Wall Street Crash

"The Wall Street crash doesn't mean there will be any general or serious business depression."
-- Business Week
November 14, 1929

Sources: "The working person's history of the great depression," Show me the Money, Issue 10, Autumn 2001.

Black Friday

Sources:

Associated Press, World markets slump on recession fears, October 24, 2008.

The Economic Meltdown: Seven Key Factors

There are seven key factors that underlie the current economic tectonic shift.

1. Financialized Economy

2. Debt (which relates to #1)

3. Real Estate Boom/Bust

4. Global commodity inflation

5. Dishonest Economic Statistics

6. Price of Oil

7. Demise of the US Dollar

Read More

Swinging Wildly

Has anyone noticed that the stock market is swinging wildly? Has anyone ever noticed that, when something is out of control it swings wildly... then, often times, crashes horribly.

Welcome to the self-correcting free market. Fasten your seat belts.

The Crash of 08?

Will today's date become famous in future history books? It already has in Hong Kong.

Those who know the US economy is running on borrowed .... money, and time, have wondered, "Will it come as a rapid crash or a slow, grinding decline?" Judging from the following numbers, it might be the former, and the time might be now.

Japan's Nikkei 225 index nose-dived 5.7 percent -- its biggest percentage drop in nearly 10 years -- to 12,573.05, a day after falling 3.9 percent. Australia's benchmark index sank 7.1 percent, the market's steepest one-day slide in nearly 20 years.

Hong Kong's Hang Seng index, which slumped 5.5 percent Monday, finished down 8.7 percent. In China, the Shanghai Composite index lost 7.2 percent to 4,559.75, its lowest close since August.

I sit here at 5:30am thinking, "Should I move my investments into cash?" Since I don't play around with my money that much, 1) I'm not sure I'd be able to do it rapidly, and 2) I'm not sure it would switch over quickly enough to avoid getting caught in today's pending crash here in the US.

Geeez! Hong Kong, 5.5% Monday and another 8.7% Tuesday. That's nearly 13% in two days.


Sources:

Associated Press, Asian Markets Tumble on US Worries, Yuri Kageyama, January 22, 2008.

Thanks to the comment below. Correction made.

Stock Market Domino Effect

7:00am EST

Markets in Asia and Europe fell again Monday, extending their slide into a second week as investors worried about a possible global "domino effect."

"When there's such a big market move in such a short period of time, there's that element of surprise and confusion," said Teruhisa Ishikawa, section chief for investors information at Mizuho Investors Securities Co.

"Everything takes a back seat relative to the sell-off that we are seeing," said Jose Vistan, research director at AB Capital Securities in Manila, Philippines, where the benchmark index sank 4.5 percent. "I don't know where the domino effect will stop."

Analysis

Possible motivations: Yen's jump to a three-month high against the dollar as investors reversed so-called yen-carry trades. In the US, markets were concerns about mortgage defaults and foreign markets.

Update:

The Dow Jones Index finished 63 points lower, having fallen in eight of the last nine sessions for a total loss of 4.6% in value since the market deflation started last Tuesday.

The Nasdaq composite index -- which is dominated by riskier technology and smallcap stocks -- dropped 27.32, or 1.15 percent. The Nasdaq has lost about 7% of its value since the slide began last Tuesday.

HSBC Holdings PLC, Europe's largest bank, said it suffered $10.6 billion in losses in 2006 on bad loans from its U.S. subprime mortgage operations. More on Real Estate.

Sources:

Extensive quotes from Associated Press, AP, March 5, 2007, "Markets across Asia plunge," YURI KAGEYAMA.

Associated Press, AP, March 5, 2007, Madlen Read,
Dow Ends Down 64, Nasdaq Drops 27 After Erratic Session Amid Worries About Mortgage Defaults