NYSE Dow Circuit Breaker
No real worries here for today:
Tuesday, January 22, 2008 | 08:45 AM | Permalink
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The best circuit breaker was Santelli just reaming out Jim Cramer--who actually tried to say if you watched his program, he's been a big Bear! What a complete jackass! Santelli for President!
Posted by: dukeb | Jan 22, 2008 8:48:23 AM
Alright, so Uncle Ben came through.
But this begs the question: What the heck is he gonna do next week?
Posted by: zero529 | Jan 22, 2008 8:49:53 AM
think you need to reprise this post
http://bigpicture.typepad.com/comments/2007/12/top-10-things-y.html#comments
Posted by: chad | Jan 22, 2008 8:51:30 AM
This needs to play itself out some more before all this rate cutting begins... In so many ways the FED should have to live a cloistered life, apart from any influence - put them on the moon and let them use market data, not investor hyseria to make their decisions. THESE CUTS ARE NOT GOING TO HELP, AT ALL! Welcome $9 dollar bread in 2010!!!
Posted by: Justin | Jan 22, 2008 8:55:11 AM
Barry you're piling on a bit here. I do see us ending the day perhaps 5-7% down across the board but this showing the children all the flesh creeping stuff in the woodshed seems to be overdoing it a bit. Once todays over were probably going to be testing the bottom. Then I suppose it's three months of skittishness while everyone gets used to the idea. Seat belts will be needed but it's not 1929.
Posted by: John | Jan 22, 2008 8:57:30 AM
Barry,Where's that Dow chart overlaying the 1932 crash and through the depression era with the Dow today from 2000 crash onward.....
Posted by: jim | Jan 22, 2008 9:05:25 AM
so we got the 75 pt.
but is it going to help?
are we not already in the panic mode? where every one is looking for a rally to sell his stuff?
any bulls out there thinks otherwise??
Posted by: techy2468 | Jan 22, 2008 9:05:31 AM
"eat belts will be needed but it's not 1929."
No. You're right it's not 1929. It's looking pretty ugly.
Especially when Mr. 64 Year-Old Boomer with his 300K house and 500K 401K gets the feeling he wont be able to use his house as retiremwent money and realizes that his 500K only give him 17K per year so he'll have to keep on woking while companies do everything to squeeze him out to get him by contract.
Posted by: D. | Jan 22, 2008 9:06:41 AM
In 1929, they didn't think it was '1929' either. The parallels in consumer debt, real estate speculation and eceonomic patterns in 1929 and 2008 are not dissimilar. There are some differences, such as globalization and a much more significant federal deficit, but I'm not sure a comparison favors 2008.
Posted by: Pilgrim | Jan 22, 2008 9:08:14 AM
The Federal Reserve in their great wisdom has just convened an emergency meeting and then announced by way of an emergency rate cut that the situation is m-u-c-h worse than they had previously stated.
And this is supposed to be a good thing?
Posted by: Winston Munn | Jan 22, 2008 9:08:21 AM
Yes, I love the doom and gloom and perhaps thats why Ben decided to chop .75% to shore up sentiment. The problem is that no one seems to care that everytime he does that the possibility of a secular bull market in raw materials and a bear market in stocks increases. I wonder how low Uncle Ben will go and if this most recent rate cut will give the desired effect of a market rally.
Posted by: SFH | Jan 22, 2008 9:10:03 AM
Did Santelli really hand Cramer his arse? Wish I'd seen that. Really, all you need to do is remind Cramer that he recommended Countrywide as a buy last February.
Posted by: Florida | Jan 22, 2008 9:15:29 AM
I was figuring on a 1000 point drop today
(-8%)absent any Fed help, now that we have the Fed really stepping in, we have to revise our expectations. What is the equivalent ? Probably a 300 point drop for the day is my best guess.
md
Posted by: Michael Donnelly | Jan 22, 2008 9:21:30 AM
I was expecting a meltdown today and went short heavy.
Trouble is I went short late... at 11,400 (for the daily Dow 30 contract)
With this rate cut now everybody's talking 300ish declines, rather than 1000ish declines.
