Dow plunges to lowest level since 2004.
By on Oct 6th, 2008 at 11:21 am
Dow plunges to lowest level since 2004.
Wall Street joined a “selloff around the world” today, with the Dow Jones dropping more than 400 points and falling to below 10,000 for the first time in four years. As the AP reports, the “markets have come to the sobering realization that the Bush administration’s $700 billion rescue plan won’t work quickly to unfreeze the credit markets, and that many banks are still having difficulty gaining access to cash.”
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ot but what ever happened
to our good friend backup?
#
doesn’t like to talk about the
economy anymore, does he?
%
thank you.
#
October 6th, 2008 at 11:24 amNationalize the Farouking BANKS!
Sweet leaping jesus, why is this so hard.
Nationalize the fed, and all the “national” banks.
That’ll fix yer credit problem today…
October 6th, 2008 at 11:27 amNote to Dems who caved on bailout…
You blew it.
October 6th, 2008 at 11:27 amSorry but I don’t see what’s to be gained on a progressive site by adhering to the notion that the Dow is a meaningful number. Maybe when tickertape was a technological breakthrough, but no longer. The gaming of the listings by the WSJ Corp. is further evidence of marketing departments developing a brand, rather than economists (or even traders) trying to get a grasp on overall trends in the stock market.
October 6th, 2008 at 11:29 amWaitaminnit — the Dow was below 10,000 on October 29, 2004 and Bush/Cheney STILL won???
October 6th, 2008 at 11:29 amRUCerious Says:
Note to Dems who caved on bailout…
You blew it.
Well, sorta. They do now OWN it, though, for good and all…
The Dims went for the scare-bait like bison in front of wolves: right the fark over the cliff…
October 6th, 2008 at 11:29 amWere American financial entities just waiting until 4th quarter?
You’ll see a remarkable drop in your 401K, etc., when you get your 3rd quarter earnings statement.
But…just wait until January. You’ll be in ’shock & awe’ that your ‘retirement fund has already been retired’.
Tired, retired & retarded…the Bush / McCain administration
October 6th, 2008 at 11:31 amJust askin’ but is it possible for Congress’ approval ratings to be in the negative?
October 6th, 2008 at 11:32 amMr Blifil Says: Sorry but I don’t see what’s to be gained on a progressive site by adhering to the notion that the Dow is a meaningful number.
A lot of Average Americans have pension and retirement plans in the stock market.
Many economists say it will take 5 to 10 years to get their money back, never mind the interest they were supposed to be earning. Some people don’t have that long to wait.
October 6th, 2008 at 11:32 ammisshusseinmolly Says:
Waitaminnit — the Dow was below 10,000 on October 29, 2004 and Bush/Cheney STILL won???
October 6th, 2008 at 11:29 am
No. Not really. There’s now plenty of evidence that the ‘election’ was stolen. Bradblog’s got most of it.
Pretty much like it’s gonna get stolen this time, I suspect.
October 6th, 2008 at 11:33 amSo, where are all the Conservatives to talk about how wrong Karl Marx was that Capitialism would fail under its own excessive greed, and that Socialism would come in to rescue it?
October 6th, 2008 at 11:35 amIf there is an upside to this, it is the likelihood that McNutzi and the Snowbilly are going to have an awfully hard time changing the topic from the economy to irrelevant nonsense about Bill Ayers.
Still feel sorry for people who thought they might be able to retire in the next ten years though.
October 6th, 2008 at 11:38 ammisshusseinmolly Says: Waitaminnit — the Dow was below 10,000 on October 29, 2004 and Bush/Cheney STILL won???
Proably not, but it was still close enough to be stolen.
I think, back then, many people still bought the advice of Wall Street to just ‘ride it out’, as it’s just part of being an investor.
If nothing else, George W. Bush has brought back the Skeptisism the Founding Fathers wished us to always have.
October 6th, 2008 at 11:39 amThis is not purely the Dems fault, although they are in charge in Congress. It’s also the media’s failure to report on several more viable options that exist beyond the Bush plan. As I understand the problem, it’s a lack of credit.
The US should do what Warren Buffett did recently when he injected capital into Goldman Sachs, five billion dollars for preferred shares. This business of buying garbage assets is and was so obviously misguided. Congress should create a fund that specifically does what Buffett does: invest strategically.
In fact, Obama has so missed the boat on this issue that McCain could easily step in by proposing this sort of response. The fact he has not says alot about his team, as well.
October 6th, 2008 at 11:39 amIt looks like the trickle down Wall Street bailout ain’t workin’!
In a Spring 2000 article in the JEP, James Poterba includes data on stock ownership in the US.
