“Total fear”: Dow drops 512 points

posted at 4:06 pm on August 4, 2011 by Allahpundit

Remember the last time America had a nice quiet year of economic stability and relative political tranquility? If you do, let me know. Maybe it’ll jog my memory.

“Total fear”:

U.S. markets were already sharply lower on widespread worries, including the weak job market. But the selling gained momentum as Japanese and European policymakers stepped in with dramatic measures to shore up their financial markets.

There’s “total fear” in the market, said Bob Doll, chief equity strategist at the world’s largest money manager, BlackRock.

All three major indexes tumbled more than 4% Thursday and erased all their gains for the year. The indexes have also pushed into ‘correction’ territory – defined as a 10% drop from their highs earlier this year. Over the past 10 days alone, the Dow, S&P 500 and Nasdaq have dropped about 8%.

Debt-ceiling discontents claim the sell-off this week is a backlash to the feebleness of the deal in addressing America’s long-term debt problem. I don’t buy it. The market’s known for weeks that the deal wasn’t going to touch entitlements or lock in major spending cuts. Once Obama demanded an extra $400 billion in new revenue and Boehner walked away, the grand bargain was dead. If, as Erin Burnett speculated, shares were pricing in an elevated risk of a credit downgrade, that should have happened Monday or last week. I think J Pod’s right that what we’re seeing here is markets pricing in something else — namely, the growing risk of a double dip:

In fact, the debt deal came to fruition at exactly the same time as a series of devastating economic reports that indicate we will be lucky if the current moment is only a “slowdown” and not the beginning of—maybe even the middle of—a double-dip recession. You don’t need an economics degree to see the disaster in these numbers. Lower consumer confidence means less consumer spending, which means less demand, which means less economic activity, which means no improvement in employment figures and very possibly a worsening of unemployment. What we are seeing on Wall Street this week is that a coming recession is being “priced in.”

By “devastating economic reports,” he means this, this, and this, all of which are being served with a garnish of a new debt crisis in Europe. Follow the link above to Podhoretz’s post and read his account of chats with investors. They can’t make a move because they’re paralyzed with uncertainty over government policy, and since the Super Committee may or may not produce tax reform four months from now, that’s bound to continue until Thanksgiving at least. That’s a more trenchant criticism of the debt deal vis-a-vis the stock sell-off, I think, than knocking it because it took only a few pebbles off of America’s mountain of debt. It did nothing much to encourage job creation and it prolonged regulatory uncertainty, and now the market’s reacting accordingly. Bad days ahead — starting tomorrow, when the July unemployment numbers come out. Exit quotation:

Economists at Bank of America’s Merrill Lynch said Thursday that the economy is just one shock away from a recession. They put the probability of a recession in the next 12 months at 35%. However, they said the likelihood that the economy is currently in a recession was just 10%.

Breaking on Hot Air

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 3 4

…but I if I could I would still buy stock in companies that I admire and use.

Cindy Munford on August 4, 2011 at 5:13 PM

Well, you wouldn’t want to do that if the market continues its slide.

It’s not wise to become “wedded” to stocks. You buy them to make money, not enter into a long-term commitment. People will hang onto a ‘dog’ believing it will go back up and they can recoup their losses because they like a company for whatever arbitrary reason.

eanax on August 4, 2011 at 5:23 PM

Is it time yet for the Malaise Speech?

Ward Cleaver on August 4, 2011 at 5:23 PM

As to the news, which is better? People selling like crazy because we might go into a recession or because it’s obvious we’re not tackling our debt problems? I feel like one will eventually beget the other anyway.

Esthier on August 4, 2011 at 5:05 PM

I think it is mainly panic. People are afraid of losing everything.

katy the mean old lady on August 4, 2011 at 5:23 PM

Everybody remember that scene in Bill & Ted’s Bogus Journey where they fall down the hole to hell and they’re screaming while they’re falling and after several minutes of screaming, they stop, look at each other, and then continue screaming and falling?

Yeah…it’s like that.

tlclark on August 4, 2011 at 5:22 PM

Sta-tion!

Ward Cleaver on August 4, 2011 at 5:24 PM

sicoit on August 4, 2011 at 5:22 PM

Beck may be incorrect judging from the crash today. Someone seems to be taking the dow seriously, like all the folks stampeding to sell off…

And those lining up to do it tomorrow.

dogsoldier on August 4, 2011 at 5:26 PM

Barack Obama to send in Seal Team 6 to free Wall Street from the terrohobbits who are holding guns to Mr. Stock Market’s head. DOW expected to rise at least 5,000 points as soon as the terrohobbits join OBL.

Lon Chaney on August 4, 2011 at 5:28 PM

There’s something that scares me far more than the debt, the weak GDP, and unemployment. What scares me the most is the large number of people still saying “Seize the money from the top 400 earners!” and other idiotic things.

