Wall Street Tumbles Below 7000

97 comments on this post so far. Add yours!

• 

  toadman on March 02 at 8:38 a.m.

  My “care-o-meter” is at an all-time low, also.

• 

  Charlie on March 02 at 8:51 a.m.

  Cash, no long term debts or short ones for that matter. Cash is king. The market may go below 6000. The stimulus ain’t working, wish D.C. would shut up.

• 

  idawa on March 02 at 9:07 a.m.

  thankfully, I’m young enough to ride it out…however, I always amazed at the pundits claiming that the stock movement means such and such…They want us to think the market is shocked by the fact that AIG reported a record loss…when just a few months ago the company was on the verge of collapse and had to bailed out. There is no way the market should have expected anything else given the dire straight that AIG is in.

• 

  hmoffsuite on March 02 at 9:23 a.m.

  Idawa. AIG is just one element of the market decline today. A bigger part of the problem is that the new Obama budget had been digested over the weekend and it isn’t settling well. Obamanomics is at fault here and it will continue to get worse as his policies are the problem. Even those of you who aren’t invested in the markets will feel its effects. The stock market is a scorecard for the economy and it has be deteriorating ever since Obama got elected. Those that voted for him are getting what you wished for. Unfortunately for the rest of us.

• 

  Joker on March 02 at 9:32 a.m.

  Hmoff,

  Wall Street hasn’t been gushing over Obama, but to pin this collapse on him isn’t fair. The country was in a nosedive before he took office.

  Conservatives used to ramble about how the 2001 recession wasn’t Bush’s fault cause Bill Clinton’s economy was turning south when Bush took office. Then 9/11 made things worse (also Clinton’s fault). Never mind there was a budget surplus and huge job growth.

  Anyway, Presidents have very little effect on economies, yet they get blamed or praised for the economy under their collective watches.

• 

  Stickman on March 02 at 9:36 a.m.

  None. Just survival.

• 

  Kage_Mann on March 02 at 9:40 a.m.

  Obama has to be negative to get his proposed budget plans/Stimulus bills passed through congress. Where is the optimism? Everytime he goes negative the stock market tanks.
  When he was elected the Dow Jones was at 9600 points and now it’s at 6800 points, that’s a 2800 point loss. It’s really a scary situation were in.

• 

  Kage_Mann on March 02 at 9:43 a.m.

  We could blame Bin Laden and Co. for alot of things.

• 

  hmoffsuite on March 02 at 9:44 a.m.

  joker >> “Wall Street hasn’t been gushing over Obama, but to pin this collapse on him isn’t fair”

  I don’t give him a pass. His stimulus was not well received, Geithner is still in hiding and has no plan for the banks, the new budget is devastating to the investor and market alike. Agreed, presidents have little effect but in this case, when the entire government is controlled by the democrats, the president, if he had wisdom, could veto some of this stuff being passed. Like Rahm Emanual stated, “Never waste a good crisis” . The markets are forward looking. If they saw any upside here, they would be going up, not down. We are in big trouble with this administration and Obama happens to have have his name on it.

• 

  Joker on March 02 at 9:46 a.m.

  Kage,

  I think the problem is the stimulus is government spending projects and not investment and banking projects. Also, Obama is promising stricter controls on investing and banking. So, I can see why they’re not doing handstands.

  Obama isn’t giving the very wealthy people in this country a big old wet one. These folks are gripping their money like they could be broke any second, which is laughable.

• 

  JBelle on March 02 at 9:48 a.m.

  Not so fast there on President Obama’s budget, hmoffsuite. It looks drastically different from the last budget written by former President Bush for a really good reason: it is both more realistic and conservative, a term accountants use to describe outcome independent of politics. First, President Obama !gasp! includes the cost of the war in Iraq. Something our former president apparently didn’t think we could handle knowing; that and those pesky flag-draped coffin pictures. So if you are tracking, we actually have been operating under budgets with no line item for the Iraq War! Wonder who is keeping THAT set of books?! Second, President Obama folds in tax code changes such as the AMT change retro to the acutal change date, or in this budget year, making us understand better the effect of these changes. This is a far more conservative and realistic look at what our “actual” under the budget will be. So, whereas President Bush’s budgets would note huge negative variances, say as a result of funding that little incident in Iraq for 7 years now, President Obama’s budget variances will be fewer and quite less dramatic. Nope, we should have been getting this info all along. Two snaps up for P-o. So far, so good.

