Thread: US Stocks Plunge, Dow Falls Over 300 Points As Fears Grip Market

Originally Posted by crippen

So who paid the bill?

what bill?

Originally Posted by Hampsha

You forgot one line for the article from the website...Real People Say "Screw You" To The Markets in [Market-Ticker]

Liquidity? None. This is the bid/offer stack in the S&P futures a few minutes into the trading day.

That's an important line as it is premarket. He does mention when the market opens too. I don't know a lot about this myself but who would want to place orders prior to the opening these days. Does the computer trading show on this? What day was this from? They story was posted Friday at 10:10 so what day is this from. Thursday and Friday they knew the city would be hit by the hurricane. Is tha affecting this?



Another story for y'all.

Market crash 'could hit within weeks', warn bankers - Telegraph

futures trade all the time I thought

Babymaker, sounds like you are doing well if they say on bet as much as you can afford to lose.

Originally Posted by baby maker

any link to the index not the story

SPX Options Chain, S&P 500 Index Options Chain

Futures are speculative instruments, a drop in volume and bids might indicate a future flat market expectation

not necessarily a bad thing,

Originally Posted by Butterfly

Futures are speculative instruments, a drop in volume and bids might indicate a future flat market expectation

not necessarily a bad thing,

....as you say....

Fundmastery Blog

Kurt Brouwer

Is Another Bank Bailout Brewing?

August 30, 2011, 2:50 PM

By Kurt Brouwer

If you thought the $800 billion TARP program was the end of our government’s bailout bonanza for wayward banks, you’re wrong. If you thought the Fed’s secret $1.2 trillion loan program for foreign and domestic banks was the end, guess again. It’s like we are living in one of those late-night TV ads for Ginsu Knives, ‘But wait, there’s more!’
From Matt Taibbi’s blog, we read about another political deal and power play favoring bad banks. Fortunately, this deal has, so far, been thwarted by a lone holdout [emphasis added]:

…On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.
On the other side is the Obama administration, the banks, and all the other state attorneys general.
This second camp has cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes.
The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.
This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline…

Since 2008, there has been a bipartisan deal to absolve banks deemed ‘too big to fail’ from responsibility for their actions. The litany of ills that have followed from that decision is long indeed. At some point, we have to stop the madness, but apparently we have no political will or stomach for that yet.
NY Attorney General Schneiderman
Eric Schneiderman, the New York Attorney General mentioned by Taibbi, seems to be holding out for a combined settlement dealing with both the issuance of mortgages and with mortgage backed securities as this Wall Street Journal piece spells out [emphasis added]:

Efforts to forge a consensus among government officials seeking to negotiate a foreclosure settlement with banks are stumbling in the face of New York State Attorney General Eric Schneiderman’s efforts to include both consumer and investor claims.
Mr. Schneiderman’s approach is opposed by some government officials involved in the negotiations. They believe the deal should be limited to foreclosures and mortgage servicing, while leaving New York and other states free to pursue claims related to the packaging of mortgages into securities…

There is obviously a great deal of horsetrading going on behind the scenes and lots of pressure is building for the holdout New York Attorney General to make a deal.
Even the White House is getting involved with Shaun Donovan, the Secretary of Housing and Urban Development taking the lead in working on AG Schneiderman.
Finally, the head of the group of 50 attorneys general, Iowa AG Tom Miller, has released a statement rebuking Schneiderman. Miller is clearly irritated because Schneiderman is not playing nicely with the other kids as reported by Bloomberg:

…From October 2010 until June 2011, New York was intimately involved in every aspect of this investigation and possible settlement,” Miller said in the statement. “In June 2011, our group decided that we needed to take the fairly large executive committee and create a smaller negotiation committee.”
New York declined an invitation to be part of this negotiation committee “because it indicated it would possibly pursue a different direction,” Miller said.
“While we certainly respect the right of any state to choose to no longer participate in a multistate and to pursue another path, working to actively undermine a multistate while still a member of the Executive Committee simply doesn’t make sense, is unprecedented and is unacceptable,” Miller said in last week’s statement.

