Dow Below 10,000

[Dissipate]

Originally posted by: Pliablemoose

Originally posted by: aldamon
Surging back to 10K. Dead cat bounce or have they decided the punishment is over?

It's paring its losses on speculation of a coordinated interest rate cut.

And I suspect it'll happen, but the long term consequences of a coordinated global rate cut are unknown.

One word: inflation.

 

[dmcowen674]

Originally posted by: jman19

Originally posted by: dmcowen674

Originally posted by: Dari
Someone said it best when they said that America doesn't really make anything anymore.

That would be me that said way back early in the Bush Regime.

:laugh:

Ok, Dave.

Tell me, where is $5/gal gas?

We had plenty of it. Just like the dow it's gone back down.

 

[IronWing]

Originally posted by: LegendKiller

Originally posted by: dmcowen674

Originally posted by: Pliablemoose

Originally posted by: PingSpike
Kind of glad I'm young and didn't bother with a 401K for the first part of my working career. I only have like $4000 to lose in mine.

Sucks about my savings though, I'm hoping hyper inflation doesn't hose those.

The hyper inflation scenario IMHO is unlikely.

More likely stagflation, or deflation.

Quoted and bolded for laughs later

It is far more likely than inflation at this point. That or it'll counteract inflationary pressures.

I'm not so sure about that. It seems that debtor nations plunging into economic downturns tend toward inflation while creditor nations head toward deflation. Since the US is now a the grand prize winning debtor nation, high inflation is a possible result.

 

[dmcowen674]

Close -304 10021

 

[Wreckem]

Originally posted by: dmcowen674
Close -304 10021

Tomorrow it'll close below 9500....

 

[StageLeft]

Originally posted by: Pliablemoose

Originally posted by: PingSpike
Kind of glad I'm young and didn't bother with a 401K for the first part of my working career. I only have like $4000 to lose in mine.

Sucks about my savings though, I'm hoping hyper inflation doesn't hose those.

The hyper inflation scenario IMHO is unlikely.

More likely stagflation, or deflation.

I don't see that. The fed is printing money, now mass. is asking for a loan. This money is going to devalue the dollar, how can it do anything but?

It always bounces back near the end of the day. People buy with 30min-one hour left so they can sell tommorow usually.

Often does something, anyway 🙂 Recovers fast or drops hard, but it had already dropped too much.

 

[aldamon]

Originally posted by: RichardE

Originally posted by: aldamon

Originally posted by: RichardE

It always bounces back near the end of the day.

Come on. No, it doesn't.

Yes, yes it does. Rarely is the "lowest point of the day" the "end mark of the day".

Thank you for correcting yourself. Always is not the same as most of the time.

 

[Wreckem]

Originally posted by: Skoorb

Originally posted by: Pliablemoose

Originally posted by: PingSpike
Kind of glad I'm young and didn't bother with a 401K for the first part of my working career. I only have like $4000 to lose in mine.

Sucks about my savings though, I'm hoping hyper inflation doesn't hose those.

The hyper inflation scenario IMHO is unlikely.

More likely stagflation, or deflation.

I don't see that. The fed is printing money, now mass. is asking for a loan. This money is going to devalue the dollar, how can it do anything but?

It always bounces back near the end of the day. People buy with 30min-one hour left so they can sell tommorow usually.

Often does something, anyway 🙂 Recovers fast or drops hard, but it had already dropped too much.

Im glad Texas has a constitutional amendment the State Government cannot run a defecit. Texas will be the only major state, not to ask for a bailout. Although this means there is going to be a shit load of spending cuts in Texas' next biennial budget.

 

[LegendKiller]

Originally posted by: ironwing

Originally posted by: LegendKiller

Originally posted by: dmcowen674

Originally posted by: Pliablemoose

Originally posted by: PingSpike
Kind of glad I'm young and didn't bother with a 401K for the first part of my working career. I only have like $4000 to lose in mine.

Sucks about my savings though, I'm hoping hyper inflation doesn't hose those.

The hyper inflation scenario IMHO is unlikely.

More likely stagflation, or deflation.

Quoted and bolded for laughs later

It is far more likely than inflation at this point. That or it'll counteract inflationary pressures.

