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John Galt
01-21-2008, 12:17 PM
http://www.thisislondon.co.uk/news/article-23433407-details/Black+Monday+as+biggest+FTSE+crash+since+911+wipes +off+nearly+%A360bn+in+shares/article.do

The stock market was in meltdown today as nearly £60billion was wiped off London shares.

A combination of poor economic figures and the worsening global credit crunch sent the FTSE 100 plunging.

At one stage the drop was the biggest since 9/11 in 2001, although the index of Britain's biggest companies later clawed back some of the losses. At lunchtime the Footsie was down 250.1 points to 5647.8.

http://www.marketwatch.com/news/story/stock-futures-pointing-sharp-losses/story.aspx?guid=%7B9A894790%2D5D69%2D48C6%2D8303%2 D18EE41CA5D1C%7D

LONDON (MarketWatch) -- If futures contracts traded on a day when U.S. stocks weren't even due to open are anything near accurate, then markets will be in for a major decline on Tuesday, with concerns about bond insurers and the health of financial institutions dragging markets lower.
March contracts on the Dow Jones Industrial Average traded 482 points lower to 11,624.
Futures contract don't move in complete lockstep to the underlying indexes, but by comparison, the Dow industrials fell 382 points on Sept. 20, 2001, just days after the terrorist attack on the Twin Towers, and by 387 points on Aug. 9, 2007, shortly after the recent credit crunch first emerged.

Web Rider
01-21-2008, 03:46 PM
You know, I think if they shut up about all this "recession" stuff, the market will improve.

It's like talking about terrorism, the more you say scary things, the more scared people will get. And the more scared of a recession investors get, the closer to one the economy will get.

Pavlos
01-21-2008, 04:41 PM
The FTSE 100 closed down at 5 578.2, wiping £84bn off the value of its listed shares. Looks like the mainland European markets did even worse - Paris and Frankfurt were down by 7%.

This is pretty bad stuff. Though I'm not sure I'm pleased with the plans to encourage spending in the USA. I'm no economist, of course, but I would imagine that's simply delaying the problem and adding to it while doing so.

After all, it was spending without saving that got us into this mess in the first place.

Web Rider
01-21-2008, 06:04 PM
After all, it was spending without saving that got us into this mess in the first place.

True, but the economy doesn't get any better anyway through saving. It IS spending that boosts the economy. But personally, it's a lot of this ultra-economy hype that's doing the damage. The real estate bubble, it NEEDS to burst. yes, it will hurt, and it needs to. Maybe wake us up a little. But the massive drop in housing prices will encourage people to buy homes.

Tommycat
01-21-2008, 09:04 PM
Well the housing bubble has already burst for some areas. Homes are not meant to be bought and sold like stocks. They are long term investments. These recent years, the housing marked was flooded with investors hoping to make a quick buck, and moved home prices in the US to almost obscene prices in a short time. My home doubled in value in 6 months. That is insane. Mine wasn't even the highest gain either.

The way I was taught was spending helps the economy short term, saving helps the economy and the individual long term. Granted that is a massive paraphrase, and I reserve the right to be completely wrong. That's just how it was described to me.

John Galt
01-21-2008, 09:39 PM
The FTSE 100 closed down at 5 578.2, wiping £84bn off the value of its listed shares. Looks like the mainland European markets did even worse - Paris and Frankfurt were down by 7%.

This is pretty bad stuff. Though I'm not sure I'm pleased with the plans to encourage spending in the USA. I'm no economist, of course, but I would imagine that's simply delaying the problem and adding to it while doing so.

After all, it was spending without saving that got us into this mess in the first place.

Of course it's not going to work. All it's going to do is increase inflation and the federal debt. Anyone who has half a brain would save that couple hundred dollars, or better yet buy some hard money. Too bad the FBI raided the Liberty Dollar mint...

SilentScope001
01-21-2008, 10:19 PM
*gulps*

mimartin
01-21-2008, 10:35 PM
Consumer spending is a huge part of the U.S. economy, so yes these tax breaks could lessen the overall decline in the U.S. economy. Although with the way oil prices are going Congress and the President could cut out the middleman and cut the checks to the Vice President friends now. Forgoing the tax break and giving the money straight to the oil companies would save taxpayers money on postage at least.

Web Rider
01-21-2008, 11:47 PM
Well the housing bubble has already burst for some areas. Homes are not meant to be bought and sold like stocks. They are long term investments. These recent years, the housing marked was flooded with investors hoping to make a quick buck, and moved home prices in the US to almost obscene prices in a short time. My home doubled in value in 6 months. That is insane. Mine wasn't even the highest gain either.

