Yes, Virginia, this is a crash
Nasdaq down 9%, S&P500 off 8.8% Dow off a mere 7%. Set your downward targets to SPX 975, plus or minus. That is both a technical target (breakout in 2003) and fundamental target (15X $65 SPX Earnings)
(Anyone know how I can embed auto-updating quotes that aren't laden with too much advertising or junk?)
>
And what has to be the best headline of the day: House to Street: Drop dead.
Source:
Stocks, Oil Plunge After Congress Rejects Bailout; Bonds Rise
Michael Patterson and Lynn Thomasson
Bloomberg, Sept. 29 2008
http://www.bloomberg.com/apps/news?pid=20601087&sid=a0PeALhiaraY&
Monday, September 29, 2008 | 03:32 PM | Permalink
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If "Wall Street" continues with its tantrum, it'll get what it wants before long.
Posted by: DL | Sep 29, 2008 3:35:06 PM
Consider one more experimental example to prove the point: the ultimatum game. You are given $100 to split between yourself and your game partner. Whatever division of the money you propose, if your partner accepts it, you each get to keep your share. If, however, your partner rejects it, neither of you gets any money.
How much should you offer? Why not suggest a $90-$10 split? If your game partner is a rational, self-interested money-maximizer -- the very embodiment of Homo economicus -- he isn't going to turn down a free 10 bucks, is he? He is. Research shows that proposals that offer much less than a $70-$30 split are usually rejected.
http://www.latimes.com/news/opinion/la-op-schermer13jan13,0,1195880.story?coll=la-opinion-rightrail
Wall Street / Paulson offered at $90/$10 split. America balked.
Posted by: Dave | Sep 29, 2008 3:36:31 PM
a great day for a new America. the Republicans have done the right thing for the wrong reasons. i hope they're suitably punished one month from now
Posted by: scorpio | Sep 29, 2008 3:38:06 PM
Plan C: Crush the shorts
All short positions on any stock must be closed by next Friday.
Short selling on any stock remains illegal forever.
Rally for America!
Posted by: All-in | Sep 29, 2008 3:39:41 PM
Well, up here in Canada, where we should be relatively insulated from the idiotic shitstorms US financial players create for themselves AND where we shouldn't have to give a rat's ass about the moronic jawboning of the US "political elite" (read: republican sissies) - I have something for the "Street", the House, and the morons who bought homes they couldn't afford..."FUCK YOU" and thanks for wrecking things for the rest of the world.
P.S. to the 12 Republicans who voted against the bill because Pelosi hurt your feelings: Man up, you pansies!
Posted by: Clay | Sep 29, 2008 3:42:34 PM
The head line says, "House To Street: Drop Dead" but this also can be construed as "House Republicans to President: Drop Dead."
Following comment is from Republican Congressman Baron Hill from Indiana: “I have been rushed to judgment by the Bush administration before,” Hill said. “There hasn’t been enough time to evaluate the impacts this legislation would have if enacted or to consider alternatives. Congress deserves time to weigh the benefits and the potential pitfalls of borrowing this money.”
Posted by: Guy Lerner | Sep 29, 2008 3:43:45 PM
Come on, Barry, don't do that. The crash of 1987 was -22.6% on the Dow. I am hopeful - for the hope that this bailout never passes - that the stock market and credit markets remain stable. All of your regulars who are against the bailout should cheer the market for the next few days. That includes "Dow 5000" me.
Bruce in Tennessee - I hope your Plunge Protection Team does not become the Plunge Implementation Team...
Posted by: CNBC Sucks | Sep 29, 2008 3:46:04 PM
> Yes, Virginia, this is a crash
C'mon you sissies! Tis only a flesh wound!
Posted by: HCF | Sep 29, 2008 3:47:17 PM
Barry, saw the MW headline earlier and laughed my ass off.
Down 590 points ... not good but not Armageddon. Looks like the market is working fine so far.
The Greek
Posted by: Agoracom - George | Sep 29, 2008 3:50:29 PM
Didn't the FED already do what the House just voted down?
http://www.bloomberg.com/apps/news?pid=20601087&sid=a9MTZEgukPLY&refer=home
"Sept. 29 (Bloomberg) -- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression. "...
Posted by: wireliner | Sep 29, 2008 3:52:40 PM
Warren Buffet needs to step in like JP Morgan did 100 years ago.
Posted by: Sam Jacob | Sep 29, 2008 3:54:57 PM
Hey,
I was watching CNBC, Dennis Kneale especially, he said that the bailout passing was a sure thing. Dennis is never wrong, what happened? Ok, that was a little sarcastic, sorry Dennis, I feel for you buddy..you always have faith..
So, anybody think this is as bad as it gets? What about Gold being up huge, but the GDX down?
We do eventually get a bailout, right?
Posted by: Rich Shinnick | Sep 29, 2008 3:55:57 PM
Time to buy. If you haven't panicked by now and sold everything, you're never going to.
