Countdown to Meltdown 2008

5 Comments

1. 

   TerranceDC on October 8, 2008 at 4:48 pm

   Overwhelming, and without an end. Yet.

2. 

   dada on October 8, 2008 at 5:19 pm

   1 year ago today the DOW was a record high of 14,164, today it closed at 9258, a drop of 34.6% with no end sight.

   Down market hits 1-year mark with no clear bottom

   Jim Cramer, the normally bullish host of CNBC’s “Mad Money” program, caused a stir Monday when he warned investors to take whatever money they need for the next five years out of the market now. On Tuesday, he called it “the most horrible market that I’ve ever seen.”

   Money manager Peter Schiff, who has long espoused the bleakest of market views, said the Dow has a good chance to sink to 7,500 or lower. He expects the bear market to last another five years or more. That would signal a possible loss of at least 20 percent more in shareholder value.

   “Everybody wants to think there’s a government solution to spare us the pain,” said Schiff, who runs the investment firm Euro Pacific Capital Inc. in Darien, Conn. “There is no government solution. All there is is more pain.”

   link

   and l thought l was overly pessimistic with predicting a bottom at 8000.

   at this point, l have to agree with jerome a paris at ET; the only thing thats going to clean up this mess is “nationalisation“:

   So far, governments (starting in the US) have been quite imaginative in finding new ways to hand over public money to the financial sector with very little, or nothing, to show for it. I’ve been saying it for a while in the comments threads, but it’s time to say it loudly here on the front page: there is no other endgame for the financial sector than wholesale nationalisation so that (i) lending to the real economy can restart and (ii) the cleanup (of bad assets, and badder bankers) can be started.

   Instead, ad hoc pseudo-nationalisations are done on what now appears to be an almost daily basis, with seemingly as main goal to avoid the stigma of socialism…

   read the whole essay HERE

   now we ll know what would happen to any candidate who tried to make this argument, even as solidly based in reality as it is…but look for it to appear in some form after january 2009, assuming the econmy lasts that long.

   recommended.

   • 

     Oui on October 8, 2008 at 5:52 pm

     .

     Conquer the Crash by Robert Prechter

     If the herd is a contrary indicator, then all the anodynes from politicians, corporate executives, and the media argue against economic recovery and smooth sailing ahead. Consumers, too. One anecdotal sign is when living in a hot housing market, we talk about our houses the way we yammered about stocks during the last boom. Ever hear, “Thank goodness the appreciation of our house makes up for our devastating stock losses [nervous laughter]”? Worse, we’re apparently throwing money at real estate in sizzling markets the same way we used to at stocks.

     "But I will not let myself be reduced to silence."

   • 

     dada on October 8, 2008 at 10:14 pm

     well, it appears l may have spoken too soon…nationalisation…by any other name…via NYT,  U.S. May Take Ownership Stake in Banks:

     WASHINGTON — Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials.

     …

     Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

     …

     The concern is that the bailout law calls for limits on executive pay when capital is directly injected into a bank. The law directs Treasury officials to write compensation standards that would discourage executives from taking “unnecessary and excessive risks” and that would allow the government to recover any bonus pay that is based on stated earnings that turn out to be inaccurate. In addition, any bank in which the Treasury holds a stake would be barred from paying its chief executive a “golden parachute” package.

     …

     The gloomy market response sent policy makers and outside experts on a scramble for additional remedies to stabilize the banks and reassure investors.

     There is no shortage of ideas, ranging from the partial nationalization proposal to a guarantee by the Fed of all lending between banks……

     bet this has a lot of bvd’s in a twist tonight. the greedey bastads may have finally gone to far with the hoarding of all the cash that’s been thrown at them.

     we shall soon see who gets called out and who doesn’t, because it looks like they’re ready to pull the trigger on somebody, or body’s.

     methinks citicorp just lost the wachovia deal to wells fargo…big time…since the WF offer doesn’t involve any fed funds and theirs did.

3. 

   hauksdottir on October 9, 2008 at 1:11 am

   If you make another timeline, about Governor Palin’s career, you could call it “Sarah n’ Dipity”.

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   OK, just give me 3 steps toward the door….