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Apocalypse
05-06-2010, 05:40 PM
DOW Drops 1000 Points, Rebounds To 300 Point Loss

The Dow dropped nearly 1000 points before rebounding to a 300-point drop on Thursday afternoon. The drop narrowly avoided the point where stock trades would have been halted for a full hour based on Wall Street regulations. If the drop would've been 1,100 points, futures would've continued trading, but stock trading would've been on hiatus.

UPDATED....

Initial analysis was uncertain as to the cause of the crash. The blame was first pinned on unrest in Greece, and then reports emerged of a faulty trade involving Proctor and Gamble. A trader or computer could have mis-entered a number that devalued the stock and set automated stock-selling mechanisms into play. Other reports said that supposed faulty trade didn't occur until the Dow was already in freefall.

Greek unrest is still a prime suspect -- their financial turmoil is now threatening Portugal, Spain, and Ireland. The Greek bailout deal isn't finalized, and the markets are reacting, said Fox News' Neil Cavuto.

"This is a classic panic response to a country situation where they're spending more than they're taking in," said Cavuto.

Even if Greece does get the money, and the civil unrest subsides, the issue of other countries' solvency is still uncertain, and investors responded accordingly. E.U. bond dealers are demanding full details of Greece's bailout before they will sign off on the plan.

Another factor could have been the Senate's approval of an amendment that would end "too big to fail," which was being discussed as part of the financial reform bill. The major financial houses all suffered significant losses as the result of the stock market volatility.


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Nice.... I love taking a hit in my investments.

ColonialMarine0431
05-06-2010, 05:43 PM
Hmmmm...Blammo wants "financial market" reforms...

"Trade error" causes programmed trading to kick in...

Markets tumble...

Hmmmm......

Obama's puppetmaster is George Soros....

Soros caused the British pound to collapse in 1992....

Hmmm...

http://i3.photobucket.com/albums/y53/ColonialMarine/Soros/George-Soros_Dr-Evil.jpg

lacarnut
05-06-2010, 07:20 PM
Wait for a dip, buy gold, silver, etc. I got out of the market a year ago. Up around 30% on metal investments. Soris is into gold so it's gotta be good.

As a sidebar, I think the mess in Europe is only going to get worse. The PIIG countries are in deep shit cause they can not print money like the fools in the US.

ColonialMarine0431
05-06-2010, 07:27 PM
I can foresee what's happening in Greece happening here. In fact, it may be an ominous prelude.

KhrushchevsShoe
05-06-2010, 09:36 PM
I can foresee what's happening in Greece happening here. In fact, it may be an ominous prelude.

With our capacity to lend money and the pent up wealth in this country it would take decades for us to get anywhere near Greece's current situation.

lacarnut
05-06-2010, 11:35 PM
With our capacity to lend money and the pent up wealth in this country it would take decades for us to get anywhere near Greece's current situation.

You do not know what you are talking about. Withing 10 years, the percentage of debt in the US will increase to the level of that of Greece.

Odysseus
05-07-2010, 01:10 AM
With our capacity to lend money and the pent up wealth in this country it would take decades for us to get anywhere near Greece's current situation.

It took Argentina about thirty years to go from the 10th richest country in the world to an economic basket case. It's economy suffered in the 1930s during the Depression, and continued to decline under the Perons. Peron nationalized strategic industries and services and prioritized urban development over agriculture. The Argentine peso lost about 70% of its value from early 1948 to early 1950, and inflation reached 50% in 1951. Record debt led to higher taxes, which led to high rates of tax evasion and capital flight. The result was a balance of payments crisis and severe stagflation from 1975 to 1990. The Argentines pegged the peso to the U.S. dollar in 1991 and limited the growth in the money supply, liberalized trade, dergulated and privatized many of the industries that Peron had nationalized. As a result, inflation dropped and GDP grew by one third in four years, but the crisi brought on by benefits led to the collapse in 2001. In 2002, Argentina defaulted on its debt, GDP collapsed, unemployment reached 25% and the peso lost another70% of its value.

Now, where are we compared to Argentina? Well, Obama has nationalized the auto and banking industries, the national debt is approaching 100% of GDP and Social Security is about to start paying out more than it takes in. Of course, Argentina's decline was precipitated by the election of a political novice with a history of supporting discredited totalitarian movements marked by centralized planning and economic failure. We'd never do anything like that...:rolleyes:

Constitutionally Speaking
05-07-2010, 06:22 AM
With our capacity to lend money and the pent up wealth in this country it would take decades for us to get anywhere near Greece's current situation.

You are being incredibly naive. Your hero is confiscating any ability to climb out of this hole AND he is accelerating all of the things that drove Greece to the state it is in.