• 

  Joker on March 02 at 9:49 a.m.

  Hmoff,

  I will to give Obama six months to start turning things around. The guy hasn’t wowed me, but getting your hands around the worst economic situation since the Great Depression isn’t easy.

  Would things be better under McCain? Doubt it.

  A lot of economists are predicting things will turn around in late 2009. Everyone needs to avoid pulling the ejection seat lever.

• 

  JBelle on March 02 at 9:51 a.m.

  oh, and of course would Wall Street would react to the budgetary information in this way. As with much of the acticvity in Wall Street these days, it represents a technical correction to a market gone awry many, many, many moons ago. Think of it as a deferred reaction, kind of like when you put off replacing that old crummy deck on the back of your house. Hurts like hell when you finally have to do it.

• 

  hmoffsuite on March 02 at 9:54 a.m.

  JBelle. I’m glad you are happy with this budget. It is the spending and tax increase issues that I disagree with, not the accounting.

• 

  JBelle on March 02 at 9:55 a.m.

  And you just hope one of your kids hasn’t tetanusized themselves on the old, rusty nails poking out everywhere….

  If you know what i mean.

• 

  brandxranch on March 02 at 9:55 a.m.

  My 401 is now a 201, I won’t sell my rental properties in this market, my hopes of retirement this year are dashed on the rocks. I am thankful to have a job, though. The way it looks now, my “strategy” is nose down, butt up, and work three days after I’m dead.

• 

  Kage_Mann on March 02 at 10:00 a.m.

  “Obama isn’t giving the very wealthy people in this country a big old wet one. These folks are gripping their money like they could be broke any second, which is laughable”.Joker on March 02 at 9:46 a.m.

  Joker, My well-off relatives in Seattle are pulling back on their spending also and are now making trips to Walmart. When the
  well-off and rich people start to pull back on their spending etc.
  we will be headed for a depression.

• 

  JBelle on March 02 at 10:01 a.m.

  yeah, but that’s what i’m saying hmoffsuite. Those increases by a significant amount, represent accounting changes to a significant extent.

• 

  hmoffsuite on March 02 at 10:03 a.m.

  JBelle >> “As with much of the acticvity in Wall Street these days, it represents a technical correction to a market gone awry many, many, many moons ago.”

  The technical correction ended a long time ago. Companies are now selling for unheard of PE ratios and in some cases, at book value. Irrational exuberance left a long time ago, about 2000, as a matter of fact.

• 

  JBelle on March 02 at 10:04 a.m.

  Whether any here want to acknowledge it or not, it’s the well off who create jobs; it’s their investment that will create a market that is fed by resouces, raw materials and the labor of a local economy. It’s a tricky balance to raise taxes yet keep incentive in place. We’ll see how close a balance President Obama is able to keep.

• 

  JBelle on March 02 at 10:06 a.m.

  AIG needs what? is it this morning? 60 more? billion? and you’re saying the technical is all wrapped up? Thanks just the same, hmoffsuite; you won’t convince me of that one!

• 

  Aliasjax on March 02 at 10:08 a.m.

  I just bought a bigger house…and, I’m trying to get a little more into the market. My thinking is, if we recover and the bull returns, I stand to gain substantially over the next 10-15 years…if it all crumbles, and all this spending creates runaway inflation (which it may), saving cash right now is a guaranteed loser as its purchasing power dwindles. Either way I’m broke, but only betting on the country’s recovery gives me a chance to prosper…

  I’m also drinking more…

• 

  Kage_Mann on March 02 at 10:08 a.m.

  Some people have come to the conclusion that they might have to work until they die. I’m a little miffed at the gov’t for making me work so long, before I can even collect Social Security. I might not live long enough and I have the second most dangerous job in America.

• 

  JBelle on March 02 at 10:11 a.m.

  atta boy/girl A-jax. I know a real estate broker who emphatically contends that if you make over $80,000 per year, YOU HAVE A PATRIOTIC DUTY to buy more real estate. :) He maybe right.

• 

  Joker on March 02 at 10:12 a.m.

  Kage,

  I am not sure how well off your relatives are, but truly wealthy people should be spending like crazy.

  Depressions are clearance sales for rich people.

