The carnage continues on Wall Street

[redrumloa]

Dow falls below 10,000
http://biz.yahoo.com/ap/081006/wall_street.html

Financial markets took a bleak view of the future Monday, seeing contagion in a credit crisis that threatens to cascade through economies globally despite government efforts to provide relief. The Dow Jones industrials skidded more than 400 points and fell below 10,000 for the first time in four years, while the credit markets remained under strain.

Investors around the world have come to the sobering realization that the Bush administration's $700 billion rescue plan won't work quickly to unfreeze the credit markets. Global banks, hobbled by wrong-way bets on mortgage securities, still remain starved for cash as credit has dried up.

Well duh :roll:

World Markets Tumble, No Floor in Sight
http://finance.yahoo.com/tech-ticker/ar ... r-in-Sight

Stocks tumbled around the world Monday in reaction to Friday's post-bailout slide in the U.S. and a growing crisis in Europe's banking system.

Update: Monday morning, the Dow traded below 10,000 for the first time since October 2004. At 11:00 a.m. EDT, the index was down 450 points, or 4.4%, to 9579, while the S&P and Nasdaq were each down more than 5%.

Earlier: Once viewed to be relatively insulated from problems in the "Anglo-Saxon" banking system, institutions in Germany (Hypo Real Estate), Belgium (Fortis) and Italy (Unicredit) either received or were seeking major infusions of capital, much of it coming from local governments.

ugly, ugly times ahead. Time to circle the wagons, boys and girls :x

 

[redrumloa]

Russian Stocks Battered, Fall Almost 20 Percent

http://biz.yahoo.com/ap/081006/eu_russia_markets.html

Russia's leading stock markets suffered their biggest-ever one-day losses as shares went into free fall on the back of falling oil prices and deepening fears about the global economy despite the passage of a $700 billion U.S. bank bailout.

Trading on MICEX -- the country's largest index-- was shut down three times, closing down 18.6 percent to 752 points. The benchmark RTS -- where trading was halted twice -- crashed to its lowest point since August 2005, falling by 19.1 percent to 866.4 points.

"The mood is kind of disbelief. You'd think we would have gotten used to it by now," said Ron Smith, strategist at Moscow-based Alfa Bank. "Traders are just sitting there staring at the screens and going, 'Wow.'"

Guns and freeze-dried food sound so kooky now :?:

 

[the_leander]

Guns yes, though buying in a load of tinned stuff might not be a bad idea...

 

[Robert]

Guns and freeze-dried food sound so kooky now

To me, absolutely.

Perhaps not in your specific neighbourhood though.

 

[redrumloa]

Poll: Almost 6 of 10 Americans see depression as likely
http://biz.yahoo.com/cnnm/081006/100608 ... _poll.html

Nearly six out of ten Americans believe another economic depression is likely, according to a poll released Monday.

The CNN/Opinion Research Corp. poll, which surveyed more than 1,000 Americans over the weekend, cited common measures of the economic pain of the 1930s:

25% unemployment rate;

widespread bank failures; and

millions of Americans homeless and unable to feed their families.

In response, 21% of those polled say that a depression is very likely and another 38% say it is somewhat likely.

 

[redrumloa]

But on the plus side the bear brought friends :wink:

 

[Glaucus]

Thanks Red, I feel much better now. :-D

- Mike

 

[FluffyMcDeath]

Poll: Almost 6 of 10 Americans see depression as likely
http://biz.yahoo.com/cnnm/081006/100608 ... _poll.html

Nearly six out of ten Americans believe another economic depression is likely, according to a poll released Monday.

The CNN/Opinion Research Corp. poll, which surveyed more than 1,000 Americans over the weekend, cited common measures of the economic pain of the 1930s:

25% unemployment rate;

25% unemployment? That would be less than double the current rate.

Of course, that all depends on how you measure it.

Current estimated unemployment rate if you count it the way it was done B.C. (before Clinton) is about 15%

And inflation is running around 13% if you calculate it the same way it was calculated back in 1980.

