount.

[KharmaTrain]

16. Defaults Create More Defaults

This crisis is a lot deeper than the corporate media wants to let on. Millions are either on the verge of losing their homes or complete financial collapse. Not only the housing market, but keep a watch on the other credit lenders...especially the predatory credit card companies that also have huge amounts of consumer debt that could get called in this crunch and make things even worse.

This collapse is due to the disatrous bankruptcy bill that has come back to bite the banks...instead of being able to ramp up interest fees and suck off the poor bastards stuck in these predaotory loans, they're not stuck with having to sell off the bad debt and there are no takers. Already Central banks around the world are attempting to pump of defaulting banks and this ripple could get real bad if some of the big institutional lenders...the ones who hold billions in debt, begin to weaken.

Yep...falling stock prices mean the companies either have to cut services or products and jobs or raise prices to consumers. Either way you lose.

Now will booooshie do what his poppy did and bail out the lenders? Stay tuned...

[Blackhatjack]

17. You seemed to have it nailed ... I especially agree with this statement...

"Yep...falling stock prices mean the companies either have to cut services or products and jobs or raise prices to consumers. Either way you lose."

[KharmaTrain]

20. Watch Out For Interest Rates

Any economist worth their salt will say that the cost of this Iraq war for profit combined with the tax cuts and the big time borrowing from China all but puts this government in a hole and the Fed will be forced to clamp down on credit by raising interest rates and with it, the monster known as inflation.

Repugnicans loves to tag Jimmy Carter with the economic problems of the 70s but he ended up with the fallout of the debt incurred by Vietnam along with the sharp rises in energy prices. That looks like the "good ole days" compared to the debts and messes we're confronted with now.

[Blackhatjack]

21. And the situation is made worse when the govt does not carry the true costs in the budget...

How can you continue to fund a war at $2bil/wk and not carry the real costs of that to the economy in the budget figures?

As a country we are moving in the wrong direction, and the pay up day is fast approaching regarding the costs of this war.

[ProfessorGAC]

34. Not Economically True

Unfortunately, too many companies are slaved to their stock price.

The money from that stock is already in the company's asset base. Unless they have large volumes of treasury stock, the changing of the price of a share they sold 25 years ago, the price is irrelevant. It has no effect on cash flow, particularly when the market is falling in general.

So, the scary part to me, is that stock price, in a snapshot in time, may have nothing to do with company performance, profitability, or sustainability. But, i'm afraid you two are right about companies overreacting.
The Professor

[leveymg]

22. As debt becomes securitized, watch out for cross-market collapse

The rush to bundle debt and convert it into securities easily swappable for assets has led to a false sense of economic growth. All that liquidity keeping these devalued markets going is really nothing but increasing debt. It's like a virus that's spreading and undermining all markets. The devaluation of the Dollar would pull them all cascading down together.

The essential problem in America is concentration of wealth. The majority of people aren't earning enough so they're converting their assets into debt to keep up with the cost of living. Meanwhile, a very small global elite are becoming overly-wealthy, and their investments aren't of the sort that go to increase domestic production and employment and wages.

It's a vicious cycle of gutting the middle-class that can only tip over and crash because it's too top-heavy with debt to sustain.

[Blackhatjack]

23. Yep this is exactly what is happening, and it has a lot in common with past depressions...

When the balance of wealth shifts dramatically to the wealthy elites, those elites do not have to use that wealth to balance the markets. They can hold tight until prices crash then pick up the pieces for pennies on the dollar. THat happened with the tech crash, and surely seems to be the case here.

I predict the biggest banks and mortgage companies will pick up their competition on the cheap, and the consumer will suffer because of it.

[jmowreader]

25. Don't neglect Bush's employment policies as a cause of this collapse

Three MAJOR causes of the disaster:

The removal of our manufacturing base to the western side of the Pacific Rim. This has been discussed at great detail on DU.

The Republicans' expansion of the H1B program, which allows companies to bring professionals in from other countries because they work for less money than Americans have come to expect.

And the removal of many jobs like customer support and telemarketing to India.

I'm worried that Bush WANTS this to happen.

[KharmaTrain]

29. The GOOP Mantra of Defecits Are Good

I've long contested that Repugnican never did care about being fiscally responsible since it's "not good business". Debt means interest and this is the juice the big banks live on...especially when it's interest owed by a government. When the government borrows, it usually goes to the large lenders who add to the already revolving interest and make even more money. In turn, this regime cranks out more debt that benefit their banker buddies through fees and added interest. In return, this government pays just the interest and none of the principal, thus not only does the debt continue to be built on by additional borrowing, but it grows through lack of payment on the principal. It's just like revolving a credit card...those lenders love it when you're paying nothing but interest as well.

Booosh and his cabal especially hated the balance budget Clinton ran. The GOOP goaded Clinton about it, thinking he could never do it...and the moment they could gut the surplus and start defecit spending, they didn't even wait until 9/11,

All the problems you cite above are symptoms of the credit mess this country is in. Companies see the tax advantages of moving off shore and can exploit laws through their outsourcing.

[Blackhatjack]

19. Witness 'pillaging of the market' ... haves with cash are picking up assets at huge discounts

"Wounded companies" still have intrinsic value, but that value is greatly discounted if they are cut off from financing and the pool of potential buyers is sharply limited to just those with substantial cash.

Once the cream of the crop has been scraped off the liquidity problem will ease, and the purchasers of these assets at firesale prices will be able to restore value to those assets and enjoy their new possessions. Too bad suckers for everybody else.

[madrchsod]

24. "how low can you go".....

crash the market and separate the men from the boys....

[leveymg]

26. Bangladesh? Mad Max? A Boy and His Dog?

Yes, it can get worse.