In all this back and forth, the actual point of prosecuting bank mortgage fraud seems to have fallen by the wayside. Now, it’s all about the political push to get a deal — almost any deal — done that meets with the banks’ approval. Why all of these government officials are so concerned about the banks, I don’t know. They, after all, played a significant role in getting us in this mess.
I went to the NY Attorney General’s official web site and did not find any recent updates on this issue. If you want to check it out, go here.
Ultimately, I think Schneiderman’s position will win out because the lone holdout to a deal everyone else wants has the power. Stay tuned.
See also:
Fallout from the Fed’s secret $1.2 trillion bailout

^ The Fed/Dollar system is being squeezed by the ECB/BIS. European banks are the Fed/dollars problem.(lots of Euro banks are Fed primary dealers) That is why the Fed gave 1.2 trillion dollars in loans to all of those international banks. The ECB didn't hand out a nickel at that time. There will be more Fed sponsored bailouts in the future because they have the most to lose.

The ECB can just sit back and watch the Fed print itself to death.

Originally Posted by socal

The ECB can just sit back and watch the Fed print itself to death.

....if it's that simple....one could believe in Gold as a international basis of exchange....that is not to say Governments do not hold Gold in esteem...
but as a means of buying a chip buttie....fair go...

....Fed print itself to death....

be careful what you wish for...look at the African examples of totally bankrupt curriencies....would you wish that on yourself, family, neighbours....even those you don't like...

Originally Posted by baby maker

be careful what you wish for...look at the African examples of totally bankrupt curriencies

Don't upset "social" he's always on the side of the underdog especially if they're the right colour i.e. darker the better!

Originally Posted by baby maker

Originally Posted by socal

The ECB can just sit back and watch the Fed print itself to death.

....if it's that simple....one could believe in Gold as a international basis of exchange....that is not to say Governments do not hold Gold in esteem...
but as a means of buying a chip buttie....fair go...

....Fed print itself to death....

be careful what you wish for...look at the African examples of totally bankrupt curriencies....would you wish that on yourself, family, neighbours....even those you don't like...

Its going to be tough for the Americans. The thing is, it will resemble more of a currency crash then a hyperinflation. Like the Thai baht in 1997.

There has already been enough money printed to have a currency crash/hyperinflation, it is just hiding in the treasury market which is the biggest bubble in history.

Originally Posted by socal

Its going to be tough for the Americans

Originally Posted by socal

There has already been enough money printed to have a currency crash/hyperinflation, it is just hiding in the treasury market which is the biggest bubble in history.

For once "social" apart from posting the obvious you're correct on both points.

The almighty mess began in the USA but unfortunately for all of us it's not going end there and believe it or not (despite your hatred of the USA) you're a part of this mess as are the rest of us!

Originally Posted by The Bold Rodney

Originally Posted by socal

Its going to be tough for the Americans

Originally Posted by socal

There has already been enough money printed to have a currency crash/hyperinflation, it is just hiding in the treasury market which is the biggest bubble in history.

For once "social" apart from posting the obvious you're correct on both points.

The almighty mess began in the USA but unfortunately for all of us it's not going end there and believe it or not (despite your hatred of the USA) you're a part of this mess as are the rest of us!

First of all, it does take some brains to comprehend this ^ reality. Second, the majority of the financial world does not realize that treasuries are a bubble, the popular opinion is that gold or oil is or some bullshit.(buterfly is a good contrary indicator)

Third, I don't hate the US at all. I just hate Obama and the lowlife left.

/\


....pretty much like shooting the rapids....there no getting off..

...but as an aside....have serious resevations that quidesential finiancial views are the sole prerogitive of TeakDorians.


....but lead on.........

Welcome to the 'new normal minus'

