[Breaking News] Stocks close at lowest point since '97

reply to post by Uniceft17



I think the system as we know it today is dead. We will, I think move back to a more traditional model like we had before the '90s where mostly folks bought and sold stocks and bonds and did not get into these artificial securities. Securitized debt, complex derivative strategies, commodity and currency hedge strategies, all that crap will need to go.

Investment banking as a major industry is dead. Hedge funds and private equity will move back to where they should be - the privy of seriously wealthy investors. Not part of endowments and pension funds. I doubt that most teachers in South Carolina knew that their pension was heavily invested in hedge funds, private equity and securitized derivatives. Frankly it was close on impossible for them to find that out.

In my opinion, these are good things.

On the banking level, they will sort this credit mess out and get the cash flowing again and a number of banks will fail and we'll have a much smaller number of banks. The massive entities, like Citi will cease to exist. Firms that have commercial banks, investment banks, trading operations, insurance, credit cards, broker dealers and distribution will be broken up so that there is no longer entities "too large to fail".

On the housing front, that will ultimately get fixed, but that will be more emotional. The notion that everyone should be able to own a home is dead. Fact is that many folks don't make sufficient income to own a home but were given the credit to get into one. These are folks who should have, at their current income level, stayed in apartments, condos or townhouses. We will revert to that. My sense is that all that Obama is doing with his latest housing deal is stretch that process out for two reasons - it is far better to allow folks to renegotiate their loans and give them an opportunity to leave their home on their own rather than millions of folks being thrown on the streets at the same time and two - it will take a while for the housing prices to settle down to where they need to be as we have a massive over supply of single family homes in the country and at appropriate income levels, demand does not match supply.

A few other things that I think will change is that the regulatory environment will undergo substantial change. The SEC is weak and fails on a regular basis (Madoff & Stamford two very recent examples) and the simply matter that the regulations that exist today make it in many cases impossible to know what the hell you are buying. These instruments are very sophisticated and mandatory rules governing transparency into their underlying components is a must. Finally, the methodologies surrounding how the rating industrys work is in need of a massive overhall. IMO that whole industry is rife with at least the appearance of a conflict of interest and is a legitimate role for the government. At a minimum the government should have some input to the methodologies and mandate transparency in security ratings.

On the global business, not sure, but global standards around accounting, reporting, rating and transparency would be a good place to start.

reply to post by Uniceft17


I still think the stock market will drop to 3000 by years end when everyone figures out the Stimulus packages are not working like planed. Yes I said Stimulus packages and you can rest assure there will be more coming our way which will be insanity.

Here is an idea proven to work and I know this is hard for you to do because you will not have as much control over the population of the U.S. Mr. President. Cut massive government spending, cut way back on government and give the money back to the people in the form of a giant tax break.

Now we consumers have been programed to spend money and we are the biggest spending economy in the World. So let us keep our own money and quit preaching how bad things are and tell people to go out and spend their own money for goods and services. Now this is based on you giving us a giant tax break for we can control where we spend our own money and not you and giant government rather then the token $13.00 a week tax break you let us keep of our own money.

I beg you Mr. President please Decentralize our government it is not Constitutional to have a strong Centralized government but yet you continue to go against our forefathers who wrote this sacret Constitution Of The United States Of America. Why?

I agree and disagree. Short-selling plays an important role in the market under normal conditions and should absolutely be a viable investment option. During times like this, it should be illegal to short sell, period. This could easily be accomplished by automatic triggers based on market fluctuations that prohibited a short sell order when the markets were volatile.

Here are snippets from a corporate message just sent from R. Murdoch addressing the current economic situation:

As you all know the downturn we are operating in is more severe and global than anything we have seen before. No company is immune to its effects. I want to take this opportunity, today, to write to you about how we will manage such an important leadership transition, and why I am convinced that today our company is not only well-positioned financially and competitively, but is on the cusp of a new phase of growth. Remember, we began priming ourselves for a weakening economy over a year ago.

****

We are in the midst of a phase of history in which nations will be redefined and their futures fundamentally altered. Many people will be under extreme pressure and many companies mortally wounded. Our competitors will be sorely tempted to take the easy beat, to reduce quality in the search for immediate dividends.

Let me be very clear about our company: where others might step back from their commitment to their viewers, their users, readers and customers – we will renew ours.

This info from one of the biggest business leaders in the world (whether you agree with his tactics or not) highlights the state of the global economy as 'severe' and hardly temporary.

This is not new info, but there you have it anyway, hot off the press from Mr. Press himself.

