Global stocks plunge

[Marshal Murat]

London Market in Free-fall (http://www.thesun.co.uk/sol/homepage/news/money/article709921.ece)

From France to Japan (http://biz.yahoo.com/ap/080121/world_markets.html)

GAH!

[Fragony]

Here too, 6% down. Don't worry.

[Tristuskhan]

GAH! is the word....

[ICantSpellDawg]

in 5 days start buying stocks like crazy. Fire sale

in the US that is.

[TB666]

We are not gonna see people dropping out of tall building and land splat on their cars now will we ??
If you are gonna do so then atleast don't drag the rest of us down with you.

[Tristuskhan]

Oh sometimes I'm proud to drink or give my wages instead of acting as a poor short-viewed s****r who thinks he can become fat thru gambling...

Be adult: don't play with money.

Use it for good wines instead. Or give it away, to people who need it.

[Fragony]

Be adult: don't play with money.

Well right now would be a good time if you want to.

[Ice]

I'll post some wsj articles on the issue in a little bit if anyone wants to read up on the looming recession of DOOM (evil laugh) :laugh4:.

:clown:

[Ice]

Be adult: don't play with money.


An informed investor doesn't "play" with money. Only a dumbass does.

[Papewaio]

I wonder if Buffet is having a buffet or is getting a slapped around and buffeted?

[Oleander Ardens]

Well looks like a deep bearish (http://www.nytimes.com/2008/01/22/business/worldbusiness/23cnd-asiastox.html?hp) market...

So what do you guys think? I guess that right now the naked and painted panic is dancing with wild bear under a black rain and screaming "Sell!, Sell!, Sell!". :dizzy2:

How far will this panic spread and how long will it last?

Cheers
OA

[Fragony]

Tough luck for Asia, will be better tommorow, panic thingie. Me = buying

[Oleander Ardens]

I not yet - fundamentals seem good, but with spreading panic....

[HoreTore]

All I can really say is....


HAH!

[Fragony]

Good thing someone invented keyboards then

[Oleander Ardens]

Especially since they help one to make good long term money out of stocks - roughly 27% every year since 2003 for me :juggle2:

Plus I'm out of the market right now :egypt:

[doc_bean]

I just hope this will all lead to a dramatic increase of the (Belgian life) index. More wages and same downpayment on my loan !

[KukriKhan]

Moderator's Note: merged the 2 'stock market plunge' threads. :bow:

[pevergreen]

Told everyone to get out of the stock market. Our $63 AUD shares are now worth $49. In one day. We bought them at $25, but still. There is a few thousand at least that we own. :no:

[Northnovas]

How far will this panic spread and how long will it last?

Cheers
OA

When the media outlets attention moves on to something else. Nothing like a slow news day for a little exploitation of a business cycle to cause more concern then there should be... :dizzy2:
Any investor knows what goes up comes back down and will go back up again.

[cegorach]

Heh, yesterday I got a phonecall from my panicked mother asking if she should sell her shares after Warsow SM followed the general drop....

Of course I said NO - there are no indications it will affect the long term projections, especially with investment funds which will find find a new area to invest for example infrastructure which thanks to Euroe 2012 and other investments will see its golden era for next 5-6 years. ;)

[Oleander Ardens]

Well I gave the advice to cut and run in early August, shortly before the DAX reached the all-time high. Since than I have moved most of my money to certificates (with a 100% captial return) and in other short-term cash assets.

Now my sister's friend wants to sell and frankly I hate do give advice to other people I know very well. Still I convinced my sister not to follow her bank's advice to invest in stocks in December. So much about their knowledge :furious3:

In this situation I frankly would not now what to do if I still had stocks. Selling would be good if the panic goes one, while waiting could pay of if it ends. Gah, so many could and would... :thumbsdown:

I personally hope to reinvest soon in a calmer market in the Nikkei, the DJ and the DAX

[TinCow]

It's an interesting situation. I'm invested for long-term growth (I mean seriously long-term, 20 to 30 years) so this doesn't really impact me, but it's still very nerve racking. I know that for me personally today's numbers mean next to nothing, but I still don't like seeing it drop across the board. At the same time, the prospect of further interest rate cuts over the coming year or so are making me think that perhaps it's time to pony up for a ridiculously expensive DC house.

The next couple years will be interesting, to say the least.

