World Stock Markets Drop Like it's 9/11 this morning

London fell massively this morning as did the other European markets after sharp falls on the Asian markets overnight. How far can they fall? Can this get any worse. You bet it can. Loads more banks are set to announce further sub prime losses soon. I read today that this is the worst start to a year on the stock markets since records begain...in 1935. Just when you thought things couldnt get any worse.

Did anyone NOT see this coming. This country has been running on borrowed time. The Federal Reserve has completely dismantled the U.S. Screw recession, we're about to enter into a full out depression.

The sad thing about this is that it is old news to those who have not been waiting for the main stream media to talk about it. It is all over the news as if this is something just starting to happen. It has been a long time coming. Bush is offering another shot in the arm in a sad attempt to push back the pain of the financial reality that is facing the majority of Americans while the itty bitty percent of the wealthy continue to spin this as some small blip. It took them long enough to use the word "recession." I wonder when they will actually start using the word "depression" The spin I heard this weekend goes something like ?it takes 7 years for anyone to really know or call this a recession and we are only in the first year of this...so...we can't be calling it that word for another 6 years" By the end of those 6 or 7 years I would say. you are pretty F**(kt but at least we will be able to call it what it is.

The entire economic boom of the past 7 years has been funded the way most past economic booms have been maintained: cheap and easy access to credit, credit cards and loans. With the subprime meltdown and defaults at an all time high, this really was inevitable.

I'm sure the amnesiac republicans who've been in charge the last 7 years will find a way to blame Pelosi and Reid though once any stimulus package stalls in Congress. Bush will attach making the tax cuts run until 2010, and dems will either roll over & pass it, or the package will die in committee and the blame game will begin all over again.

This could affect the election outcome in November depending on how it's played out in the halls of D.C.

-zen

Buy gold, copper, and Steel, as well as uranium.
You can not go green unless you can pay for it.

Well, tangible assets is nice to have, but floating market currencies are much more valuable I'd say.

Enslaving a country through depression making it's citizens solely dependent on a flawed "democracy." What ever happen to "I pledge allegiance, to the REPUBLIC, for which it stands..." We were never supposed to be a Democracy. Bush needs another history lesson. How did he win the elections anyway? Oh that's right He lost! It just goes to show that someone else besides the U.S. gov't runs the show.

Bush's "stimulus package" will help Americans, but unfortunately, the money received will largely go to creditors, benefiting creditors.

The idea is that the economy will pick back up shortly and the "stimulus package" will fill the void in the mean time.

What Bushenney and crew lack is the awareness that jobless Americans (jobless because he spent American taxpayer dollars to subsidize manufacturing's exit from our country) can not spend money they don't have.

Trickle down? Trickle down is another term for rip off the American workforce, or steel from the poor and give to the ultra wealthy.

Trickle up? Now, that's a good thing and about the only thing that can actually really do something for us Americans and America. Problem is, for the ruling elite this is a threat. Us little people having money empowers us and frees us to look at and do other things - like re-establish Constitutional law and order.

America would naturally return to it's position of respect in the world and be again a guiding light in the world - not through the use of overwhelming force, shock and awe, but by being a good example of what and how life can be.

Let's hope VoyagerFilms is right and that we can regain respect. It won't happen without a good-faith effort at reconciliation, and I think it should start with the Congress re-asserting itself and possibly removing our hostile embargoes against foreign governments (Cuba, North Korea, Iran, etc.).

Another point to be raised is two of the top three democrats (Edwards and Clinton) both voted for the bankruptcy reform laws in 2005 that favored credit card companies over the consumer.

When both were asked in the last debate about their vote, both replied, "That vote was a mistake..." followed by a long diatribe about helping the "middle class".

So just so I'm clear, they both screwed over the middle class and working people in credit trouble with their vote, then say "oops, we goofed". This is why I have no faith in the current crop of democrats running.

I was impressed that Obama was the only candidate who said "that was a bad bill, and I did not vote for it".

Back to the meltdown.

Invest in baseball cards and comic books - it's safer than stocks, the US Dollar or most other investment vehicles.

-zen

zen, I think it is an honest "oops" of Edwards and glad he admits to it without squirling around it. I honestly think Edwards has the best vision of picking up the poor and middle class. He made a mistake. Obama is way too strong on Nuclear Energy which is a nightmare to go down that path again.