Futures currently 11,688.
People still advising me to hold and close further in the day but I don't know if I have the nerve...
Posted by: Whitespiral | Jan 22, 2008 9:26:45 AM
Next time someone on CNBC says " the economy is great, just look at how low inventories are!!", look at him and say JIT. Everyone works on JIT now and inventories are low because demand is low. Supply doesn't create demand no matter what Kudlow screams.
Prediction: dow down 600-750 at open and recovers to down about 400 with a late day ghost bid.
Posted by: Brian | Jan 22, 2008 9:28:30 AM
Winston
Yes it is a good thing, at least the Fed is starting to realize how bad things are.
Hell you got folks still saying we aren't in a recession for pete's sake.
And a massive cut like this really does help the financial sector, they can make money on the spread. Is it enough ? Unlikely, but it does help.
But you have to wonder, do we just inflate our way thru it all? Are the 1970's ahead of us?
Posted by: Michael Donnelly | Jan 22, 2008 9:29:47 AM
That rate cut gives me the creeps. If the Dow comes close to losing 500+ points, it will only harden the impression that rate cuts--at this late date--will have absolutely no effect. The problem is that if foreign investors have already factored in $150 billion and a probable rate cut, their selling alone could easily push the Dow down that much and further. And if you were a foreign investor, of all the markets you could be in, why would you want to be in the U.S.?
Posted by: Jay | Jan 22, 2008 9:30:11 AM
Fed just put a speedbump in front of a car moving at 100 mph...let's see what happens.
CNBC spin: It could've been worse...down 7% like Europe...hey, oil is dropping and that is great for the consumer.
Posted by: Steve Barry | Jan 22, 2008 9:38:05 AM
this is fun!
Posted by: Eric Davis | Jan 22, 2008 9:44:13 AM
It could be worse. We could be Japan.
Posted by: MooPoint | Jan 22, 2008 9:44:15 AM
It sure isn't fun to be me right now. ;-)
The price of greed I suppose...
Posted by: Whitespiral | Jan 22, 2008 9:49:14 AM
New CNBC Spin:
300 points is not a big drop...need 2700 point drop to equal 1987 crash.
QQQQ has blown out huge support of the August lows. SELL THIS BOUNCE
Posted by: Steve Barry | Jan 22, 2008 9:51:25 AM
The Fed has prevented the total washout the market needed. They gave the addict another hit.
Posted by: Steve Barry | Jan 22, 2008 9:54:19 AM
The rate cut stinks. It stinks of panic. They would have been much better letting this play out over the week and coming in with a cut after the turbulence had subsided somewhat, probably with a Dow at mid to low 11's. Now it's all swept up in the general hubbub and within hours people are going to be saying what does this change and downward pressure starts all over again. Psychologically this stinks.
Posted by: John | Jan 22, 2008 9:55:56 AM
No capitulation low.....when it is sorely needed. I gather it's a bit tough to want to vote for a republican when they have presided over this entire mess. You just saw one of the "tools" of the election process since I can think of no other real reason for this.
Pretty Sad
but thanks for the free money Ben....
Ciao
MS
Posted by: michael schumacher | Jan 22, 2008 9:58:42 AM
Kudlow pre-empted???? They have a market special at 7PM. DAMN IT!!!!! I wanted his take on this.
Where o where is Goldilocks Larry?
Posted by: Steve Barry | Jan 22, 2008 10:00:48 AM
I saw Santelli ream Cramer and it was GREAT. Cramer is just trying to save his ratings. I won't miss his show tonight, but I only watch the firt five minutes. Booya Baby, and a big Ski Daddy. What an idiot.
Posted by: Innocent Bystander | Jan 22, 2008 10:01:40 AM
You're right, John. At least Greenspan had a trader's instinct when he cut rates. He waited for a somewhat of a bottom, and just when it started to rise a bit he pulled the trigger; it was like a surfer catching a wave.
Just remember everyone, for those that want to catch this "bottom" - there's always a retest of the low.
