Down goes the Dow

More of a thud than I expected, within a couple of minutes, DJIA down 300.

The day is, however, long. Again, a fairly orderly decline would be nice IMO, not too fast.

Freefall? -370

Today is already interesting, and I have to go because of it, preparations are being made.

I can't wait to check back into this thread in a couple of hours.

Yet post-tax corporate profits are at an all time high.

world stocks now down 10.7% from highs

US: down 9.2%

balanced portfolios still up 1-2% for the year

US stocks roughly flat for 2014 now

world stocks down around 3% for the year

hardly a disaster but it has been very very fast and there are multiple problems.

And the economy is not even the major problem here - weird.

* wrote:

The Dow will soon pass 17,000 and never go below 17,000 again.

Missed my joke prediction by a mile.

Oh, it got over 17.

But it's below 16,000 right now.

Still have another 1,000 points to get back to the original post.

the vix hit 27 this morning - highest since the 2011 euro crisis.

that's good news - people are clearly throwing stocks over the side. Panic is good - get the weak hands out of the market so it can rebuild with firmer holders.

the bad news is that the vix went to 43 in that euro crisis. to get that high would have to cost us 1000 points on the dow.

agip wrote:

the vix hit 27 this morning - highest since the 2011 euro crisis.

that's good news - people are clearly throwing stocks over the side. Panic is good - get the weak hands out of the market so it can rebuild with firmer holders.

the bad news is that the vix went to 43 in that euro crisis. to get that high would have to cost us 1000 points on the dow.

The Dow has already climbed back to just -127, but it could drop a lot again today.

Tells me that people (or managers) decided to buy at the 16,000 threshold.

I am very pleased to see this level of fear among investors. I don't care too much about how far it drops, but the fear factor is excellent. The market has needed this for a while. I will gladly take a 2014 that is mediocre or even a little bit down if it means some big gains in the next few years. This is a good time for serious long-term investors. AND, it is a good example of why you need to have some money OUT of the market when you are in retirement. If retired today or even this month, it would be great to take some money from cash or CDs or some other place other than your stocks. That's why I plan to have 3 YEARS of expenses saved in liquid form before I retire.

I buying. I bought mid-cap and small-cap etfs yesterday and I'm doubling down today. No more idle cash. Let the recovery begin.

interesting again that small caps are again down less than the big caps.

big caps down 1.6%, small caps down 0.6%

hard to interpret this since the market keeps hitting new lows, but I think it is more positive than negative.

I see the Dow has dropped again...down 311. Quite a roller coaster ride. Again though, I'm very glad this is happening.

Down about 290 with about an hour to go.

I disagree with whoever upthread described this as panic. I don't think it is--I think it is rational profit-taking and risk-dumping, in an overvalued market.

With apologies again to agip, "the economy" sucks, plain and simple. Amplifying what I said before, as the US consumer goes, so goes everything. The retail numbers for Sept were down, which is no surprise. Good jobs disappearing, part-time and temp jobs replacing F/T jobs, hours reduced to avoid paying for health care and benefits, higher-paying positions being abolished/re-interepreted to pay incoming employees less than outgoing ones received or are still receiving via their pensions, etc.

Rising home values = rising property taxes. Everybody who matters' health care costs are rising, massively. University tuition through the roof. Schools demanding that parents carry more of the load, having to pay for all extracurriculars and even basic supplies. Etc. Sure some things are down, like gas at the moment (which will have a favorable effect that is not yet reflected), but cost of living is continuing to increase while incomes are falling. The US consumer is not in a good way.

Another thing I said previously was that almost everything would come to rely on the US housing market, conceived as a "store of wealth" for the everyman. Well, well, what have we here, an announcement that mortgage rates are going to drop! Big surprise, right? Again, totally predictable. They NEED those housing numbers, and interest rates are really the only way to encourage them. While personal deleveraging increased for a while in the US, consumer debt is back in vogue. In Europe, it seems to have risen significantly. With the new rates, people will refi and "cash out" a bit, giving the standard boost.

