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T. Mac
05-06-2010, 03:17 PM
DJIA drops 1000 points.


http://www.msnbc.msn.com/id/36983596/ns/business-stocks_and_economy/

Don't think we are out of the woods yet, economically speaking

Uncle Bill
05-06-2010, 04:39 PM
DJIA drops 1000 points.


http://www.msnbc.msn.com/id/36983596/ns/business-stocks_and_economy/

Don't think we are out of the woods yet, economically speaking

That index went into free fall for several minutes. I think there's more to it than JUST the Greeks. Dayum, if we continue along the Obama/socialist agenda, we can be in line to be another Greece... a couple decades hence.

UB

TN_LAB
05-06-2010, 05:13 PM
Let's hope not.

depittydawg
05-06-2010, 05:19 PM
A drop in the Dow like that is very out of ordinary. Interesting story on CNN. Quesion: Where there any huge bets on a short of PG prior to the "glitch" that crashed the stock, and the market.


NEW YORK (CNNMoney.com) -- At about 3 p.m. ET Thursday, shares of Procter & Gamble appeared to have fallen 37%, helping trigger a massive 900-point sell-off in the Dow Jones industrial average.
The huge drop in P&G's stock - reportedly from more than $60 to less than $40 - is widely believed to have been a technical glitch.
http://money.cnn.com/2010/05/06/markets/procter_and_gamble_stock/index.htm

Goose
05-06-2010, 05:44 PM
That index went into free fall for several minutes. I think there's more to it than JUST the Greeks. Dayum, if we continue along the Obama/socialist agenda, we can be in line to be another Greece... a couple decades hence.

UB

Speaking of the Greeks...what's with their unarmed police force? I've been watching the Athens riots for the last few days (since it's coming to America soon) and every time they show a Greek cop close up he's unarmed except for a shield to block the bottles being hurled at him. This morning I saw 40 or 50 bottles thrown at these guys in a short 60 second stretch. The only thing they can do is block the bottles with their shields.

Greek leftists are no different from American leftists...throw a bottle and run.

Buzz
05-06-2010, 06:06 PM
Do you think it's a good policy to shoot someone that throws a bottle?

badbullgator
05-06-2010, 06:09 PM
Do you think it's a good policy to shoot someone that throws a bottle?


When it is filled with gas and a burning rag like many I saw thrown.....yes!

Tomorrow may tell but I don't think the market is done yet, does it close below 10K on a Friday?

Lucky Seven
05-06-2010, 06:22 PM
DJIA drops 1000 points.


http://www.msnbc.msn.com/id/36983596/ns/business-stocks_and_economy/

Don't think we are out of the woods yet, economically speaking

BUSH'S FAULT !!!!!

Buzz
05-06-2010, 06:30 PM
When it is filled with gas and a burning rag like many I saw thrown.....yes!

Tomorrow may tell but I don't think the market is done yet, does it close below 10K on a Friday?

I didn't see that they burned down a bank till a few minutes ago.

I would not be surprised if the Dow finishes the week below 10k. I was watching it fall on CNBC in my office and I was panicking. Not because it was falling, but because I did not have cash in my Ameritrade account, and because I could not have reached my broker in time to catch the bottom. There was lots of cash in that account.:( I'm wondering if there should be more, as in more cash, less equities.

Buzz
05-06-2010, 07:11 PM
Gosh, what have I been thinking.

Isn't the timing of this market free fall kind of suspicious? ;-)

M&K's Retrievers
05-06-2010, 09:12 PM
Do you think it's a good policy to shoot someone that throws a bottle?

Duh........

M&K's Retrievers
05-06-2010, 09:13 PM
I bet IHOP was working his arse off in the old cubicle today.

Jim Pickering
05-07-2010, 09:49 AM
Isn't the timing of this market free fall kind of suspicious? ;-)

Not in the least. Apparently, some 500 point of the drop yesterday was due to a programed trading error; someone keyed in an incorrect number. However, the other 350 point decline has been expected and is likely just the start of more to come.

See my post #52 dated 2/22/09 on this thread http://www.retrievertraining.net/forums/showthread.php?t=36286&highlight=Stock+Market&page=6

May 22 was a Sunday and the market had closed the prior Friday with the DJIA at 7,366 after falling from the high of 14,094 in Oct of 2007. I indicated that according to Elliot Wave Principle analysis of liquid markets our stock market appeared to need just a couple more very small waves to complete wave patterns of much larger degree so should soon find a bottom around 6,500.

