Will There Be Panic In The Markets?

[Bikerdude]

Originally Posted by Retire Soon

IMHO, the ball is now in Ben Bernanke's court. One thing that could prevent a major slide in tomorrow's markets is for the rate setting committee to do what they did last August: that is, lower interest rates by 1/2% without waiting the next scheduled Federal Open Market Committee Meeting. The goal of the Federal Reserve is to prevent damage to the economy and their major weapon is control of interest rates. The next meeting is set for January 29/30 and that may be simply be too late.

The Fed just may lower rates tomorrow. No sense pretending everything is OK when the walls are tumbling around you. Seems as though the bond insurers are causing problems due to their impending downgrade. I guess this means nothing is priced correctly yet.

Insurance companies got a haircut on Friday due to their investment in bonds that may be downgraded. Until everyone comes clean and all assets are repriced I think the market will be unsettled to say the least.

[FIREdreamer]

My wife is getting her bonus on Thursday. We had planned on adding it to our emergency stash but given the kind of market we have right now, I think we will invest it instead. Right now every dollar I invest gives me an opportunity to lower the average price per share I paid for most of my investments. I don't want to miss that opportunity.

[barbarus]

Originally Posted by JPatrick

After you've read the above, article read this link for some hope. Personally, I've made some of the same observations as this article contains.
Help Wanted highlights skills drain in U.S. | Markets | Markets News | Reuters

Does anyone think skilled manufacturing won't be following unskilled mfg. overseas too? In a few years many Chinese and Indian w*rkers will be trained and brought up to speed to take over the "skilled" arena from the West.

Digital automation will simultaneously allow the lower-paid, under-skilled employees to do these j*bs anywhere in the world. Happenin' right now!!

Technical skills shortages are temporary blips at most. (Too bad for us, I say.)

[TromboneAl]

Al, are you a peakist?

Well, I do believe we have reached peak oil, and I do believe that that should lead to (or is causing) large fluctuations in oil prices, and believe that part of these financial worries are due to high oil prices.

I sure like it when interesting things happen, even if they are bad.

[REWahoo]

Originally Posted by TromboneAl

I sure like it when interesting things happen, even if they are bad.

Please try to keep this in mind should you ever develop a serious disease.

[Retire Soon]

Originally Posted by Retire Soon

The overseas markets have taken a significant downturn today over worries that the U.S. economy is headed for a recession. The Asian stock markets had a very bad day with Hong Kong losing 5.49% and Japan off by 3.86%. European markets are not starting off any better with France down 5.37%, UK off by 4%, and Germany down 5.5%. As I write all of the U.S. futures markets are not looking good either with the Dow down by 385, S&P 47 and Nasdaq 61.

The American markets will not be opening for about 24 hours. The S&P 500 is now down 15% from its most recent high, so we're close to being in bear territory. I don't mean to sound all doom and gloom, but do you think people will panic after the opening bell tomorrow?

The market indexes ended the day with:

France: -6.8%

Germany: -7.2%

UK: -5.5%

Dow Futures: -522

S&P Futures: -60

Nasdaq Futures: -76

[Oldbabe]

Excuse me! Could you please tell me what are "futures"? and are these minus numbers pretty ominous?

[unclemick]

Originally Posted by Nords

Woo-hoo!

As for fear & greed in the financial sector, watch this space for the February annual report:
BERKSHIRE HATHAWAY ANNUAL & INTERIM REPORTS

We're reinvesting the dividends and I wish we had extra cash sitting around. Of course being fully invested is probably a wise counterbalance to my "early-to-the-knife-catching-party" tendencies. But what a great time to be an employed DCA investor!

Crap me too - I'm relatively broke compared to the size of my mad money stash already invested.

Ya gotta love fear and greed and lust and football and :

Lynchburg Lemonade - equal parts JD, sweet and sour mix, triple sec and 4 parts Sprite.

Of course if the Market's really down skip the Sprite, double the Jack and consider buying on margin.

what else are falling knives for??

Memory says we have some time - like an aircraft carrier it takes a lot to turn around a multi billion cap company which is the kind I tend to buy.

Sooo - where do we start the greed list??

Brew - I'm still watching Old Republic. As well as Budweiser, BAC, Walmart and Weyerhaeuser.

heh heh heh - I wonder if Warren will ever reprise his 'oversexed teenager in a cathouse quote.' perhaps the market hasn't fallen far enough yet to produce his kind of buys.

[barbarus]

Why are so many of you guys so anxious to invest now? This is just a minor clearance sale. Wait for awhile. Major equity bargains are coming. Why overpay for something that you can pick up next month or next year for much less. The skillful player will be making a bundle in a few years.

[accountingsucks]

Have not read the whole thread, but Canadian markets up here down close to 5%. I would be VERY SURPRISED if the DOW did NOT drop by over 750 points tomorrow. It will be a bloodbath tomorrow morning.

[mathjak107]

the reason is statistically small investors wait to long for the big sale . something out of left field kicks the markets off higher and the buy in price gets higher and higher. get at least a little now so you dont miss entirely if it goes up.