• 

  idawa on March 02 at 10:19 a.m.

  While the spending levels this year are high (given all the bailouts already given and to come), the actual spending level as a share of GDP in the budget in the ten years window in the budget will be about 22-23% (of course, the economic recovery need to pan out in order for this to be achieved). This is, gasp, the same level of spending as that commie pinko Reagan. It just goes to show how far to the right this nation swung during the conservative revolution in the last 30 years (except for the Clinton interlude, and even he wasn’t liberal on economic issues) that we are aghast as such spending levels. And, quite frankly, the conservatives have no credibility with they have been blatantly bilking future generations for the past 8 years without any remorse so that there current machinations only come off as empty platitudes to their base.

• 

  Kage_Mann on March 02 at 10:22 a.m.

  Jbelle, wasn’t happy the other day for me having the audacity to mention that Obamas proposed budgets through 2010 total a staggering 3.7 trillion.So, he wants to spend more over two years, than the previous administration spent over 8 years.And somehow, cut the deficit in half by the end of his term.What a pipe dream.Some don’t like to acknowledge that Bush was forced to spend to try and keep america safe.

• 

  hmoffsuite on March 02 at 10:28 a.m.

  Kage. Additionally, Bush had his hands tied for the last two years when the Dems had control of the Congress. He couldn’t do anything, actually. Couldn’t even rein in Fanny and Freddie as they tried because of Dodd, Barney, Schumer et al. Even though Bush was the President, he had no control over spending during that time, fwiw.

• 

  JBelle on March 02 at 10:38 a.m.

  Actually Kage, I have been talking about this very thing: this new budget doesn’t represent the huge increase that you might think because it actually budgets for costs that were not heretofore considered in federal budgets. Erronesouly not considered according to any budgeting philosophy known to mankind. Review my previous remarks . President Obama’s budget takes into accounts amounts that we were already spending, yet not budgeting for and not disclosing to the American electorate. With the redistribution of income that President Obama is seeking, he believes he can significantly whittle down the deficit. I believe, as I mentioned previously, that the trick will be in maintaining incentive. If he deincentivizes the hefty balance sheets in this country, they will move on to Asia. Or what’s left of it. Southeast Asia, let’s say. And Eastern Europe, where natural resources abound and the green mandates of the EU and Japan have no currency. We’ll see.

• 

  JBelle on March 02 at 10:40 a.m.

  AND fwiw, the sunshine laws in this country, explicity or implicity, apply to both business and industry and government. If they’re spending it, we are entitled to know about it.

• 

  hmoffsuite on March 02 at 10:41 a.m.

  JBelle >> “I believe, as I mentioned previously, that the trick will be in maintaining incentive”

  That is a very insightful and accurate statement, imo.

• 

  JBelle on March 02 at 10:43 a.m.

  ok, you two: I am off to fulfill the commitments of my gainful employment. Please don’t my word for the budgeting changes I have noted here; go see what Paul Krugman and your favorite eminent American economist have to say about President Obama’s budget.

  And tomorrow, let’s talk about the dollar and the euro. Have you SEEN the forecast? (shivering)

• 

  Cabbage Boy on March 02 at 10:45 a.m.

  Has anyone else seen the M0 hockey stick chart? One of the senators showed it recently. It represents the amount of money in circulation, coin and bank note. It labored along pretty steady, started growing in the late 80s and rose through the 90s and 00s.

  But it has basically turned straight up in 08 as money is being printed right and left. (or by the right and left). We are in for major inflation once the banks start lending this money. So buckle the seatbelt, it is gonna be a wild ride for a while.

• 

  idawa on March 02 at 11:03 a.m.

  CB - generally, inflation occurs when there is an over abundance of currency and too few goods. However, I haven’t seen any data suggesting that production levels are at capacity or that supply of goods is constrained. However, if firms do cut back too much during this downturn and reduce capacity, we could be in an inflationary period if the economy rebounds. Its a possibility, for sure, but I don’t think it should be the primary concern at the moment. If the economy doesn’t rebound, then demand will continue to fall.

• 

  Kage_Mann on March 02 at 11:16 a.m.

  “This is, gasp, the same level of spending as that commie pinko Reagan”.idawa on March 02 at 10:19 a.m.