[Xiahou]

The only stocks I really own are in a 401(k), which I won't be touching for several decades yet. So all this means is that I'll be able to buy more shares per paycheck- good deal.

[Redleg]

Markets go up and markets go down. If one needs to maintain a set level of funds then one should sell in a bearish market. However if one is looking at the long term the stock market is generally a good investment.

Now if the world econmy suffers from a depression like the one after WW1 the had effected the whole world with stock market crashes of the late 1920's then one should be concerned. The problem with that is that money values will drastically shift so one does not know what their money is worth.

Even precious metals will be effected by a severe depression.


However a minor recession is good for the stock market. It allows for a market re-balance after the recession is over. My problem with the US economy is that we have been artificially halting a natural cycle of market recessions since the late 1970's, eventually the artificaly stimulious will fail and who knows what level of recession will occur and if it developes into a true depression of the market.

[ICantSpellDawg]

Markets go up and markets go down. If one needs to maintain a set level of funds then one should sell in a bearish market. However if one is looking at the long term the stock market is generally a good investment.

Now if the world econmy suffers from a depression like the one after WW1 the had effected the whole world with stock market crashes of the late 1920's then one should be concerned. The problem with that is that money values will drastically shift so one does not know what their money is worth.

Even precious metals will be effected by a severe depression.


However a minor recession is good for the stock market. It allows for a market re-balance after the recession is over. My problem with the US economy is that we have been artificially halting a natural cycle of market recessions since the late 1970's, eventually the artificaly stimulious will fail and who knows what level of recession will occur and if it developes into a true depression of the market.

In the event of a Recession I would buy on the cheap in relation to the pattern of the individual company overall (as long as you believe it to be a good company with a solid foundation)

In the event of a depression, money held outside of the market probably wouldn't be worth much anyway. It is just paper after all, and general costs would skyrocket.

Long story short- before a recession, buy stocks, weapons and ammo. Stocks in the event of the market correction, Weapons and ammo in the event of a crash and depression

The phrase "lock stocks and two smoking barrels" has an all new meaning

Intelligent people who have never gotten into the market before would be well served by putting some disposable income in soon.

[Xiahou]

Long story short- before a recession, buy stocks, weapons and ammo. Stocks in the event of the market correction, Weapons and ammo in the event of a crash and depression
To quote "Brainy" Gremlin (https://www.youtube.com/watch?v=OpckODBA6no&feature=related): "Well, it's rather brutal here. Right now we are advising all our clients to put everything they've got into canned food and shotguns." :laugh4:

[Papewaio]

All I can really say is....


HAH!

At least with stocks anyone can buy part of a company. I thought you would be more concerned with the barriers imposed by private equity. :yes:

[Ice]

At least with stocks anyone can buy part of a company. I thought you would be more concerned with the barriers imposed by private equity. :yes:

That really just shows his lack of knowledge on the subject. :balloon2:

[Caius]

MERVAL went 5 points down yesterday. I hope we don't have a Second Big Depression.

[Mikeus Caesar]

MERVAL went 5 points down yesterday. I hope we don't have a Second Big Depression.

I personally do hope we have a horrid depression. It would make life difficult, a struggle, and thus make it rather interesting.

Plus, i always wanted to live in the 30's. This'd be as close as i'd get :beam:

[CountArach]

I personally do hope we have a horrid depression. It would make life difficult, a struggle, and thus make it rather interesting.

Plus, i always wanted to live in the 30's. This'd be as close as i'd get :beam:
Every cloud has a silver lining... I guess...

[Husar]

I personally do hope we have a horrid depression. It would make life difficult, a struggle, and thus make it rather interesting.

Plus, i always wanted to live in the 30's. This'd be as close as i'd get :beam:
Hey, I'm bored sometimes as well, but that is a bit much. :sweatdrop:
Life would be more interesting if certain things were cheaper, not more expensive. :dizzy2:

[HoreTore]

At least with stocks anyone can buy part of a company. I thought you would be more concerned with the barriers imposed by private equity. :yes:

You think I like the idea of financial speculation? :juggle2:

As things are now, they're the ones getting it in the buttocks, and I couldn't care less about them. If jobs start going down the drain I may be a little more concerned, as governments are quite powerless to create jobs, all they can say is "we have to lower taxes to create incentive", instead of starting the bloody business themselves....