I think the stock market is going down because the cat's out of the bag. We've been living on credit (not wages) for so long that, well, we're out of credit! The "stimulus" package is worthless because all that money is just going to go to pay exsisting debts. No one is going to run out an buy a new washer and dryer with their check -- their just going to make another minimum payment to Capital One! But there are other ways to "stimulate" consumer spending. The fastest and most obvious: rewrite the bankruptcy law so people can forgive medical bills and student loans AND restructure existing credit debt! Without debt forgiveness we ain't going nowhere. Even 3rd world nations can only function and thrive if large portions of their foreign debts are forgiven. What the Bushies just don't get is that wages are waaaay too low and prices have jacked up waaaay to high for any one time checks to make a damn bit of difference.

I think what's going to happen either by choice or simply by events beyond anyone's control (ie, just not enough money) -- the default rate on credit cards is going to skyrocket. People are just going to say, "I can't maintain these debt payments to Visa and keep a roof over my families head at the same time!" People in the working class are paying upwards of 50 percent of their paycheck (after their mortgage) on NOTHING ELSE but credit card payments. I honestly think a lot of people are just going to say, fine, tank my credit score. Drop it to zero if you want. I'm not going to live paycheck to paycheck with zero in savings just so Visa isn't pissed at me. I know a lot of people are engaging in this Velvet Revolution against our corporate masters -- you can either be best friends with Capital One or you can have savings account and be financially stable. If Bush refuses to allow any form of debt forgiveness, well, hell, we'll just do it the hard way and stop paying until we can get the household finances solid and stable again. Sorry Visa! If the game is "All or Nothing!" then we'll have to go with "you get nothing."

also,people who went down the path of charging toys,gadgets and trophies on credit have themselves to blame. It is magic money. If you do not have the money to buy toys why did you buy them? If we are paying attention it is not all that complicated. are we ready to pay attention yet?

twodee -- I don't believe people who ran into problems with credit card debt did so charging up trips to Paris or big screen tv's. I think credit cards were supplementing low wages and a lot of the credit card debt out there is mostly gas for the car, hospital bills, gorceries, paying the electric bill, daycare providers, etc. Unemployment benefits really don't pay that much, certainly not the entire value of your previous wage --- but your mortgage payment is still due every month. A lot of people have been laid off in this country after ten or 15 years at a company. The house you bought after 15 years of salary rasies is no longer the house you can afford on unemployment, but the payment is still due. It might take more than 4 weeks to find a new job and even then it won't be at the exact same rate as what you made at the old job (that rate was AFTER 15 years of raises. The new job you're starting at the ground floor! Plus if you're in Michigan or a Rust Belt state and that layoff was one of 50,000 that occured overnight, well, when the labor supply vastly outnumbers the jobs the wages go down). A lot of these debt the working class has is not frivolous consumer goods but just groceries, medical bills, prescriptions, car payments -- the credit cards were being used to supplement low wages or insufficent unemployment benefits. There are so many stories out here like that: people used to making $2,700 a month laid off and now only getting $1,400 a month in benefits, well, they just can't make it to the end of the month without resorting to a credit card to buy groceries, put gas in the car or help them meet that mortgage payment. The debts people have racked up in the last few years aren't because of mismanagement of spending sprees (IMHO) so much as just relying on credit cards to help them survive times of financial crisis such as a layoff or a serious illness. So now in order to keep their credit "score" in good standing their are being asked to fork over over 50 percent of their paychecks after making the mortgage payment. They were forced to use credit cards to weather a serious financial crisis and now their kept living paycheck to paycheck with zero savings out of fear of having a low score. They want to do the right thing, but at what cost? Credit scores are important, but a lot of people are rethinking their financial priorities. Household stability first, good credit score second. Which is more important: financial stability for your household (having savings and a IRA, a college fund and paying life insurance) or making Visa happy? Right now a LOT of people can't do both anymore.

crob.; I do agree with most of what you are saying. My point is that we can not forget personal responsibility. I know of and have walked into peoples homes who are living financially on the edge yet drive some big expensive cars and have those big screen TVs. An Ex tenant of mine is just such an example. This young familly with one small child was 4 months behind on rent (which i never collected) yet they had their toys. This is only my one personal experience but I have seen it and talked to others with this similar situation. Again, I agree with much of what you say but this example is also a truth.

