Dow plunges nearly 450 points ("People are scared to death.")

[Pale Blue Dot]

Source: MSNBC

NEW YORK - Wall Street plunged again in a crisis of confidence Wednesday — finishing the trading day down about 450 points — as anxieties about the financial system still ran high after the government’s bailout of insurer American International Group Inc.

While stocks plummeted, investors sought the safety of hard assets and government debt sent gold, oil and short-term Treasurys soaring.

The Federal Reserve is giving a two-year, $85 billion loan to AIG in exchange for a nearly 80 percent stake in the company after it lost billions in the risky business of insuring against bond defaults. Wall Street had feared that the conglomerate, which has its tentacles in various financial services industries around the world, would follow the investment bank Lehman Brothers Holdings Inc. into bankruptcy. The ramifications of the world’s largest insurer going under likely would have far surpassed the demise of Lehman.

“People are scared to death,” said Bill Stone, chief investment strategist for PNC Wealth Management. “Who would have imagined that AIG would have gotten into this position?”

He said the fear gripping the markets reflects investors’ concerns that AIG wasn’t able to find a lifeline in the private sector and that Wall Street is now fretting about what other institutions could falter. Over the past year, companies including Lehman and AIG have sought to reassure investors that they weren’t in trouble, and now the market isn’t sure who can and can’t be trusted.



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

[inanna]

1. Well I know I'm scared to death n/t

[Supersedeas]

2. there's lots of smart people in designer suits in NY that didn't see this coming...

[aquart]

11. I did. Krugman did. Plenty here did.

Why is that?

[apnu]

15. Greed is your answer

They road that pony till it died under them. They always do, and they always will.

[girl gone mad]

23. Yes, I'm sick of this meme.

"Nobody could have imagined it"

What does that remind you of?

Just like 9/11, many people saw this coming. I could point to dozens and dozens of economists, traders, money managers, even bloggers who have been warning about this for years. Not the tinfoil hat gold pushers, but smart, informed people.

The line that "no one predicted this" seems designed to shut down real investigation into how the system failed, just as it was 7 years ago.

[Stevepol]

36. Nobody saw the Iraq mess coming either.

Nobody in the CIA, no intelligence expert, NOBODY saw the mess coming!

Come on! I remember seeing the pundit madness as we invaded Iraq and hearing a few voices prophesy exactly what would happen. Of course, not very many voices attached to fully functioning brains were allowed on TV in those days, but those few pundits who did have some semblance of gray matter, said exactly what would happen. It would become a quagmire, Sunni would fight Shiite, we'd be stuck in the middle, terrorism in Iraq would greatly increase, the region would be de-stabilized, etc. etc. etc. etc.

I hate that meme too. Plenty of people saw it coming. I heard a woman call C-Span to say she had not finished high school, but she could see this wasn't the right thing to do, that it would lead to trouble. She didn't think there were any WMDs in Iraq. Those who were honest at the time knew what would happen or had a good feeling for what would happen.

[aquart]

39. Well, they were lying about that.

Probably this, too. Love to see this administrations personal financial records. Wonder where their money is today.

[Quantess]

47. Alan Greenspan said "no one could have foreseen this"

earlier this year, I believe. I didn't believe him then, and I don't believe it now. I think many experts saw it coming, a few of them with anticipatory glee.

[mzmolly]

76. Air America Radio has talked about the impending financial doom

for quite some time. :shrug:

[SmokingJacket]

13. They didn't want to see it.

If they could convince themselves and everyone around them that the money-stream would continue, it would continue, at least for a while.

[mitchum]

70. If by "smart" you mean "greedy"or "delusional", you are absolutely correct

[krispos42]

79. No, they did. The question is "when do I bail out?"

The system is obviously unworkable in terms of long-term growth and stability; however you can make plenty of money in such a market as long as you get out before the crash.