Those who are in it for the long term haven't lost a thing anyway, and they're likely to earn money on this as they can now expand easily if they have cash reserves. Only the short term speculants(sp?) have lost their money. Justice is served...

[TinCow]

Only the short term speculants(sp?) have lost their money. Justice is served...

Not quite true. It also hurts long-term investors who have reached maturity. If you were expecting to cash out and retire soon, and you didn't get out of the market last fall, you're hurting a bit.

[Fragony]

Justice is served indeed, how dare they make an honest living instead of waiting for the government to feed them and plan every aspect of their lifes. PROPERTY IS THEFT

[ICantSpellDawg]

The best "outside the box" idea that I have heard that will make everyone happy is this:


Make the Tax Cuts Work

Link (http://www.nytimes.com/2008/01/23/opinion/23burman.html?_r=2&ref=opinion&oref=slogin&oref=slogin)
Article Tools Sponsored By
By LEN BURMAN
Published: January 23, 2008

Washington

SINCE 2001, Washington’s answer to every policy question has been the same. What should we do with a big surplus? Tax cuts. How do we beat back global terrorism? Tax cuts. Increase energy independence? Rebuild New Orleans? Expand health insurance coverage? Tax cuts, tax cuts, tax cuts.

Now comes another question that becomes more pressing each day that the markets lose ground — one to which taxes have long been at least part of the answer. How do we stimulate the economy to prevent or shorten a recession? One way would be to repeal the Bush tax cuts two years early, in 2009.

It’s true that more tax cuts this year could help head off a recession in the short run. Washington could send taxpayers rebate checks or give businesses temporary breaks for new investments in equipment. President Bush is likely to propose both as part of his $150 billion package of emergency measures.

Similar efforts in 2001 and 2002 had mixed results at best, but so long as the tax breaks are temporary, they wouldn’t do much long-term economic harm either. That said, the president’s proposal would leave out 37 percent of households because they do not earn enough to pay income taxes. A credit against payroll taxes or, better still, increasing transfers to the low-income families most likely to spend the money — say, by temporarily increasing food stamps — would do more to energize the economy.

There’s bipartisan agreement that something along these lines should be done, but the president has also argued for an extension of his tax cuts, now scheduled to expire at the end of 2010. This idea has met with less support. It would accomplish nothing in the short run, and most of the benefits would go to the very rich — the group least likely to spend a tax windfall.

But if they were repealed in a year, the Bush tax cuts could spur a burst of economic activity in 2008. If people knew that their tax rates were going up next year, they’d work to make sure that more of their income is taxed at this year’s lower rates. Investors would likewise have a giant incentive to cash out their capital gains now to avoid paying higher taxes later. In 1986, stock sales doubled as taxpayers rushed to avoid the capital gains tax rate increase scheduled for 1987. If people pour their stock gains into yachts and fast cars, that’s pure fiscal stimulus.

The money involved could be considerable. Capital gains in 2007 were something like $700 billion, representing well over $1 trillion in asset sales. It looks as if gains will be much lower in 2008, but a looming tax increase could easily spur an additional $500 billion in sales. If only 20 percent of that translated into extra spending, we’d have as much or more short-term stimulus as we could get from the package Congress and the president are considering.

Best of all, this is one stimulus proposal that would reduce the deficit — the single largest threat to the economy’s long-term health. And that long-term benefit wouldn’t depend on our getting the timing and amount of stimulus right, something policymakers are notoriously inept at.

Len Burman is the director of the Urban-Brookings Tax Policy Center.

Any thoughts?

[Ironside]

Justice is served indeed, how dare they make an honest living instead of waiting for the government to feed them and plan every aspect of their lifes. PROPERTY IS THEFT

Stockmarket speculation = honest living? :inquisitive:

With current econimical system the market will either go up over time or crash really badly, which causes slightly larger problems.

[TinCow]

Stockmarket speculation = honest living? :inquisitive:

I think I need some education in economics. It was my understanding that stock market investments significantly benefited the global economy by providing operating capital for businesses to invest in future products and services. I thought that without those investments, innovation and expansion would be significantly stifled, thus vastly constricting the economy, and in turn decreasing the distribution of wealth and the standard of living for most of the planet's population. I thought of it in a manner similar to the huge economic benefits from banking and loans. Am I wrong in this?