I'm not so sure about that. It seems that debtor nations plunging into economic downturns tend toward inflation while creditor nations head toward deflation. Since the US is now a the grand prize winning debtor nation, high inflation is a possible result.

It all depends. Creditor or debtor nation doesn't matter was much as how much credit was available and how much is available currently.

We are facing massive deflation from housing, energy, and food, at this point.

 

[Pliablemoose]

Originally posted by: Skoorb

More likely stagflation, or deflation.

I don't see that. The fed is printing money, now mass. is asking for a loan.
[/quote]

2 reasons, IF oil continues to decline because of reduced global demand, it will have the effect of reducing the bottom line of all goods & services, and the rest of the world is actually in worse shape than we are because despite threatened flights to the Euro, etc, when we catch a cold, they catch pneumonia, further depressing prices.

The deleveraging going on right now is also deflationary.

I was actually hoping that we'd stay down at the close, as it stands, we haven't hit capitulation yet, and with the action of the market today, I don't know if I want to see capitulation.


The other thing going on that's deflationary is that houses are pricing below the value of their components, the sticks & mud are priced higher than the completed item, either house prices go up, (unlikely) or the sticks & mud become worth less (more likely because of reduced demand)

Translation: Joe Six Pack will walk away from his house & move in with mom/bro/sis/cousin, further depressing home prices and basic components.

In the 30's there was no money and nothing to buy.

 

[RichardE]

Originally posted by: aldamon

Originally posted by: RichardE

Originally posted by: aldamon

Originally posted by: RichardE

It always bounces back near the end of the day.

Come on. No, it doesn't.

Yes, yes it does. Rarely is the "lowest point of the day" the "end mark of the day".

Thank you for correcting yourself. Always is not the same as most of the time.

Well, I have to yet to see a day when it hasn't. If you have, I would love to see it.

 

[StageLeft]

Originally posted by: Pliablemoose

Originally posted by: Skoorb

More likely stagflation, or deflation.

I don't see that. The fed is printing money, now mass. is asking for a loan.

2 reasons, IF oil continues to decline because of reduced global demand, it will have the effect of reducing the bottom line of all goods & services, and the rest of the world is actually in worse shape than we are because despite threatened flights to the Euro, etc, when we catch a cold, they catch pneumonia, further depressing prices.

The deleveraging going on right now is also deflationary.

I was actually hoping that we'd stay down at the close, as it stands, we haven't hit capitulation yet, and with the action of the market today, I don't know if I want to see capitulation.
[/quote]But a reduction in bottom line is a good in this context as a decrease in oil has an economically stimulating factor. I can definitely see how deleveraging would be deflationary. When money is harder to get, things will sell for less of it.

 

[xenolith]

Originally posted by: Wreckem
Truth be told all this crap is a result of 30+ years of fiscal mismangement by the govt and 20+ years of rampant consumerism by the american people. The american people and the american govt has far to long over extended itself. There has been a culture of consumerism and that is the problem. People(and the Govt) spending way more than they make.

It's called a people living within their means, which is a very rare find in our current "instant gratification" society.

 

[MovingTarget]

It looks like it may be closing just under 10k. Maybe we should break out the "Dow 10,000" hats tomorrow and party like it is the late 90's.

 

[nixium]

Originally posted by: Skoorb

Originally posted by: Pliablemoose

Originally posted by: Skoorb

More likely stagflation, or deflation.

I don't see that. The fed is printing money, now mass. is asking for a loan.

2 reasons, IF oil continues to decline because of reduced global demand, it will have the effect of reducing the bottom line of all goods & services, and the rest of the world is actually in worse shape than we are because despite threatened flights to the Euro, etc, when we catch a cold, they catch pneumonia, further depressing prices.

The deleveraging going on right now is also deflationary.

I was actually hoping that we'd stay down at the close, as it stands, we haven't hit capitulation yet, and with the action of the market today, I don't know if I want to see capitulation.

But a reduction in bottom line is a good in this context as a decrease in oil has an economically stimulating factor. I can definitely see how deleveraging would be deflationary. When money is harder to get, things will sell for less of it.

Which is worse - inflation or deflation?

