Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
LONDON - Stocks fell sharply worldwide Monday following declines on Wall Street last week amid investor pessimism over the U.S. government's stimulus plan to prevent a recession.
Investors took cues from the negative reaction to the president's plan on Wall Street on Friday, when the Dow Jones industrial average slid 0.5 percent to 12,099.30, bringing its loss for the year so far to nearly 9 percent.
Traders also have shrugged off assurances from Federal Reserve Chairman Ben Bernanke that the U.S. central bank is ready to act aggressively — which means a likely big interest rate cut later this month — to help the sagging economy.
Major financial institutions like Wachovia and Bank of America (Countrywide purchaser) will be making their 4th quarter reports tomorrow. Rumor around here (NC) is that Wachovia will post a loss.
Dow futures seem to be down about 4.3% at the moment, which translates to a 520-point drop tomorrow, at least for the opening.
I'd expect the Dow to finish Tuesday somewhere in the mid or mid-high 11000's, depending on how much 'bargain-hunting' activity (which lifts the index higher) takes place.
A 1,000 Point Drop On The Dow? (C)(BAC)(AXP)(AAPL)
Tuesday could bring a 1,000 point drop on the Dow, especially if markets in Asia and Europe repeat their Monday performances tomorrow. China's big Hang Seng index fell 5.5% to 23,818. The percentage drop in Shanghai was a bit less.
Some people are uneasy at the idea of foreign governments and interests holding so much equity in America's top investment banks, but at this point, the US government is paralyzed with fear that the lack of such investment could be catastrophic.
If you follow the markets over a long time you see that it is very rare for the US market and foreign markets to act differently from each other. Usually they go in the same direction (overall foreign index and S&P 500 index) with just amplification variances.
Some people are uneasy at the idea of foreign governments and interests holding so much equity in America's top investment banks, but at this point, the US government is paralyzed with fear that the lack of such investment could be catastrophic.
This is the danger of allowing our dollar to fall so far in value. The cost of the Iraqi war has contributed to the dollar decline by the increased amount of national debt.
The decrease in fed funds rates contributed to increased consumer spending and rising home values. The lower dollar made US-made products cheaper to export. However, the return on long-term Bond yeild is low compared to historical returns. Risk-free returns are barely keeping up with inflation if you factor IN food and energy.
The stock market can only go so far on "consumer-driven" end demand. High-dollar items such as cars, construction and agricultural equipment, has cooled domestically. The world is not immune from our slowdown as some "experts" purport. The only strategy that makes sense for foreign investors is to buy valuable assets such as US resources, farm land, timber, US oil reserves, etc.
Not coming to the rescue of our financial institutions makes the prices of these assets lower and even cheaper to buy.
The Fed, if they want to be proactive, should take the Fed Funds rate down to 1% now for a finite communicated period of time to encourage business investment. The rate would then be scheduled to increase 1/4 point per quarter until it reached the 10 year average of the risk-adjusted rate of inflation.
The US government should be backing 0% investment bonds for qualified alternative energy initiatives conducted by US-based companies. Education grants should be offered to colleges for R&D initiatives aimed at marketable alternative energy development. Similar incentives could be offered for US infrastructure system development that incorporates light rail and other non-automotive transit systems into existing metropolitan areas.
It's time that we start making products that are needed for the 21st century not just importing the same things from former 3rd-world nations.
Don't get too involved in analyzing Hang Seng downturn, the index went up 57% between 1/1/07 and 10/30/07. It too, is due for a bit of a downturn.
Quote:
Originally Posted by NewToCA
If you follow the markets over a long time you see that it is very rare for the US market and foreign markets to act differently from each other. Usually they go in the same direction (overall foreign index and S&P 500 index) with just amplification variances.
Well it just isn't one market now, it seems this is wide spread and pretty much affecting every market.
Stocks Plummet in Germany, Hong Kong, India, Brazil in Rout
Quote:
It's the worst I've ever seen,'' said Johan Stein, who helps manage the equivalent of about $14 billion at Nordea Asset Management in Stockholm. ``The financial system is in terrible shape, and no one knows where this will end.''
Today's declines follow the worst week for U.S. stocks in five years after President George W. Bush's $150 billion plan to revive the economy and expectations of interest-rate cuts failed to allay recession concerns.
Futures plunge on U.S. recession fears: Financial News - Yahoo! Finance (broken link)
Futures plunge on U.S. recession fears
Quote:
"What we are seeing today are more signs that the shock waves from the U.S. are still expanding throughout the world, and we are still in the eye of the storm as far as credit issues are concerned," said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.
The S&P/TSX composite index plummeted almost 605 points on Monday as it joined a worldwide market sell-off prompted by growing fears of a U.S. recession.
The Nikkei 225 Stock Average plunged 466.01 points, or 3.36 per cent, to 13,395.28.
The broader [domain blocked due to spam] index of all first-section issues also dropped 39.8 points, or 2.97 per cent, to 1,301.70.
The Tokyo players remained uncertain that Bush's stimulus package would be enough to recover the US economy following Wall Street's falls.
I do not even pretend to understand the nuances of global economics and how one thing will eventually affect another. I do however know that this is not a good sign and looks to me like people are in a panic mode.
My grasp of economics comes when I go to buy a gallon of gas or milk, a box of corn flakes, or a beef roast. Of late, I have certainly noticed a sharp increase in prices on day to day consumer items and I suspect that this years garden will be expanded and I will be doing a lot of canning.
While I am all for folks making bucks, it is the American dream after all, but this however is a slap in the face to most people....
The Wall Street gurus who presided over the subprime mortgage crisis currently shredding global sharemarkets have awarded themselves bonuses totalling $US33.2 billion ($38 billion).
In a concession to the crisis - which has forced America's largest banks to write off billions in bad investments and raise billions more to shore up their capital reserves - the bonuses were down nearly 5 per cent on the previous year.
The average bonus of $US180,420 ($206,088) in 2007 dipped 4.7 per cent from the previous year, New York state Comptroller Thomas DiNapoli said in a statement today.
I am deeply saddened that exec's had to take a 5% cut in bonuses.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