10% of households directly own 91.2% of all stocks.
1% of households directly own 53.2% of all stocks.
The numbers on direct and indirect stock ownership are not all that different.
Thus, apart from the “wealth effect” on autonomous consumption, what happens to the stock market means jack all to most people!
It makes me wonder why it gets so much media attention.
October 6th, 2008 at 11:40 amAh, but none of this matters, dontcha know, cuz Barack Obama associates with terrarists who wanna destroy our country and stuff, you betcha . Not like us mavericks, doggone it, who will do all kinda mavericky stuff to get this country back on track for all you Joe Sixpacks out there.
/snark
October 6th, 2008 at 11:40 amNationalize the Federal Reserve System. This private company holds a lot of our treasury bills and holds the power to issue our currency. If we took over this bank we the tax payers won’t have to pay the treasury bills back – saving us a lot of hardship. Remember we must use nonviolent civil disobedience as a means of stopping them. We cannot be the aggressors. Preemption is wrong. They are desperate. Keep fighting using words and ideas. We cannot win this militarily. We must reach the hearts of the people who are blissfully ignorant and confront them with a choice.
October 6th, 2008 at 11:40 amtokin librul Says: Pretty much like it’s gonna get stolen this time, I suspect.
This time around the government is more afraid of the people than they have been in a while, because they seem to understand that when you have nothing left to lose, and you’ve been denied peaceful revolution, you’re willing to resort to violent revolution.
I think the voting margin will be too wide for them to steal it. And Obama is much more willing to fight them if they do. If he fights, then so do his supporters.
I don’t think they can afford to steal it this time.
October 6th, 2008 at 11:43 amJaneDoe Says: The US should do what Warren Buffett did recently when he injected capital into Goldman Sachs, five billion dollars for preferred shares. This business of buying garbage assets is and was so obviously misguided. Congress should create a fund that specifically does what Buffett does: invest strategically.
That’s exactly what Jimmy Carter did, which resulted in net gains for the treasury.
October 6th, 2008 at 11:44 amOh, golly gee! The bailout for the rich and powerful didn’t WORK? And they still get the money ANYWAY? Doubtless, NO ONE could have predicted that!!!!
JESUS!
October 6th, 2008 at 11:46 amDid Hank Paulson really just put a 35 year old former Goldman Sachs VP in charge of the entire bailout program? This has “heckuva job Brownie” all over it:
http://www.bloomberg.com/apps/news?pid=20601103&sid=ak5RqnboIhG0&refer=news
October 6th, 2008 at 11:50 amAs the AP reports, the “markets have come to the sobering realization that the Bush administration’s $700 billion rescue plan won’t work quickly to unfreeze the credit markets, and that many banks are still having difficulty gaining access to cash.”
I really know nothing about how the economy works.
October 6th, 2008 at 11:52 amI did feel like I knew before hand that the 700 billion had nothing to do with the economy or the United States.
That it was more about the rich getting richer at the expense of the tax payer.
Kind of like, oh, I don’t know, the entire bush admin’s reign of terror.
I could very well be wrong on that.
The numbers on direct and indirect stock ownership are:
10% of US households own 87.2% of all stocks directly and through pensions, IRAs, mutual funds and so on.
1% of US households own 47.7% of all stocks directly and indirectly.
So again, what happens to the stock market has little or no effect on most people. Also, those who don’t sell when the markets are down don’t lose until they do.
October 6th, 2008 at 11:53 amHow many times do we have to hear:
“No one could have predicted…” until we realize that the reason why Bushco never predicted what was about to happen, whether it be 9/11, Katrina, Wall Street, et.al., was because it served the best interests of Bushco to let these things happen. They are in a much better place because of what’s happened and to hell with the rest of America.
October 6th, 2008 at 11:56 amstewarjt Says:
1% of US households own 47.7% of all stocks directly and indirectly.
______________
Well, it is nice to know that the top 1% is feeling some of the pain for a change.
October 6th, 2008 at 12:06 pmIntriguing side note: this guy goes by the name “Neel Kashkari”.
Get it? “Kneel”?
“Cash”? …”Carry”?
You can’t make this shit up.
October 6th, 2008 at 12:07 pmHow many times do we have to hear:
“No one could have predicted…” until we realize that the reason why Bushco never predicted what was about to happen, whether it be 9/11, Katrina, Wall Street, et.al., was because it served the best interests of Bushco to let these things happen. They are in a much better place because of what’s happened and to hell with the rest of America.
I could have.
http://sacxtra.com/mbs/node/224
Sacxtra! – May 2008
Submitted by phil on Wed, 2008-04-23 15:07.