We have raised a nation of economic illiterates and outright morons. They are totally captive to the nitwit infotainment culture of leftist politics via Stewart/Colbert and the more conventional liars like ABC, CBS, NBC. That’s a bigger and scarier problem than anything else.

No matter how much evidence they get that Obamanomics is a disaster, they still want to blame the economy on Tea Partiers. And you can’t fix a nation of people who are that catastrophically stupid.

Django on August 4, 2011 at 5:28 PM

Tomorrow won’t be as bad as today; there will be the bottom-feeders to shovel in what they can as soon as they think we’ve hit the floor.*

* I’m not qualified to advise anyone

hillbillyjim on August 4, 2011 at 5:28 PM

http://urlizr.de/chan

Hey now, no reason to insult all those comic geniuses

PJ Emeritus on August 4, 2011 at 5:29 PM

Those “pathetic” guys like Allan West, Paul Ryan and Mike Pence saved the Tea Party from its own self-immolation.

I can say this to you ten times over, but you will never listen. Talking points from blunt-headed talk show is all you got.

Things were going to suck no matter what. A default absolutely would have made things worse. That’s not a question. Only a retard would deny that.

The key is that the media cant spend all week excoriating the selfish, extremist ideologues in the Tea Party.

$$$$ talks. There are a lot of non-political people, indies and mods, who would be blaming the Tea Party for this.

But the leaders took the issue off the table. People know this isnt the Tea Party, or the default.

But angry, bellowing small-minded types, prefer to be angry and small-minded and will scream at the “establishment” because that’s all they got.

swamp_yankee on August 4, 2011 at 5:17 PM

Yes, yes. Keep insulting the people you’re trying to convince.

That always works.

Or are you just venting?

Whatever, Sparky. Make yourself feel better, that’s all that matters.

fossten on August 4, 2011 at 5:31 PM

sicoit on August 4, 2011 at 5:22 PM

Beck may be incorrect judging from the crash today. Someone seems to be taking the dow seriously, like all the folks stampeding to sell off…

And those lining up to do it tomorrow.

dogsoldier on August 4, 2011 at 5:26 PM

Okay, then what companies DO make up the Dow? Now I’m curious. How many companies are we looking at that have the capability of making this part of the market go up or down? Not arguing, but just asking. As I said, I am illiterate on the market.

sicoit on August 4, 2011 at 5:31 PM

Allah -

Your services are needed over at the Perry post.

Odie1941 on August 4, 2011 at 5:32 PM

Don’t bother dear leader now, he has. BBQ to run

I’ll take a burger hold the cheese

/

cmsinaz on August 4, 2011 at 5:32 PM

cmsinaz on August 4, 2011 at 5:32 PM

Heh…… :-)

sicoit on August 4, 2011 at 5:33 PM

Hey sicoit, drink one for me tonight

cmsinaz on August 4, 2011 at 5:35 PM

I have a question for y’all that dabble in the market. Today, Glenn Beck said that to pay attention to the Dow is a waste of time because the ONLY company that comprises the Dow now is GE. He also said that the one to pay attention to is the S&P’. What say y’all about this? As I said, I don’t dabble in the market.

sicoit on August 4, 2011 at 5:22 PM

IIRC, the Dow Jones Industrial Average weights all 30 companies equally, which means GE is always one-thirtieth of the average (since it always contains exactly 30 companies, though it occasionally drops companies in order to add new ones). Because it only contains 30 companies, it’s less good as an indicator of the broader market than an index like the S&P 500.

DKCZ on August 4, 2011 at 5:35 PM

Quick! Dole out the Disappoint Mints.

Dr. Charles G. Waugh on August 4, 2011 at 5:36 PM

cmsinaz on August 4, 2011 at 5:35 PM

Will do my friend. Going to dinner at a Mexican food restaurant with my son again tonite. Will toast with a margarita just.for.you.!!!!! :-) Thank goodness tomorrow is Friday eh?

sicoit on August 4, 2011 at 5:36 PM

Stock market schmock market. I’m getting myself my very own brandy new Obama bus for my campaign tour! I can’t wait to pick out the colors!

And best of all? You schmucks are gonna pay for it. Bullet proofin’ and all dat. Happy Birthday to ME!!!

BHO

Key West Reader on August 4, 2011 at 5:38 PM

Okay, then what companies DO make up the Dow? Now I’m curious. How many companies are we looking at that have the capability of making this part of the market go up or down? Not arguing, but just asking. As I said, I am illiterate on the market.

sicoit on August 4, 2011 at 5:31 PM

See this list
Also http://www.investopedia.com/articles/02/082702.asp

DKCZ on August 4, 2011 at 5:38 PM

IIRC, the Dow Jones Industrial Average weights all 30 companies equally, which means GE is always one-thirtieth of the average (since it always contains exactly 30 companies, though it occasionally drops companies in order to add new ones). Because it only contains 30 companies, it’s less good as an indicator of the broader market than an index like the S&P 500.

