UPDATE: The Dow dropped 777 points at its lowest today. Isn't that God's number?
The Dow is down 708.87 at the time of this posting, but it's adjusting up and down steadily as we speak.
This comes at the heals of Congressional announcement that no deal has been struck on a bailout for U.S. financial institutions. The "No" vote came from a majority in the U.S. House of Representatives. There's talk about letting the Senate vote on the bill next, before the House goes back to the drawing board (if at all). If the issue isn't solved within the next week, my take is that solving the crisis will likely fall to the current and future administration to pioneer change. Otherwise, it may not be until next year (Jan. 3) before the item is revisited -- since that's when our Congress once again returns to session.
This is the largest point drop in the history of the stock exchange, topping 724 points down earlier today. The closest fall was when the Dow dropped 722.11 points during the first day that the market opened after 9-11.
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Comments: 45
Look out below!!!!
700 points so far today....10 more minutes....
You're right Brian. There are sooo many people with their hopes and dreams and retirement pinned on how the stock market fares.
Now all bets are off.
I think the catch phrase we will be seeing in the mainstream media will be 'trading curbs' and market crash'.
At least the journalists will have work.
It is after all only the companies that mismanaged their funds and business that are causing all of this.
**5. FINANCE: FINANCIAL CRISIS' LONG-TERM SOLUTION IS TRIPLE BOTTOM LINE.
SANDY WIGGINS, chairman of E3BANK and past chairman of the USGBC: "As Wall Street continues to reel and the government bailout plan is debated, businesses and banks need to discuss a strategy that will take a long-term profitability approach, rather than short-term gains against a financial black hole. The existing banking model, based solely on short-term financial profits, has put the entire global economy in jeopardy. Instead of a single-bottom-line goal of pure profit, a triple-bottom-line approach means every dollar in a company needs to show a return, in terms of environmental and social benefit, as well as economic profit. The triple bottom line is made up of social, economic and environmental accountability, and seeks to benefit many constituencies -- not exploit or endanger any group of them. The current crisis actually supports the efforts of banks that are in the process of getting FDIC approval, and validates the need for triple-bottom-line financial services."
News Contact: Zoe Klein, zklein@stargroup1.com Phone: +1-215-875-4375 (9/29/08)
The deal includes Lehman's Asset Management unit and private funds investment group, but excludes Lehman's major direct private equity businesses, the firms said in a statement Monday.
Some estimates in August had valued the business -- including the private equity and hedge fund unit -- at between $8 billion and $10 billion, according to a Wall Street Journal article at the time."
http://www.reuters.com/article/ousiv/idUSTRE48S5BB20080929
Here we go! Free market at work!
It's important to note that, under the plan now under consideration by the U.S. Senate, companies that take the bailout must forgo "excess" top-executive compensation. Executives from companies that are sold before the handout, however, get their full take.... Now that's an incentive to cut bait now and let the bigger companies sort it out.
We are in a very different space than in the 30s, for those who believe we can come back stronger than before because we did it once.
At the beginning of the 20th century, the British Empire began to fall and the world began to look toward the New World: USA.
The crash and the Great Depression took a long time but we also benefited from WWII, in that we did not have to rebuild our factories or our land.
So, after WWII while Europe and Asia were reeling from the devastating economic, geographic, political and cultural effects of III, the US of A was enjoying prosperity like never before. It took 20 years to recover from the crash of '29.
Now, with China rising, and Europe caught up from WWII and Japan also, the prices, prosperity and boom times enjoyed in the 50s onward until the 70s, but then manipulated through the 80s and 90s, well, our glory days, as we knew them, are over.
Its far to early to be bottom fishing. Let the markets calm down. Bottoms take months to resolve, so there is no hurry to jump in.
You're mostly right on the bottom fishing comment. However, some times you just feel like fried catfish with some corn fritters or steak fries. And if you've got the waistline to tolerate it and the money saved up, then this just might be the best buy on catfish in decades. Then again, who knows for sure....
You're of course fundamentally right. History has shown that prices at "the market" will continue to fall for the next six months to a year. That said, would you agree that there is always room for prudent investing in ANY market?
Ron, you bring up a valid point -- one certainly being used to explain the reason for a government-induced bailout plan. I agree that those in our government in conjunction with the financial institutions and financial watchdog groups should be able to come up with, collectively, a plan that is able to fix this mess.
I'm not saying the government intervention isn't warranted. What I am saying is that it shouldn't fall on the working-class taxpayers' shoulders to pay for other people's bad investments. In a round about way though, that's just what happened in the stock market today....
This is no time to be 'investing'. It is time to preserve capital.
Even if we hit the low yesterday (which I doubt), there will be months to take positions.
Market tops are generally explosive and choppy, but bottoms are protracted and end with a whimper. The market will bounce along at a low level for months, with weak to average volume.
Some people call it bargain hunting or 'buying opportunity'. I call it catching a falling knife.
Lots of people were calling the bottom and pointing out opportunities in the last two weeks.
If you are impatient to find an opportunity, spend some time reviewing balance sheets and income statements of early cycle sectors. Look for companies with a low PE, low debt and lots of cash. Put your picks on a watch list and wait for the smoke to clear.
T.J.I., I'm not quite sure what you're saying with your comment. Are you saying that we're irresponsible for reporting the news? If so, wow. The facts are the facts T. J. I. People not knowing about them, doesn't make them not so.
As far as panic goes, that's each individual's doing. Those who read this blog know to expect a turnaround, if the fall-out from this bailout mimics the fall-out from the S&L bailout in the late 1980s. After all, as they say, history is the best predictor of future events....
I'm in agreement with you on that T.J.I.