Posted by: Steve C | Jan 22, 2008 10:03:46 AM
I'm a Republican when the market is going up...
But a Commie Stalin loving "please save me" when the market is going down
Will they ever let this thing burn?
Blow up some multimillionaire hedge funds. Kill some Harvard educated genius.
Oh. I'm sorry. Suffering and pain is only for auto workers. welders. waitress.
Posted by: Steve | Jan 22, 2008 10:06:51 AM
Larry on now...likes the move to cut rates...won't solve all our problems...Fed didn't panic...reacting to plunge...this is a financial event not economic event...will make another move Jan 30...money is tighter than people think...inflation not a problem...fed creating a safety net...wants to see other CBs cut in coordinated basis.
Posted by: Steve Barry | Jan 22, 2008 10:07:47 AM
I love how Bernanke is playing this. Give the guy credit. He is really measuring this and analyzing this. He is not being reactive. He was going to cut at least one point on January 30th anyway. What is the harm in giving away .75 now in order to soothe the skittish market? This is not panic. He is taking measured steps to battle liquidity and inflation. Step 1 was the coordinated multi-national effort to staunch the global liquidity/credit problems. Step 2 is to drop rates as needed. Go Ben!
Posted by: mike e. | Jan 22, 2008 10:08:30 AM
The initial shock and oversold condition for today has been worked off. I now predict Dow will now plunge to down 700, then stabilize.
Posted by: Steve Barry | Jan 22, 2008 10:10:22 AM
Not panic??? Measured response???
Damn give me some of whatever you just smoked.
Thanks Mike E. I needed a good laugh after I just saw the fed panic.
Ciao
MS
Posted by: michael schumacher | Jan 22, 2008 10:12:23 AM
While it's always fun to bash the Fed this rate cut won't prevent a washout IMHO. The recession is pretty well locked in. What they and a stimulus package aim at is preventing it from getting really serious; which, given the downside fragilities is a very good thing.
For more details on what I think the Fed's strategic posture is try this post.
Let's All Blame Uncle Alan: http://tinyurl.com/2tf2t6
They're playing this like a great fisherman plays a big salmon while on a lite fly rig. If the line breaks we're all in trouble.
BtW - I was involved in trying to get JIT adopted for 20 years. It's nowhere as prevalent as the business press would have you believe. Cisco got in terrible trouble last bust when they didn't act on their own early warning systems. Who's prepared this time for a major downturn in the economy ?
This is going to catch a lot of folks by suprise. And there are a lot of over-leveraged firms out there with bad balance sheets.
Business Fragilities: http://tinyurl.com/336smv
Posted by: dblwyo | Jan 22, 2008 10:13:38 AM
Perhaps the global markets dropped because Funds have decided to bring money back home to US Equities? Curious that this drop occurred on a day when the US Markets were closed. They pull money out of foreign equities and bring it back home.
Posted by: mike e. | Jan 22, 2008 10:14:55 AM
I don't blame Bernake for anyting really. Greenspan kept the Fed funds rate at 1% for three years, and that cheap money had to go somewhere. It just inflated a housing bubble and that inflated a derivative market. We are just watching it unwind. It will take a long time for things to reach equilibrium. Oh here's Maria on Bubblevision from Davos, and she has talked to a high ranking Fed official and Blah Blah Blah.
Posted by: Innocent Bystander | Jan 22, 2008 10:23:11 AM
Bernake is a wall street whore....
0% interest rates are going to be the norm....
then what????
Posted by: MarkTX | Jan 22, 2008 10:29:11 AM
Just wondering...if the Dow futures are ever up 500, would the Fed do a 75 bp emergency raise?
Posted by: Steve Barry | Jan 22, 2008 10:40:13 AM
The short side gets no respect but can make a very comfortable living.
Posted by: JT | Jan 22, 2008 11:39:45 AM
If a circuit breaker tripped then some people might(aimlessly investing their 401ks etc) actually wake up.
Maybe.
How much money is invested in 401k's? 2 Trillion? I'm sure its significant.
Posted by: Owner Earnings | Jan 22, 2008 7:25:52 PM