KhrushchevsShoe
05-07-2010, 01:01 PM
Yea comparing us to Argentina doesn't really work either, we never had to contend with the Import Substitution Industrialization fiasco.

This is America guys, we've got a long way to go before we are anywhere near these scenarios. If some country wants to call in our debts I wish them the best of luck finding a collection agency willing to strong-arm the USA.

ColonialMarine0431
05-07-2010, 03:58 PM
Yea comparing us to Argentina doesn't really work either, we never had to contend with the Import Substitution Industrialization fiasco.

This is America guys, we've got a long way to go before we are anywhere near these scenarios. If some country wants to call in our debts I wish them the best of luck finding a collection agency willing to strong-arm the USA.

Wow. Where do you gt your data? Greece's debt to GDP is now 115%. According to the CBO, ours will be 90% in ten years.



CBO report: Debt will rise to 90% of GDP

President Obama's fiscal 2011 budget will generate nearly $10 trillion in cumulative budget deficits over the next 10 years, $1.2 trillion more than the administration projected, and raise the federal debt to 90 percent of the nation's economic output by 2020, the Congressional Budget Office reported Thursday.

SOURCE (http://www.washingtontimes.com/news/2010/mar/26/cbos-2020-vision-debt-will-rise-to-90-of-gdp/)

lacarnut
05-07-2010, 04:15 PM
Wow. Where do you gt your data? Greece's debt to GDP is now 115%. According to the CBO, ours will be 90% in ten years.


SOURCE (http://www.washingtontimes.com/news/2010/mar/26/cbos-2020-vision-debt-will-rise-to-90-of-gdp/)

It will be higher than the CBO 90% estimate because they understimate the figures. Health care will drive a stake into their projections. I can not think of any federal program that has not exploded in costs. BTW, going from around 70% today to 90% in 10 years is not sustainable and will put us in dire straits.

Molon Labe
05-07-2010, 04:49 PM
Wait for a dip, buy gold, silver, etc. I got out of the market a year ago. Up around 30% on metal investments. Soris is into gold so it's gotta be good.

As a sidebar, I think the mess in Europe is only going to get worse. The PIIG countries are in deep shit cause they can not print money like the fools in the US.

And when and if this little Greek problem spreads to other European nations that can't meet costs, then it could get a bit worse. The only hope we have is that the dollar is still the reserve currency and will be one of the last to tank. I'm trying to weather this. I don't have the time or resources to figure the market out. And I don't believe in putting more than 20% of assets in gold/silver.

malloc
05-07-2010, 05:12 PM
And when and if this little Greek problem spreads to other European nations that can't meet costs, then it could get a bit worse. The only hope we have is that the dollar is still the reserve currency and will be one of the last to tank. I'm trying to weather this. I don't have the time or resources to figure the market out. And I don't believe in putting more than 20% of assets in gold/silver.

It feels like betting against America, but I'm going to start putting some in Yuan. It looks like the Chinese are purposely holding the Yuan down against the dollar. This is the 'currency manipulation' that people are talking about. Right now this practice is actually helping the dollar, which is good for China because they hold a lot of debt in dollars. Sooner or later, especially in the event of a Dollar crisis, the Chinese may very well decide to liquidate the debt, and unpin their currency causing Yuan to skyrocket. I think shortly thereafter the Yuan would compete with the Dollar for reserve currency status globally, and that would be interesting to say the least.

lacarnut
05-07-2010, 05:37 PM
And when and if this little Greek problem spreads to other European nations that can't meet costs, then it could get a bit worse. The only hope we have is that the dollar is still the reserve currency and will be one of the last to tank. I'm trying to weather this. I don't have the time or resources to figure the market out. And I don't believe in putting more than 20% of assets in gold/silver.

I don't have the knowledge to figure the market out either. I made a tidy profit when REIT's were going great guns and then lost most of it back when they crashed. I had 100% in real estate; learned my lesson and would not put more than 20% in any asset class. I have about that amount in gold and silver and am buying silver for the melt value on ebay. Gold is too expensive for my taste. Waiting till it drops to $1k then will buy.

Odysseus
05-08-2010, 01:00 AM
Yea comparing us to Argentina doesn't really work either, we never had to contend with the Import Substitution Industrialization fiasco.

I'm glad that you raised that point. To the extent that Obama's economic theories aren't Marxist, they're Keynesian, and his approach to our economy reflects that. His idea of certain industries being "too big to fail" and his policies towards them, semi-nationalization in the form of a permanent regime of bailouts and regulation, is consistent with ISI, but reflects his lack of understanding of it. America went through its own period of ISI after the Revolutionary War, when we developed domestic industry in the north through the use of export duties to keep southern textiles in the country. In fact, the economic basis of the Civil War can be traced to ISI. What Obama doesn't understand is that the impact of ISI in a complex economy is not that we decrease imports, but that we shift them from manufactured goods to raw materials. Our dependence on foreign energy sources is a prime example. By refusing to expand domestic energy production, Obama is ensuring that our remaining industries will be severely impacted by fluctuations in commodities prices while becoming less competitive. That is a prescription for disaster.