[Champion Jack]

3. Welcome to trickle down economics

[valerief]

10. More like trickle up economics. They play and we pay. nt

[Yo_Mama_Been_Loggin]

18. No

It's trickle on economics.
:mad: :wtf: :argh: :hurts: :spank: :wow: :grr: :nuke: :thumbsdown: :banghead: :hide:

[Jackpine Radical]

29. Tinkle-down has always been my term of choice.

[endarkenment]

4. I know, lets vote some really stupid and old people into power!

Just the thing for solving a complicated crisis, a sick, badly aging, short tempered, and none-too-bright to start with 30-year beltway hack who admittedly knows little or nothing about economics backed up by the Airhead from Alaska who demonstrably knows nothing much about the federal government, world affairs or the global economy, and is too vain and stupid to admit she knows nothing.

Are we really this dumb? Is "stupid like me" really the winning ticket?

[FVZA_Colonel]

5. Isn't the Dow nearly at the level it was at when Bush took office?

[Roland99]

6. Only 21 points above that. NASDAQ and S&P500 have been under for a while.

[lapfog_1]

7. It's still 6 points higher!

That's .05 %!

Yeah!

:sarcasm:

[phantom power]

8. Which is about 6700 in 2001 dollars...

Awesome!

:woohoo:

[Yavin4]

17. But...But...In Jan. 2001, Larry Kudlow Said That We Were Going to have a 20,000 DOW

What happened?

[lapfog_1]

41. One has to ask the question...

why do these people still have TV shows for them to bloviate their nonsense?

[Yavin4]

45. Because You Can Trade Against What They Say

Do the opposite. There's a financial term for this. It's the Constanza Theorem.

[clear eye]

53. Bush happened. nt

[unblock]

9. it closed 22.07 points higher than when shrub took office

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=132&topic_id=7095023&mesg_id=7098511

[Eurobabe]

12. My mom is FREAKING OUT

She says at this pace, she can afford to live for 2 more years. This shit is unacceptable in America.

:nuke: :nuke:

Has anyone read the story in the WaPO about what has happened to the whole stock market since the 1980s??

Link here: Wall Street's Unraveling. http://www.washingtonpost.com/wp-dyn/content/article/2008/09/16/AR2008091602877.html?hpid=opinionsbox1

[redwitch]

16. I feel really, really bad for retired people.

and the rest of us too. :-(

[Eurobabe]

20. Me too.

Oh what to do. :shrug:

[high density]

27. Retired people shouldn't have a large exposure to equities

[redwitch]

33. That's true.

I hope most have gotten good advice.

[Hugin]

34. If they depend on a 401(k) they do.

That's the bulk of my retirement and if the Republicans had their way the remaining Social Security would've
been dumped in there too.

[high density]

43. 401ks should have bond and stable value funds in addition to stock funds

Retirees can rollover their 401ks to an IRA when they stop working, so with that they can invest in virtually anything they want.

[lumberjack_jeff]

66. Why would a retiree have a 401k? Roll it into an IRA. n/t

[alcibiades_mystery]

71. 401k's allow you to select packages for your correct level of risk

Young people in 401k's can choose aggressive growth packages, while people close to retirement should not.

Don't be silly.

[nookiemonster]

40. And yet, some things still boggle my mind.

I just listened to NPR and they were interviewing 2 retired nurses (I don't know from where), but they were adamantly voting for Mc Cain / Palin.

:banghead:

I just don't get it.

[Quantess]

48. Maybe they are fundies who want to hasten Armageddon?

Just because some weirdos have a death wish doesn't give them the right to bring us all down the swirling toilet.

[sarcasmo]

51. Because Mcsame will promise to get ride of them abortions.

People always vote against their best interests because of that issue.

[customerserviceguy]

57. I've come up with a theory on that

instead of blaming the Repukes for the mess, they take the tack of "who is most like me, who can see this crisis from the same perspective I do?" and they identify with McCain based on age. In a perverse way, the worse Chimpy's made the economy, the less they feel that they can take a chance on Sen. Obama's relative inexperience in Washington.

A perfect explanation? I hope not, but it's something thats occurred to me as I watch the news this week.