Sacxtra! TV
October 6th, 2008 at 12:10 pmEpisode: The 65 Trillion Dollar Debt
stewarjt Says: So again, what happens to the stock market has little or no effect on most people. Also, those who don’t sell when the markets are down don’t lose until they do.
It’s not about collective volume, but about the fact that many Americans have their paltry $5K to $200K in the market that is all they have. Lose 10% of your pitiance, and you feel it worse than those who corner the market, because when you have virtually nothing, you can’t afford to lose any of it.
A few years back, I met a 70 year old man who worked at McDonalds to afford his wife’s prescriptions after Enron cleaned out half of his retirement. It does impact average Americans. Just ask them.
October 6th, 2008 at 12:11 pm401K now equals less than I put into it, I was gonna retire at 60 with 1.5 mil and 3 rentals….
….now the retirement plan is work till I die, if I can work at all.
PHUCK YOU BUSH REPUBLICANS!!! I wish I was religious so I would know that you would burn in hell. But cancer is the best I can wish on you as an atheist.
October 6th, 2008 at 12:14 pmBadmoodman Says:
Did Hank Paulson really just put a 35 year old former Goldman Sachs VP in charge of the entire bailout program? This has “heckuva job Brownie” all over it:
Did you see Bush and Paulson excitedly shake hands when the bailout passed? You could read “The treasury is raided and our returns to private life are paid for” on their faces.
October 6th, 2008 at 12:16 pm“Wall Street joined a “selloff around the world” today, with the Dow Jones dropping more than 400 points and falling to below 10,000 for the first time in four years.”
Anyone want my copy of Dow 36,000?
October 6th, 2008 at 12:16 pmstewarjt Says: So again, what happens to the stock market has little or no effect on most people. Also, those who don’t sell when the markets are down don’t lose until they do.
If you think this does not affect most people, in the way of their 401ks, retirements, and their job security, you are nuts.
When a companies stock falls, this affects them getting financing for expansions, research, etc.
This affects the job markets, the more companies that crash, the less jobs that are available.
The stock market is a reflection of the economy, not the economy itself, but if you think this does not affect everyone in some way, you are a total fool.
October 6th, 2008 at 12:20 pmIdeas Have Consequences.
October 6th, 2008 at 12:20 pmThat old saying is true if you live long enough you’ll see the same thing happen again.
1989 The Keating 5 Scandal which included Senator McCain and 4 other US Senators Brought down the US Economy, many Banks closed and Millions of American lost everything they had.
October 6th, 2008 at 12:24 pmFast forward to 2008 and a repeat of the Crime and yes McCain is still a major player who now doesn’t want to talk about our broken Economy.
Wayne Says:
When a companies stock falls, this affects them getting financing for expansions, research, etc.
This affects the job markets, the more companies that crash, the less jobs that are available.
October 6th, 2008 at 12:20 pm
_______
And even well-valued, stable, Fortune 500 companies are being denied commercial paper, which affects their ability to build new factories, launch new products, or even manage basic cash-flow.
October 6th, 2008 at 12:32 pm#42, Wayne.
If you are going to argue that falling stock prices affect most people in the face of empirical data to the contrary, then what are your reasons for believing this?
You might be interested in knowing that most companies, the overwhelming amount of investment is financed through retained earnings, not stock offerings. Therefore, your main reason for disagreeing with me is refuted.
Your view of what the stock market is a reflection of is a revelation. Whence arises this idea, besides the mainstream media?
Last, I have reasons for why I don’t think it affects everyone. What are yours for thinking it does, besides what I already debunked?
October 6th, 2008 at 12:34 pm#42, Wayne.
You’ll notice that I didn’t not respond to your ad hominem attack.
October 6th, 2008 at 12:35 pmY’know, I never thought we’d see a political landscape that would chase away all our trolls.
But I guess even their powerful delusions and their reality-immune systems can’t stand up to the massive disaster that Bush hath wrought.
Either that, or they all completed their “McCain ‘08″ Slurpee cup sets and have moved on — probably masturbating in theaters to “An American Carol”.
October 6th, 2008 at 12:37 pmIf for no other reason, it’s a shame that the Twin Towers aren’t still there so that some of these corrupt clowns would have a nice perch from which to launch themselves.
¶ AIO
October 6th, 2008 at 12:48 pmstewarjt Says:
Last, I have reasons for why I don’t think it affects everyone. What are yours for thinking it does, besides what I already debunked?
I haven’t seen you debunk anything, and your statement this doesn’t affect most people is just plain silly.
October 6th, 2008 at 1:01 pmhussein toasterhead Says:
Wayne Says:
When a companies stock falls, this affects them getting financing for expansions, research, etc.