I knew it was going to be a bad day today when TPTB sent George Soros out on Friday to help tank the markets. I mean it seems obvious look at the timing of it.

On Friday at 4:19pm EST (19 min after the market closed) Reuters released a story on the wire with George Soros saying "the world financial system has effectively disintegrated" "the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union." "We witnessed the collapse of the financial system,"
www.reuters.com...

In my opinion this story was intentionally released at that time to allow everyone to digest the bad news over the weekend so Monday morning would begin a sell off. Soros and his buddies will come in and buy up everything at rock bottom prices.

Oh cmon Guys


The bottom has not even been seen yet.

This is nothing like the 1937 time, what we have seen until now is like the "tulip" depression in the 1800's with the winding sown of the banks and Financial institutions, some other big sompanies gone to, but now the slide on the REAL economy starts.

The bottom is 4000 or lower, well hopefully not much lower APRIL is the month by the end of April it will be a different world for many, and the news we have been seeing will become the reality. The Malls empty, being borded up, Half Foreclosed areas, Kids moving back home etc etc.

That 4000 will be lucky to make 1-5% growth at most over the following 3 yrs.

Maybe the greens as in CHEAP new solar or something may provide a boost, but there is no new internet, no new expansion, no new china left, and oil is cheaper than Coca Cola so not even any new wars to fight and boost the markets from....

This all has to be paid of Iraq 2 the bailouts, the debt's, the Bernanke retirement fund.... and its not nice for anyone.

Best advice its spring in the northern hemisphere, start turning your garden over, dont put any weedol or chemicals on it this year, dig it down deep 2-3 ft or more, turn it , mulch it, but manure and put it down , ignore the neighbours, you will laughing next year, get some potatoes in it now they break the soil up, and take out toxins etc.

Next year dont eat them throw them out (chemicals and weedkiller etc) and star growing your own, good for wallet, mind body soul and something to talk and brag to the next door about when you cant get the new 4x4 in two years

Elf.

Things will never be the same again.

There is another similar thread on this subject and I will make my prediction public!
Dow 5000 bottom! If I am wrong I will return all of my bailout money! I promise. The Nikkei is tanking at this very moment and my money is Russian trading will be suspended again!

I believe Obama will be left with no choice but to nationalize, (socialism) for all you conservatives who got us into this mess, some major US banks. Perhaps a single bank to absorb all of the bad paper.

Another Bank VP friend of mine was laid off today and I could swear he does not understand what happened!!!! You see we were all soooooooooooooooooooooooo smaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaart a few years ago. Remember the "New Economy" it's different, you just don't understand, you're "old fashioned"!

See ya on the soup lines let's try to be nice to one another OK!!

[edit on 23-2-2009 by Leo Strauss]

I too believe there will be more decline, and then in Mid-April, when the government realizes the full extent of tax revenue shortage due to unemployment (income tax), store closure (commercial taxes), and foreclosures (property taxes), the reality will set in.

In fact, I think they already know and part of the reason for Obama's recent "halve the budget" announcement.

Add to that the G20 meetings in April supposedly to save the economy, I agree with others, that it will end in failure. Then we will really see the drop and the societal effect worsen.

Just my opinion, hope to be wrong.

[edit on 23-2-2009 by helpmefindtheway]

In the early 1980's, the magic number for the DOW was 800, if it went above that there were fears of inflation. Well now it looks like we are slowly heading back to 800.

"Babylon, Babylon the Great will fall" or something like that. My friends in the US and I mean that, I've been to almost every state. I fear that your country is going to cease to exist as you've grown to love her. I just think 8 years of huge deficit spending on top of what the Federal Reserve has loaned out with your backing has destroyed any chance of survival for your economy.

Let's be honest, your growth over the last decade has been fuelled by financial scandal after scandal after scandal. Not to mention the Fed creating bubbles every 7-10 years ruining retirement plans, small businesses, you know the average Joe/Jane.

A very small percentage of the Earth's population control all the fortune. We outnumber them. My crazy hair-brain idea is to hold a world vote to erase all debt on the planet, everyone. Country, business, personal. Everyone starts at zero. What's the big deal. It would fix all the problems around the world. I would say 30% of Countries, businesses and people would get themselves right back into the same mess, however the smart people that learned their lessons would smarten up. Economies around the world would kick off initially with massive spending and then start to dwindle as time rolls on.

Crazy I know, but isn't the debt all electronic anyways.

Maybe Tyler Derden wasn't soo crazy after all?????

