Global economic crisis

[Derek Ortt]

Did you know that DJIA is made up of 30 companies (which closed 6763.29 today) including General Electric, General Motors, American Express, Citicorp, JP Morgan Chase, Bank of America (all companies receiving bailouts) and Chevron and ExxonMobil (see Ed's comment about IDC deduction).

Just something I noticed. . .and wondering why we pay attention to just 30 companies . . .and not to something like the S&P 500

e could pay attention to the NASDAQ... still about 80% below its 1999 high

[Nimbus]

The UK FTSE dropped by 5.33 percent today. One of the strongest banks in the UK is having problems.

"HSBC said the £12.5bn it is seeking to raise from shareholders to both shore-up its balance sheet and to grow through "targeted acquisitions".

The European markets open earlier than the US markets and sometimes lead.

[Dionne]

A needed adjustment. Imagine coins being worth more than cash? Or a gallon of fresh water worth more than a gallon of gasoline?

[zaqxsw75050]

S&P 500 below 700. Back to the red after a decent start this morning.

[Brent]

Another bad day:

DOW
6626.3
-249.54
-3.63%
NASDAQ
1310.06
-43.68
-3.23%
S&P 500
685.3
-27.57
-3.87%

[gtalum]

Moved from NK thread:

The first 'stimulus' bill will cost far more than the entire Iraq and Afghanistan wars combined

Not quite. The total spent on Iraq thus far approaches $2 Trillion. Regardless, we were in this recession long before the passage of any of the stimulus or bailouts.

The CRA is a canard and has nothing to do with the problem. Have you actually read the CRA? There's no language anywhere in it that requires banks to lend money to people who can't pay the loans back.

Bank greed, borrower fraud, and incompetent oversight are a big part of the problem, and the causes of the housing meltdown. Another big part of the overall economic trouble is the long-term devaluation of our currency from massive deficit spending, thanks primarily to the ill-advised war in Iraq.

[Derek Ortt]

Moved from NK thread:

The first 'stimulus' bill will cost far more than the entire Iraq and Afghanistan wars combined

Not quite. The total spent on Iraq thus far approaches $2 Trillion. Regardless, we were in this recession long before the passage of any of the stimulus or bailouts.

The CRA is a canard and has nothing to do with the problem. Have you actually read the CRA? There's no language anywhere in it that requires banks to lend money to people who can't pay the loans back.

Bank greed, borrower fraud, and incompetent oversight are a big part of the problem, and the causes of the housing meltdown. Another big part of the overall economic trouble is the long-term devaluation of our currency from massive deficit spending, thanks primarily to the ill-advised war in Iraq.

However, we quickly came out of the recession as the Afghan and Iraq wars heated up. Increased defense production. Iraq has not had anywhere near the same level of requirement during the last couple of years, so this recession may in part, though likely small, be due to a lessening of the fighting

[gtalum]

However, we quickly came out of the recession as the Afghan and Iraq wars heated up.

Oh I agree, it did help bring us out of the short and shallow 2002/03 recession. But it was fleeting, and the long term result of the resulting devaluation of the dollar, the world's safety currency for the last three-quarters of a century, is what we're seeing today. The alleged reduction in fighting hasn't resulted in less spending yet, so that has nothing to do with anything.

Regardless, I'm sure you're not suggesting that we start wars just to jump-start the economy, right?

[Derek Ortt]

However, we quickly came out of the recession as the Afghan and Iraq wars heated up.

Oh I agree, it did help bring us out of the short and shallow 2002/03 recession. But it was fleeting, and the long term result of the resulting devaluation of the dollar, the world's safety currency for the last three-quarters of a century, is what we're seeing today. The alleged reduction in fighting hasn't resulted in less spending yet, so that has nothing to do with anything.

Regardless, I'm sure you're not suggesting that we start wars just to jump-start the economy, right?

of course not! I believe that NK is the puppet Master behind Iran, Syria, and Venezuela. Israel already confirmed them behind Syria with NK being at the nuke reactor that Israel had to bomb immediately... We know how close Iran and Syria are and NK and Iran were working together on missile technology. The only one where the link is less strong is Venezuela, but Chavez' statements regarding Iran do leave me very suspicious

A massive jump start to the economy though would be a byproduct

[Derek Ortt]

the dollar also has become stronger recently as the rest of the world has cut their interest rates. A large weight on the dollar was our rates being well below the rest of the world. They still are lower than the rest of the world.

That is one reason why I do not see the link between the war and the devaluation of the dollar

I do give Bernake credit... I was against the interest rate reductions when they occurred... however, they were necessary to keep us out of the full deflationary spiral. If the dollar becomes too strong too quickly now, it will shove us into the deflationary spiral

[DanKellFla]

http://dealbreaker.com/2009/03/cc-box-a ... kgroun.php


Hysterical

[gtalum]

the dollar also has become stronger recently as the rest of the world has cut their interest rates. A large weight on the dollar was our rates being well below the rest of the world. They still are lower than the rest of the world.

True, but its been slowly sinking again in recent weeks, and even at its recent high the dollar was significantly below what it was before the war. Massive deficit spending is a big drag on the value of a fiat currency like the dollar.

[Derek Ortt]

rates around the world were recently cut again. I believe the dollar has risen somewhat as a result

[gtalum]

The dollar is still fully 25% less valuable against the Euro than it was in 2002.

[zaqxsw75050]

Unemployment rate up from 7.6% to 8.1%

http://www.bls.gov/cps/

[Ed Mahmoud]

If Citi drops below a dollar, into penny stock land, it'll be replaced by another financial sector stock weighted in such a way that the DJIA would be the same at the time of replacement.


C is trading at a $1.02


Edit- maybe not- heard a temporary rule gives the stocks that drop below a dollar until June to come back up.

[Derek Ortt]

citi was below a dollar yesterday

[Derek Ortt]

the question I have is will we see an eventual full crash of the market where we lose ~20% in a single day?

[vbhoutex]

the question I have is will we see an eventual full crash of the market where we lose ~20% in a single day?

Very doubtful according to everything I hear/read.

[Derek Ortt]

the question I have is will we see an eventual full crash of the market where we lose ~20% in a single day?

Very doubtful according to everything I hear/read.

that may not be good as a full crash would likely set us up at least for a solid bear market rally. If things continue the way they are, we may need to fall to about 6,000 before seeing a short rally, before falling once again. This is eerily similar to the DOW fall during the run toward depression and the NASDAQ fall at the start of the decade