Almost exactly one year ago at the NYSE when the fundamentals of our economy were oh so strong:
On October 9, 2007 the Dow set an all time high of 14,164. On that same day the S&P reached its Mount Everest of 1,565.
And today? Well, we’ve hit a bit of a rough patch . . .
Stocks ended lower for the fifth straight session. According to preliminary calculations, the Dow fell 508.39, or 5.11 percent, to 9,447.11. The drop came a day after the blue chips fell below 10,000 for the first time in four years. The Dow skidded as much as 800 points on Monday before finishing with a loss of 370.
Broader indexes also fell. The Standard & Poor’s 500 index declined 60.66, or 5.74 percent, to 996.23, while the Nasdaq composite index fell 108.08, or 5.80 percent, to 1,754.88.
So in a year’s time we’ve gone from a bubble inflated high of over 14,000 to losing approximately 33% of the value of the DJIA at today’s market close of just under 9500. And an even greater 37% loss in value if we look at the Standard & Poor 500 index. How low can the Dow go? I’m guessing a bottom of 7000, but then I’m an optimist.
Maybe somebody should ask the candidates at the debate about this stuff. I can’t wait to see John McCain blame everybody but himself and his own party for this disaster.
This has gotten so bad that I would not be surprised to see a few VERY LARGE companies in different industries just collapse at any time.
GM is headed for bankruptcy as is Ford to name but one industry.
well the economic is turning the electoral map blue..so to speak.
http://news.yahoo.com/s/ynews/ynews_ts59
the lowest since 1937. S&P below 1000 – 30% decline
One of the unintended consequences of allowing Lehman to fail…. Blocked Pipes. so today the Feds have taken most unusual step – will lend directly to companies by buying their commercial paper and OTC derivatives…
How much ?…”big enough to backstop the market”
Can a Central Bank go broke?
Implosion of banking system on the way. All Feds action still does not address the core problem – blocked pipes.
Feds should call up all the institutions in the banking and shadow banking system – let them come clean.
What is at stake here is the only money that counts: CONFIDENCE.
well we’re certainly getting the Toil and Trouble out of the equation, aren’t we?
What’s amazing is that so many folks are surprised. This housing/credit bubble has been the most publicized bubble in the past 3 decades and the bursting of this bubble has also been predicted ad nauseum.
Anyway for those punters in the game – SocGen’s Albert Edwards forecast of S&P 500 at 500 seems ever more correct. Now of course he is the first to state that nothing happens in a straight line. But he has continuously reaffirmed his call as we have had the inevitable rallies along the way.
We can be sure that the current political and economic response to the financial crisis will get us the Great Depression where the US GDP shrank by half. This is what we should expect when you have a corrupt Treasury secretary that played a major role and benefited from the bubble as CEO of Goldman Sachs from 1998 to 2006 and a clueless academic shilling for the very same firms and managements that created the bubble. Of course they are backed by some of the most corrupt Congressmen and senators many of whom are Democrats. My Wall St hall of shame list includes Barney Frank, Chuck Schumer and Chris Dodd who were directly responsible for the Fannie/Freddie mess as they prevented any oversight and coddled these firms. Just check on who are the largest recipients of campaign contributions from Wall St – Hillary and Barack are the top 2. Barney Frank, Chris Dodd and Chuck Schumer are in the top 10.
this is 100% the Republicans fault, you can’t clean up six years of crap with 2 rolls (or years) of toleit paper
I beg to disagree.
Barney Frank has been shilling for Fannie/Freddie for a very long time. He played a major role in protecting Franklin Raines who was Clinton’s budget director and then CEO of Fannie during the Clinton years who settled with the SEC/DoJ for accounting fraud at Fannie. Raines walked away with millions.
Bob Rubin another Goldman Sachs alum and Clinton’s Treasury secretary was a big proponent of “free market capitalism” and played a significant role in the repeal of Glass-Steagall, promoting the deregulation of credit derivatives and NAFTA. At the end Clinton signed all this legislation into law.
Take of your rose tinted glasses. The Democrats have played an equally corrupt role in the financial mess and continue to do so. They are as beholden to Wall St as the Republicans.
Yeah, and who sponsored the bill?
Sen. Phil Gramm, McCain’s Economic advisor
and while we’re blaming Clinton that little meeting in 2004 had a huge roll.
U.S. regulator’s 2004 rule let banks pile up new debt
Have to agree with ab initio. The Democrats are just as responsible for everything as the Republicans. There’s just no question, the history is very clear. Clinton reappointed Greenspan twice. Obama strongly supported the bailout bill, as he has the wars. They have strongly supported and profited from the wars in Iraq and Afghanistan, and have continued them for the past two years despite controlling Congress and having the power to stop them at any time. They are just as corrupt in every way, and represent just as much danger to the country and the world as the Repubs. To claim otherwise at this point is just unreal. It’s hard to believe that anyone is actually seriously considering voting for either party.
Obama did what he had to do. Damned if he does, damned if he don’t.
There’s a lot of info not in the public square. It would be throwing all of a week’s gasoline production on a brush fire.
We have moved from facing a severe deep recession to economic depression.
As for Obama, I’m relieved Paulson and Bernanke were not able to keep this toxic ball in the air or in the closet until after the election. Now Obama can’t be blamed. He inherited the shit.
well the record points towards 100% Republican fault they have controlled congress since 1994 to 2006. I am still looking for a near economic depression during the Clinton years, can’t find one.
You can nitpick, but Republican’s have been in control since 2001 to 2006. I sure if we look hard enough we can try to blame Jimmy Carter too.
I agree with ab initio also. There is so much corruption around; no wonder the economy is tanking. Having Paulson as Secretary of the Treasury is a national disgrace. Kind of like having the foxes guard the chicken coop.
fuld ‘cold cocked’:
Knock Out: CNBC Confirms Lehman CEO Punched at Gym
damn!…l’ll bet that felt really good…at least one guy got a lick in, eh.
I bet the judge on that case would be like “hit him again!” instead of punishing him for assault/battery.