  Why trash one of the best presidents this country ever had?He’s a hero to alot of people and we could use Reagans optimism right now, during this economic downturn.

• 

  Cabbage Boy on March 02 at 11:19 a.m.

  But Idawa, if you consider the amount of the “abundance” of currency, inflation is probable. I think the numbers were 2 to 2.5 times as much currency in “circulation”.

  I understand the too few goods influence, that is why FDR and the New Deal administration slaughtered pigs and left grain to spoil, they wanted the demand to be higher.

  But inflation is tied more directly to the money supply. Which is skyrocketing.

• 

  toadman on March 02 at 12:36 p.m.

  What strikes me as funny is that everyone’s concerned about all the spending…now….as if we weren’t spending a lot over the past 8 years for other stuff.

  Have I mentioned my “care-o-meter” is at an all time low? Why? Because the last 8 years made me realize, it doesn’t matter anymore, about the spending. They can spend all they want, and they will. My only consolation about Obama’s spending is that he’s spending on more stuff that I agree with, than Bush spent on.

  Oh, another thing that makes me laugh is the whole “saddling future generations with debt” argument. It’s a pretty weak argument, considering our government has been “saddling future generations with debt” for a really long time.. both Democrat and Republican governments. It’s all about debting it forward, man.

  In other words, it can’t be helped. It can’t be stopped. It’s like complaining about the heat in August when you live in Texas. Get over it.. it’s gonna be hot.

• 

  hmoffsuite on March 02 at 12:57 p.m.

  Market update. Dow down 300 and breaks thru 6800. S&P went below 700 which is a major support level. No bottom now. You may have little interest, toad, but this will effect you as much as everyone else, sooner or later. Even without holdings in the market.

• 

  JBelle on March 02 at 1:00 p.m.

  ugh.

• 

  toadman on March 02 at 1:02 p.m.

  I think it was digger who called 6500 as the bottom. We’re gettin close.

  I called 6000 to be the bottom.

  Anyone want to start a pool?

• 

  idawa on March 02 at 1:13 p.m.

  KM - if you can’t read subtext that’s not my problem…to be more explicit, I was using Reagan an example. He’s your hero but yet he was spending the same amount as Obama has planned, yet you don’t deride him… (and, I hate to tell you, there are a lot of people who aren’t as fond as Reagan as you are, just because you are enamored of someone does not make them off limits - I think Clinton was a pretty good president too, but I’ve read you attack him directly a time or two).

• 

  Cabbage Boy on March 02 at 1:24 p.m.

  Toad, That kinda pool would remind me of the bullpen pool back at the stockyards. Where you could buy a square and if the bull crapped in your square, you win.

• 

  toadman on March 02 at 1:26 p.m.

  “You may have little interest, toad,” - hmo…

  Yer tellin’ me. What interest I was getting, is gone.

  ;-)

  But hey, I’ve still got a job, and I’m still alive and relatively healthy. That’s more important than anything else, right?

• 

  toadman on March 02 at 1:27 p.m.

  Cabbage.. that’s EXACTLY what kind of pool it is…

  ;-)

• 

  idawa on March 02 at 1:29 p.m.

  one could make the argument that the market is burning off all the value it has derived since securitization came to prominence with the revision of Article 9 of the UCC - we could be plummeting back to pre-1990s levels which would put a DJI around 2500!!! I think a low of 6000 is more rational number given the a trend line that burns out all the exuberance since 1995. Toad, I’ll take 5999. :)

• 

  toadman on March 02 at 1:33 p.m.

  “Toad, I’ll take 5999. :)”

  What is this, The Price is Right?

  ;-)

• 

  Kage_Mann on March 02 at 1:48 p.m.

  I have a feeling in me that says below 4000 points.Maybe,3700+

• 

  hmoffsuite on March 02 at 2:55 p.m.

  toad >>> “But hey, I’ve still got a job, and I’m still alive and relatively healthy. That’s more important than anything else, right?”

  Absolutely true. Afterall, money is only important when you don’t have any. :~)

• 

  Arch_Druid on March 03 at 8:08 a.m.

  I contribute $25.00 a month to a money market fund. My 401(k) continues to make purchases on the stock market. Strategy, even if stocks are cheap at this point you can buy more of them, hold and purchase more. Stocks may after all rise in price.

« Back to Huckleberries Online

• ›Scanner traffic