Open thread: Wall Street
posted at 9:08 am on October 24, 2008 by Allahpundit
The market hasn’t opened yet and already it’s the story of the day. Here’s your thread for pep talks, survivalist tips, and all points in between. There’s little doubt the Dow will break through 8,000; the real question is whether we’ll reach the magic number for trading to be halted. These Friday financial death threads sure are fun, huh?
Nouriel Roubini, who predicted both a recession and a financial meltdown earlier this year, expects markets may soon have to be closed for a week or more to prevent a run on hedge funds. Exit question: Where’s the bottom?
Update: One way to ease the panic: More women traders!
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: 1 2 Next »
I can’t wait. Ugh.
thebrokenchair on October 24, 2008 at 9:12 AM
Nobody interested in yet another crash – or is it that everyone has full confidence in whatever Secretary Paulson’s plans are today?
corona on October 24, 2008 at 9:13 AM
The bottom is wherever it stops sinking.
ManlyRash on October 24, 2008 at 9:13 AM
Allah is up early.
carbon_footprint on October 24, 2008 at 9:14 AM
Allah, you are 1 positive fella, ya know that?
Now, where is the Old Charter?
TheHat on October 24, 2008 at 9:15 AM
Can the DOW go negative?
MarkTheGreat on October 24, 2008 at 9:15 AM
Dude, where ya been at the last 2 weeks? That aint an upward spiral your seeing.
If the DOW were to actually fall into the negative overall, would hedging for it to go positive be legal?
TheHat on October 24, 2008 at 9:16 AM
I think I’ll stick to selling stuff on eBay. The risk is slightly less (considering all the flakers out there) and the reward is slightly better…. Unless eBay ups it’s fees again.
DakRoland on October 24, 2008 at 9:18 AM
Yeah, and it doesn’t get any more beautiful as all of the hedge fund owners with 60 day notice requirements start sending in their withdrawal demands for a year-end cash-out.
Plenty of sellers but not too many buyers looking to pick up whatever the heck it is that’s for sale — a derivative of an interest rate swap in a securitized pool of subprime mortgages, I think.
JudetheFossil on October 24, 2008 at 9:18 AM
Gulp.
Yossarian on October 24, 2008 at 9:19 AM
I was only in my IRA a short time before I left the job and have not added anything in five years. I am still way ahead of my original “investment”. That being said I just don’t see why this is happening and I beg you not to waste your time trying to explain it to me. It just isn’t logical.
Cindy Munford on October 24, 2008 at 9:20 AM
I’m not very good at this investing thing. I bought up a bunch of stuff at the start of last week, guessing/ hoping we were near a bottom. Oops. Seriously though, a company like Microsoft or Wal-mart isn’t going bankrupt no matter how slow the economy gets. I’ll eventually make some money. Right?
BadgerHawk on October 24, 2008 at 9:20 AM
The dollar is up and oil is down.
Since I’m not cashing in my 401K for awhile, the only problem with this is that it appears someone (cough, Soros, cough) is doing something really shady.
Conspiracy theory? Nope. Read about what he did to try and destroy Major and sink the pound in the early 90′s. Bernard Connelly’s The Rotten Heart of Europe is a great place to start. Fwiw, this is a book Kathleen “Media Whore” Parker couldn’t finish a chapter before crying to her mother about how many big words it contains.
PimFortuynsGhost on October 24, 2008 at 9:21 AM
I think he’s responding to where the bottom is. As in below 0 points value.
amerpundit on October 24, 2008 at 9:21 AM
I just can’t believe it’ll get so bad that the markets will be forced to close down.
We just need to get through the election, and the market will even out. What I’m worried about tho is the major retailers and what the 4th quarter earnings/profit bottom line will be…considering the Christmas shopping season may not be good.
JetBoy on October 24, 2008 at 9:22 AM
In better news, I am seeing gas as low as $2.39 per gallon this morning in Texas.
carbon_footprint on October 24, 2008 at 9:26 AM
The market is scared sciteless about an Obama presidency.
carbon_footprint on October 24, 2008 at 9:27 AM
Whoopie! Its Payday! I’m going to be able to buy a whole bunch of shares for my 401k!
franklinstein on October 24, 2008 at 9:28 AM
Yes. And if I remember correctly from some of your other comments, you are young. Unless you anticipate needing your savings soon, to buy a home or pay for education or start a business, you can feel safer than others in buying because your time horizon is longer.
The point is, a good investment often depends upon how long you have to wait for the value to be recognized. Retirees, and those close to retirement, are being seriously damaged and spooked by this market. Younger people may have some nice opportunities in stocks and housing.