[ICantSpellDawg]

Absolutely not. Capitalism goes along with Democracy hand in hand.

In democracy, those of us who pay taxes are "technically" the bosses of those in government. In Capitalism, those of us who invest are "technically" the bosses.

We create jobs when we invest. International investment also helps us not hurt so much in the event of a slowing down in our own economy. This also applies to those who wish to better themselves in other economies during times of hardship.

When our economic growth outpaces or job growth, those of us who invest still do well - so does the government.

Both systems have checks and balances, but if you are cynical, you won't benefit.

Education, Savings and Investment separate the rich from the poor. We have made education free, now we need to make savings and investment more attainable to the majority, but they will have to work for it.

[Tristuskhan]

I think I need some education in economics. It was my understanding that stock market investments significantly benefited the global economy by providing operating capital for businesses to invest in future products and services. I thought that without those investments, innovation and expansion would be significantly stifled, thus vastly constricting the economy, and in turn decreasing the distribution of wealth and the standard of living for most of the planet's population. I thought of it in a manner similar to the huge economic benefits from banking and loans. Am I wrong in this?


A 5% investment is good for economy...

15 to 25% is just plunder.

[doc_bean]

I think I need some education in economics. It was my understanding that stock market investments significantly benefited the global economy by providing operating capital for businesses to invest in future products and services. I thought that without those investments, innovation and expansion would be significantly stifled, thus vastly constricting the economy, and in turn decreasing the distribution of wealth and the standard of living for most of the planet's population. I thought of it in a manner similar to the huge economic benefits from banking and loans. Am I wrong in this?

The problem is speculation, in the short term sense, it means buying stock because you think other people will pay more for it very soon. It creates 'bubbles' (overvalued stock of a company or a whole sector, like the IT sector in the late 90s), which collapse when enough people realise the stock isn't worth the asking price, and the stock price plumets rapidly (often more than it should based on the actual company situation, which tends to be really bad for the company).

There are some more problems with the stock market, but I feel that if the people would properly realise what it is and what it can do, it is one of the best and most efficient tools for the redistribution of wealth.

[Papewaio]

You think I like the idea of financial speculation? :juggle2:

As things are now, they're the ones getting it in the buttocks, and I couldn't care less about them.

I take it you are against ATP (http://en.wikipedia.org/wiki/Adenosine_triphosphate) too then?


Adenosine 5'-triphosphate (ATP) is a multifunctional nucleotide that is most important as a "molecular currency" of intracellular energy transfer.[1] In this role, ATP transports chemical energy within cells for metabolism. It is produced as an energy source during the processes of photosynthesis and cellular respiration and consumed by many enzymes and a multitude of cellular processes including biosynthetic reactions, motility and cell division. In signal transduction pathways, ATP is used as a substrate by kinases that phosphorylate proteins and lipids, as well as by adenylate cyclase, which uses ATP to produce the second messenger molecule cyclic AMP.

Short term investors are the equivalent of ATP in the body. They don't actually do the work, but without enough of them biolgogical processes grind to a halt.

[Ironside]

I think I need some education in economics. It was my understanding that stock market investments significantly benefited the global economy by providing operating capital for businesses to invest in future products and services. I thought that without those investments, innovation and expansion would be significantly stifled, thus vastly constricting the economy, and in turn decreasing the distribution of wealth and the standard of living for most of the planet's population. I thought of it in a manner similar to the huge economic benefits from banking and loans. Am I wrong in this?

Some minor notes. I admit that I have'nt studied economics more carefully so I might have missed something.

The companies does not benefit from the ownership speculation that happens after the stocks have entered the market (this is here the companies earn money), outside possibly ownership changes (that involves something like 0.01% of the total owners) and some possible influence on the share dividends (that is the original return on the stock investment, correct?).
This makes the stockmarket into something that in practice are more something that is human mass-psychology that's vaguely controlled by the actual value on the stocks. Aka bubbles and the current massive drop on the market.

Besides, does jobs like politician or broker usually classify as honest living? :laugh4:

[HoreTore]

Short term investors are the equivalent of ATP in the body. They don't actually do the work, but without enough of them biolgogical processes grind to a halt.


*Locks at the current financial markets*

Yeah, they've sure done great! Couldn't live without them!

