Stock markets drop more than 2 percent (Fear of "credit crunch")

[Pale Blue Dot]

Source: MSNBC

Wall Street plunged anew Friday, hurtling the Dow Jones industrial average down more than 280 points after comments from a Bear Stearns executive reinvigorated the market’s fears of a widening credit crunch.

The drop of more than 2 percent in major stock market indexes was a fitting end to two volatile weeks on Wall Street and followed back-to-back late-day triple digit gains in the Dow. This time, the catalyst for a sharp skid was Bear Stearns Cos. Chief Financial Officer Sam Molinaro, who described turmoil in the credit market as the worst he’d seen in 22 years.

...

Stocks started the day with a decline after the government said jobs growth was not as strong as expected last month and a trade group reported that the nation’s service sector grew at a slower pace than expected in July.

Then, credit concerns, which have dogged investors for months and have roiled markets since last week, weighed on investor sentiment again; Standard & Poor’s Ratings Services lowered its credit outlook on Bear Stearns Cos. to negative from stable because of the investment bank’s exposure to the distressed mortgage and corporate buyout markets. The stock fell $7.28, or 6.3 percent, to $108.35.

Read more: http://www.msnbc.msn.com/id/3683270/

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drip, drip, drip....

[radfringe]

1. that's what happens when shit trickles down...

[Acadia Blue]

2. Unfortunately, its going to have to crash to get rid of the neo-con

mindset that unregulated capitalism is best. We all do better when we have regulated capitalism. They want filthy Chineses beef here and don't give a damn about our own farmers, because all the filthy factories are in China. I sold my stock and don't give a damn if it crashes, because that is what it may take for all the neo-cons to face reality.

[Speck Tater]

3. Looking into my crsytal ball I see a stock market crash starting...

...next Tuesday at 1:10 in the afternoon, eastern time.

[still_one]

12. frankly using the word "filthy" with Chinese infers an inappropriate racial tone

Perhaps I am too sensitive, but expressing it as contaminated beef or substandard would probably serve the purpose

I essentially agree that the small mom and pop farms have been treated extremely unfairly, and in fact are being destroyed by corporate farms.

However, our particular handling of food and beef products here also has some problems. Did you realize that South Korea has stopped accepting beef products from us, since we were shipping banned products associated with "Mad Cow" to them.

As far as selling your equities, it all depends on your risk tolerance. All I know is that a diversified portfolio, and long term investing is usually favorable.

No question the market has been pushed up by writing off or ignoring the bad news. Of course company profits are doing well, they have trashed our dollar, and are exploiting oversea labor. Eventually, the piper needs to be paid.

The excesses that have built up during the years are perhaps being equalized.

Your assumption that a crash may allow all the neo-cons to face reality is is way off though. They NEVER lose when the market drops, it is the pension funds, and individuals.

[HereSince1628]

4. Funny, one of my R.O.W. stocks with no exposure to American credit

got punched the worst today.

Could it be that the brokerages are all running the same automated trading program?

[ooglymoogly]

5. are we not in kind of the same situation before the 29 crash that brought about the

great depression....greedy dumb conservatives in charge of the economy, reckless to no regulation, overpriced stocks, greedy reckless politics, reckless greedy robber barons.....ad infinitum

[Demeter]

6. If Not Worse

I don't think they were inflating the currency then like they are now. All around the world, the presses are whirring like mad.

[ozone_man]

7. We are.

I thought 2000 was that point, but we see that the dollar was inflated and debt increased to give appearances that the (Bush) economy was healthy and SM growing. Maybe now we're finally at the tipping point. People vote with their pocket book to a large degree, so hope for a big downswing in the markets and economy blow out all the Bushites and trickle down bubble heads.

[dickbearton]

8. Yes...

The economy seems to be catching up with the Criminal Bush and
the Corrupt Republicans. To bad we will all pay.

[unblock]

9. afraid not. 1929 was a big bubble ready to burst. what we're in for is a slow rot

perhaps as painful, but without the instant drama. few rich bastards will be jumping out of buildings. they'll have time to make a cozy withdrawal and flee to another country....

[pokercat999]

10. And since the neo-cons will be gone they'll blame it on

the Dems.

Hell, even if they were still in power (in 2009) they'd blame it on the Dems.

[ooglymoogly]

11. It seems to me there are several bubbles....

1st; A near worthless dollar who's only value is in its credit and even that is stretched to the limit. If the Chinese, Oil Sheiks, or Japanese find more safety in the Euro...then it seems to me that bubble is very fragile indeed.

Second; The obscene payments to CEO's and the huge concentration of wealth in so few at the expense of the many consumers will eventually take its toll and that breaking dam will be a catalyst to a tsunami.

Third; the cost of vital resources (energy) again given to the richest amongst us by this administration now forcing a strapped population to mop up what is left of any pennies laying around by a population that no longer can afford them is another catastrophe waiting to happen.

Fourth; we are living beyond our means with no help in site and our most important nest egg to those lucky enough to have them are over mortgaged homes and credit is tightening.

Granted, I am only a cranky old codger for whom the 29 depression was close enough for me to remember its aftermath and to see the parallels of today. It was close to the family I grew up and though they were farmers with no mortgages, all round there was misery and I was lucky enough to have a father who figured it out before it happened...as all of us must. Optimism is not something we should even be contemplating. Where we are today, optimistic daydreamers and those who have no options will be the first to feel the catastrophic misery

[still_one]

15. everything you say has merit, but does not indicate a 1929 depression

margin rates are not what they were then. The banking system is protected.

Yes this administrations policy of trashing the dollar has been ill-advised. No country trashes its dollar, and goes from a net creditor to a net debtor nation as part of economic policy, it isn't good

We definitely will have, and are having a reduction in our standard of living, and that will continue for some time

[still_one]

14. Absolutely, conditions are far different. Doesn't mean a lot of people won't get hurt

but it won't be a 1929 depression. We are in a downturn though

[still_one]

13. no, the margin exposure was far worse than, plus the banks had no backing

not even close. That does not mean that a lot of people are not getting hurt, and have been hurt, but I do not see a 1929 style depression.