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I am betting that we will have a Black Monday that history will talk about. What is your guess?
Down 200, where will the money go? It will still flow into treasuries. The bigger question is how will Washington react? If they get serious we can pull out of this. If there is more billionaire and millionaire talk, we are doomed.
Someone in Congress has to step up. Obama is impotent.
One of the biggest questions after the downgrade was what impact it would have on already nervous investors. While the downgrade was not a surprise, some selling is expected when stock trading resumes Monday morning. The Dow Jones industrial average fell 699 points this week, the biggest weekly point drop since October 2008.
"I think we will have a knee-jerk reaction on Monday," said Jack Ablin, chief investment officer at Harris Private Bank.
But any losses might be short-lived. The threat of a downgrade is likely already reflected in the plunge in stocks this week, said Harvey Neiman, a portfolio manager of the Neiman Large Cap Value Fund.
"The market's already been shaken out," Neiman said. "It knew it was coming."
One fear in the market has been that a downgrade would scare buyers away from U.S. debt. If that were to happen, the interest rate paid on U.S. bonds, notes and bills would have to rise to attract buyers. And that could lead to higher borrowing rates for consumers, since the rates on mortgages and other loans are pegged to the yield on Treasury securities.
However, even without an AAA rating from S&P, U.S. debt is seen as one of the safest investments in the world. And investors clearly weren't scared away this week. While stocks were plunging, investors were buying Treasurys and driving up their prices. The yield on the 10-year Treasury note, which falls when the price rises, fell to a low of 2.39 percent on Thursday from 2.75 percent Monday.
A study by JPMorgan Chase found that there has been a slight rise in rates when countries lost an AAA rating. In 1998, S&P lowered ratings for Belgium, Italy and Spain. A week later, their 10-year rates had barely moved.
Yikes, I hope the dummies in Washington don't share your opinion. In the short term, it will not be the end of the world, but we have a very short window (12 to 18 months) to show the world we are serious about debt reduction or we are cooked.
If the Dow starts down and can't get it's feet, then the bottom should be around 5975 when a few months to a couple years.....
Canada and japan will be liquidating billions and buying the US doller to prevent the rise of our currency.
Canada's doller value cannot go over $1.10CDN because we will have to de-vaule it on purpose.
Also expect some massive in Canada/US building projects to be annouced time to build some massive super freeways to replace the old ones that will need tons of poeple and be nation wide and create some 3-4 years worth of temp jobs.
I am betting that we will have a Black Monday that history will talk about. What is your guess?
I say no big reaction.
1. IBM, Chevron, Walmart, Honeywell and the other 496 companies in the S&P 500 did NOT get downgraded today.
2. S&P says our politics are a hash and our policies are deficient. This is not news to anyone.
3. Ironically, anyone who sells out ends up going to the downgraded entity: money funds are full of US obligations, and banks are backed by...the US government. Why would anyone sell non-down-graded stuff to pile up more exposure to the downgraded stuff?
If I am wrong and you are right, I'll be buying like I've never bought before.
No black. This will trend back up before all hell breaks out. It's best to stand on the sideline if you don't like the up and down motion. At sometime the US will default on it's loans. Be in steller dividend companies. They will out smart the gov't. Gold and silver with some oil will serve you well. Good investing! GE
We are the largest economy on the planet, we are not just some other country. It is a pretty big deal. Don't forget we are the worlds reserve currency, for now.
No black. This will trend back up before all hell breaks out. It's best to stand on the sideline if you don't like the up and down motion. At sometime the US will default on it's loans. Be in steller dividend companies. They will out smart the gov't. Gold and silver with some oil will serve you well. Good investing! GE
I don't think commodities will save you. I'm not sure what will. Equities, such as those you suggest may be the best bet.
That all depends on if the big broker boys set their HFT machines to swoop up all the folks looking to dump and run. If they do all will be fine most likely. If not look out.
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