Go forth and multiply young Luke.
JiangxiDad on October 24, 2008 at 9:28 AM
it will go down -750 and at the end of the day, it will be down -225 (I hope) :)
Rov
Rovin on October 24, 2008 at 9:29 AM
Funny.
I just heard the AP touting another recent poll showing Obama ahead of McCain by 11.
Coincidence?
cntrlfrk on October 24, 2008 at 9:29 AM
Dead on CF!
Rovin on October 24, 2008 at 9:30 AM
Yeah. I’m in my twenties and only investing money I don’t plan on needing for 4 or 5 years. 4 of the 6 companies I bought into so far are down, but I’m pretty comfortable with their long term outlook.
BadgerHawk on October 24, 2008 at 9:32 AM
Gulp
CanadianGuy on October 24, 2008 at 9:34 AM
When I saw it for $2.42 on Wenesday in Virginia Beach, I taught my 3yo son a new phrase: Hot Damn! In trying to remain optimistic, I’m going be happy about the low gas prices.
Anna on October 24, 2008 at 9:34 AM
When it hits -1100 the market actually closes for one hour.
Rovin on October 24, 2008 at 9:34 AM
I wish people would tell the truth…markets crash when Obama surges. McCain surges and Markets soar. Makes sense.
Mommypundit on October 24, 2008 at 9:35 AM
The dollar is up and oil is down.
PimFortuynsGhost on October 24, 2008 at 9:21 AM
Several months ago this was tauted as the magic combination that would make everything right. Funny who times change. But what does happen to all the money that is being put into IRAs and 401K’s, are they being invested in “safe” areas while things are so crazy?
Cindy Munford on October 24, 2008 at 9:35 AM
Down 424.
amerpundit on October 24, 2008 at 9:35 AM
Oil’s down to $63 bucks…..yah—hooo!
Rovin on October 24, 2008 at 9:35 AM
476.
amerpundit on October 24, 2008 at 9:37 AM
The “stock market dramatically portrayed in photos” blog:
http://brokershandsontheirfacesblog.tumblr.com/
jgapinoy on October 24, 2008 at 9:38 AM
Arin Burnett is sooooo hot!
When the sell orders cycle through….it will rise for a bit and then you’ll see the “real” #’s
Volitility is the buzz word
Rovin on October 24, 2008 at 9:38 AM
BTW, think Warren Buffett is a genius now?
corona on October 24, 2008 at 9:39 AM
I think you are being smart. I sincerely wish you make a boatload!
JiangxiDad on October 24, 2008 at 9:40 AM
No coincidence. Barry scares the hell out of the market.
txsurveyor on October 24, 2008 at 9:40 AM
-433.
amerpundit on October 24, 2008 at 9:42 AM
It won’t go much below zero, that I can promise.
ballz2wallz on October 24, 2008 at 9:42 AM
The effect of the upcoming demographic shift (boomers retiring) on the market will be interesting. As the aggregate investor timeframe continues to shorten and boomers draw down rather than plow money into equities it will be challenging.
dedalus on October 24, 2008 at 9:44 AM
Half this nation could retire comfortably on what Buffet lost in the past two weeks.
Rovin on October 24, 2008 at 9:46 AM
Good thing I’m picking up my venison at the processor today, may need that soon.
quax1 on October 24, 2008 at 9:48 AM
:( I miss backstrap, bisquits & gravy
Rovin on October 24, 2008 at 9:50 AM
Much of this indeed be due to hedge funds unwinding, in order to meet the demands by clients for their money at the end of the funds’ fiscal year…
But, I wouldn’t rule out economic terrorism, or an attemot to influence the market in a negative way by unscrupulous folks in order to benefit O!; to provide him with the ultimate October surprise…
I hope that our FBI and CIA are looking into this, on both the domestic and international fronts respectively, to try and find out whether this is deliberate or simply a perfect storm of circumstances…
RocketmanBob on October 24, 2008 at 9:51 AM
Since you’ve asked, here’s the bottom, and perhaps more importantly, how we know.
If you’re more interested in whether or not October 2008 is the worst X month, months, or years for the stock market ever, see this post.
The short answer is: it’s up there, but it won’t rank as the worst. Through 21 October, the average value of the S&P 500 for the month is 997.23 – that value will be hard to drag down to the 896.10 it would need to be to make this the worst one-month period ever. The worst ever is June 1932, the bottom of the stock market during the Great Depression.
Finally, for the sake of putting things in perspective, here’s Political Calculations’ guide to the worst of the stock market.
