Dow Jones down over 400 in two days: Easy come, easy go? by SIGNYM

REAL WORLD EVENT DISCUSSIONS

Dow Jones down over 400 in two days: Easy come, easy go?

POSTED BY: SIGNYM
UPDATED: Wednesday, August 6, 2014 18:17
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Friday, August 1, 2014 12:08 PM

I believe in solving problems, not sharing them.

The volatility index (VIX) is rising, and the fear-greed index (I kid you not, it's a real index) is pegged at "extreme fear".

The banks have been tightly involved with the stock market, not only buying stocks themselves (to bolster their portfolio of "assets" and raise their returns) but also loaning out a lot of money for stock purchases. If the drop turns into a full-bore rout, it will affect not only the businesses selling (and buying) their own stocks on the market, as well as pension funds and other investors, it will affect the banks right away.

Maybe the price drop will pull in money from the sidelines and will right itself. But if not, we could see a return of the financial crisis, round 2.

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Friday, August 1, 2014 12:26 PM

REAVERFAN

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Friday, August 1, 2014 1:00 PM

SIGNYM

I believe in solving problems, not sharing them.

HAHAHAHA!

Yes ... some people reflexively blame Obama.

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Saturday, August 2, 2014 6:51 AM

AURAPTOR

America loves a winner!

Quote:
Originally posted by SIGNYM:
HAHAHAHA!

Yes ... some people reflexively blame Obama.

while other continue to reflexively blame W.

Glenn Beck says to buy gold! He just may be onto something.

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Saturday, August 2, 2014 9:47 AM

BYTEMITE

Y'know, back around the turn of last century in England, gambling the markets was called "speculation" and it was considered a very bad vice liable to leave a person in economic ruins.

If you think about it, the stock market is a pretty dumb idea, and just like electronic banking most of it is based on fake imaginary money and best wishes instead of what's real and tangible. And people wonder why our current financial system seems so unstable. It's because we've undermined ourselves at every opportunity instead of trying to play honest.

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Monday, August 4, 2014 9:58 PM

JEWELSTAITEFAN

Didn't the DOW go up today?

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Monday, August 4, 2014 10:10 PM

CHRISISALL

Quote:
Originally posted by JEWELSTAITEFAN:
Didn't the DOW go up today?

And it will go down tomorrow, then up then down... are you trying to make a point of some kind?

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Monday, August 4, 2014 10:34 PM

CHRISISALL

Quote:
Originally posted by BYTEMITE:
Y'know, back around the turn of last century in England, gambling the markets was called "speculation" and it was considered a very bad vice liable to leave a person in economic ruins.

Well done, young Miss.

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Tuesday, August 5, 2014 12:38 AM

JONGSSTRAW

You can greatly reduce the risk on your investment dollars if you buy ETFs or traditional mutual funds. Picking individual stocks is not a game for novices or the weak-hearted.

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Tuesday, August 5, 2014 2:07 AM

1KIKI

Goodbye, kind world (George Monbiot) - In common with all those generations which have contemplated catastrophe, we appear to be incapable of understanding what confronts us.

http://www.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=
1&symb=DJIA&uf=7168&type=2&size=2&sid=1643&style=1013&freq=1&time=8&rand=2143342896&ma=1&maval=50&lf=1&lf2=4&lf3=0&height=444&width=579&mocktick=1

SAGAN: We are releasing vast quantities of carbon dioxide, increasing the greenhouse effect. It may not take much to destabilize the Earth's climate, to convert this heaven, our only home in the cosmos, into a kind of hell.

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Wednesday, August 6, 2014 9:13 AM

SIGNYM

I believe in solving problems, not sharing them.

Clearly, my concern about the market isn't about the fact that the price to earnings ratio is (was) at an all-time high, or that stock prices were floating on banks' zero-percent money, or that volume was very thin.

NOPE!

My concern about the stock market isn't based on ANY of these facts, it's all because somebody (looking at YOU, THUGR!) thinks I hate America!

Yanno, back when in early 2008, when I was saying the economy was going to take a major dive (and rappy was saying the economy was ON FIRE!) there was nobody on the board stupid enough to claim that the only reason to point out problems was "lack of patriotism". And there were some pretty big patriots on the board back then, including active duty servicemen. At least the people who were pushing back had the sense realize that the real target of my ire was speculation.

Well, the board has reached that low point, where someone is using "patriotism" as the all-purpose excuse to plug their ears and close their eyes on topics far, far away from anything to do with it.

Yeesh!

Anyway, I had just concluded that Yellen wasn't going pull the plug until AFTER the elections, it looks like the plug may have decided to pull itself. So the question is whether this is just a minor dip, a "correction" (which requires a loss of at least 10% in order to be categories as such), or a major rout. There are a lot of factors that could turn any loss into a selling panic, but the banks themselves would take a major bath, so they (and the Fed) have an interest in keeping stock prices up. I think a major rout is inevitable, the only question is ... when?

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Wednesday, August 6, 2014 6:17 PM

JEWELSTAITEFAN

Quote:
Originally posted by Jongsstraw:
You can greatly reduce the risk on your investment dollars if you buy ETFs or traditional mutual funds.

Yes, see definition of "Diversification."

Quote:

Picking individual stocks is not a game for novices or the weak-hearted.

Sadly, prior to Mutual Funds, this was the only course open, and thus was the game for the wealthy.

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