[econ21]

I think I need some education in economics. It was my understanding that stock market investments significantly benefited the global economy by providing operating capital for businesses to invest in future products and services. I thought that without those investments, innovation and expansion would be significantly stifled, thus vastly constricting the economy, and in turn decreasing the distribution of wealth and the standard of living for most of the planet's population. I thought of it in a manner similar to the huge economic benefits from banking and loans. Am I wrong in this?

Shares provide an alternative way of financing firms' investment to bank loans (and to retained profits), so yes I think you are fundamentally right.

However, the direct link to firm investment comes from new share issues. Buying and selling existing shares does not directly provide capital to the firms. Nonetheless, high share prices do make it easier for firms to issue new shares and also affect the creditworthiness of the firm. At the aggregate (macroeconomic) level, the overall level of stock market prices has big effects on the real economy, as so much wealth is held in the form of shares.

In theory, the stock market should work efficiently so that share prices reflect the expected profits of a firm (since these profits determine the share dividends). The share price therefore provides an important signal about where capital should be efficiently invested.

Efficient market theory is a good working approximation when dealing with individual shares: for example, it is hard statistically to predict share price changes. However, on aggregate financial markets seem subject to excessive volatility that is hard to explain in terms of changes in the real economy. This may lead to speculative bubbles and crashes. Lack of information may lead to traders indulging in herd behaviour where psychology plays a part as well as economics.

[Louis VI the Fat]

Meanwhile, to add to the upheaval, amidst much confusion it has just been uncovered that a rogue trader frauded Société Générale (http://www.bloomberg.com/apps/news?pid=20601087&sid=ame4MqMgBBIE&refer=home) for a whopping €4.9 billion.

To put that into perspective: that's four times the amount of previous world banking fraud recordholder Nick Leeson. Société Générale was, until a few hours ago, one of the most well-respected and stable French financial institutions.

[Samurai Waki]

My father was huge into real estate investment, and had a real knack for knowing when to buy and sell, in the late eighties through most of the nineties he bought, and by the time of his death, he had told me and my siblings to sell by late 06' or early early 07'. I ended up selling last January, at the highest the market had ever been, and shortly thereafter it began collapsing. I don't think I have quite the acumen my father had for the market, and I'm not about to trust most banks with a large sum of money.... So I've divvied it up, and it's in multiple accounts, as well as a master fund (just in case of an emergency) in the strongest currency in the world. I'm not too worried about the future for now.

[ICantSpellDawg]

The rebate thing went through. People who paid taxes and people who paid no taxes are getting between $600 and $1200. Individuals who make $75,000 or less and couples who make $150,000 or less will receive it.

What I don't understand is, if the checks won't be here until June, what is the point?

also, If there aren't many people above the $150,000 combined pay range anyway, why not give them the rebate as well? It would be fair, seeing as their money finances the rebate and people who don't pay anything are getting it.

OOOH that's right. It the governments way of buying support from the many - "we give out money to everybody but not the rich because they don't need it!"

[Ice]

[QUOTE=TuffStuffMcGruff]The rebate thing went through. People who paid taxes and people who paid no taxes are getting between $600 and $1200. Individuals who make $75,000 or less and couples who make $150,000 or less will receive it.

That's incorrect. People who paid no income taxes, but made atleast 300, and paid social security taxes, are getting 300.



What I don't understand is, if the checks won't be here until June, what is the point?


Good question. By that the time, the Fed rate cuts will begin or will shortly start to kick in. This could actually be disastrous due to the inflation is may cause in the future.


also, If there aren't many people above the $150,000 combined pay range anyway, why not give them the rebate as well? It would be fair, seeing as their money finances the rebate and people who don't pay anything are getting it. OOOH that's right. It the governments way of buying support from the many - "we give out money to everybody but not the rich because they don't need it!"

This isn't about being fair, it's about stimulating the economy. I guess the logic is, the rich won't really spend theirs any different then they are currently spending because if they want something, they already have the means to obtain it.

That's faulty logic I know, due to first hand experience, but that appears to be their reasoning.

[Ice]

Oh yeah, get this.

I sold my Exxon Mobile and Microsoft stocks a few days before the big crash.

Now Exxon mobile looks like they recovering, and Microsoft posts record quarter profits.

I then put my money into a bond fund which has been returning 7% already since the start of the year. Rate cuts are suppose to help bond funds, right?