It’s certainly not a time for pansies, but there is opportunity here.
ironman on October 24, 2008 at 9:52 AM
The formula for *victory:
1. Augment victim class via FM&FM
2. Metasticize FM&FM cancer-loans within banking system
3. Have media thump recession drum incessantly
4. Season with cooked polls until opposition hopeless
5. Have candidate promise salvation and lower taxes for victims, higher taxes for
investorsoppressors6. Rinse, repeat, until country is totally cooked.
* Some collateral damage may occur. Side-effects may include loss of vision, integrity, and some allied democracies. Democracy worldwide may be subject to severe shrinkage, and fairness doctrines may be experienced resulting in impaired free speech. See your Republican doctor if you experience a recession lasting longer than 4 years.
Prevention: ignore those who profess to inform you, destroy their encampments through starvation, hear the lamentations of their columnists and talking heads, and drive them before you into bankruptcy.
drunyan8315 on October 24, 2008 at 9:54 AM
I hate to be a conspiracy theorist, but there is a part of me wondering whether there are actors afoot overseas (e.g., George Soros) who are influencing the market to try and elect Obama. First we have Obama claiming to raise over $600 million from individual small donors. Now multiple market crashes right before a crucial national election…
Outlander on October 24, 2008 at 9:56 AM
Getting ready to invest some money in GM and GE myself…
Skywise on October 24, 2008 at 9:56 AM
And here is the proof?
carbon_footprint on October 24, 2008 at 9:56 AM
Yeah, he’s a pretty smart guy. He’s often collecting 10% dividends on the preferreds he takes in companies and he’s liquid enough to wait a very long time to convert his shares. He ususally gets terms few others can get.
dedalus on October 24, 2008 at 9:57 AM
I’m buying. Now I just have to live long enough to spend all the money I am going to make.
huckleberryfriend on October 24, 2008 at 9:57 AM
GM is speculation at this point. GE is interesting but their financial exposure is opaque.
dedalus on October 24, 2008 at 9:59 AM
GM? They aren’t going to be making a profit until at least 2010.
BadgerHawk on October 24, 2008 at 10:00 AM
GM’s not going away either. If McCain wins, we get lower oil prices (hopefully) and car sales return. If Obama wins, he protects the UAW which props up GM.
Skywise on October 24, 2008 at 10:02 AM
MSFTs profits are up from last year’s quarter, and their stock is down 5% right now. Chaos.
BadgerHawk on October 24, 2008 at 10:03 AM
yes, of course. Same could have been said for housing in many places, as boomers downsize and relocate. But with this sudden RE and market crash, what might have been a slow process happens instantly. Net result? What was probably in the cards anyhow. A reduced standard of living for boomers, especially with still rising life expectancy rates. People may have to find out what a used car is, or how to cook at home. But God is good. He won’t let people be asses their whole lives. If you didn’t learn what you should have earlier (mend your socks, don’t throw them away), you’ll find out later :)
JiangxiDad on October 24, 2008 at 10:04 AM
Due to my health, I have low income and only a modest savings. If McCain gets elected, I will consider taking my money out of my CD when it comes due and plowing it into some kind of investment. It’s only a grand, but by the time things bottom out, maybe that’ll actually get me a lot compared to now. :D
If Barry wins… I’ll either renew my CD or take my money to put under my mattress. Or buy silver (gold is way too expensive now for a modest trader like me).
Vatican Watcher on October 24, 2008 at 10:05 AM
drill babay drill
custer on October 24, 2008 at 10:06 AM
Right now few have the money to buy a new car and even fewer have the money to pay all-cash, since there are few auto loans available. If you believe GM is going to be there, I think you can get 30% on some of their debt–the fixed income market is pricing in a high risk of default.
dedalus on October 24, 2008 at 10:08 AM
Save us Obamessiah, you’re our only hope!
offroadaz on October 24, 2008 at 10:09 AM
serious question though, if we are in a recession why does the dollar keep gaining on the euro and losing ground on the yen?
offroadaz on October 24, 2008 at 10:10 AM
Watching and waiting. In cash and ready to pounce. No way to tell the actual bottom except in hindsight so now is not the time to make a greed-based gamble.
But the time to buy is coming. Stay steady and invest in good companies.
Gilda on October 24, 2008 at 10:12 AM
Do I detect a note of mockery in there, AP?
RushBaby on October 24, 2008 at 10:12 AM
Should Obama win (God forbid), I think we’ll see the markets jump in the short-term for psychological reasons–people believe this guy will help the economy, even Buffet.