The market did, in fact, bottom 2 weeks later on March 9, 2009 with the DJIA at 6,547.

Also in that 2/22/09 post I indicated that based on wave principle once the market did bottom we should see a major bear market rally which should retraces 38% to 62% of the decline from 14,094 high to the expected bottom of 6,500. The arithmetic at that time put the top of the bear market rally between 9,000 and 11,000.

Doing the arithmetic on the actual numbers 14,094 - 6,547 = 7,547 total points lost in wave one down. Then 7,547 x 62% = 4,679 for the maximum probable points up for the bear market rally. Therefore 6,547 + 4,679 = 11,226 likely high for the rally. It now appears that the bear market rally as measured by the DJIA has, in fact, top out at 11,258 in late April.

Unfortunately the final prediction based on wave principle as stated in the 2/22/09 post was what comes next. There are no absolutes with any form of technical analysis, just probabilities, but the probability is that the third wave down is underway and that third waves of a pattern are the longest and strongest. If this proves to be correct, 2010 & 2011 will be worse than 2008 for stock ownership. That is, the first wave down took the DJIA from 14,094 to 6,547 for a total decline of 7,547 points. Wave two up took the DJIA from 6547 to 11,258. If waves one and three were equal then 7,547 points down from the recent high of 11,258 would put the bottom near 3,700. A longer and stronger third leg down would mean something below 3,000 with 2,000, as pointed out in my 2/22/09 post, being the first significant chart support level. The stock market certainly will not go straight down and the process will take several years to complete.

As interesting as it will be to see how this plays out, I truly hope the wave principle forecast is wrong and the accuracy of first leg down and bear market rally were just incredibly lucky guesses. If this proves to be even close to accurate the impact will be worldwide and it will get ugly out there over the coming few years.

Probably the best synopsis of our situation that I have heard is that the recent financial crisis was averted by governments shifting debt from the private sector to the government sector, but who funds the government sector. Is Greece the first government domino to fall to be followed by Spain and others?

Buzz
05-07-2010, 10:08 AM
Jim, my comment was meant to be a joke. The SEC going after GS was "convenient timing." As was the tragedy in the Gulf.

However, I appreciate you taking the time to type all that out. If the Elliot Wave Principle is correct, we are all screwed, so I hope it was just really lucky. I don't have a lot of faith in technical analysis, but we'll see. If it is, I should sell all my equities, stop trailing my dogs and sell them, I should sell my house, and put it all into gold...

Hew
05-07-2010, 10:11 AM
If it is, I should sell all my equities, stop trailing my dogs and sell them, I should sell my house, and put it all into gold...
I knew it...a closet Glenn Beck listener. :p

Buzz
05-07-2010, 10:17 AM
I knew it...a closet Glenn Beck listener. :p

Newsflash. I listen to Gibson and Beck, as well as Schultz and Maddow...

Right now I'm listening to Kudlow. ;-)

Uncle Bill
05-07-2010, 10:48 AM
Thanks for the EW theory, Jim. I used to follow that stuff pretty closely when I had bread in stocks/bonds. Been a while tho, and haven't been a buyer of that newsletter for a couple of decades. As with most of those 'writers', they have lots of history to base their theorys on, and it's no doubt good science.

If I were a betting dude, which I'm not any longer...just don't have the where-withal to be a player anymore...I'd be inclined to buy into that theory. While this 'plunge' yesterday was an error blamed on "fat fingers", it certainly shows how fidgity the entire stock market is, and worse, how completely "follow the leader" batch of lemmings it exhibited.

It's become all so pathetic. It's analogous to my experience crossing the Atlantic in '58, when 85% of the troops were seasick. Standing in the hallways leading to the galley was like having a game of musical chairs, only this was putting groups of 6 to 8 soldiers around a garbage can. They would progress from one can to the other, and if one head went down, they all went down, hurling their guts out.

The "market" is so tied to electronic trading, This exercise yesterday certainly illustrated how quickly in this era, the entire system can disintegrate. Granted, they have some protections to do a stop/hold that kicks in after it plunges so far, but in the meantime, it's an emotional escalator I'm no longer interested in riding.