More explicitly, I was referring to the current efforts in Washington to freeze interest rates and stop bad lending policies. While I agree with stopping the bad lending tactics, it is those people trapped in the interest only loans and non-fixed loans that are causing the housing market not to fall, and will be the fall of the housing market if they can't make their payments.

Problem is, though new homes aren't being built in many areas, and the price of homes SHOULD start dropping, it's not, and I can't quite understand why. Only thing I can really figure is that there aren't enough homes sitting on the market. People who paid top dollar for their home can't make a profit, or even an acceptable loss if they tried to sell right now.

Personally, I think it's all this stuff that's causing my dad to rethink his line of work(which is a small construction business).

Jae Onasi
01-22-2008, 08:58 AM
In response to yesterday's world market meltdown, the Fed just dropped interest rates a surprising 3/4 of a point--the talking heads had been predicting 1/4 or 1/2 at next week's Fed meeting. I'm assuming they did that to prevent a similar plunge in the US stock markets. I heard that world banks may also be dropping lending rates, but didn't quite catch all the details on the radio, so that information is subject to change.

urluckyday
01-22-2008, 06:21 PM
All the market is is speculation and most everything people go crazy about is basically what's in the New York Times. It doesn't seem like anyone really cares anymore about legit facts...especially the general public...

mimartin
01-22-2008, 09:38 PM
All the market is is speculation and most everything people go crazy about is basically what's in the New York Times. It doesn't seem like anyone really cares anymore about legit facts...especially the general public...
Finance Major? I went to 6 years of school and many thousands of dollars to learn that. There is no one answer to fixing the problem because there is no one problem.

1. Some people are worried about interest rates.
2. Some people are worried about the housing market.
3. Some people are worried about the Presidential Election.
4. Some people are worried about inflation.
5. Some people are worried about oil prices.
6. Some people are worried about unemployment.
7. Some people are worried about lack luster sales.
8. Some people are worried about the deficit.
9. Some people are worried about credit crunch.
10. Some people are worried about the Stock Market.
11. And so on and so on….
Eddie Murphy as Billy Ray Valentine summed it up in the movie Trading Places:
Okay, pork belly prices have been dropping all morning, which means that everybody is waiting for it to hit rock bottom, so they can buy low. Which means that the people who own the pork belly contracts are saying, "Hey, we're losing all our damn money, and Christmas is around the corner, and I ain't gonna have no money to buy my son the G.I. Joe with the kung-fu grip! And my wife ain't gonna Radio Edit… my wife ain't gonna make love to me if I got no money!" So they're panicking right now, they're screaming "SELL! SELL!" to get out before the price keeps dropping. They're panicking out there right now, I can feel it.

SilentScope001
01-24-2008, 04:46 PM
Oops. I pressed the wrong button and caused the entire stock market to crash. Oh well. I still get a paycheck, right? (http://news.yahoo.com/s/nm/20080124/ts_nm/socgen_markets_dc)

urluckyday
01-24-2008, 10:38 PM
mimartin...if you were being serious:
No, I'm not educated specifically in finance in any way, but I do know a thing or two about how people work when it comes to mass media and what troubles it causes, and the "market troubles" is no exception...

if you weren't being serious:
I'm sorry, I can't tell...but my condolences on spending that time and money...

mimartin
01-24-2008, 11:19 PM
I was half-joking and half serious, I was very serious about you your being correct about what is wrong with the market.

I was serious about having degrees in Finance and Accounting. I was also being serious that Finance is not an exact science and it does involve a great deal of speculation. You have this great in-depth formula to value a stock, but it still has a speculative factor in what you believe the future growth rate will be. You can use past history, but past history is no guarantee of future growth. While I do work for myself in this field, I did not go into this field or give advise to friends or family, because of the speculative nature and not wanting to be responsible of others retirement for that reason.

Since you already know the second most important concept of finance and I will give the first for free – Diversification (diversify, diversify, diversify). if you weren't being serious:
I'm sorry, I can't tell...but my condolences on spending that time and money...
Thanks, but even though I do not use the Finance Degrees the way they were intended, the time and money spent towards them are the best investments I’ve made or will make in my life.

urluckyday
01-25-2008, 03:33 PM
Hey, thanks for the information, lol...you definitely can tell you know your stuff...I wish I was that smart.

John Galt
01-25-2008, 08:53 PM
My question:

What, if anything, did the PPT(Plunge Protection Team) have to do with the market's surprising rally on Tuesday?

By the way, does anybody other than me think that these rate cuts are only encouraging more of the irresponsible behaviour that leads to these bubbles?