Hopefully I can sell out (even my IRAs) by mid-Dec at a modest profit, before he takes office and the true economic carnage begins.
jazz_piano on October 24, 2008 at 10:14 AM
How can you panick because there might be a recession…therefore, creating a recession…People are so reactionary. 9-11 worked beyond our wildest nightmares.
tomas on October 24, 2008 at 10:15 AM
That’s an idea… now I just gotta figure out how to purchase it. :D
Skywise on October 24, 2008 at 10:15 AM
Best of luck to you.
BadgerHawk on October 24, 2008 at 10:15 AM
Skywise,
As I’m sure you know, there’s tons of excellent buys out there right now that have gone far too low for their actual capital strength and reliability.
Hope you pick some good ones….
Rovin on October 24, 2008 at 10:16 AM
The financial talking heads offer the following explanation:
Re. the Yen. Japan has had extremely low interest rates for many years. So, what many traders did was borrow Yen at a low interest rate, and take that money and invest it in emerging markets when returns were much higher. That worked well for a long time. Using other people’s money borrowed at low rates, and making a killing elsewhere. It was called the “Yen carry trade.” Now that the world’s stock markets are imploding, many are fleeing emerging markets, and are reversing the above. Thus the Yen rises.
The Euro/dollar rate is wild because now the presumption is that Europe’s economies are even worse than ours, so investment money is fleeing Europe and coming back to the US.
The theme of both is repatriation of money from abroad, and back into the “relative” safety of the US economy.
But this has its limits too. After all, the big debate is whether deflation is so strong, that it can compensate for the massively inflationary stimulus that the printing of so many dollars represents. Maybe they cancel each other out, maybe deflation will be even stronger and the dollar will rally for a long long time, or maybe inflation will be stronger and the dollar’s rally will be very short lived.
JiangxiDad on October 24, 2008 at 10:19 AM
Good points. Thriftiness is a good virtue during these times both with household expenses and finding investments.
dedalus on October 24, 2008 at 10:20 AM
I wish Sarah Palin would make a nice surprise little trip to the NYSE one of these days SOON. Would give the traders a boost.
JiangxiDad on October 24, 2008 at 10:27 AM
The hedge funds deserve a run — all the short sellers deserve to go down in flames. You’ve got to break a few eggs to make an omelet.
And, A: The bottom is at zero. And we never got there, even in the Great Depression.
unclesmrgol on October 24, 2008 at 10:33 AM
theres alot of forced liquidations happening today. portfolios that are over levereged and have folded are being sold.
so this is not surprising if you knew that was happening today. Yesterday was the more informative day. we didnt go under the pennant line. This is too complicated to explain here but it was a good sign
CaptainObvious on October 24, 2008 at 10:33 AM
Because investors are selling emerging market stocks and then putting the money into US Treasuries. So the US has an infusion of cash and emerging market countries have a loss of cash.
huckleberryfriend on October 24, 2008 at 10:33 AM
These days, Mr. Andrea Mitchell (aka Alan Greenspan) isn’t quite the smug bastard he once was.
highhopes on October 24, 2008 at 10:33 AM
IMHO, the market is being manipulated. When Obama needs a boost in the polls, we have carnage in the markets. Greenspan’s testimony yesterday was enlightening. This genius who has been overseeing the financial sector for 19 years could not foresee a problem with NINJA loans?????? Give me a break.
Political pressure and avowed enemies of this country combined to make the perfect storm.
eaglesdontflock on October 24, 2008 at 10:35 AM
Hedge funds are going belly up at WARP speed.
eaglesdontflock on October 24, 2008 at 10:36 AM
Thriftiness is ALWAYS a good virtue. It’s only during times like these that more people are “virtuous” and less wasteful.
highhopes on October 24, 2008 at 10:36 AM
Vatican Watcher on October 24, 2008 at 10:05 AM
not that Im saying to change but just so you know platinum is 50% rarer than gold and it has took a bigger hit than gold has as the hedgdefunds are liquidating. You may want to look at that at your buy point.
CaptainObvious on October 24, 2008 at 10:37 AM
Get those testosterone levels back up and encourage some risk taking? Maybe get a trader to buy a risky asset?
phronesis on October 24, 2008 at 10:38 AM
What’s a NINJA loan?
BadgerHawk on October 24, 2008 at 10:39 AM
So, is anyone else over this whole ‘global economy’ thingy yet? Maybe we should go back to doing business the old fashioned way – buying and selling goods and services with other countries. Not so much investing in foreign markets and businesses. Most of the businesses we are able to invest in in other countries are under the control of socialist/communist governments. We don’t want that here so why are we putting money at risk in those places? Just Asking.
Sporty1946 on October 24, 2008 at 10:40 AM
Talk of abolishing 401ks is just what the volatile markets need right now.