DKCZ on August 4, 2011 at 5:35 PM

That’s what Glenn Beck was saying, but he also said that 29 (?) of those companies have backed out of Dow and the only one left is GE. That’s my question. Is there any way to dig into this and see if this is true or not? I’m REALLY curious on this…..hmmmmmmmmm

sicoit on August 4, 2011 at 5:39 PM

DKCZ on August 4, 2011 at 5:38 PM

WOW, okay then, thanks. My mind is totally boggled…..

sicoit on August 4, 2011 at 5:40 PM

Thanks sicoit….enjoy your time!

Amen, tgif

cmsinaz on August 4, 2011 at 5:41 PM

Things were going to suck no matter what. A default absolutely would have made things worse. That’s not a question. Only a retard would deny that.

swamp_yankee on August 4, 2011 at 5:17 PM

Yawn. Yes, we’re hobbits, terrorists, suicide bombers, retards, etc. Such pursuasive.

I see that you couldn’t come forward with a single refuation of my points:

-This horrific market decline started in the US (Not Europe)
-It started immediately after the “Debt Deal” framework was announced.

Like I said, you GOP Establishment hacks are pathetic.

Norwegian on August 4, 2011 at 5:42 PM

Just googling around the internets and it appears the Left is convinced we “teabaggers” have crashed the stock market over the past couple of weeks.

Look for more insanity all night on MSNBC.

jondun5 on August 4, 2011 at 5:43 PM

Is it time yet for the Malaise Speech?

Ward Cleaver on August 4, 2011 at 5:23 PM

not there yet, but coming…he’s waiting for Dhymia to clear his schedule to get some tutoring :-)

jimver on August 4, 2011 at 5:44 PM

Thank you Obama bin Biden!

carbon_footprint on August 4, 2011 at 5:45 PM

Hey sicoit, drink one for me tonight

cmsinaz on August 4, 2011 at 5:35 PM

I just bought a case of wine. I’ll be drinking for everyone tonight.

Knucklehead on August 4, 2011 at 5:48 PM

LINK

“But we can do it,” a woman shouted from the audience.

“But we can do it,” Obama agreed. “We have made some incredible strides together. Yes we have.”

In his video link-up to the parties around the country, Obama said, “I am beaming in from Chicago … You may hear the ‘L’ train in the background. It’s passing right next to us.”

He then launched his pitch for supporters to begin working on his re-election.

“It starts now,” he said

William Amos on August 4, 2011 at 5:49 PM

Knucklehead on August 4, 2011 at 5:48 PM

*clink* Knucklehead! :-)

sicoit on August 4, 2011 at 5:50 PM

Okay, then what companies DO make up the Dow? Now I’m curious. How many companies are we looking at that have the capability of making this part of the market go up or down? Not arguing, but just asking. As I said, I am illiterate on the market.

sicoit on August 4, 2011 at 5:31 PM

I’d have to go look it up. If WIKI can be trusted there are 30,

http://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average

dogsoldier on August 4, 2011 at 5:51 PM

I just bought a case of wine. I’ll be drinking for everyone tonight.

Knucklehead on August 4, 2011 at 5:48 PM

I’m with ya, sister. Might as well fiddle while Rome is burning. WTF.

I’m not pussyfooting around with the vino, though. Rotgut liquor is called for in this situation.

Bourbon, baby.

hillbillyjim on August 4, 2011 at 5:53 PM

But Baghdad Debbie says the economy is turning around!
John the Libertarian on August 4, 2011 at 4:10 PM

And around And around And around And around And around And around And around, swirling actually, kinda like when a toilet is flushed.

Strange she didn’t know that, perhaps she’s a bit dizzy from getting swir…………Nope not going there to easy.

DSchoen on August 4, 2011 at 5:54 PM

I’d have to go look it up. If WIKI can be trusted there are 30,

http://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average

dogsoldier on August 4, 2011 at 5:51 PM

Pfffffttttt, I trust Wiki as much as I trust snopes.

sicoit on August 4, 2011 at 5:54 PM

He then launched his pitch for supporters to begin working on his re-election.

“It starts now,” he said
William Amos on August 4, 2011 at 5:49 PM

LOL! The A/C went out at his big boy Birthday Cash Bonanza. Temp was 92 degrees

/That’s hot

Key West Reader on August 4, 2011 at 5:54 PM

I just bought a case of wine. I’ll be drinking for everyone tonight.

Knucklehead on August 4, 2011 at 5:48 PM

I’m with ya, sister. Might as well fiddle while Rome is burning. WTF.

I’m not pu**yfooting around with the vino, though. Rotgut liquor is called for in this situation.