This affects the job markets, the more companies that crash, the less jobs that are available.
October 6th, 2008 at 12:20 pm
_______
And even well-valued, stable, Fortune 500 companies are being denied commercial paper, which affects their ability to build new factories, launch new products, or even manage basic cash-flow.
My point exactly, thanks
October 6th, 2008 at 1:08 pmThis does not work in anybody’s interest, except of course, those who seek political office by manipulating the real pain of others.
October 6th, 2008 at 1:27 pmOne thing I can say from personal experience as a smoker that works in the financial district.
The vibe I get from the locals has certainly changed. It’s pretty melancholy down here.
October 6th, 2008 at 1:47 pmAIO, that was in really poor taste.
October 6th, 2008 at 1:49 pm#50 Wayne,
I’ve provided evidence and logic supporting my conclusion. Your not comprehending is on you, not me. Also, calling my supported conclusions “silly” is again name calling and ad hominem and no substitute for logic and facts, i.e., critical thinking.
Again, I’ll leave the ad hominem and name calling responses to others.
October 6th, 2008 at 2:06 pmWe had CNBC on the TV at work — Former CEO from Lehmann Bros. was trying to explain his obscene wages, options and benefits while his company was going down.
Granted, going after the guys at the top of certain companies is warranted and will give us some satisfaction — but the real problem lies not with specific individuals, but the collective individuals – and their companies – who perpetrated this fraud in finance.
There must be a reinstatement of all regulations from the past, and then some.
The guys responsible must be forced to pay back the millions they continue to collect.
October 6th, 2008 at 2:11 pmShould I get gold, Euros, or Huan?
October 6th, 2008 at 2:30 pmI want our f ucking money back.
October 6th, 2008 at 2:34 pmralph the wonder llama Says:
AIO, that was in really poor taste.
Ralph:
Sorry to offend your llama sensibilities.
I did say ‘If for no other reason’…
I guess the Empire State Building is still there, maybe I should have used that.
In the mean time, you can explain the ‘really poor taste’ thingy to the people who recommended the comment.
¶ AIO
October 6th, 2008 at 2:35 pmI guess I shouldn’t worry one little bit about the $35,000 I’ve lost in my 401k since October.
October 6th, 2008 at 2:46 pmOoops, October shoulda been August. Still a huge chunk of my retirement. Oh hell, I ain’t retiring till I’m 72 anyhoo.
October 6th, 2008 at 2:47 pmCrap, it’s down 740, make that $37,000…
October 6th, 2008 at 2:47 pm#45 Hussein Toasterhead,
And even well-valued, stable, Fortune 500 companies are being denied commercial paper, which affects their ability to build new factories, launch new products, or even manage basic cash-flow.
Exactly what does this have to do with the stock market or it falling? I don’t put the burden on you alone, but how is this a refutation or response to my conclusion?
I repeat my earlier fact that, according to economists Dornbush and Fischer, the overwhelming majority of new investment in plant and equipment is financed by retained earnings, not stock issues.
October 6th, 2008 at 3:05 pmJust curious, JT, what do Dornbush and Fischer have to say about this week’s lack of credit at large lending institutions?
October 6th, 2008 at 3:16 pmAIO, the reason I found your comment in poor taste was that it recalled the victims of 9/11 who chose to leap to their deaths from the building rather than be incinerated.
If you still think that’s a function of ‘llama sensibilities” then there’s not much else to say. Congrats on all the “recommends” though. You should be proud.
October 6th, 2008 at 3:21 pmstewarjt, stock prices really do affect everyone.
1) Stock price falls.
2) Business can no longer get loans.
3) Business stops or slows spending on everything but basics. Advertising stops, hiring stops.
4) Because of the lost buisness, the advertising, hiring, accounting firms, of the original business – their own stock price falls…
… repeat ad nauseum…
It’s a spiral death trip.
October 6th, 2008 at 3:31 pm#66, dfletcher,
What evidence do you have that falling stock prices cause banks to stop lending to businesses? What is the exact criteria you assert banks are using for loan approval? And how, exactly how do you know this?
Writing a list is not the same as providing logic or evidence for your conclusions.
October 6th, 2008 at 3:54 pmI currently have my last piece of tangible wealth ( a piece of art) up for auction. The auction is not for some months but I am hoping that those who still have any money left might also view art as a safe bet. Any thoughts?
October 6th, 2008 at 4:03 pmGraph the market numbers vs time for the last 7 years and be sure to correct for inflation / Cost of living. Dow has lost 20%, S+P 500 and NASDAQ even more.
October 6th, 2008 at 4:55 pmWhat gets me is how the bailout is directed at protecting the very people who gambled with credit swaps for non-existent stocks.