The big one, though, has got to be healthcare. The single best thing that could happen for the US consumer would be a rationalization of health care that would enable lowered costs. Obamacare really screwed things up, because costs have risen so far that a new normal may have developed, which will influence prices even if Obamacare itself is scrapped.

Things are not good for the US consumer. Better, maybe, than for consumers elsewhere in the world, but not good. IMO it is less efficient for the government to spend money than it is for individuals to spend it, and higher-taxed jurisdictions are therefore less economically efficient by this measure. The US is headed in the wrong direction, and everybody knows it. Sure, we could become Europe or Japan, but then we would find ourselves in a similar position.

Maybe people want that, I don't know. If they do, a significant re-set in the markets is in order, along with a different future.

Down 270 now, making some gains.

I'm feeling a big rally coming - small caps are positive now

re; healthcare - healthcare as a threat has faded as a threat to the economy - health care cost rises have been arrested so it doesn't look like an eternal line upwards.

the US economy does not suck - we have had almost uninterrupted growth since 2009, the deficit is at a sustainable level, corporations are healthy, personal balance sheets are healthy, lower gas prices will put money in everyones' pocket, unemployment is dropping like a stone, inflation is low, interest rates are low, housing is well ok, the US is taking in billions in investment from around the world, the political wars have subsided...

it's never all good, but these are pretty good times in general.

Hard to argue with a guy who thinks every number is fudged and the only positives are people dying.

Maserati wrote:

Down about 290 with about an hour to go.

I disagree with whoever upthread described this as panic. I don't think it is--I think it is rational profit-taking and risk-dumping, in an overvalued market.

With apologies again to agip, "the economy" sucks, plain and simple. Amplifying what I said before, as the US consumer goes, so goes everything.

tell me - how is 3% growth in consumer spending a problem?

"Consumer spending slowed in September due in part to falling demand for fall merchandise and unseasonably warm weather, according to Atlanta-based First Data Corp.’s monthly SpendTrend report.

Overall spending growth in September was 3.1 percent, down from August’s growth of 3.9 percent, the report noted."

These end-of-day gains are not insignificant.

I hope the market ends the day down, however, to continue its controlled fall.

agip, you know inventories are high, right? You know growth analysis has been revised to give an artificial 3% bump, right? You know many corporations are borrowing money to buy back shares, right? You know that personal balance sheets are a tale of two cities, that there are 2 classes, healthy and not, right? You know that health care costs to those who actually have to pay them continue to rise, right? You know that quality of employment is what is dropping like a stone, right? You know low inflation means low growth, right? Etc.

The political wars have subsided? Are you kidding me?

The only thing on which you appear correct is that foreign money is coming into the US.

From today on, market direction is not readily predictable for the next few months, it could go anywhere, in any manner, depending on individual mood. What is the big money? Money like reversed the freefall this morning. It exists, and it matters.

If you are a believer, like Flagpole, I would encourage you to buy at these levels, if you plan on staying in the markets uninterrupted for another 10 years minimum. While the "bargains" out there are only relative, there is the possibility of doing alright on dividends.

Even I am tempted to buy some things at the moment, but was talked out of it this morning by others in our group, because I was only tempted--not decided.

Down only 150 now.

Maserati wrote:

You know growth analysis has been revised to give an artificial 3% bump, right?

uh huh

liars and cheats! Everyone! tell it, Maserati! Preach!

We've just turned the corner. 17,000 by the end of the week, 18,000 by Christmas.

Thank you Obama!

Maserati wrote:

Bloomberg is reporting concerns about fake Chinese export data, in order to circumvent capital inflow regulations, in preparation for a rising Renminbi.

fake data!

Maserati wrote:

R2D3 wrote:

The numbers are "fudged" exactly the same way they were under the Bush administration.

Sure. I have no political fight here.

I will say that, regardless of who sat in the big chair, it was the Oracle and his henchmen who really developed a taste for fudge. The effects continue to resonate.

Up 100 now.

fudged! fudge everywhere and by everyone! no one and no thing is unfudged!