[benfranklin1776]

62. And they wanted our Social Security money?? McBush of course still does.

The leverage ratio of Merrill Lynch was 30-1???? In other words, they borrowed thirty times more than they had in assets. Gee and I wonder why they failed?
Unreal! This is what these so called geniuses educated at the Ivy League have engineered, a giant poorly constructed Ponzi scheme to part us with our money. Their "model" is the rough equivalent of me running up a 100,000 credit card bill by using it to play the ponies and it has proved about as successful. At least if I borrowed to play the ponies I would have the thrill of a race to entertain me and perhaps a fair shot at winning as there are some rules enforced in harness racing. There are no rules on Wall Street of course and no thrill in being fleeced by the Gucci clad conartists who we as a society stupidly hail as "financial wizards." Please. Anyone can pay themselves hugely off other people's money and live large while losing it. And, as another poster pointed out, the Stock Market is exactly where it was when Bill Clinton left office which in 2001 points, its really about 6,000 which is worth far less in real dollars than when Bill Clinton left. NICE job guys and you want our Social Security?! No way no how. Obama must be elected or we will perish. At least he gets it and was talking about regulation and the need for it back before this calamity struck. I think he would be another FDR and save capitalism from itself.

[4dsc]

14. The American Ponzi scheme is crashing....

I hope most of you are like me and saw this coming..

[Tansy_Gold]

24. Seeing it coming and being in a position to do anything about it

are two different things.


Unfortunately.




Tansy Gold

[KillCapitalism]

77. Yeah I saw it coming for a while.

I'm sure somewhere Karl Marx is laughing & thinking "I told you so!"

[dipsydoodle]

19. Good

I only wish it harm.

[greyghost]

21. Good! I hope they're terrified! They should be because the crash

that many of us here have been predicting is now upon us!


If you voted for the smirking chimp you are getting what you deserve.
If you didn't you have my condolences. If you didn't listen when we tried to warn you it's to late now.

[sarcasmo]

52. Preach on brother Preach on. How long have we been warning of this? back in 04?

I don't have a lot of the old ones saved so I don't know how far the warnings go back.

[greyghost]

72. It seems that long doesn't it ? I've only been here around...

18 months but sometimes it seems longer. I'm just happy that chimpy is still in office. For awhile I thought they were going to be able to prop it up long enough for him to slip away.

[martymar64]

22. Time to watch for the jumpers.

Some of these Brooks Brothers Bastards might try to take the easy way out by making swan dives from their cushy offices right down to the street.

Let 'em jump, I say. Good riddance to bad rubbish.

[high density]

25. I bought a little today

Trying to catch the falling knife. :)

[Demobrat]

69. Me too.

Bought WaMu at $2.00. If it goes poof, that's okay, I only put in what I can afford to lose.

[slipslidingaway]

74. Me too n/t

[MuseRider]

26. At least we still have marketable skills.

*sigh*

Morgan Stanley, they keep telling us all is well but I do not fucking believe them.

Holy shit, there goes the retirement fund.

[clear eye]

55. I'm actually afraid to look into my NYS pension. n/t

[NeoConsSuck]

28. Yet the polls are still close

Amazing how much pain murcans will put up with just so they don't have a black president.

[defendandprotect]

37. How could you possibly believe polls--???

Do you believe corp-press "news" or commentary -- ??

[downindixie]

30. Chris Matthews must have lost in the stock market

Chris absolutley tore into Repug rep Cantor on his show.He said repugs are ashamed to admit their republicans.He tried his best to get Cantor to own up to the mistakes they've made!Canotr wouldn't admit that the repubicans and bush have gotten us into this mess.Chris was shaking his head in amazement!

[eowyn_of_rohan]

32. any relation to the Cantor-Fitzgerald Cantor?

just curious

[defendandprotect]

38. "Mistakes" .. ??? No, this was planned criminal activity --

THIS is capitalism in action --

unregulated capitalism is merely organized crime --

"Capitalism isn't about competition, it's about killing the competition" ---

[Imagevision]

31. Would you trust your money with a republican...

[defendandprotect]

35. "Who could have imagined ..." ???