Karen Maley

It’s rare for leading funds managers to admit that they’ve made a bad call. But Bill Gross, who heads up the world’s largest bond fund manager, PIMCO, concedes that he made a major error in betting that the price of US government bonds would fall.
“Do I wish I had more treasuries? Yeah, that’s pretty obvious”, Gross said in a frank interview with the Financial Times. “I get that it was my/our mistake in thinking that the US economy can chug along at 2 per cent real growth rates. It doesn’t look like it can.”
In February this year, PIMCO sold off all its holdings in US government-related debt, including Treasury bonds and agency debt. At the time, Gross argued that there was a risk that bond prices could fall, which would force bond yields higher, when the US central bank ended its $US600 billion bond-buying program.
Instead, bond yields have tumbled as investors have worried about the faltering US economy. Earlier this month, yields on 10-year US bonds slipped below 2 per cent, a 61-year low.
In the FT interview, Gross said PIMCO – which has been buying US government bonds in recent months – had reassessed its bearish opinion on US bonds to reflect the fact that “US and developed economies are near the recessionary dividing point”.
He added that the “new normal” – the term coined by PIMCO to describe the new world in which developed countries would achieve much lower growth rates than in the past – may need to be revised downwards to the “new normal minus”.
But PIMCO isn’t the only one worried about the “new normal minus”. The US central bank is also clearly concerned, judging by the latest minutes of its Federal Open Market Committee, which makes important decisions on US monetary policy. According to the minutes from the August meeting, the latest data indicate “the pace of the economic recovery remained slow in recent months and that labour market conditions continued to be weak.”
The minutes reveal that the FOMC considered a range of possible monetary stimulus measures aimed at cutting long-term interest rates and boosting US economic activity. One possibility was for the US central bank to embark on a new bond-buying program, dubbed QE3. Other FOMC members suggested that long-term interest rates could be reduced without swelling the size of the US central bank’s balance sheet if the bank bought long-term bonds at the same time that it sold off short-term securities.
In the end, the US central bank merely promised to keep US interest rates close to zero until at least mid-2013. But the FOMC clearly intends to come back to this discussion at its September meeting. Indeed, the minutes show that FOMC agreed to extend the meeting to two days to give them extra time to discuss “the possible costs and benefits of various potential tools”.
All the same, some economists believe that the US central bank remains overly optimistic about US economic growth. The Goldman Sachs economics team estimates that most FOMC members still expect the US economy will grow by around 2.5 per cent in the second half of this year, and by around 3 per cent next year. In contrast, they say, “our own expectation is that real GDP growth will average nearly one percentage point below the committee's likely forecast."
The Goldman economists argue that the US central bank is likely to engage in further monetary stimulus because there is already a large – and probably growing – amount of excess in the US economy at a time when US government budget deficits are being cut. “Thus, the risks to the attainment of the Fed's dual mandate of maximum employment and low inflation are clearly tilted to the weak side at the current stance of monetary policy, which implies that further easing is a natural expectation.”
The Goldman economists expect that the US central bank will announce a new bond buying program, which is roughly the same size as QE2, the $US600 billion bond buying program unveiled last November.
But they predict that the new bond buying program – already dubbed QE3 – will have some “tweaks” aimed at shielding the US central bank from a fierce backlash from both local and foreign critics. One possibility involves the US central bank financing its bond purchases by selling short-term securities, which avoids another controversial expansion in the US central bank’s balance sheet. Investors clearly expect that QE3 will be every bit as effective as QE2 in bolstering the price of risk assets, such as shares and commodities. As a result, risk assets are likely to surge on every fresh confirmation of the “new normal minus”.

The Storm is Over...



"Irene was not so bad. She knocked down a few trees, flooded a few basements. But, in the end, she was a good girl who left quietly when her time came.

Traders, players, speculators and mid-night ramblers drifted back into Manhattan as soon as they could clear the fallen trees. They must have felt they had been spared for some great purpose. They must have looked to the heavens as clouds parted and rays of golden sunlight struck their uplifted faced. Whatever got into them, they rushed to the stock exchange and bought US stocks! The Dow rose 254 points.

If you believe the stock market, the storm is over…all is well…

But US GDP grew at only a 1%[PA] rate last quarter. That is a small number. Don’t look too carefully or it will disappear altogether. If you deflate the latest ‘growth’ number by the inflation rate published by the Bureau of Labor Statistics (actual year-to-year CPI-U is 3.6%) you get negative real growth. Recession, in other words.

And then, you have to wonder. Suppose you were to adjust that number for population? US population is growing at something just under a 1% rate. What you would see is that the average American is getting poorer (his share of GDP) at about 3% or 4% per year.

And then you are able to make sense of a lot of the other economic information that comes your way.