[edit on 23-2-2009 by DEEZNUTZ]

reply to post by DEEZNUTZ


Your idea IS crazy. You can't eliminate debt anymore than you can eliminate wealth--or respect--or power. The power of the US, any nation, in fact, any person, is directly derived from you ability to defend that power. You can have all the gold in the world, but if you lack a gun to defend it, you are essentially poor the second someone decides it would be easier to steal it than barter with you.

As long as the US can maintain its military might, there is no danger whatsoever of a collapse, either internally, or externally. Unfortunately, in the interim, financially we will not be well off. The danger is that the financial debacle will lead to an inability to finance our defense, and hence put the nails in the coffin.

In order to save US, if there truly is any saving to be done (I question whether this Thursday, we may be all humming a different tune...though I am pessimistic as Obama consistently proves himself incapable of helping this country in any way), I believe we must get out of these foreign conflicts, war on drugs, have a crack down on illegal immigrant criminals at home, cut taxes dramatically, reduce the size of the federal gov't-- slowly but dramatically, keep defense spending reasonably high (the economy depends upon it), and develop programs of a more defense nature. --If we feel there is any enemy so threatening we need to deploy our men, so be it, but I strongly suggest we bomb it to the ground first--our rationale being self-defense NOT nation-building. Meanwhile, we will nation-build back home.

I used to like the idea of big governement but the incompetence is staggering. The people do not elect officials based upon skill or merit but rather the way they choose their favorite celebrities. I feel this has caused a major degradation of the American political system-- which while not causing, certainly contributes the this financial quagmire (if I may) we now find ourselves in.

Around now is when someone like me will actually start looking at teh stock market.

heres some anecdotal evidence: A person I know well works for a place that makes junk mail. There's business in that industry closing down, and his place just about double, near tripled in size over a month. Why? People still want their advertising to go out and SOMEONE has to do it, so why not them. They just bough tmore machines, and are hiring more people (many from these closed down companies) to do this work. Their value just went up, up and up and banks right now are just about begging them to take some money. Why? because they're a good investment.

I'm starting to look through various stocks, and I'm seeing businesses going up, just not the big ones or the well known ones.

You know whats helping? hitting the random button or typing in random characters for stocks.. its amazing what you find smetimes. Some are volitile, others are still steadily going up.

Theres work out there, theres money out there and theres capital out there, just not where you expect to find it. while the economy sucks in general, its like nature, it still keeps finding inroads back in and around the damage.

But he says his industry is like that, his isn't recession proof, or recession tolerant, its recession friendly! When teh economy goes down, his business goes up.

I refuse to think that his is the only industry like this. Look around on what you'r estocking up on, what your friends are stocking up on and what people are buying more of. what companies make those things? look there.

Originally posted by Hypntick
As long as they're not saying "lowest level since 1937" i'm not gonna go insane yet.

When that happens though.....look out

Some numbers to consider:

On September 3, 1929 the DOW was at 381.17. This was its highest point before the crash of '29.

On November 13, 1929 the DOW was at 198.69. This the lowest point for the year 1929. This was a loss of 48% from the high point.

The Market bottomed out around July 5, 1932 (almost three years after the crash of '29) at 41.63. This was a loss of 89% of value from the highest point in 1929.

On February 24, 1930 - the same amount of time had elapsed as in this current crisis - the DOW was at 262.47. This is a 31% drop from the high point in 1929.

_________________________________________________________

Now lets look at the current situation:

The Market's highest point was actually in 2007 at 14164.53 on October 9, 2007. The highest level it reached in 2008 was around 13058.20 on May 2, 2008.

In 2008, the lowest close was on November 20, 2008 at 7552.29. This is a loss of 42% from the 2008 high, and a 47% loss from the all time high in October of 2007.

Today, February 23, 2009, the market closed at 7114.78. This is a 46% loss from the 2008 high, and a 50% loss from the all time high in October 2007.

To compare the numbers, crash of '29 = 48% loss. Crash of '08 = 47% loss.

From September 1929 to February 1930 the market actually rebounded slightly to only a 31% loss from the high point.

From May 2008 though February 23, 2009 the market shed 46%, 50% from October 2007.

To reach the Depression era bottom, the DOW would have to reach 1558.10. We still have a long way to go until we reach that bottom; however, in the depression, it took almost three years to get there. We are actually falling deeper and faster into depression in this crisis than in the Great Depression.

You have to understand, in 1929, when the market crashed, its not like people suddenly started living in shacks and begging for food. It took a little time for it to get that bad. This time around, the crash is happening faster, and deeper. Welcome to the GreatER Depression.