[Dawg54]

Originally Posted by barbarus

Why are so many of you guys so anxious to invest now? This is just a minor clearance sale. Wait for awhile. Major equity bargains are coming. Why overpay for something that you can pick up next month or next year for much less. The skillful player will be making a bundle in a few years.

Ok then, what is the bottom so we will know when to buy?

[Puppy Belly]

I was wondering if Fidelity and Vanguard computers will handle the load in the morning.

Hope someone who's transacting in the morning will let me know. It was scary in one freefall, logging in to some brokerages sounded difficult and phone lines all tied up. Ugggh.

Hoping for the best.

[Retire Soon]

Originally Posted by Oldbabe

Excuse me! Could you please tell me what are "futures"? and are these minus numbers pretty ominous?

Index futures are futures markets where the underlying commodity is a stock index, such as the Dow, S&P 500 or the Nasdaq. Stock futures cannot be traded directly, so futures based on stock indexes are the way in which stock indexes are traded. Index futures are traded basically the same way as any other commodity future such as wheat, gold, coffee or crude oil. Futures market will usually tell you the direction of the market before it opens. For example, if the Dow futures are -30 points, there is usually a good chance that when the market initially opens in the morning that the index will be down about 30 points. This, however, is no perfect prediction of how the market will close. Many times the futures market will be down before the market opens, but the corresponding index will actually be higher when the market closes and visa versa. I would recommend that you watch CNBC or Fox Financial news in the morning to experience firsthand the correlation of stock index futures with the actual stock market. By, the way I don't recall the Dow futures ever being -522 points. If nothing drastic happens to change the perception of the market between now and the opening bell at 9:30 EST, the Dow may be down by around 500 points shortly thereafter.

[newguy88]

Originally Posted by Retire Soon

Index futures are futures markets where the underlying commodity is a stock index, such as the Dow, S&P 500 or the Nasdaq. Stock futures cannot be traded directly, so futures based on stock indexes are the way in which stock indexes are traded. Index futures are traded basically the same way as any other commodity future such as wheat, gold, coffee or crude oil. Futures market will usually tell you the direction of the market before it opens. For example, if the Dow futures are -30 points, there is usually a good chance that when the market initially opens in the morning that the index will be down about 30 points. This, however, is no perfect prediction of how the market will close. Many times the futures market will be down before the market opens, but the corresponding index will actually be higher when the market closes and visa versa. I would recommend that you watch CNBC or Fox Financial news in the morning to experience firsthand the correlation of stock index futures with the actual stock market. By, the way I don't recall the Dow futures ever being -522 points. If nothing drastic happens to change the perception of the market between now and the opening bell at 9:30 EST, the Dow may be down by around 500 points shortly thereafter.

I think a lot will depend on what happens overseas tonight. IF the asian markets are in the tank again I would bet on a large sell off tomorrow. Its gonna be a long ugly few months.

[Retire Soon]

Originally Posted by newguy888

I think a lot will depend on what happens overseas tonight. IF the asian markets are in the tank again I would bet on a large sell off tomorrow. Its gonna be a long ugly few months.

It's Tuesday morning in Japan and its not a pretty site. The market is open with the Nikeii down 609 points or 4.58% of its value (8:18 E.S.T.).

[Bigritchie]

Bloodbath Americas



click on chart for sharper image

Bloodbath Asia/Pacific



click on chart for sharper image

Bloodbath Europe

[al_bundy]

check out Bill Gross's podcast

he says the CDS market is so overstreched that at even historical default rates MBIA and other bond insurers will go belly up

check out the 2000-2002 charts just for history's sake and because the media keeps saying that just because the market drops 15% or 20% or whatever the bear market standard is then it's up from there.

2000 the SP500 drops around 20% and rallies late in 2000 and early 2001. then another 15% drop for a total loss of around 30% since the peak in 2000. then it rallies and then starts dropping again before 9/11 took place

[Oldbabe]

Originally Posted by Retire Soon

Index futures are futures markets where the underlying commodity is a stock index, such as the Dow, S&P 500 or the Nasdaq. Stock futures cannot be traded directly, so futures based on stock indexes are the way in which stock indexes are traded. Index futures are traded basically the same way as any other commodity future such as wheat, gold, coffee or crude oil. Futures market will usually tell you the direction of the market before it opens. For example, if the Dow futures are -30 points, there is usually a good chance that when the market initially opens in the morning that the index will be down about 30 points. This, however, is no perfect prediction of how the market will close. Many times the futures market will be down before the market opens, but the corresponding index will actually be higher when the market closes and visa versa. I would recommend that you watch CNBC or Fox Financial news in the morning to experience firsthand the correlation of stock index futures with the actual stock market. By, the way I don't recall the Dow futures ever being -522 points. If nothing drastic happens to change the perception of the market between now and the opening bell at 9:30 EST, the Dow may be down by around 500 points shortly thereafter.

Thanks very much for the explanation, Retire Soon. I will be locking my gaze on CNBC tomorrow morning to witness the debacle.