Bourbon, baby.

hillbillyjim on August 4, 2011 at 5:55 PM

I have a question for y’all that dabble in the market. Today, Glenn Beck said that to pay attention to the Dow is a waste of time because the ONLY company that comprises the Dow now is GE. He also said that the one to pay attention to is the S&P’. What say y’all about this? As I said, I don’t dabble in the market.

sicoit on August 4, 2011 at 5:22 PM

Well, you probably know more than Beck does…GE is hardly the “only”company, and many for years have thought the S & P is more accurate in some scenrios…btw, I would be surprised if GE accounts for 1/10 of 1% of all stocks traded.

right2bright on August 4, 2011 at 5:55 PM

This market crisis won’t be complete until John McCain suspends his vacation and returns to Washington to save the nation.

Mark1971 on August 4, 2011 at 5:57 PM

ObamaNero – partying while our economy burns to the ground!

Ogabe on August 4, 2011 at 5:58 PM

However, they said the likelihood that the economy is currently in a recession was just 10%.

Good god…if we’re not in a recession already, it’s going to be very, very ugly when (not if) we re-enter one in the next few months…Geez.

AUINSC on August 4, 2011 at 6:00 PM

*clink* Knucklehead! :-)

sicoit on August 4, 2011 at 5:50 PM

No *clinks* tonight. This calls for a special occasion, like drinking straight out of the bottle.

Knucklehead on August 4, 2011 at 6:01 PM

Well, you probably know more than Beck does…GE is hardly the “only”company, and many for years have thought the S & P is more accurate in some scenrios…btw, I would be surprised if GE accounts for 1/10 of 1% of all stocks traded.

right2bright on August 4, 2011 at 5:55 PM

That’s exactly what Glenn Beck said. Pay attention to the S&P not the Dow.

sicoit on August 4, 2011 at 6:01 PM

It’s time to tell the 52% “we told you so”!
At least we won’t have to listen to “four more years”. Four more years of this cr@p? No way.

HellCat on August 4, 2011 at 6:01 PM

ObamaNero – partying while our economy burns to the ground!

Ogabe on August 4, 2011 at 5:58 PM

Prezakly. OJugears doesn’t give a fig about this nation; he never has and he never will. It’s in his genes from both sides.

A little bit of research will tell anyone who bothers that his mother was a communist sympathizer and his father was just a flat-out communist hack. And there’s more.

hillbillyjim on August 4, 2011 at 6:02 PM

No *clinks* tonight. This calls for a special occasion, like drinking straight out of the bottle.

Knucklehead on August 4, 2011 at 6:01 PM

Need a straw????? I’ve got a spare…. :-) I feel your pain… *hic*

sicoit on August 4, 2011 at 6:02 PM

And here in Central Texas we are on our fourth day in a row of 111 degrees F. 33 days in a row over 100 degrees F. and our worst drought since mid-1950′s. All we need now is for the winds to blow the dust and topsoil away and we will be mimicking the good old 1930′s. Bolshevik president and all.

carbon_footprint on August 4, 2011 at 6:03 PM

When the Progressive Dem Leaders go before the cameras with their “victim parade” and start caterwalling about:

“CUTTING money for Head start…”

“CUTTING money for the elderly..”

“RIPPING money from Education…”

“TEARING up the social fabric…”

All the GOP should repeat over and over and over again, to every single one of these claims is:

“WE CAN’T AFFORD IT”
“WE CAN’T AFFORD IT”
“WE CAN’T AFFORD IT”
“WE CAN’T AFFORD IT”
“WE CAN’T AFFORD IT”

PappyD61 on August 4, 2011 at 6:04 PM

I better hush before the black helicopters start circling…

I didn’t say a thing.

hillbillyjim on August 4, 2011 at 6:04 PM

Pfffffttttt, I trust Wiki as much as I trust snopes.

sicoit on August 4, 2011 at 5:54 PM

They cite a reference to the dj site, its (4).

dogsoldier on August 4, 2011 at 6:05 PM

Well, we can look forward to another stellar day tomorrow when the jobs and unemployment reports come out, then?

Anyone wanna speculate that they are rosier than they really are just to calm markets?

What am I saying, of course they will be. They always are.

catmman on August 4, 2011 at 6:06 PM

This horrific market decline started in the US (Not Europe)
-It started immediately after the “Debt Deal” framework was announced.

Like I said, you GOP Establishment hacks are pathetic.

Norwegian on August 4, 2011 at 5:42 PM

your don’t look at the big picture….you underestimate the extent to which Europe’s ongoing sovereign debt crisis is responsible for the fear and panic spreading through investors circles…

jimver on August 4, 2011 at 6:11 PM

Hey, Allah, have I been banned? My posts are not posting…..wazzup?

sicoit on August 4, 2011 at 6:13 PM

Hope and change: Can you spare some?