I agree. There are definitely those kinds of people in the world. Being a landlord I'm sure you see quite a few.

Moved all our family's investments out of the stock market and into safer investment vehicles two weeks ago. We're not getting creamed again like we did back in 1999/2000. Live and learn. The next 3-5 years are going to be an economic nightmare for most ordinary people. The top 1% in wealth won't have to worry...they don't keep their money onshore. In fact, since most of them have the requisite funds to hedge their bets, they're sure to just get richer no matter how bad it gets.

Alright, Im young. My dad frequently tells me he hopes I dont turn into an "angry young man". But in my relatively short life, let's just say some shits gone down. Im afraid of the banks. ever stop and wonder how interesting it is that cash is no longer "helpful". talk about conrol of funds. Those visa commercials are rediculas. 'dont throw off the groove, hurry up and get plugged in'. Cant hardly cash a third party check anymore. and my little brother doesnt have it in his vocabulary. Which means it doesnt exist!!! Look out for "terrorist"!

zenbeer, i think you're right. barkway, it isn't a recession until there are several quarters of negative gnp "growth." .................... but i don't think that's the real issue here.......... here's something that just occurred to me a few hours ago................ if people use credit cards to pay bills that really should be paid off in cash, they eventually reach some kind of "tipping point" where the cost of interest on the credit card balance either becomes the "right percentage" of their total cash flow or overwhelms it, so that it's completely impossible for them to pay both their credit card LOAD [principle plus interest] AND their essential cash flow bills, like utilities, gas, insurance, etc....................................... at that point, there IS NO RETURNING to solvency unless interest rates plummet, they get a huge raise or a big cash subsidy [which, of course, they probably WON'T use to pay down the debt load.....]. ...................... now you tell me how people can be helped back from the tipping point..............................

plusaf: Indeed....and did you see the panic rate cut from the Fed this morning? Another .75...and apparently they met just LAST NIGHT to plan it. Nothing like a last minute attempt at bail-out-quick-fix....it won't work.

Surely such a massive rate cut out of the blue out of hours is the biggest proof yet that this is very serious. The Fed were terrified of New York stocks being wiped out this morning after the rest of the world saw such massive falls as they were all guessing what might happen in the US which if course was shut. It might have been for the best that you guys had a public holiday yesterday because I'm sure had the markets not been closed there would have been total bedlam - they would have been caught up in the fear everywhere else in the world and not had the Fed to give them a big interest rate cut as a shot in the arm. Crob80227 - a good point about some credit card debts growing simply to keep up with basic living costs during a tough patch - a mistake made by so many people I know over the last few years who are really feeling the pinch now.

Oh ya, and I cant pay my bills in cash either! In fact they charge you more to do so. It's a scheme and I dont like it. Forcing me to keep my money in an account somewhere. But then again, im convinced everythings a scheme. So I pay the 6 extra bucks. It's better than the hidden fees being taken from my checking account all stealthylike.

futurist: banks benefit more from the interest they make on your money while holding it than on the fees they collect (except debit card fees which apparently IS a huge moneymaker for them; when people overdraw withthe debit card, and they allow it, and then charge huge fees for letting you do it).

back to BARKWAY........ milton friedman showed, maybe 20 years ago, that those kind of interest rate changes take a year or two to percolate through the economy before any real correlated results can be seen....................... but you can bet any amount of money the media will be bitchin' about "where's the results???" within a few weeks, as will the presidential contenders............................ and FUTURIST...... find another bank..... i pay all but three or so of our regular bills from a checking account with Wachovia. my Wachovia-connected Visa account is paid off every month [actually, as soon as the bill posts from where i made the purchase], and they don't charge me anything for the automatic transfers...... that includes three or more insurance policies, my home water/sewer bill, my cell phone bill, my cable/phone/internet fee, my ISP's bill, and on and on...................... i recently figured out that if your outgo for Must-Pay bills PLUS your outgo for minimum credit card fees goes above some Tipping Point, you're doomed because there's no way to cover both, so your credit card balance goes up instead of down OR you don't buy gas to go to work in the first place................. if you're in that boat, find a REAL financial advisor to help you, and do it VERY quickly!!!!!!!!!!!!!!!!!