 

[Pliablemoose]

Originally posted by: Skoorb

But a reduction in bottom line is a good in this context as a decrease in oil has an economically stimulating factor. I can definitely see how deleveraging would be deflationary. When money is harder to get, things will sell for less of it.

Oil prices will drop because of reduced demand, a result of the economy(s) seriously slowing down.

Yeah, I know, it's like the serpent swallowing it's own tail... 😕

 

[Wreckem]

Originally posted by: MovingTarget
It looks like it may be closing just under 10k. Maybe we should break out the "Dow 10,000" hats tomorrow and party like it is the late 90's.

Ill be suprised if we arent around 9000 by the end of the week.

 

[Thump553]

I'd be interested to hear the talking heads explanation of today's markets. Basically all the world markets were down, and feeding off each others negative vibes. But for some reason the US markets pulled a very strong rally and climbed solidly for the last half hour or so.

 

[StageLeft]

Originally posted by: Thump553
I'd be interested to hear the talking heads explanation of today's markets. Basically all the world markets were down, and feeding off each others negative vibes. But for some reason the US markets pulled a very strong rally and climbed solidly for the last half hour or so.

Because people started distributing x to the traders after lunch. There is no fundamental reason why the DOW would swing that much except that people are hysterical and once they saw a small upswing for whatever reason, they wanted to be part of it, so it accelerated, and before we know it an 800 drop was 370.

 

[mshan]

Is this the end of the "global trading day" till Asian markets open tonight?

I wonder if end of day surge was simple massive short covering rally where traders that made a lot of money today covered their shorts to lock in their gains. I've read numerous times about how mutual funds and hedge funds are facing massive redemptions, so other traders know they have to sell - they've got wounded prey and they are going in for the kill, but they don't want any overnight exposure.

Can't short a whole list of financials, but I think you can still short indexes such as SP500 as proxy. Plus China's market was closed for the last week I think, so they had a week's worth of catching up to do, and Eurozone didn't get an equivalent of Paulson bailout over weekend.

 

[Pliablemoose]

Originally posted by: Skoorb

Because people started distributing x to the traders after lunch.

Skoorb, you just killed me with that.... a gay work orgy on the floor of the NYSE will stick with me forever damn you.

:evil:

 

[Dari]

Time to invest in Walmart.

 

[rchiu]

Originally posted by: Thump553
I'd be interested to hear the talking heads explanation of today's markets. Basically all the world markets were down, and feeding off each others negative vibes. But for some reason the US markets pulled a very strong rally and climbed solidly for the last half hour or so.

Easy, amateurs feed on fears and panic and sell early. Pros just wait patiently and when they see good buying opp. they move in on good safe bets in the later hours.

Current market suck and the economy is slowing, but the sky is not falling and if you are brave and have long investing horizon, you can find some good solid and safe bets in the stock market.

 

[soccerballtux]

Originally posted by: Skoorb

Originally posted by: Thump553
I'd be interested to hear the talking heads explanation of today's markets. Basically all the world markets were down, and feeding off each others negative vibes. But for some reason the US markets pulled a very strong rally and climbed solidly for the last half hour or so.

Because people started distributing x to the traders after lunch. There is no fundamental reason why the DOW would swing that much except that people are hysterical and once they saw a small upswing for whatever reason, they wanted to be part of it, so it accelerated, and before we know it an 800 drop was 370.

No fundamental reason...I'm not so sure about that. We opened with a gap downward.

Pliablemoose, you are right on with your assessment higher up where you mentioned oil, goods&services, and how the housing market is overvalued. I see deflation as well. Dollar has been rallying like crazy lately, oil is down (I bet the offshore drilling ban expiring has something to do with that too). Doesn't look like people are very worried about inflation from the bailout (or they're just more concerned about a recession).

I wonder if the Fed sees this as a sign that they can cut interest rates. We can't go much lower; I'd hate to have us make the same mistake as Japan did with their housing crisis in the 80's. Look where their interest rate is now...I'd rather a recession.

 

[Pliablemoose]

In case anyone missed it, I suspect the primary reason we closed with only a near 400 point drop is because of the likelihood of global interest rate cut by central banks.