Philly on August 4, 2011 at 6:13 PM

I have a question for y’all that dabble in the market. Today, Glenn Beck said that to pay attention to the Dow is a waste of time because the ONLY company that comprises the Dow now is GE. He also said that the one to pay attention to is the S&P’. What say y’all about this? As I said, I don’t dabble in the market.

sicoit on August 4, 2011 at 5:22 PM

Well, you probably know more than Beck does…GE is hardly the “only”company, and many for years have thought the S & P is more accurate in some scenrios…btw, I would be surprised if GE accounts for 1/10 of 1% of all stocks traded.

right2bright on August 4, 2011 at 5:55 PM

Glenn Beck said (I assume, I didn’t actually hear) that GE is the only company in the Dow that has been there since the beginning. The point is the DJIA’s member companies are always changed. And because of this, using the DJIA to measure value of stocks over time is useless since you’re comparing apples to oranges.

Same goes for any index, S&P included. All indexes continually change the member companies.

angryed on August 4, 2011 at 6:14 PM

See that RINOs? A lot of good caving did you!!!!

MaiDee on August 4, 2011 at 6:15 PM

It’s simple why stocks are plummeting. They’re just going back to the values they should have been all along. QE1 and QE2 artifically inflated values. Now that QE2 is over, the values are going back to reality.

Just like housing. Prices went crazy due to the iditoic policies of Ben Bernanke/Alan Greenspan. Then house prices fell. All the experts were SHOCKED of course, just like the experts are UNEXPECTEDLY surprised this time around as well.

angryed on August 4, 2011 at 6:16 PM

According to Obama, Americans “want us to get this economy growing and adding jobs”.

Gee, Scooter…ya think?

Y’know, I had a Frampton Comes Alive album that used to repeat itself like that…

The market will continue downward tomorrow. Obama has been found wanting.

kingsjester on August 4, 2011 at 6:17 PM

And because of this, using the DJIA to measure value of stocks over time is useless since you’re comparing apples to oranges.

Same goes for any index, S&P included. All indexes continually change the member companies.

angryed on August 4, 2011 at 6:14 PM

Or do they change to be more accurate, where someone can’t manipulate the averages?
The point being, Beck is a snake oil salesman, his job is to drive up his numbers, not be accurate or informative.

right2bright on August 4, 2011 at 6:18 PM

It’s now clear that without stimulus, the economy would have experienced a major fall over the last two quarters. With stimulus coming to and end and no political drive for another round of spending to keep the economy afloat, it’s looking like a classic balance sheet recession in the US.

bayam on August 4, 2011 at 4:18 PM

The Bush Tax cuts are the only thing helping keep jobs but once they expire so will the jobs…

tinkerthinker on August 4, 2011 at 6:19 PM

angryed on August 4, 2011 at 6:16 PM

Probably correct, at least they are reflecting on how the economy is…since about the only thing investors have to invest in is the stock market (that had any value) it was just a matter of time till the bubble popped.
Poor economy, high unemployment, shrinking manufacturing…wasn’t it just a matter of time for a correction…as you stated.

right2bright on August 4, 2011 at 6:20 PM

http://tinyurl.com/3kqo5ng

The number of Americans using the government’s Supplemental Nutrition Assistance Program (SNAP) — more commonly referred to as food stamps — shot to an all-time high of 45.8 million in May, the USDA reported. That’s up 12% from a year ago, and 34% higher than two years ago.

William Amos on August 4, 2011 at 6:21 PM

Or do they change to be more accurate, where someone can’t manipulate the averages?
The point being, Beck is a snake oil salesman, his job is to drive up his numbers, not be accurate or informative.

right2bright on August 4, 2011 at 6:18 PM

No they change because Dow Jones is a private company that benefits when people invest in stocks. And people are more prone to invest in stocks if they see the DOW JONES always goes up.

You think Beck is a snake oil salesman? Maybe. But he’s nothing compared to the con men running Wall St. And I say this having worked in IB for many many years. There’s that old saying if you want a friend in DC, get a dog. On Wall St. even your dog will f**k you to make an extra buck.

angryed on August 4, 2011 at 6:21 PM

It’s now clear that without stimulus, the economy would have experienced a major fall over the last two quarters.

bayam on August 4, 2011 at 4:18 PM

How is this now clear?

blink on August 4, 2011 at 6:22 PM

Bayam uses liberal math. Same math where spending $1T on Obamacare = saving $1T in health care costs.

angryed on August 4, 2011 at 6:24 PM

It’s now clear that without stimulus, the economy would have experienced a major fall over the last two quarters. With stimulus coming to and end and no political drive for another round of spending to keep the economy afloat, it’s looking like a classic balance sheet recession in the US.

bayam on August 4, 2011 at 4:18 PM

The porkulus did absolutely nothing to help the economy, dufus. There was no like ACTUAL recovery.

