Another Black Monday – Dow down 800

I remember the 1987 Black Monday; this one isn’t quite as black in percentage terms but we may not be finished.
Wow, glad we passed that bailout rescue plan.
I am not actually sure how I mean that. One could say if the rescue plan was still in doubt then the bloodletting would be worse. But then one might say the rescue plan is inadequate to address the serious fear which appears to infiltrate the financial markets.
Chime in…

15 thoughts on “Another Black Monday – Dow down 800”

  1. That number is probably going to keep growing as California slides into the Pacific.
    Drowssap,
    Yikes – I hope not! = – 0

  2. Mortgage losses now calculated to hit 1.4 Trillion
    It should be noted that in April mortgage losses were estimate at 945 Billion. That number is probably going to keep growing as California slides into the Pacific. And of course this doesn’t count car loans, credit cards, business bankruptcies, etc. etc.
    Losses are going to be in the trillions just in the USA. That $700 Billion is a small fraction of what the “bailoutters” need. It’s also more than we can get our hands on without turning on the printing presses and creating massive inflation. If we do that old people will get hosed.
    At 10 to 1 leverage we could build a whole new banking system for $1 Trillion dollars ($10 Trillion dollars in loans).

  3. Lynn David
    From your link and it’s SPOT ON.

    “If the system is so fragile that the collapse of the fifth-largest investment bank in America could bring the whole thing down, what’s going to happen in a few years when the No. 2 or No. 1 banks go bad…What’s Bernanke going to do, get in his helicopter and fly around the country repossessing cars and houses? This is insane.”
    Jim Rogers, June 25, 2008, Moneynews.com

    If the system is this fragile it’s a joke. It clearly isn’t serving the interests of the average American.

  5. I’ve always been a fan of gold. There was a time when you could tie increases in the inflation rate to it quite well. Then the Fed stepped in and things changed. Some think the Fed is manipulating gold, but cannot do so for too very much longer. It’s all a plan to create an NAU like the EAU with one currency called the Amero for Canada, Mexico and the USA. Lotsa low level buzz about it. Ron Paul even. Then there is a guy who is called DeepCaster. Sounds a little too conspiratorial to me, but then I’m even a fan of “24.”
    See: http://news.goldseek.com/GoldSeek/1221843300.php

  6. You’re welcome, Mary. This time around I was mostly in mutual funds, but I have been ill and in hospitals or nursing homes/rehab centers for over nine months. The result was that I had to liquidate most of my holdings earlier this year or late last year. As a result, I got better return on my investments even if that then went for my medical expenses. Medical billls swallowed my last corn crop sales all in one gulp too, even though that was two and a half times more than any crop I or my parents had sold from that farm before (due to the higher corn prices). I should have broken down and bought my [rather lousy] state-sponsored health insurance, more ‘normal’ insurers find me to be uninsurable due to a few prior conditions.

  7. Yeah – that sums it up. Many will sink. Another man shot and killed his family, then suicided, in Los Angeles today. Reason: Financial difficulties.
    Thanks Lynn for the tip.

  8. Great comment I ran across

    The Titanic is sinking. Captain Bush ordered first class passengers aboard the few $700B lifeboats. He and his crews have their own lifeboat. We are all left to drown.

    That pretty much sums up the bailout.

  9. I remember 1987, I liquidated my stock holdings before that and bought puts on the DOW index. Made a lot of money on them.

  10. BTW, I should add that nobody on Wall Street thought the plan was going to work in the first place. It’s not like they figured it out this morning and decided to sell in a panic. Even at $700 Billion the bailout is 50X too small to solve the problem.
    However $700 Billion is more than big enough to trigger runaway inflation and huge interest rate hikes. I feel sorry for anyone living on a fixed income.

  12. There will be more fall out. Banks crashing and being re-acquired and put together, re-organized, under different names.
    Personally, I just want to make it to the beach without a total wipeout.

  13. I like Sarah Palin a lot but I bet (cha) if Mitt Romney were the V.P. pick, he would have given a more hopeful speech with a concrete plan during the debate. Everyone keeps saying he is handsome – I never noticed 😉

  14. Wow. I used “meant” instead of “met”. Sharon will kill me.
    Moral: proofread your comments before hitting “submit”!

  15. I am not an economist (nor do I play one on TV) but it appears that the markets are still tanking because what was a US problem with liquidity seizing up has spread very violently to Europe over the weekend. They, being a loose affiliation rather than a single country, can’t really DO a bailout, and the steps individual countries have taken (like Ireland moving to insure bank deposits and Germany moving to increase limits on its bank deposits) are being meant with resistance in Brussels. Confusion breeds contempt, and what you are seeing is the unwinding of very complicated trades that involve holding positions in currencies not your own because people are worried about the EUR.
    There’s probably more to it than that, but the bailout in America wasn’t the only piece. Most of the commentary I’ve read suggests that had the first bailout passed this might not have happened (or been this bad) but that markets were still scared because of the House voting down earlier and now they have new worries. Markets react much less to information than gut, and in particular when margin clerks get scared they force people to sell everything – even good investments get flushed with the bad in the search for liquidity on the balance sheet.

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