[edit on 23-2-2009 by finemanm]

[edit on 23-2-2009 by finemanm]

One more number to think about:

Between May 2, 2008 and today there are 297 days. From September 3, 1929, if you add about 300 days, you get June 30, 1930.

5/2/08 - 2/23/09 = 46% loss.

9/3/29 - 6/30/30 = 42% loss.

As I said, this is worse than the Great Depression.

Originally posted by xbranscombex
10$ says it'll be in the 6k range tomorrow.

that might be the only way you can make money on the stock market anymore

i think there will be another and worst economic crash in october 2009
this worldwide economic crash will be a irreversible stage that will creat chaos

Originally posted by Uniceft17
The markets have really been going down here lately, I think things are really gonna start hitting home with alot of Americans when April comes around. The stocks predict and anticipate how the market is gonna be in the forseeable future and they have been hit hard recently, so it's fair to say that here in the next several weeks things are probably going to start snowballing out of control even more.

As much as it sounds horrible to say it, I must admit I'm glad to hear it. The sooner we get this over with, the sooner we can pick up the pieces and either continue to be the United States of America, or break up and be individual nations. I'd rather get it over with than drag things out as long as they have gone thus far. These continued bailouts are making me sick. We're literally witnessing the death of our nation due to these actions.

It's not a question of if, it's a question of when. If we make it to the end of March without the complete collapse of Eastern Europe, or a complete crash here in the US, it'll really surprise me.

Originally posted by DEEZNUTZ
"Babylon, Babylon the Great will fall" or something like that. My friends in the US and I mean that, I've been to almost every state. I fear that your country is going to cease to exist as you've grown to love her. I just think 8 years of huge deficit spending on top of what the Federal Reserve has loaned out with your backing has destroyed any chance of survival for your economy.

Let's be honest, your growth over the last decade has been fuelled by financial scandal after scandal after scandal. Not to mention the Fed creating bubbles every 7-10 years ruining retirement plans, small businesses, you know the average Joe/Jane.

DEEZNUTZ, I honestly hope that when we do collapse down here that we won't affect you all up there too much. I admit that we haven't been the best of neighbors (I live just south of the border from you and have been to Vancouver tons of times) but I think taking Canada down with us would just plain be horrible. I know we deserve what we get. We're unable to control our government. We've grown too big. I think a break up would actually benefit us at this time. We'd have some regions that become ultra-liberal, some ultra-conservative, and others right in between. Sadly, I have a feeling that Washington State would be a ultra liberal nation and I'd have to leave it.

The stocks being down as low as they are is one thing, but it's also good to get an overall view. Here's a site I visit several times a day (will not refresh automatically). This thread is about us being back to 1997. By the end of this week, we'll be further back than that. Good luck to you all up there. We might just be calling you for help when the fit hits the shan.

The Dollar did well today to a certain degree. But this, to me is deceiving. Imagine pumping 9 trillion dollars in bailouts to the private sector, only to have it disappear somehow, and the wealth still gets destroyed...

This is economic warfare. Someone is pulling strings. The dollar is going to crash.

Originally posted by Leo Strauss
There is another similar thread on this subject and I will make my prediction public!
Dow 5000 bottom! If I am wrong I will return all of my bailout money! I promise. The Nikkei is tanking at this very moment and my money is Russian trading will be suspended again!

I believe Obama will be left with no choice but to nationalize, (socialism) for all you conservatives who got us into this mess, some major US banks. Perhaps a single bank to absorb all of the bad paper.

Another Bank VP friend of mine was laid off today and I could swear he does not understand what happened!!!! You see we were all soooooooooooooooooooooooo smaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaart a few years ago. Remember the "New Economy" it's different, you just don't understand, you're "old fashioned"!

See ya on the soup lines let's try to be nice to one another OK!!

Leo Strauss, As was posted by another member on this thread, back in the 80's the magic number was 800. I have to say that I think your 5000 is very optimistic regarding the damage we've incurred.

As for your conservative comment, I'll just say this. The people you were referring to were what I'd call RINO's. (Republicans In Name Only). I'm all for minimalist government (something the previous administration had no concept of) and following the Constitution to the letter (also something the prior administration had no concept of). If there is one thing that working for Uncle Sam for over a decade has taught me (while in the Air Force) it is this - never ask government to do anything in a minimalistic way! Even the last bailout Bill was over 1000 pages long!

Having our stock market back to 1997 numbers is still a cakewalk. We've yet to see the real damage that is just around the bend. You can't spend your way out of debt, no matter what frosting you want to put on it. I do agree completely with your last statement. I look forward to seeing you all on the soup lines, and we should all try to be nice to one another. I can make some good soup!