That's as phony a question as Rice's "who could have imagined..." re 9/11 ---

When you let capitalists run wild, you get organized crime --

Keep in mind also that much of our government has been run "off the books" as well
for decades --

[superconnected]

42. Is it still the homeowners who took the only loan they could's fault?

[SoCalDem]

44. Time to dump all the garbage out on the lawn for all to see

By trickling out the bad news a bit at a time, this has dragged on for a year now..

If they had all just come clean in the beginning, we would be well on oour way to recovery by now..

"Everyone" knows there is still a whole bunch of hidden stuff.. They are still trying to hide it, in hopes that when the recovery comes, they can manage it..They cannot..and that's why people are suspicious..

[benevolente]

46. Is a depression approaching?

Man, I'm not friend of exaggerating, but the way things are going, things are looking a lot like the great depression in 1929.

[greyghost]

49. Yes it is, and it is going to be global.

[sarcasmo]

50. The Evil Empire is crumbling from it's own greed.

[depakid]

54. Something we might ask ourselves

why is it that people like finnfan like to eanable panic?

For what it's worth, it makes me wonder anyway.

[Pale Blue Dot]

56. Because I want my son and my students to have no future?

What total bullshit. I posted an article from the front page of MSNBC with no comment and suddenly I'm part of an evil conspiracy to destroy the US economy.

It makes me wonder why some people like you want everyone else to ignore the FACTS.

[depakid]

58. Because you do things that no responsible teacher would do

and that says to me, for what it's worth, that you might want to find another profession.

[Pale Blue Dot]

59. I don't teach economics to my students. I teach english.

I don't discuss economics with my students. I discuss economics on an internet message board. I don't share my fears with my students. I share hope with my students. I communicate my fear for my students anonymously on an internet message board.

You did this 2 nights ago, too. I can only conclude that you are scared out of your mind.

[fascisthunter]

60. most sane people should be scared

most poor folks already have it bad... I'm sure it will get worse for all, but the transition is much easy for them than for those who have lots to lose. I can empathize with that...

[Pale Blue Dot]

61. You may want to reread and revise this

"most poor folks already have it bad... I'm sure it will get worse for all, but the transition is much easy for them"? This is one of the most ignorant things I've read over the past couple of days.

[fascisthunter]

63. how so?

[Pale Blue Dot]

64. You seem to be saying that

those who used to shop at Tiffany's but who will now have to shop at Walmart will suffer more than those who were barely getting by and now won't have enough to feed themselves and their families.

[fascisthunter]

68. "now won't have enough to feed themselves and their families."

that's happening already... as I said, I can see why those who went to Tiffany's before are scared shitless. Most sane people should be. The transition will be harder for them to adjust... not for those who have learned how to survive on so little is what I mean. As for those who starve or freeze, that sure as hell will be the hardest transition.

[Name removed]

67. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[anarch]

65. the only thing we have to fear...

is a crushing global economic depression combined with a shortage of the very natural resources on which our society's infrastructure is based.

[bluesmail]

73. Shock Doctrine. And we are witnesses and we are

the taxpayers who's money 'helps' the filthy rich BANKS. I don't care if it's a regular bank or it's an investment bank or if it is The Almighty Carlye Private Equity Firm. We've been robbed and it was premeditated.

[hunter]

78. Won't they be surprised when their wealth isn't worth anything?

First there's no gas to heat the pool, and then there's no water to fill the pool, and besides that, the last pool boy blew himself up in the foyer and killed all the house guests.

If this economy goes full bore 1930's Depression on us, life is gonna suck for wealthy people too. I suspect this time 'round the mob will be hungrier, and not so polite.

Let's hope for a soft landing here, though I think we all know the Bush Administration won't be able to pull that off, or a McCain administration. Crappy crooked pilots the whole lot of them. It pisses me off that we have to fly with them.

[Kablooie]

75. What we need is MCCAIN and PALIN to the rescue! Vote them in and all will be well!!! Whoopee!!