I'm entirely much more inclined to agree with crob80277 than two-dee who's probably glibly on holiday somewhere. Obviously, two-dee is increasingly of those priveleged few in an unique position to even be able to criticize even the worst examples they "see" which let's not forget, probably aren't very representative of the whole of the struggling masses not half as guilty of his blanket assertions. Corporate america simply sucks and has so for a long long time, making every rule and law to essentially mistreat the working class at their whim. That's not even disputable to me. Like I say, I'm much more inclined to agree with crob80277...

well, echoz, "That's not even disputable to me" does tend to put a damper on any chances of discussion, doesn't it? ............................... i'm used to it..... this site is rife with it...................... :) ............. but it's still some of the best fun i've had with my clothes on.........

ps.... note DOW Jones change on Wednesday, 23 January..... ..................... all emotional, no rationale.............. we'll see more of this for the next year or two............. next recession: circa late 2009 or into 2010, and it will last for 1-3 years, max.. ........... but whatever you do, DON'T listen to ME.......... :)))))))) ......... don't hold on to your stocks until 2010 or buy at the bottom in 2011-2013............

yes, plusaf... =) it's hard to argue with the facts, even if they stand against you. e.g.....to further entertain your apparent complacency, most labor unions have been broken, and most of working class america *is* defenseless. i've heard of the "one percenters"... have you? when is more than enough wealth, more than enough? there should be a war on greed where humanitarian concerns, especially at home, are ignored or conveniently side-stepped by those who can always take but never really give. another example...homeless veterans. hey, but just my humble opinion. don't let little me inconvenience any leisurely attitudes out there about the facts, but I know I'm not alone. I'm surely with the other 90+ per cent...the so-called "wage slaves."

well, maybe you wouldn't argue with Falk's 5th Law, then.... http://www.plusaf.com/falklaws.htm#5th .......... the only problem with trying to establish a level of "enough" is that it becomes not a "recommended level" or "suggested level" but soon becomes a LIMIT or "mandated level" and then everyone figures out tons of ways around it, to the eventual detriment of all................ unfortunately, many people assume that anyone who's got more wealth than they can burn at any one time without violating pollution laws either buries it in their mattress or pillow or back yard.......that isn't the case at all: they keep their money in banks, which lend it as mortgages, they invest it in companies, which often grow and hire workers and managers, and once in a while they even give it away to causes they deem worthwhile, but that side rarely sees the light of day..... i've argued AGAINST unions since i started working in industry....... at the first place i worked, there weren't any unions for the engineers, and we enjoyed a wonderfully free and open working environment. if you wanted to build something, you could; then we got flak from the local machinists' union when we started bending small sheet-metal boxes for some of the electronic circuits we were testing, to "let them be part of the process and profit" would have meant incredible delays for US and pretty much "make-work" and "monopoly-power" for THEM. their "value-add" would have been their earning maybe $5 an hour for their work, while costing the company many times that in lost time and productivity of the engineers!...... the company was smart enough to explain to the union that we weren't costing them any ?.. look at what unions have "done" for their workers over the last four or five decades............... rather than "be satisfied" with improving working CONDITIONS, as they might have done through OSHA-like support, they go on strike time after time for more benefits, pensions, raises and such, often using THEIR OWN monopolistic power to prevent companies from offering their members' jobs to other "competitors"......... non-union workers................. in today's auto industry, pension funds practically bankrupt the US automakers; balance sheets for pension plans make the Social Security Administration look like Wall Street Einsteins; benefits and pensions add literally thousands of dollars to the out-the-door price of any given car or truck! ............ if you want to help homeless veterans, consider lowering taxes on companies which might just be able to employ them if their profits weren't eroded by taxes...... you won't allow yourself to believe this article, because it's from those ultra-wealthy, untrustworthy people at Forbes Magazine, but http://www.forbes.com/business/forbes/2008/0128/034.htm... describes some work by Philadelphia's Mayor .......... match up "And he has vowed to cut the inaptly named "business privilege tax," which takes 6.5% of any profits earned in the city plus 0.15% of the revenue even from money-losing? " with the following: "?With help from an increase in the wage tax from 3% to 5%, the city lost 170,000 jobs between 1970 and 2000, says Robert Inman?. corporations that moved headquarters to the suburbs or into New Jersey: Provident Mutual and Arco Chemical.
" .. wanna get vets employed? make it more profitable for businesses to HIRE THEM, rather than tax the businesses.... ah, but sorry, my ideas still aren't any good for you.... i'm one of those 1-percent-ers who socked away every spare penny and did without some luxuries so that i could retire relatively young and have enough savings to MAYBE live off the principle plus interest............. so i'm a bad guy........ right? please learn a little more about how economies and people "work" before offering your "solutions." ............ and see some other "numbers" you won't agree with, either, at........ http://www.plusaf.com/soapbox/flattax.htm ..... enjoy!