Good luck to those that are 'in the game'...and don't fool yourself into thinking it's anything else. It's all gotten way beyond the original intent of 'investing' in a good product or idea. The gamblers are running the game, and volatility is a given.

UB

T. Mac
05-07-2010, 12:49 PM
http://data.moneycentral.msn.com/scripts/chrtsrv.dll?symbol=%24DJI&E1=0&LPR=2&C1=3&E8=1&D5=0&D2=0&D4=1&DD=1&width=800&height=458&CE=0&CF=0

Investors still not looking too confident in the market today!

Uncle Bill
05-07-2010, 02:14 PM
Mr. Bonner has a view about the Greek situation:

UB

Abandon Ship!A few words of advice for sovereign debtors and would-be investors
http://www.agorafinancial.com/temp/DR/email/template/BillBonner.jpg

Bill Bonner
Reporting from Baltimore, Maryland...


It looks to us as though the stock market is finally rolling over...it's finally putting in a big top after a long, long bounce. But it could be just another temporary setback. We won't know for a while. In the meantime, readers are advised to floss their teeth and stay out of stocks. The bounce may or may not be over. It hardly matters. There's not much upside at these prices...and a lot of downside.

Flossing helps protect your teeth. Staying out of stocks might help protect your money. There are too many sticky things that could go wrong.

For example:

"Eurozone debt fears deepen," says the front page of yesterday's Financial Times.

According to the papers, the Greeks have spooked the world's stock markets. "The sell-off in global markets accelerated [Tuesday] amid fears that the eurozone debt crisis would worsen and that China's recovery was faltering."

As to the Greek bailout, there are two points of view - both of them insufficient. One group thinks the bankers should get their money. The other thinks the public employees should get the money. 'Stiff them both' is our advice.

A nation is like a ship. Over time - especially when the weather is nice - it accumulates barnacles. They attach themselves to the hull, weigh it down, and slow the boat.

Barnacles need to be scraped off from time to time. That's what revolutions and corrections are for. But, naturally, the barnacles don't like it. They live on pensions, public sector jobs, handouts, government contracts - and debt. And the barnacles have a way of fighting back. They vote, threaten and demonstrate. Yesterday, government employees shut down schools, airports and hospitals. Gray- haired retirees took to the streets, too, trying to prevent pension cuts.

The bankers made their threats too - quietly warning France and Germany that if the Greeks didn't pay, their banks could be in trouble...which could lead to a financial meltdown all over Europe.

The rescue plan calls for deep cuts in public spending - 20% of the Greek government budget. And that means scraping a lot of crusty parasites off the hull. So much the better, as far as we're concerned. Of course, some of them do useful work. Government payrolls include teachers, nurses and firemen. But there are plenty of do-gooders, bureaucrats, meddlers, paper-pushers, lobbyists, chiselers and layabouts on the payroll too.

But what about the debt barnacles?

The bankers speculated on Greek debt. The debt went bad. Now, they should stand up, admit their mistake, and take their losses.

Advice to Greece: Haul the boat out of the water...fire one out of every five government workers, cut the budget by 20%, and default on your loans too.

Advice to the US: Follow the Greeks.

Advice to investors: Take a long vacation.

The "Euro-feds" have turned the sovereign debt market into a 'price hiding' mechanism. Not even Mr. Market knows what the stuff is worth. A couple months ago, he thought Greek bonds might be A-OK. Now he's not so sure. Recently, Mr. Market has been turning over some other rocks...Portuguese debt...Spanish debt. He's finding slimy critters and creepy crawlers under all of them.

But then, the Euro-feds stepped in. They said they'd bail out Greece.

Now what's Greek debt worth? Nobody knows. Will the guarantors make good on their promises? Will the Greeks get their financial house in order? Will the IMF, Germany and France stand behind the Greeks even if they don't bring their deficit down to 3% (currently 13%)? Nobody knows.

And then, the head of the European Central Bank pulled a Bernanke-style stunt to further confuse everyone. Jean-Claude Trichet announced that Greek bonds could still be used as collateral at the bank, even though the bonds do not meet their quality requirements.