Shadow Government Statistics

Also, according to those guys, GDP growth has been mostly negative since 2000. Well, yes of course, if inflation is actually so much higher than is being stated.

 

[JoBBo]

25% unemployment? That would be less than double the current rate.

It is important to consider that Northern American and European societies were very different back in the 20s and 30s. For instance, the one-income family was far more common than it is today for a variety of reasons (far higher birth rates which often required women to stay at home, etc.).

A 25% unemployment rate in 1930 is probably closer to a 40 or 50% unemployment rate today.

For the record, I live in an area with a permanent unemployment rate of 20%. It most certainly does not feel like the Great Depression. Crime rates are very low, etc.

Also, according to those guys, GDP growth has been mostly negative since 2000. Well, yes of course, if inflation is actually so much higher than is being stated.

The high inflation rates are perfectly normal if you consider that the Fed's interest rates had been as low as 1% (between 2003 and 2005). At 1% of interest, you actually earn money by borrowing since the inflation is pretty much always higher than 1%.

Regarding the validity of GDP data, I recommend the following article which is fairly credible considering the source:
http://www.businessweek.com/print/magaz ... tm?chan=gl

 

[redrumloa]

25% unemployment? That would be less than double the current rate.

Of course, that all depends on how you measure it.

Current estimated unemployment rate if you count it the way it was done B.C. (before Clinton) is about 15%

And inflation is running around 13% if you calculate it the same way it was calculated back in 1980.

Shadow Government Statistics

Also, according to those guys, GDP growth has been mostly negative since 2000. Well, yes of course, if inflation is actually so much higher than is being stated.

Dittos.

 

[redrumloa]

For the record, I live in an area with a permanent unemployment rate of 20%. It most certainly does not feel like the Great Depression. Crime rates are very low, etc.

Not everyone went into total poverty during the Great Depression. My grandmother was alive during the depression. While her family had to live frugal to levels unheard of in the modern day, they got by o-k.

Anyhow, I don't think anyone believes we are in the great depression yet. The simple fact this scenario is on the table is frightening enough.

 

[FluffyMcDeath]

For the record, I live in an area with a permanent unemployment rate of 20%. It most certainly does not feel like the Great Depression. Crime rates are very low, etc.

Not everyone went into total poverty during the Great Depression. My grandmother was alive during the depression. While her family had to live frugal to levels unheard of in the modern day, they got by o-k.

Anyhow, I don't think anyone believes we are in the great depression yet. The simple fact this scenario is on the table is frightening enough.

Soon it may become normal again to have a ball of string in the kitchen drawer that is made up of lots of little bits of string tied together. My grandmother was a saver like that. Brown paper, tins, etc. Anything that could come in handy would be saved. I'm a bit like that too, so perhaps it just runs in the family but gran had an excuse. There was a war on, you know.

Well, maybe soon I will be able to demonstrate to the wife how useful all those little bits of string can be in a crisis!!!

 

[FluffyMcDeath]

A 25% unemployment rate in 1930 is probably closer to a 40 or 50% unemployment rate today.

The 30's were, without doubt, a rotten time. There was also the dust bowl which only made things worse.

I read an article a while back (which of course I cannot source, just like usual) that tried to study the population through the 30's in North America. It was modeled on a similar survey that tried to estimate the death-toll in the Ukraine.

According to the study, about 7 million people went missing in the US. Some of them may have moved away, but some of them may simply have starved or succumb to disease. No-one knows.

Now that seems like a very large number of people. Perhaps the methodology was wrong (in which case maybe Stalin was a slightly less effective mass murderer than we thought) or the depression really did kill a lot of people. - or the lesson from one doesn't carry.

Interesting article though.

 

[FluffyMcDeath]

This is the Dow.

Click the "1yr" for teh scary!!!

Down 40% over one year. Yeek.

 

[FluffyMcDeath]

There are two new additions to the FDIC Failed Bank List.