Mike Honcho on October 24, 2008 at 10:40 AM
No Income, No Job, No Assets
eaglesdontflock on October 24, 2008 at 10:43 AM
Will my prediction of a 7500-7600 bottom come true?
Awesome.
LimeyGeek on October 24, 2008 at 10:44 AM
Symbolize the spirit of American style capitalism, her faith in our country’s resiliance, in the spirit of the Steve Forbes article, and to show that Republicans won’t ever let the Dems use the US economy for social engineering–you know, spread YOUR wealth.
JiangxiDad on October 24, 2008 at 10:46 AM
Ah. I never would have come up with that. Shouldn’t it be NINJNA, though?
BadgerHawk on October 24, 2008 at 10:46 AM
If the pollsters released a poll that had McCain ahead, bet the market would pick up pretty quick.
The market is afraid of Obama.
Queen0fCups on October 24, 2008 at 10:49 AM
Wonder how happy the BRIC fund investors are. I told em so. For my money, I pulled 85% out in June, the rest is invested in solid, old fashioned American industry. No foreign crap. No derivatives, no BRIC’s. No funds with foreign investment. I losing money, but not broke.
eaglesdontflock on October 24, 2008 at 10:50 AM
The direction cannot be helped by the prospect of an Obama presidency and now serious talk by Dems in Congress of tossing everyone into a government pension. Look at Obama’s 2007 tax return: $0 dividend income and $45,851 of tax-exempt interest income. This is the guy people are convinced knows more about the economy? My mother, the retired registered nurse, knows more about the stock market than Obama will ever know. He needs to be propped up in this regard (and he’s not) every bit as much as Biden (supposedly) props him up in foreign policy.
BuckeyeSam on October 24, 2008 at 11:00 AM
I think part of the problems is the way the market is run no days.
Its no longer just a vehicle to invest in companies, but its a large betting service, with some really high rollers playing in the game.
Hedge Funds and Foreign money can use the rules of the market to drive prices up or down, because of playing computer games with large chunks of assets.
I’ve been watching, and almost EVERY day the market drops HUNDREDS of points at the ends of the day due to computer trades as short sellers drive the market…
Wallstreet insiders will tell you this is “normal” but its not. Just as the Mortgage derivitives which sparked the problem did not even exist until the 80′s, these hedge funds, and especialy computer driven International Trades were not possible until the last few years.
I don’t know if its a “conspiricy” or a bunch of greedy people all seeing the same possibility to make a buck, but I think someone IS playing games with the market.
Romeo13 on October 24, 2008 at 11:03 AM
Rumor has it The One wasn’t too keen on simple interest bank accounts before 2005 either.
BadgerHawk on October 24, 2008 at 11:04 AM
Obama doesn’t add up. It’s like he’s been in a bubble all his life. Or on another planet, being groomed to step in to someone else’s place.
Nothing about the guy smacks of genuine.
eaglesdontflock on October 24, 2008 at 11:04 AM
Remember to buy lo, sell high!
kanda on October 24, 2008 at 11:04 AM
When you look at your 401K and you feel like you have to throw-up, we are near the bottom. When you actually do throw-up, we are there.
huckleberryfriend on October 24, 2008 at 11:07 AM
Not to threadjack but check this out!
http://www.foxbusiness.com/story/markets/industries/energy/oil-plummets–despite-opec-production-cut/
Scorched_Earth on October 24, 2008 at 11:09 AM
I don’t know about everyone else, but my 401k is hovering around -60% on the year. But for me anyway, it’s all monopoly money. It’s taken out pre-tax and I never see it. Also I can’t take it out for 35 years, when this will all be a bad memory.
My opinion:
Let. It. Ride.
everybody else:
PANIC!
Micheal on October 24, 2008 at 11:12 AM
Recently, these large drops are being caused by Hedge Funds being forced to liquidate. People invested in the Hedge Funds call up and say “I want my money”. The Hedge Funds are forced to liquidate to meet all the demands for cash.
My understanding is that the Money Market Funds haven’t gone through this yet. So there is a good chance that the market will stabilize, start to come back, and then some of the Money Market Funds will be forced to liquidate.
huckleberryfriend on October 24, 2008 at 11:12 AM
You know what’ll help the stock market?
Nationalizing 401k plans.
lorien1973 on October 24, 2008 at 11:13 AM
Yeah, well you can take your “little doubt” straight to hell. Its still at 8300.
jimmy the notable on October 24, 2008 at 11:13 AM
The headline at MarketWatch.com right now:
Less bad than feared
What a weird and slightly comical construction that is!
aero on October 24, 2008 at 11:14 AM
Comment pages: 1 2 Next »