So, let's see...what are they worth now? This additional information from the feds is misleading. It suggests the bonds are good credits. And the bailout itself suggests that lenders have nothing to worry about - they're going to be repaid.

Uh...we wouldn't count on it.

David Rosenberg:

"Back to Greece - the fiscal future is really messy. Latest projections show that by 2013, public debt-to-GDP will approach 150%. Debt-service charges will absorb 9% of GDP and 25% of tax revenues will be siphoned to bondholders outside the country. Government spending is 50% of GDP and the civil service does not seem willing to accept even a freeze - not a cut - to wages, benefits, and pensions. It is not difficult to see the Euro-area going the way of the Latin Monetary Union a century ago."

This is just another example of rolling up small debts into big ones. Mr. Market can't tell who's on the hook, exactly. So he doesn't know where the 'good' debt ends and where the 'bad' debt begins.

One thing is pretty sure. Even with the bailout and the support from the ECB, the Greeks are still going to default. They have more debt than they can carry. The bailout just muddies the waters...postpones the inevitable...and makes the situation worse for almost everyone.

The proposed solution is just slow torture before the coup de grace. The debt grows...and becomes so large the Greek economy can't support it. Plus, efforts to keep paying back the bankers (mostly French and German) severely damage the Greek economy.

It's easy to see how. In very broad terms, the Greeks are going to have to go from fiscal party to a fiscal hangover without a good night's sleep. That's what happens when you suddenly stop borrowing and begin paying back. And that means a shrinking economy. Instead of borrowing 10% of GDP and adding to the economy, not only are you NOT borrowing, you're also taking OUT 10% of GDP to pay the interest on the money you borrowed for the party. That's a depression-size decrease in GDP...which cuts into tax revenues and makes the country's finances even worse!

Buzz
05-07-2010, 03:43 PM
Gosh, what have I been thinking.

Isn't the timing of this market free fall kind of suspicious? ;-)


Maybe I was more right than I knew. In interviews on CNBC just now, they were saying that what this all means is that congress has to be very careful and moderate populist ideas in the financial reforms. They have to be very careful about scaring Wall Street. ;-)

depittydawg
05-07-2010, 06:30 PM
That index went into free fall for several minutes. I think there's more to it than JUST the Greeks. Dayum, if we continue along the Obama/socialist agenda, we can be in line to be another Greece... a couple decades hence.

UB

Buffy could be right. On the other hand,it could be investors who want Wall Street and Banking reform, reacting to the President and Congress who are not enacting any meaningful reform.

Marvin S
05-08-2010, 09:46 PM
Not in the least. Apparently, some 500 point of the drop yesterday was due to a programed trading error; someone keyed in an incorrect number. However, the other 350 point decline has been expected and is likely just the start of more to come.

See my post #52 dated 2/22/09 on this thread http://www.retrievertraining.net/forums/showthread.php?t=36286&highlight=Stock+Market&page=6

May 22 was a Sunday and the market had closed the prior Friday with the DJIA at 7,366 after falling from the high of 14,094 in Oct of 2007. I indicated that according to Elliot Wave Principle analysis of liquid markets our stock market appeared to need just a couple more very small waves to complete wave patterns of much larger degree so should soon find a bottom around 6,500.

The market did, in fact, bottom 2 weeks later on March 9, 2009 with the DJIA at 6,547.

Also in that 2/22/09 post I indicated that based on wave principle once the market did bottom we should see a major bear market rally which should retraces 38% to 62% of the decline from 14,094 high to the expected bottom of 6,500. The arithmetic at that time put the top of the bear market rally between 9,000 and 11,000.

Doing the arithmetic on the actual numbers 14,094 - 6,547 = 7,547 total points lost in wave one down. Then 7,547 x 62% = 4,679 for the maximum probable points up for the bear market rally. Therefore 6,547 + 4,679 = 11,226 likely high for the rally. It now appears that the bear market rally as measured by the DJIA has, in fact, top out at 11,258 in late April.