The manipulation of the reported GDP was made knows a few days ago and close to 30 million real and desperate unemployed people put the lie to your statements.

Now, even Jake Tapper is pointing and saying, “The Emperor has no clothes.”

dogsoldier on August 4, 2011 at 6:25 PM

It’s now clear that without stimulus, the economy would have experienced a major fall over the last two quartersit’s looking like a classic balance sheet recession in the US.

bayam on August 4, 2011 at 4:18 PM

another stimulus, fast!!! …pending approval from Hu Jintao…

jimver on August 4, 2011 at 6:26 PM

I love the smell of liberal fear in the morning.

William Amos on August 4, 2011 at 6:28 PM

It’s now clear that without stimulus, the economy would have experienced a major fall over the last two quarters.

bayam on August 4, 2011 at 4:18 PM

It is now clear you are probably the dumbest poster on HA…the stimulus did nothing but suck money out of our country.
You do know where most of that money went…hint, it wasn’t shovel ready jobs…

right2bright on August 4, 2011 at 6:28 PM

You do know where most of that money went…hint, it wasn’t shovel ready jobs…

right2bright on August 4, 2011 at 6:28 PM

Failbama Nero admitted that recently, since there were no shovel ready jobs. BTW ever wonder about those who don’t work with a shovel?

dogsoldier on August 4, 2011 at 6:30 PM

Just like housing. Prices went crazy due to the iditoic policies of Ben Bernanke/Alan Greenspan. Then house prices fell. All the experts were SHOCKED of course, just like the experts are UNEXPECTEDLY surprised this time around as well.

angryed on August 4, 2011 at 6:16 PM

So. Obama/Geithner enriched the fat-cats on Wall Street that they proclaim to loathe, by infusing the market with Obamadollah’s? And now, they’ve all taken their golden parachutes and exited the market? With all that Obamastash?

Color me shocked.

Key West Reader on August 4, 2011 at 6:30 PM

Django on August 4, 2011 at 5:28 PM

Concur 1000%

Huckabye-Romney on August 4, 2011 at 6:30 PM

Glenn Beck said that to pay attention to the Dow is a waste of time because the ONLY company that comprises the Dow now is GE.

Beck is wrong. The Dow Jones Industrial Average has 30 stocks, not one. Perhaps Beck was incoherently trying to say that they are arithmetically calculated, not weighted.

Because it only contains 30 companies, [the Dow Jones Industrial Average is] less good as an indicator of the broader market than an index like the S&P 500.

No, the Dow Jones Industrial Average is the best indicator because that’s the one most people watch, and have been watching since 1896. The S&P may be broader, but so what? The Wilshire 5000 is ever broader than that. In addition, the Dow Jones Industrial Average and the Dow Transportation Average are the two foundations of Dow Theory–a venerable technical way of predicting moves in the stock market.

Market averages are not exact measures of value–they are measures of investor pyschology.

Emperor Norton on August 4, 2011 at 6:30 PM

Thanks a friggin lot President Obama.

CW on August 4, 2011 at 6:32 PM

Market averages are not exact measures of value–they are measures of investor pyschology.

Emperor Norton on August 4, 2011 at 6:30 PM

Public perception. Well said.

dogsoldier on August 4, 2011 at 6:32 PM

http://www.modbee.com/2011/08/02/1800649/modesto-neighborhood-stabilization.html

Modesto — As federal investigators audit how Modesto spent $25 million in stimulus money, they are likely to find extravagant purchases, suspiciously high expenses, allegations of shoddy workmanship and at least one home sold at a deep discount to a city employee.

That’s what The Bee has found doing its own review of city files for the Neighborhood Stabilization Program.

From the purchase of a $2,500 designer bathtub to a painting bill that appears to be three times higher than the going rate, there’s plenty for auditors to question.

William Amos on August 4, 2011 at 6:34 PM

It is now clear you are probably the dumbest poster on HA…the stimulus did nothing but suck money out of our country.
You do know where most of that money went…hint, it wasn’t shovel ready jobs…

right2bright on August 4, 2011 at 6:28 PM

::: cough… cough… (unions)… cough… phlegm.. cough:::

Key West Reader on August 4, 2011 at 6:35 PM

Emperor Norton on August 4, 2011 at 6:30 PM

Wrong.

Had I put $1000 in 1896 into the companies that at the time made up the DOW index (it wasn’t 30 then, it was 13 I think), today I would have about $10 left. But how can this be? The DOW is up 5000% since 1896?

Exactly.

The DJIA is a meaningless metric other than something for the talking heads on CNBC and Fox Business, to talk about for 12 hours a day.

angryed on August 4, 2011 at 6:36 PM

I love the smell of liberal fear in the morning.