With the bailout, we have essentially agreed to buy the bad packages which gaining nothing.
If the repubs really want government to work like a business, they need to look more at the stock injection plan. If a business raider were to come in, they would buy stock in the failing business and thus own part of the business. Money to the business = part ownership.
But I can hear cries of “nationalization”, “communism”, “Govt infringing on private enterprise”
October 6th, 2008 at 4:58 pmstewarjt, Standard & Poor’s a good enough reference for you? If not, it’s doubtful that anyone could convince you:
http://www2.standardandpoors.com/portal/site/sp/en/us/page.article/3,1,1,0,1204839903965.html
October 6th, 2008 at 5:12 pm#71 dfletcher,
It appears from the S&P article that if a company is credit worthy, then it will receive finance regardless of the current direction of its stock price. Is this how you understand the quote?
The point is, of course, that falling stock prices are not directly connected to a “credit crunch.” If they are, what is the relationship?
October 6th, 2008 at 5:43 pmstewarjt I’m not sure what you just read but what I’m seeing is that *yes* S&P DOES use stock price in making it’s decision. The first sentence of the paper I linked is:
You seem to suggest that these companies on the exchanges are insulated, isolated. That what happens to their stocks only affects a few guys at the top of one company.
That is just not right. Events are interconnected. Note that I’m not saying in this case that the stock falling is causing the credit crunch – the causes of that are clear I think (default credit swaps, backed by bad mortgages, and all financial institutions seem to be holding loads of them). I’m saying that it *affects* the bottom line of the business with the stock, as well as hurting the businesses that work with it. Trickle-down pain if you will. Can you really deny that?
October 6th, 2008 at 10:13 pm#74, dfletcher.
Do you see what you did? You substituted the word “may” in the original for “does”. This is very clear to me.
I don’t recognize my positions when you restate them. If I want to say that “companies are insulated” then I’ll say that.
You want to show how financial institutions are using their losses to restrict credit to support your position. Exactly which financial institutions and to whom are they restricting credit? Because if they are, then it is the Fed’s job to step in and increase its lending provide liquidity to the system.
October 6th, 2008 at 10:24 pmstewarjt you have posted more than once in this thread:
You are inking stock ownership to the set of people that are hurt, 1:1. Simple, beautiful. It’s just completely not true.
Why would S&P put out a document that starts out with the sentence I quoted? To say, yes THAT IS one of the things we use. If you suddenly tank hard, the bank is going to double, triple, quadruple look at you before giving you money. Why is that so hard to understand?
I don’t actually know any specific instances where this has happened. I just know from working in the business world what happens when stock goes down. Budgets are cut. Projects canceled. I have worked for 3 publicly owned companies.
Even if the price is just a lost opportunity – a job that you can’t have now that would have been possible with a bigger budget – that is the cost. Decline. Pain.
But whatever, keep believing the tanking stock market isn’t hurting you.
October 6th, 2008 at 10:57 pm#76, dfletcher,
Let’s recap your arguments.
First, you set out a list that you take as logic or evidence that falling stock prices affect most people. I point out that providing a list is not the same as logic and/or evidence.
You provide a S&P article that says falling stock prices “may” be a factor, but does not say “determining” or “primary” factor in granting credit.
Next, you admit you don’t have any empirical evidence or “specific instances” where what you assert happens, actually happens. Then, finally, you fall back on personal experience and in doing so are committing the “hasty generalization” logical reasoning fallacy. You offer this as the logic and evidence I asked for in the first place.
And yet, you still cling to your position without logic or evidence! Wow! I really don’t need to add anything to that, except to recommend a great critical thinking book!
My point was, it was so long ago, that falling stock prices have little or no effect on most people. Should have I added, little or no “direct” effect on most people?
According to the Federal Reserve Board Survey of Consumer Finance of 2004, 20.7% of US households directly own stock. This means, of course, that 79.3% of US households directly own stock! Taking account of indirect stock ownership, either a little under or over 50% of US households are affected. Therefore, based on this evidence, I stick by my original comment.
One might think by the amount of attention given by the corporate media to the stock market, that the latter determines the health of the economy. It is the opposite. The health of the economy and especially current and expected profitability determine, in the last instance, stock market behavior.
I am much more concerned with the general well being of most people in capitalist society, not wealthy stock owners. Therefore, I look to the unemployment rate, real wages, real median wages, the poverty rate and absolute poverty numbers, health insurance coverage, hunger and homelessness as indicators of the health of the economy. Because, what is the capitalist economy without the working class, without the people who actually do the work?
October 7th, 2008 at 10:24 am