Fear on the Street: Inside the Stock Sell-Off

[Skip_In_Boulder]

Stocks posted a severe drop today, with the Dow Jones Industrial Average falling 4.3% and the Nasdaq crumbling over 5%.

By the end of the day there were few places left to hide. Gold, silver, crude and yields on Treasuries all fell sharply as traders looked for safety and were met by nothing but falling prices. Over the last 10 trading days stocks have lost more than 10%, the traditional definition of a market correction.

There's a growing realization among even the most optimistic investors that the United States is entering a new recession -- a dreaded "double-dip." Adding to the pain is the sense that the government and Federal Reserve are out of both ideas and ways to stimulate the economy. Corporate America is sitting on record amounts of cash but is refusing to make new investments with so little end demand for its products. Consumers and corporations are hoarding cash, and the economy appears to be seizing. The debt ceiling debate was a fiasco, snuffing any remaining confidence traders had for help from Washington, D.C.

<snip>

So what should people at home do? Avoid panic, for starters. The swiftness of this correction is unusual, but a 10% drop is not. Just last summer stocks fell 17% on concerns not unlike those we face today. If you're an investor who can't sleep tonight, you're probably too exposed to stocks. Sell until you can sleep. Nobody ever made good financial decisions scared or tired.

http://finance.yahoo.com/blogs/breakout/fear-street-inside-stock-sell-off-204130841.html

[Ruby the Liberal]

1. We are not out of ideas on how to stimulate the economy but I do agree we are out of ways

Deficit spending in investment (infrastructure & education not war) is the only way to get the wheels turning again.

Thanks President Obama and Congress

(with the exception of my teabagging Rep who voted against the doomsday legislation, albeit for the wrong reasons)

[Skip_In_Boulder]

2. I had a bit of trouble with that line as well

But how I saw it was that the Republicans have engaged in such a high level of obstructionism, and will continue to do so, that investors are seeing this as an impediment to getting money back into peoples hands.

The bottom line is that it is time for Democrats to close ranks and stop being hysterical and talking bull about a primary.

[Ruby the Liberal]

6. There is no question.

As I said before, we all left work Friday confident that the debt ceiling would be lifted. No one expected austerity to be tagged to it.

Market knows that we are now in lockdown mode and the employer of last resort (the government) isn't hiring any longer.

[Ruby the Liberal]

7. There is no question.

As I said before, we all left work Friday confident that the debt ceiling would be lifted. No one expected austerity to be tagged to it.

Market knows that we are now in lockdown mode and the employer of last resort (the government) isn't hiring any longer.

[RaleighNCDUer]

8. Yeah! Let's all close ranks behind the morons who let this happen! nt

[Earth_First]

3. "...out of ideas and ways to stimulate the economy"

I have about a dozen...

[Skip_In_Boulder]

5. Well great!

Now see if you can get them through the House.

[obxhead]

4. I'm tired of the term double dip.

We never pulled out of the first "dip."