This is America guys, we've got a long way to go before we are anywhere near these scenarios. If some country wants to call in our debts I wish them the best of luck finding a collection agency willing to strong-arm the USA.

Why is it that liberals only take up American exceptionalism when they are in the process of destroying it? The danger is not that we'll be beaten up in an alley by Chinese collection agents, it's that we will lose access to credit as our capacity to pay our debts is overwhelmed by them. Would you extend credit to someone who has maxed out his credit cards, committed to unsustainable spending and is in the process of cutting his own pay? Of course not. So, what happens when someone finds themselves unable to pay their debts? They either reduce what they owe through economizing and repayment, or they default, but governments have a third option, which is currency manipulation. By devaluing the dollar, the feds can pay back our loans in inflated currency, essentially robbing our creditors, but that has the same effect as default in terms of our credit, namely that no one will trust us enough to extend credit again. Countries that use devaluation to pay their debts end up with debased currency, stagflation and longterm economic decline.

The Argentine example is apropos because, like you, the Peronistas didn't believe that their policies would destroy a vibrant economy. How wrong they were.

KhrushchevsShoe
05-08-2010, 10:58 AM
I'm glad that you raised that point. To the extent that Obama's economic theories aren't Marxist, they're Keynesian, and his approach to our economy reflects that. His idea of certain industries being "too big to fail" and his policies towards them, semi-nationalization in the form of a permanent regime of bailouts and regulation, is consistent with ISI, but reflects his lack of understanding of it. America went through its own period of ISI after the Revolutionary War, when we developed domestic industry in the north through the use of export duties to keep southern textiles in the country. In fact, the economic basis of the Civil War can be traced to ISI. What Obama doesn't understand is that the impact of ISI in a complex economy is not that we decrease imports, but that we shift them from manufactured goods to raw materials. Our dependence on foreign energy sources is a prime example. By refusing to expand domestic energy production, Obama is ensuring that our remaining industries will be severely impacted by fluctuations in commodities prices while becoming less competitive. That is a prescription for disaster.

You're not really addressing the failures of the ISI in any quantifiable terms except your ideological disagreement with it. The policy failed because the countries involved lacked the capacity in skilled labor and resources to make the kind of quick development ISI was gunning for. The countries' couldn't meet their required output so they lent and lent and lent until the debt crisis in 1982.

It wasn't a complete disaster either, Brazil has a pretty decent high tech industry that is largely a product of ISI.


Why is it that liberals only take up American exceptionalism when they are in the process of destroying it? The danger is not that we'll be beaten up in an alley by Chinese collection agents, it's that we will lose access to credit as our capacity to pay our debts is overwhelmed by them. Would you extend credit to someone who has maxed out his credit cards, committed to unsustainable spending and is in the process of cutting his own pay? Of course not. So, what happens when someone finds themselves unable to pay their debts? They either reduce what they owe through economizing and repayment, or they default, but governments have a third option, which is currency manipulation. By devaluing the dollar, the feds can pay back our loans in inflated currency, essentially robbing our creditors, but that has the same effect as default in terms of our credit, namely that no one will trust us enough to extend credit again. Countries that use devaluation to pay their debts end up with debased currency, stagflation and longterm economic decline.

The Argentine example is apropos because, like you, the Peronistas didn't believe that their policies would destroy a vibrant economy. How wrong they were.

Treasury bonds are still about the safest investment you can make, there was talk of lowering the USA's credit rating but that proved to be just fear-mongering about the looming "destruction of America" that's turned into such a popular prediction nowadays.

If we really wanted to control the debt we would've reformed medicare, but ignorant fools* claimed on one hand that the out-of-control government was going to eat everything up while on the other demanding medicare be left unchanged heading down its unsustainable road. Its not like we can just cut programs like medicare so we have to lend to pay for it.

To get to the crux of this argument, that somehow the USA is heading down the same path as Greece, all it takes is a glance to realize it would take a cataclysm for that to really happen. Capability, not ideology, is what sinks economies most of the time (obvious exception is the USSR). You're saying a country of 315 million with the largest skilled workforce in the globe, the world's most vibrant capitalist class and unmatched means to produce high quality goods is going to fall apart because of a few Democrats? I just dont buy it. I think they can be a destructive little bunch when they want to, but I wouldn't give them that much credit.

*I'm not talking about you Odysseus, you obviously aren't ignorant.