Gah, right when I put it in, it starts to go down, first time in Jan.

I seriously can't win.

[drone]

What I don't understand is, if the checks won't be here until June, what is the point?
The point is the appearance of doing something. Personally, I see it as ruse to distract us from the fact that Congress let things get to the bad state they are currently in without doing anything. Proper legislation regulating lending and credit several years ago would have been better than this raid on an already stretched treasury.

In an election year, it comes as no surprise that Democrats and Republicans put aside partisan bickering to buy votes for their own incumbancies.


@Ice - why in the world would you sell ExxonMobil? They are expected to post the biggest profit ever of an American corporation.

[Ice]

@Ice - why in the world would you sell ExxonMobil? They are expected to post the biggest profit ever of an American corporation.

Because I'm obviously retarded.

:wall:

[doc_bean]

Oh yeah, get this.

I sold my Exxon Mobile and Microsoft stocks a few days before the big crash.

Now Exxon mobile looks like they recovering, and Microsoft posts record quarter profits.

I then put my money into a bond fund which has been returning 7% already since the start of the year. Rate cuts are suppose to help bond funds, right?

Gah, right when I put it in, it starts to go down, first time in Jan.

I seriously can't win.

You should think more long term, why the hell did you sell them already ?

[Vladimir]

What I don't understand is, if the checks won't be here until June, what is the point?

Checks in June, election in November.

[Ice]

You should think more long term, why the hell did you sell them already ?

I didn't feel like losing half my money I worked so hard to earn in such a short term.

So, fear.

[doc_bean]

I didn't feel like losing half my money I worked so hard to earn in such a short term.

So, fear.

rule #1 of the stock market (or gambling): don't use money you actually need.
rule #2: stay rational and don't believe the hype

[Shaka_Khan]

Even in bearish times, there are people who benefit from it. Certain companies thrive in situations in which others suffer. In the stock market, now's a good time to buy. If only I knew how to. :embarassed:

[Ice]

rule #1 of the stock market (or gambling): don't use money you actually need.
rule #2: stay rational and don't believe the hype

1) I don't need the money right now. It was still very painful to lose it.

2) It wasn't the hype. I'm actually an informed investor and thought I could time the market, which wasn't (I still don't know yet) a good idea. I honestly thought this housing bubbling was going to bring the United States into a recession.

[doc_bean]

1) I don't need the money right now. It was still very painful to lose it.

2) It wasn't the hype. I'm actually an informed investor and thought I could time the market, which wasn't (I still don't know yet) a good idea. I honestly thought this housing bubbling was going to bring the United States into a recession.

Think of it as 'tuition' then :jester:

[ICantSpellDawg]

1) I don't need the money right now. It was still very painful to lose it.

2) It wasn't the hype. I'm actually an informed investor and thought I could time the market, which wasn't (I still don't know yet) a good idea. I honestly thought this housing bubbling was going to bring the United States into a recession.

Stocks usually bounce back in a recession. A drop in stocks is the sign of a recession, but industries that show no sign of overvalue at that point will be strong - possibly even stronger than they were before the drop.

Fear is THE cause of a stock market dip, coupled with overvalue and under performance. Never believe the hype. In face, if you believe that an industry has a strong base and is necessary, wait for a good price and buy it EVEN if there is still some downward momentum. When it bounces back you could be very happy with the results.

But never spend money that you need.

[Caius]

I personally do hope we have a horrid depression. It would make life difficult, a struggle, and thus make it rather interesting.
Interesting, but depressing. No, thanks, I have enough with my life, I dont want more problems.

[Vladimir]

Interesting, but depressing. No, thanks, I have enough with my life, I dont want more problems.

Well on the plus side we can have another war. :sweatdrop:

Yea, let's avoid a depression.

[Caius]

Well on the plus side we can have another war. :sweatdrop:

Yea, let's avoid a depression.

Is that the plus?

Well, I would not mind fighting for my country. I would mind the fact that I could die.

[Vladimir]

Is that the plus?

Well, I would not mind fighting for my country. I would mind the fact that I could die.

It's the only real plus I can see from a global depression. It's probably best to fight for your country if there is some sort of ball involved...and not Nixon's football.

[Caius]

I don't get the joke, if there is one. But I can see nuclear wars, thing that I dont like.