Dow Drops 504 points

[afchic]

Originally Posted by Guy

I'm pretty sure the execs from Freddie, Fannie and AIG will NOT be leaving with their "Golden Parachutes" (severance packages)...

On February 6, 1996, the Federal Deposit Insurance Corporation (FDIC) issued a final rule that restricted troubled banks, thrifts, and holding companies from making golden parachute payments. Exceptions to the rule are allowed for individuals who have qualified for pension and retirement plans. Other exceptions permit the FDIC to enforce the spirit of the law by allowing legitimate payments but stopping payments that might be considered abusive or improper. The rule also prevents FDIC-insured institutions from paying the legal expenses of employees who are the subject of related enforcement proceedings. The rule went into effect on April 1, 1996.

Stay safe.

I see your point, but since that is indeed the law, how have all these companies been able to give the CEOs that run their companies into the ground all this money at their departure? Do they classify it something other than the golden parachute so that they can get away with breaking the law?

[Penn]

I’m not sure who said this: “All great wealth is based on/in larceny.”

[nmap]

Some things never change, as illustrated by this:
----------------------------------------------

"The commercial world is very frequently put into confusion by the bankruptcy of merchants, that assumed the splendour of wealth only to obtain the privilege of trading with the stock of other men, and of contracting debts which nothing but lucky casualties could enable them to pay; till after having supported their appearance a while by tumultuary magnificence of boundless traffic, they sink at once, and drag down into poverty those whom their equipages had induced to trust them."

Samuel Johnson, English author, "Rambler #189," January 7, 1752.
------------------------------------
Sound familiar?

[The Reaper]

First, I blame Congress, principally the Dims, for pushing for easy credit and NINJA loans.

Second, I say bring back Debtor's prison for the CEOs who allow criminal activities on their watch.

TR

[Team Sergeant]

Here's more of the cascading effect I was talking about, its going to get worse..... Remember this happened "after" the $700 billion bailout...



Monday Mayhem: Dow Plunges 700 Points
The Dow plummeted more than 700 points and the Nasdaq Composite lost more than 8% of its value Monday afternoon as U.S. markets reached session lows.

Triggered by global credit fears and worries of a U.S. recession, the sea of red left the Dow below the psychologically-important 10,000 level for the first time in nearly four years.

Today's Market

As of 2:30 p.m. EDT, the Dow Jones Industrial Average slid 715.95 points, or 6.92%, to 9612.93. The broader S&P 500 Index lost 83.71 points, or 7.62%, to 1015.52 while the Nasdaq Composite fell 156.22 points, or 7.93%. to 1792.96. The consumer-friendly FOX 50 dropped 54.97 points, or 6.68%, to 767.70.

"It's very serious. This has all the makings of a good Black Monday," said Frank Davis, director of sales and trading at LEK Securities.
The selloff was well shy of the 22% the index lost on Black Monday in October 1987. However, on a point basis the blue chips were on pace for their largest lead since last Monday's record 778-point plunge.

Still, Monday marked the second time in a week the blue-chip index has suffered a loss of 700 points or greater.

http://www.foxbusiness.com/story/mar...stock-futures/

[nmap]

/* **** Attempt at humor: ON *** */

Well, I hope everyone who opposed the bailout is happy now. See what you've done? If we had acted earlier, none of this would have happened.

/* **** Attempt at humor: OFF *** */

Seriously, we have violated all manner of technical support. Dow Theory indicates a full-blown bear market. We have penetrated the 50% level of the move from the 7300 level years ago. The trend is down on all the averages.

Perhaps more problematic, the bond market is also projecting more problems - and it tends to be more sensitive than the stock market. More accurate, too.

We have a commodity sell-off, with almost everything but gold headed down. It is my understanding that this represents large-scale liquidation in order to acquire dollars and settle debts - especially debts on credit default swaps. The Baltic Dry Index provides some insight into trends in world trade - and it, too, is headed into the basement.

It appears we will get one of those generational buying opportunities. In the meantime, we may get to observe panic. The cascade effect mentioned by Team Sergeant (which I agree with completely, by the way) is likely to have an adverse effect on the global and domestic economy, employment, and finance. People often have limited funds available to cover their expenses during periods of unemployment, which may create a policy challenge for government at all levels.

It will be interesting to observe the behavior of our politicians. In California, there is discussion of using the pension fund as a source of funds for an existing cash-crunch. But if the present credit lock-up continues, California and other governments will remain unable to sell short-term paper; the consequences to retirees might be unpleasant.

Interesting times.

[echoes]

Originally Posted by nmap

/Perhaps more problematic, the bond market is also projecting more problems - and it tends to be more sensitive than the stock market. More accurate, too.

We have a commodity sell-off, with almost everything but gold headed down. It is my understanding that this represents large-scale liquidation in order to acquire dollars and settle debts - especially debts on credit default swaps. The Baltic Dry Index provides some insight into trends in world trade - and it, too, is headed into the basement.

nmap,

You are so very wise in your assesments...Thank You for sharing them!

Some of the bond and commodity folks I used to work with at MS would agree with your above projections, I am sure.

Can remember sitting out on a bench across the street from my office in La Jolla, staring at the sea, on days like today.

At least the Dow tried to rally, and only lost 360+/- for the day.

Well, am seeing cuts in certain States funding for projects to help the disabled comming. Sooner, rather than later.

Interesting times indeed nmap.

Holly