Odysseus
05-08-2010, 11:11 PM
You're not really addressing the failures of the ISI in any quantifiable terms except your ideological disagreement with it. The policy failed because the countries involved lacked the capacity in skilled labor and resources to make the kind of quick development ISI was gunning for. The countries' couldn't meet their required output so they lent and lent and lent until the debt crisis in 1982.

It wasn't a complete disaster either, Brazil has a pretty decent high tech industry that is largely a product of ISI.

You are the one who referred to ISI as a fiasco. ISI worked very well in the early US, as demonstrated by antebellum northern industrialization patterns, but had huge social costs (the south felt thoroughly exploited by northern interests). ISI works best in countries with large enough markets and high enough incomes to allow locally made products to be consumed locally. Argentina actually faired better under ISI than many countries, which demonstrates that it wasn't the issue. The issue was debt to GDP ratios and collapsing credit. Which leads us to...


Treasury bonds are still about the safest investment you can make, there was talk of lowering the USA's credit rating but that proved to be just fear-mongering about the looming "destruction of America" that's turned into such a popular prediction nowadays.

If we really wanted to control the debt we would've reformed medicare, but ignorant fools* claimed on one hand that the out-of-control government was going to eat everything up while on the other demanding medicare be left unchanged heading down its unsustainable road. Its not like we can just cut programs like medicare so we have to lend to pay for it.
Treasury bonds are only safe so long as the "full faith and credit" of the US continues to be of value. I submit that Obama's policies are eroding that full faith and credit far faster than any previous administration (or, in fact, all of them). We cannot simply cut programs like Medicare, but must gradually wean people from them. Reconnecting the consumers of medical services with the vendors through the mechanism of pricing is the critical endstate. Privatization, vouchers and medical savings accounts are a start, but however we get there, consumers must make their own decisions.


To get to the crux of this argument, that somehow the USA is heading down the same path as Greece, all it takes is a glance to realize it would take a cataclysm for that to really happen. Capability, not ideology, is what sinks economies most of the time (obvious exception is the USSR). You're saying a country of 315 million with the largest skilled workforce in the globe, the world's most vibrant capitalist class and unmatched means to produce high quality goods is going to fall apart because of a few Democrats? I just dont buy it. I think they can be a destructive little bunch when they want to, but I wouldn't give them that much credit.

Imagine yourself in London in 1897, during the Diamond Jubilee of Queen Victoria. Would you have believed that within half a century, the imperial colonies would have been scattered to the winds? Could you have anticipated the precipitous decline of the empire? Could you have pictured Britain being driven out of Egypt, Iraq, Jordan and Palestine? Not to mention India? Now, a half century may seem to be a long time, but let's take a closer event. In 1979, the Soviet Union was at the height of its powers. It had complete control of Eastern Europe, its proxies dominated Asia and had handed its most powerful foe a humiliating defeat only a few years earlier. Iran, America's strongest ally in the Middle East (after Israel), had turned on the US and was now dragging our embassy staff through the streets of Tehran. Soviet troops had just invaded Afghanistan and their surrogates had taken over Nicaragua and were poised to do the same in El Salvador. Would you have believed that within a decade, the slave states of Eastern Europe would have driven out the Soviets without firing a shot? Or that the previously undefeated Red Army would have limped out of Afghanistan in worse shape than the US Army after Vietnam? Or that the USSR itself would come apart at the seams, forming a loose commonwealth?

What looks obvious in hindsight isn't obvious at the time, especially if you choose to believe in comforting generalities instead of hard facts, but in each case, the seeds of collapse had been sown. Was that collapse inevitable? Who can say? But right now, the US is facing an existential crisis. We have a governing elite that no longer believes in the uniqueness of America, or the moral imperative of our constitutional order. They have saddled us with unsustainable debts, gutted our defense capabilities, alienated our allies and slandered anyone who has the temerity to point this out. Perhaps these trends can be reversed, but like a Briton in 1897 or a Soviet in 1979, will we see the need to do so and find the will to act?

*I'm not talking about you Odysseus, you obviously aren't ignorant.
I'm feeling all warm and fuzzy inside... :D:o

Tecate
05-11-2010, 10:53 PM
Insider fraud, manipulation, and financial terrorism being covered up by the usual suspects. The trader who shall not be named is responsible for the 1000 point plunge.

I knew the Procter And Gamble "fat finger trade" story was a fraud from day one.

Market Inquiry Focuses on One Trader (http://www.nytimes.com/2010/05/12/business/12turmoil.html)

malloc
05-12-2010, 02:14 AM
With our capacity to lend money and the pent up wealth in this country it would take decades for us to get anywhere near Greece's current situation.


This has got to be one of the dumbest statements I have ever read anywhere. Please tell me where this 'pent up wealth' and 'capacity to lend' is hiding? Please cite the indices and indicators you would use to justify such a fantasy land statement. I need a good laugh.