William Amos on August 4, 2011 at 6:28 PM

wait till you smell the panic :)…though, if you read the socialist outfits today, both in Europe (guardian.co.uk, etc) and over here Salon a.o. – they are all busy portraying this as nothing more than capitalism implosion that happens now because said evil capitalism wasn’t allowed to self-immolate in 2008 :-)…meaning they failed to nationalize and seized all private assets then :-)…

jimver on August 4, 2011 at 6:36 PM

today I would have about $10 left

Yeah, it was a brutal day in the market, wasn’t it?

Emperor Norton on August 4, 2011 at 6:39 PM

gotta love this Drudge title: ‘NOT SINCE JIMMY CARTER’ linking to this:

http://www.marketwatch.com/story/dows-losing-streak-now-in-ninth-day-2011-08-03

jimver on August 4, 2011 at 6:40 PM

Yeah, it was a brutal day in the market, wasn’t it?

Emperor Norton on August 4, 2011 at 6:39 PM

Heh.

Not for me. I had a pretty good day. I’m in cash and long term bonds.

angryed on August 4, 2011 at 6:40 PM

Our company (who does Retail phone orders and has a showroom for walk in traffic) has been really spooked today. All 6 phone lines have gone quiet. I’ve only had 2 calls in the last hour, both from Canadians. It’s like somebody flicked a switch and all commerce stopped. My usual call volume is 30-50 calls in an hour.

Everybody is waiting to see how this plays out. The news isn’t looking good.

portlandon on August 4, 2011 at 6:45 PM

Would it be safe to say that everybody in Washington effed up? Socialists, RINOs, conservatives, Blue Dogs… I don’t care what they call themselves, they’re in it for their own self-aggrandizement and because they all feel they have the inherent, God-given right to tell the people what to do. As a result, we, the people, are left holding the bag. Exactly when do we get our government back?

Man, I gotta get down to Cabela’s and Academy. I’m running low on supplies for what’s got to be coming.

And to think, the latest J.P. Morgan estimate we received in an email showed that the market was in great shape, don’t worry, and keep shoveling money in.

creekspecter on August 4, 2011 at 6:46 PM

What happened was that the market was extremely jittery before the debt ceiling raise, correctly guessing that a raise would be bad for the market-not to say the entire country. At first the market was cheered by the “compromise”, hoping that there would be healthy spending cuts. After analysis, the market saw a front-loading of spending (read debt ceiling raise) and a back-loading of expense cuts (read they will never happen). Seeing ONLY more spending there was the entirely predictable mass sell off.

Of course, some of this was opportunistic profit taking (myself included). This may not be the big swoon we are expecting but if it is not, Obama better “get religion” real fast.

MaiDee on August 4, 2011 at 6:56 PM

Debt-ceiling discontents claim the sell-off this week is a backlash to the feebleness of the deal in addressing America’s long-term debt problem. I don’t buy it. The market’s known for weeks that the deal wasn’t going to touch entitlements or lock in major spending cuts.

European banks, even Swiss banks, took big hits. But Allied Irish Banks (AIB) took a 43% slammer.

AshleyTKing on August 4, 2011 at 7:03 PM

Unless Beck thinks that GE stock going to start weighing down the Dow because of all their questionable alternative energy and green initiatives.

blink on August 4, 2011 at 6:57 PM

You’re missing the point. It has nothing to do with GE per se.

GE is the ONLY Dow compnent that was a Dow component originally, in 1896. Every other company since then is no longer in existence. Which means its stock value is $0.

The spin is always, you can’t lose money in stocks over the long run. Look at the Dow. It always goes up. Well yea, it does. Because the components are always changed. As soon as a component gets into trouble, it is removed from the index. GM was in the index up until a few years ago. So was Citi. So was Chrysler. Had those companies been kept in the Dow would be about 1500 lower than it is now. It’s a rigged game. Companies are added and deleted to always make it seem like stocks are going up in value.

angryed on August 4, 2011 at 7:04 PM

It’s now clear that without stimulus, the economy would have experienced a major fall over the last two quarters.

bayam on August 4, 2011 at 4:18 PM

Listen, darlin’.

It’s crystal clear to almost everyone but you that Porkulus was and is a HUGE PART OF THE PROBLEM.

Spending money you don’t have is always a bad idea.

There is always a monster price to pay at the end of the day, to use a tortured phrase.

hillbillyjim on August 4, 2011 at 7:04 PM

Obamacare.

Key West Reader on August 4, 2011 at 7:08 PM

“You may have seen a thousand-point drop instead of this.”

As a thirty year professional financial advisor I’d like to see any data you may have to support this theory. Don’t bother trying to provide it. It’s obvious. You just made it up.