Unfortunately the final prediction based on wave principle as stated in the 2/22/09 post was what comes next. There are no absolutes with any form of technical analysis, just probabilities, but the probability is that the third wave down is underway and that third waves of a pattern are the longest and strongest. If this proves to be correct, 2010 & 2011 will be worse than 2008 for stock ownership. That is, the first wave down took the DJIA from 14,094 to 6,547 for a total decline of 7,547 points. Wave two up took the DJIA from 6547 to 11,258. If waves one and three were equal then 7,547 points down from the recent high of 11,258 would put the bottom near 3,700. A longer and stronger third leg down would mean something below 3,000 with 2,000, as pointed out in my 2/22/09 post, being the first significant chart support level. The stock market certainly will not go straight down and the process will take several years to complete.

As interesting as it will be to see how this plays out, I truly hope the wave principle forecast is wrong and the accuracy of first leg down and bear market rally were just incredibly lucky guesses. If this proves to be even close to accurate the impact will be worldwide and it will get ugly out there over the coming few years.

Probably the best synopsis of our situation that I have heard is that the recent financial crisis was averted by governments shifting debt from the private sector to the government sector, but who funds the government sector. Is Greece the first government domino to fall to be followed by Spain and others?

My question would be - When did you buy in & how significant are your gains? When the Dow hit 11K it was up 63%, the S&P was up 75% & the Nasdaq was up 90%, our portfolio had beat them all :D. & we were participating, having missed a few good buys that would have added another 5% or so to our gain.

For the week Nasdaq is down 7.92%, the S & P is down 6.40% & the Dow is down 5.71%, so one's portfolio should be somewher in that range depending on how volatile their holdings are. Our week had us down 7.80% though our portfolio is a mix of all caps with cash. The cash is killing us, in order to bail the government out we are earning zilch on that part of the portfolio. So much for being a saver :). We did have bonds, muni's & treasurys, but too many were callable & you get called into a low rate environment.

Does government action, meaning Greece, get factored into this theory? If so I'd like to buy one of those crystal balls ;-).

For those of you who haven't already read it I recommend The Big Short by Michael Lewis. If you are not already cynical about the supposed intelligence of the bureaucracy & the financial world they regulate you will be after this read. One heartening thing is there are those out there who have the same level of respect for this gross incompetence as I do :cool:.

But we have to play the game available to survive, you just have to be more nimble than the regulators :confused:.

Buzz
05-08-2010, 10:12 PM
For those of you who haven't already read it I recommend The Big Short by Michael Lewis.



Funny, I just started reading that before bed last night.

Uncle Bill
05-11-2010, 10:42 AM
Was anyone other than me, suspicious of the reaction the stock market had yesterday, after the big news from Europe? It was like a Utopean dream. But then, some of you no doubt expected no less eh?

How about that! Now we have Obama koolaide being served all over the world. A trillion Euro bailout for the PIIGS and their buds. I was starting to become euphoric, until this dude burst my bubble.

UB

Whiskey & Gunpowder
By James Howard Kunstler
May 10, 2010
Saratoga Springs, New York, U.S.A.




Money for Nothing, Chicks for Free

The European Union came up with a trillion dollar bailout for itself at the dawn’s early light. Plus, each member gets a Latvian prostitute, gratis. The Germans will love this. It already goosed the Euro back above $1.30 — just when they hoped a lower Euro would help them move a few more export goods off the shelves. I expect that Mrs Merkel is already catching an earful. A few hours earlier, her coalition of Christian Democrats and free Democrats got their joint ass kicked in a North Rhine-Westphalia local election....

I mention these events reluctantly, knowing how averse we Americans are to news out of Old Europe, that boring backwater of sclerotic cafe lay-abouts, socialistic train service, and less-than man-sized portions of things that real men don’t eat anyway.


The question begging itself here, of course, is how Europe intends to come up with roughly a trillion in bailout money. Sell Portugal to China? Cut Greece up into bait and catch whatever fish are left in the Mediterranean Sea? Frankly, I’m stumped. Talk about robbing Peter to pay Paul.... All the European nations are already so hopelessly enmeshed in chains of unfulfillable counter-party obligations that the bailout might as well be a game of musical chairs played in the Large Hadron Particle Collider, set to the tunes of Karlheinz Stockhausen. The European bailout is, in fact, an absurdity. I predict that the effect of the announcement will last all of one trading day on the stock markets.

