Will There Be Panic In The Markets?

[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?

 

[TromboneAl]

Yes, at least in the morning.

Just to be provocative I'll say this: Welcome to peak oil!

 

[cyclone6]

I think so as well. Could be an ugly, ugly day.

The only hope is that both Asia and Europe are going to open again before we do, and if there can be some sense of normalcy in those trades, maybe the damage can be limited.

Then again, it they tumble once again, look out below...

 

[Dawg52]

Probably. Looks like were headed for that 20% correction the talking heads have been pushing for. Thank God I have 7 years worth of expenses in cash. Looks like I will need it.

 

[travelover]

Mr Market sez, stocks are on sale!

 

[REWahoo]

Thank God I have 7 years worth of expenses in cash. Looks like I will need it.

Heck, if you think it's going to be that bad maybe you should try to corner the market on JD by buying a big supply now. It will only go up in price as the demand for it must surely increase, right?. And if things turn around quicker than you fear and you end up stuck with an oversupply, you can take consolation in the fact that JD only gets better with age. You can either drink to celebrate or drink to drown your sorrows.

Looks like this strategy might be a win-win-win proposition.

 

[Bikerdude]

Looks like fear is taking over . I think the next year will weed out a lot of investors. Too much lying and cheating going on in the Financial sector. It will be a while before greed takes control again IMHO.

 

[danm]

Heard the DOW futures are down 475 this morning - haven't verified this.

Check, -341 presently. Tomorrow - who knows?

 

[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.

 

[Wags]

I do beleive that there will be some panic.

The economy, jobs, and interest rates will now be the big issues for the administration and for those running for president.

NBC news article Highly skilled and out of work - Long-term joblessness spreads in the middle class

Highly skilled and out of work - Washington Post - MSNBC.com

GOD BLESS

 

[JPatrick]

I'm not sure if I've ever seen the Dow/500/NAS futures lower than I woke up to today.
Perhaps the fed will surprise us?? and perhaps they won't. A few more days of this the pickets will be in front of the fed.

This is likely to be one of those years that our taxes owed on mutual gains are astounding considering we have no money left.

Ah well, when the dust settles we will look back on this period as the buying opportunity of a lifetime and be subjected to endless stories about how I bought this great McMansion for cents on the dollar with a 30 year fixed @ 5%.

 

[danm]

They'll have short term effect on the markets, but long term it makes no difference I believe. There now seems to be widespread understanding that this is a solvency crisis, not liquidity. The Fed has no help for solvency.

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.

 

[JPatrick]

I do beleive that there will be some panic.

The economy, jobs, and interest rates will now be the big issues for the administration and for those running for president.

NBC news article Highly skilled and out of work - Long-term joblessness spreads in the middle class

Highly skilled and out of work - Washington Post - MSNBC.com

GOD BLESS

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

 

[Zathras]

Just to be provocative I'll say this: Welcome to peak oil!

Al, are you a peakist?
Fun topic, but I am not a doomer there.
As for panic, it is already happening. I am just looking forward to the sales on stocks.

 

[ikubak]

It seems a little early but I think I am catching a waft of panic and capitulation, based on the futures and foreign markets being down 4-6 percent. It's getting to where people can't stand stocks. At times like this, I am reminded about Peter Lynch's cocktail theory. He says in the first stage of an upward market - one that has been down awhile and that nobody expects to rise again - people aren't talking about stocks. In stage two, when the market is up 15% from stage one, most people are talking about how risky stocks are. Stage 3, market up 30% from stage one people are more enthusiastic about stocks and ask for stock tips. Stage 4, people are very enthusiastic and are giving stock tips.

As usual I will stay the course and keep contributing to my retirement accounts.

 

[al_bundy]

i wish the mods would combine all these stock market threads into one big one like they do on some other forums. have one stock market thread and one RE thread.

 

[al_bundy]

It seems a little early but I think I am catching a waft of panic and capitulation, based on the futures and foreign markets being down 4-6 percent. It's getting to where people can't stand stocks. At times like this, I am reminded about Peter Lynch's cocktail theory. He says in the first stage of an upward market - one that has been down awhile and that nobody expects to rise again - people aren't talking about stocks. In stage two, when the market is up 15% from stage one, most people are talking about how risky stocks are. Stage 3, market up 30% from stage one people are more enthusiastic about stocks and ask for stock tips. Stage 4, people are very enthusiastic and are giving stock tips.

As usual I will stay the course and keep contributing to my retirement accounts.

i don't think we are there yet since volume is going up on the downturns and the volume is drying up on the rallies. the bottom is when volume dries up on the down days signifying that the selling is done

 

[Dawg52]

Heck, if you think it's going to be that bad maybe you should try to corner the market on JD by buying a big supply now. It will only go up in price as the demand for it must surely increase, right?. And if things turn around quicker than you fear and you end up stuck with an oversupply, you can take consolation in the fact that JD only gets better with age. You can either drink to celebrate or drink to drown your sorrows.

Looks like this strategy might be a win-win-win proposition.

Just placed my order. This should help balance out my portfolio.

barrels to sit and wait for over 4 years photo - Rachel photos at pbase.com

 

[REWahoo]

Just placed my order. This should help balance out my portfolio.

Hey, when it comes to a diversified asset allocation, I can't hold a shot glass to you!

 

[Nords]

Looks like fear is taking over .

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!

 

[Bikerdude]

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.

 

[FIREd]

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]

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]

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.