I think one reason for today’s market debacle was speeches by Obama and Reid, one day after the debt ceiling deal was concluded, in which they enumerated all the spending projects they have planned like John Kerry’s union bank, healthcare implementation, education projects blah, blah, blah… and knowing that the illusory protection of a Repulican House of Representatives was essentially worthless. The only thing standing between the socialist spending agenda and the wallets of productive Americans is…nothing.

ncjetsfan on August 4, 2011 at 7:12 PM

fear, Wall Street won’t be able sell anything when their people start crapping in their pants, hard to buy from someone like that when:
1.Japanese intervene in their market because all of their exporters are starting to move to other markets because the yen is too strong. An admission by the Japanese that they are in serious trouble due the the USD/JPY exchange rate.
2.Europeans start buying up troubled bonds, their own QE for their sovereign junk bonds as announced this morning. Der Spiegel sees the Euro crisis as morphing into a “transfer union.” In American English it is welfare payments because some in Europe will do anything to save the Euro. Meanwhile Greeks pay a 23% VAT and anyone with above 14000 in income start paying income taxes that peak at 60% with 140000.00 in income. No wonder BMW executives say that they aren’t getting any business in Greece. And they starting to worry about Spain and Italy because they know they can’t handle welfare payments to them, but those countries would like the sweetheart deals the Greeks got of 3.5% 15+ year loans.
And then their is the American situation, in which politicians don’t have enough spine to check and balance the party that just lost 63 Congressional seats, it should of been a shut down until the Dems put something on paper instead lowering their own ante without even seeing the Dems cards.
Using Chess community terminology, The Dems are utterly lost, don’t know how to resign, and the Republicans don’t know how to close out a won position.
So with the traders using Euros to trade, while shorting USD at the same time, when the USD strengthens like it did today as well, the baskets of trades that are highly leveraged get sold or margin calls go in and it just snowballs until ?????? all the Goldman Sachs won’t even bother to go on TV anymore to peddly anything, a sure sign that they are crapping their pants.

mdetlh on August 4, 2011 at 7:12 PM

Economists at Bank of America’s Merrill Lynch said Thursday that the economy is just one shock away from a recession. They put the probability of a recession in the next 12 months at 35%. However, they said the likelihood that the economy is currently in a recession was just 10%.

This is certainly not good news, but from what I heard today I got the impression that our domestic economic situation is only part of the problem. I heard there are fears of default or collapse in Spain and Italy.

Terrye on August 4, 2011 at 7:15 PM

angryed on August 4, 2011 at 7:04 PM

Yup. Personally – I am a Russell 2000 fan – small cap and a good High Yield Bond indicator.

Oh – and I want to add – todays NYSE is roughly 80% automated, compared to just 10 years ago – when 20% was automated. Thats why heavy day falls occur – its automatic.

Odie1941 on August 4, 2011 at 7:16 PM

Debt-ceiling discontents claim the sell-off this week is a backlash to the feebleness of the deal in addressing America’s long-term debt problem. I don’t buy it.

*snip*

Follow the link above to Podhoretz’s post and read his account of chats with investors. They can’t make a move because they’re paralyzed with uncertainty over government policy, and since the Super Committee may or may not produce tax reform four months from now, that’s bound to continue until Thanksgiving at least.

So… the feebleness of the deal *does* factor in, buy it or not. Today’s sell-off is an extension of yesterday’s early market activity and Monday/Tuesday’s drop that happened *WHILE* they were announcing the bill was a done deal and discussing the details.

Absent yesterday’s late day buying, the market would’ve been down like 10 days in a row – hell yes, it has quite a bit to do with this feeble deal, as well as the rest of the economic news, none of which is good.

Midas on August 4, 2011 at 7:24 PM

It’s now clear that without stimulus, the economy would have experienced a major fall over the last two quarters.

bayam on August 4, 2011 at 4:18 PM

Actually, it’s quite clear that the stimulus was worthless, and that the economy would’ve recovered stronger and sooner without it – along with a myriad of other economy-strangling initiatives and regulations a$$hats who think like you came up with to foist on the rest of us.

I’m really beginning to hate a$$hats like you.

Midas on August 4, 2011 at 7:27 PM

Not for me. I had a pretty good day. I’m in cash and long term bonds.

angryed on August 4, 2011 at 6:40 PM

All cash here, with a little EUO position (an inverse euro thing – when the euro declines, EUO goes up).

Midas on August 4, 2011 at 7:29 PM

Ah darn.
You all chased bayam away. I wanted to hear more spin.
Oh well, I guess I will have to turn to MSNBC.

Electrongod on August 4, 2011 at 7:32 PM

What was that Bill O’Reilly and Laura Ingraham were saying about having to pass the debt ceiling raise so the economy doesn’t crash? They shall be having crow for dinner.

Special K on August 4, 2011 at 7:36 PM

Comment pages: 1 2 3 4