jeez...would you have us believe that the rich don't keep getting richer, and the poorer, more poorer? ...that taxes are the reason businesses don't hire veterans? corporate american culture sucks; that's my opinion and many agree with me. litany of economic figures or not. it was funny the video I saw when some visiting tourist from China bought an American souvenir only to turn it over and find it was made in China. (maybe it was a PBS NOW show...trying to remember) to me that sums up the loyalty of corporate America to American workers...blatant disregard. I know a wealthy business man who makes no bones about keeping all his hardware up to date with the latest. but when it comes to hiring even much-needed personnel he has a problem with it. if it's taxes I wonder why they don't spend money to lobby instead of stretching thin the existing workforce. and many of these highly successful companies spend tons of money lobbying congress for the laws they really want. i seriously doubt they bring any real concern for their employees to the table. meanwhile I could probably find at least one or two credible sources that would tell you corporate executives take care of themselves with increasingly soaring incomes. I work for an international company. I don't put my head in the sand. I don't pretend to offer solutions other than to say, these "significant" people could be more caring about the plights facing much of middle class America today. listening to you, you would think it's just because we're a bunch of cry-babies with no real issues at all. i would suggest they (corporate execs) could be more original and yes...take a pay cut perhaps and forgo multi-million dollar parachutes to beef up pensions, etc. i don't fault success, just the people who act like they're the sole reason for it....usually the people taking the lion's share of the profits, of course the people at the top, making it that much harder and hopeless for everyone else. thanks for your economically vetted concern however. I'm sure you inspire a lot of confidence in those less fortunate.

echoz, i ain't "agin' ya".... i thoroughly agree that US executives, either "on average" or at least "too often" are flat-out stupid about how they treat us versus making decisions which would be better for "the most of us" and that their companies' Executive Compensation Committees have NO fracking CLUE as to the damage they're actually doing to the US AND their own employees through their selfish and stupid actions!!!!!!............... executives, imnsho, get way too much money for their "value-add" to the companies. unfortunately, there are way too many "executives" [read: levels of management] in most companies, and yes, it is a closed circle [-jerk] of a bunch of guys voting themselves more power to vote themselves more money.......... AND i do think it's going to break down soon...... [and i hope it will...] see my rants at http://www.plusaf.com/bluntconsulting/gfbcarly.htm .... i worked in "corporate America" for 34 years as what i call a "zeroth-level manager": only once did i have just one person in any way "reporting to me" and i didn't even do THAT well with him, either, though we're still friends.... .......... i also know of a VERY few people who HAVE been more than wonderful managers: one of them has a pretty perfect record of tear-stained going-away parties and quotes like "if you ever plan to leave this department, please let us know where you're going, so that we can come with you...." ..................... and they are SO few and far between as to make me cry..... even at my last company, there were morons who created internal competition where cooperation was the "right answer" and ridiculed my suggestions, and they used to be one of the most respected companies in America up until a few decades ago.... [see previous link for clues...]...... but take a few steps backward and look again..... it isn't the bad guys.... it's the communities that let them persist... the people of the companies who think they'll ALL be better off if they do those [stupid] things..... the voters who think we'd ALL be better off by electing people based on promises and rhetoric and how neat their hair is and "do they look "Presidential"?" rather than looking at what really works.... like my reference to the Mayor of Philadelphia.... Too few Congresspeople have worked in businesses or owned a small business, in order to appreciate and help them. too many are lawyers, for whom every solution is a new law ["when the only tool you have is a hammer, every problem looks like a nail."] and finally, the huge number of people in the US who've been promised that "the government is the best solution" despite the evidence, and keep voting "career politicians" into office because they keep bringing pork-barrel money back to their constituent!... and thinking that's the best thing for the country!!!!......... that's why i blog at plusaf.com/soapbox....