For example, a report out yesterday tells us that the personal savings rate in America keeps edging up — just as you’d expect. From next to zero, it has moved up over 5%. Households continue to cut back on spending…and increase savings. In the last quarter, they paid down $50 billion of debt. A drop in the bucket…but at least it was the right bucket. The Wall Street Journal:

In a marked shift from their borrow-and-spend behavior during the boom, US households are now by and large prioritizing saving and debt reduction. On Monday, the Commerce Department is to release July figures likely to show the personal saving rate, or proportion of after-tax monthly income unspent, in the 5% to 5.5% range…

We also learned that gasoline use is at a 9-year low. Labor Day weekend is less than a week away. But this year, forecasters believe more Americans are going to stay home. They can’t afford the cost of filling up the tank for a long road trip.

We hope this is true. We’re driving up to New York from Baltimore to attend a wedding. We don’t want to get stuck in a lot of traffic.

But it is sad to think that people can’t afford to visit friends and relatives because they don’t have the cash to pay for gasoline. Oh, for the good old days! We remember buying gasoline for 25 cents a gallon back in the early ’70s.

Sigh…but that was before Richard Nixon came up with the funny dollar we have today. Let’s see…suppose Nixon had done the right thing? Suppose he had honored America’s commitment to settle her debts in gold?

There would have been Hell to pay in the mid-’70s…but isn’t it better to pay Hell sooner rather than later? After all, the entire amount of foreign claims against the dollar at the time was something on the order of $50 billion. Now, it is around $4 trillion. Maybe more.

So, just for fun…let’s imagine what would have happened. Of course, there would have been this aforementioned period of wailing and gnashing of teeth. And then? And then, US producers would have had to get busy making and exporting products…while consumers would have been forced to curtail their reckless spending. America’s trade deficit would have remained under control…and the US would still have jobs in manufacturing. And it wouldn’t have debt equal to 370% of GDP.

But how much would people pay for a gallon of gasoline? Well, let’s see…let’s assume that gold has done a fair job as real money, of holding its purchasing power steady. Back in the early ’70s you could have bought 160 gallons of gas with a single ounce of gold. And today? At $1,800 an ounce, and gasoline at $4, you can buy 450 gallons. It’s as if the price of gasoline had fallen to about 10 cents a gallon!

Hmmm….go figure.

Either gasoline is too cheap. Or gold is too expensive. If we were a trader we’d short the latter and go long on the former.

And since we’re always just guessing, we’ll take a guess as to what this means…

Gasoline is weak because the economy is fundamentally weak. Gold is high because Richard Nixon destroyed the integrity of the dollar, the US economy, and the world’s monetary system. Each of these trends will have to play itself out. In the meantime, gasoline…and/or gold…may need a little adjustment. And the storm continues…

At least the feds aren’t cutting back. The private sector spent itself silly in the ’00s. Now it’s the feds’ turn.

With all the talk of ‘cuts’ and ‘budget reduction’ you might have the idea that the feds are putting the same screws to their budgets as everyone else. You might have thought, too, that much of recent government spending was temporary ‘stimulus’ spending, intended to kick the US economy in the derriere, in order to get it moving faster. That spending might have been expected to taper off as the emergency passed. If you thought that you would be as dumb as a voter. The 2011 budget is on target to hit an all-time high of $3.6 trillion, more than $100 billion up from last year. Total outlays are increasing at a breathtaking pace — up by a third in just four years.

And now that the debt ceiling has been cracked…the sky’s the limit.

Whee!"

Originally Posted by baby maker

Originally Posted by OhOh

And finally, what of perhaps the two most influential players on the stage of this third-rate farce – Ben Bernanke and Jean-Claude Trichet? Bizarrely, I’d imagine that Bernanke will blame consumers for deliberately refusing to consume, as they were meant to do in his models….although he will be patronisingly sad, rather than angry, in making this judgement. And Tricky Trichet will blame all 27 EU member States for their insolent disobedience to the dictates of his Central Bank. For they unpardonably sabotaged his one big plan…to retire before any seriously smelly stuff got chucked at the fan."

Teakdoorians...you read it first here....it would be funny if it wasn't so sadly true...

Trichet is getting the Fed to do the bailouts for him(swap lines). The Euro banks are the dollars problem. The ECB has one mandate, price stability. The Euro will win out against the dollar.