The truth is that the imbalances of global finance are so grotesque now that the whole money system is hanging together with nothing but spit and prayer. I get rafts of e-letters every week warning of a supposedly-coming global currency — a companion idea to the notion of a one-world government. Both are fantasies. Events are taking the nations of the world in the other direction: towards break-up, down-sizing, down-scaling. Likewise, if major currencies such as the Euro and the dollar blow up, they’re much more likely to be replaced by more local bank-notes backed by gold than by some hypothetical Amero or Globo-buck.

At seven a.m. Eastern time, the European stock markets were zooming, and Bloomberg even carried a wonderfully mysterious headline saying Greek Bonds Rally. That was especially rich — like, who in the **** is going to load up on Greek bonds now? Is there a pension fund somewhere run by such dimwits that they would sell their positions in the Goldman Sachs issued Wolverine CDO in order to get in on the new bargain in ten-year Greek sovereigns? I hope those pensioners are prepared to spend what remains of their lives selling chestnuts from pushcarts on the streets of Oslo, because they sure won’t be clipping coupons in front of any World Cup telecast.

As if life in the USA wasn’t surreal enough last week. Once upon a time, the stock market was a place where people with capital went to look for productive activity to invest in — say, a company devoted to making soap flakes, an underpants factory. Now the market is a robot combat arena where algorithms battle for supremacy of the feedback loops. Thursday’s still-baffling fifteen-minute “crash” was an excellent demonstration of the diminishing returns of technology. People too-clever-by-half, aided greatly by computers, have now gamed the investment indexes so successfully that these markets no longer have anything to do with investment — they’re just about shaving micro-points of profit at high volumes by micro-milliseconds off mere differentials in... math! This is truly quant heaven, a place where only numbers matter and there is no correspondence to anything in the real world. In other words, last Thursday’s bizarre action was a warning that the American stock markets have flown up their own aggregate ass.

These algo-robots may be elegantly complex, but they are really no more than triggering mechanisms, and Thursday’s — whatever it was — glitch, let’s say, ought to be regarded as a mere preview of coming attractions for a full-on feature cluster**** in which the putative contents of these stock markets get sucked into a black hole so vast that the trading desks will have to find a way to arbitrage infinity to ever again catch a glimpse of America’s receding wealth. And it could all happen in a finger-snap.


Why would anybody not heavily medicated stay invested in the stock markets? Well, the answer must be that they’re not. The few still hanging around are the institutionals with nowhere else to go, the pitiful pension funds or the pathetic college endowment funds desperately chasing “yield” in a world where once-sturdier instruments yield zirp-o — and these poor chumps are getting played and played out. The only other remaining marketeers are — you guessed it — the too-big-to-fail banks, the Federal Reserve, and possibly the US Treasury itself playing front-running games and algo stunts and black box buy-ups, and carry-trade rackets, and — let’s not forget — outright swindles.

We tend to forget that all this hugger-mugger once had a relation to real economies. The basic truth about real economies — at least the industrial-strength ones — is that they cannot be successfully managed on the basis of revolving debt in the context of no growth — and no growth is exactly the bottom line of the peak oil story so revolving debt is finished for now. Speaking of oil, the Deepwater Horizon disaster (still ongoing) has gotten so boring to the editors of The New York Times that further news about it has been banished from the front page of the paper. Too depressing, I guess.

In the meantime, though, rest assured that whatever else is going on out there, credit default swaps never sleep.

Regards,
James Howard Kunstler

P.S.: A sequel to my 2008 novel of post-oil America, World Made By Hand (http://www.amazon.com/dp/B001JEPKY2?tag=whiskegunpow-20&camp=14573&creative=327641&linkCode=as1&creativeASIN=B001JEPKY2&adid=1V6PKPMA2RWDAB8N3CEB&), will be published in September 2010 by The Atlantic Monthly Press. The title is The Witch of Hebron (http://www.amazon.com/dp/0802119611?tag=whiskegunpow-20&camp=14573&creative=327641&linkCode=as1&creativeASIN=0802119611&adid=0SQE567MTVESCQASWGNZ&).

Editor’s Note: Money for Nothing, Chicks for Free (http://clicks.whiskeyandgunpowder.com//t/AQ/AAGMrw/AAGTbQ/AAHCzw/AQ/AnzL8g/-moR) is featured on Whiskey & Gunpowder (http://clicks.whiskeyandgunpowder.com//t/AQ/AAGMrw/AAGTbQ/hAo/AQ/AnzL8g/U9U2).