Posted by: Big J | Sep 29, 2008 3:56:28 PM
Both Google and Yahoo offer the ability to add live quotes to blogs.
Posted by: Larry | Sep 29, 2008 3:56:40 PM
I imagine Christmas bonuses for Wall Street employees are going to be HUGE this year.
lol...
Posted by: Mattie | Sep 29, 2008 3:57:15 PM
I don't see any down 22% days as high probability events.
And we are coming up on down 30% for the SPX peak to trough, and there still is some bottom callers out there.
Not impossible, just unlikely.
Posted by: Barry Ritholtz | Sep 29, 2008 3:57:25 PM
This is not good news for Ferrari dealers in Manhattan.
Posted by: DL | Sep 29, 2008 3:58:38 PM
Crash????
Any Grey Men Dive from the Fourteenth Floor?
No, then
More like a small rout....
Posted by: MarkTX | Sep 29, 2008 3:59:09 PM
Hey doesn't this just make Gasperino's McCain ass kissing on Squak this morning look at the more rediculous? See how the maverick made things happen in Washington.
What a comedy.
Posted by: Northern Observer | Sep 29, 2008 4:00:19 PM
"Think long term, we'll get through it." Maria said.
Posted by: MM | Sep 29, 2008 4:00:23 PM
> (Anyone know how I can embed auto-updating quotes that aren't laden with too much advertising or junk?)
Well, you can always scrape off (embed) the intraday image URLs from places like Yahoo! Finance. See the charts on the bottom-left portion of this web page:
http://leecoursey.org/stateoftheuniverse.html
Posted by: Lee Coursey | Sep 29, 2008 4:00:39 PM
Here's the big picture for wall street and main street from the BBC:
If economic growth was going to be slow before the events of the past three weeks, it's going to be a lot worse now.
And if you wish to know which economies are perceived by global investors to be most flawed and vulnerable, you could do worse than look at the price of insuring sovereign debt in the credit default swap market.
Those CDS prices tell you that Austria, Belgium, Denmark, Finland, France, Germany, Sweden, and the Netherlands are all perceived to be more credit-worthy - to be in a better position to service their national debt - than either the US or the UK.
PS. Silly me. In my list of financial firms in receipt of massive first aid, I forgot to mention Germany's Hypo Real Estate, the commercial property lender, which has received a whopping £28bn in credit guarantees from the German government in collaboration with a consortium of banks.
Oh, and Iceland's third largest bank, Glitnir, has been nationalised.
Posted by: AGG | Sep 29, 2008 4:00:45 PM
Barry- you said a couple of months ago that the banks needed to open their books and just take their hits. You said that we would have a 500 point hit and then we would be ok. You think that today is that day?
Anyways- aapl at 105 - gm at 9- time to buy sukkas. Geez I might be able to get on the google train if this keeps up (one share goog pls)
Posted by: huxrules | Sep 29, 2008 4:02:50 PM
Barry:
Last night SIFMA arranged a conf. call with Treasury. On that call were the key Street analysts, execs and their lawyers...names familiar to readers of TBP.
The tenor of the call was unmistakable. The pushback elements of the compromise bill were not anything for Wall Street to worry about. For those Members out there talking about "the party being over," for issues regarding oversight, etc., again and again Treasury basically said..."The Street is covered."
For many observers, the sections designed to protect Main Street were weak. The discretion still favored Treasury. This bill was seriously and fundamentally flawed. It deserved to fail. That call last night, a private call mind you, reminded me of comments made by Street execs after Spitzer's global settlement back in dot.com days.
The next time Treasury comes up with a bill there had better be some real protection for the taxpayer. There had better be things like tighter definitions for who assets will be acquired. Stronger language regarding executive compensation. There will not be a blank check for any Treasury Secretary.
The bill has got to be clear. This cannot be a bail-out for Wall Street. How many readers here really thought this was a fair and reasonable bill?
Also, I have real concerns over whether the Hill trusts Paulson. The man is worth hundreds of millions of dollars made while taking advantage of a system he is now seeking to manage. Do we really think average Americans trust Hank Paulson? Do they not look at him and think Goldman Sachs? What did Hank do when he needed help at Treasury on this issue? He went back to another key friend at Goldman.
What a mess. Maybe the Congress was not as stupid as Wall Street thought.
Posted by: ardano | Sep 29, 2008 4:03:32 PM
Did Erin cry? If not, this was not the final capitulation....
Seriously, that was a selling stampede. It wasn't quite universal index dumping but the clobbering was widespread. I held all my GDX.
I sold my last few 5-year Treasuries, ka-ching, and picked up a few knives late on, in the belief that they had stopped falling. We'll see how tomorrow dawns.
A bottle of champagne and a hamburger to the SDS/ SKF/ QID faction. Price discovery depends on a free market.
Posted by: leftback | Sep 29, 2008 4:09:19 PM
