U.S. Stocks Plunge Most in a Year

[Cali_Democrat]

http://www.bloomberg.com/apps/news?pid=20601087&sid=agPXRT6wLzLs

May 20 (Bloomberg) -- A weeklong rout in stocks deepened, with U.S. benchmark indexes losing the most in more than a year, as reports cast doubts about the strength of the economic recovery and European leaders struggled to contain the region’s debt crisis. Commodities plunged and Treasuries soared.

The retreat pushed the Standard & Poor’s 500 Index down 3.9 percent to 1,071.59 at 4 p.m. in New York, its biggest drop since April 2009. The Stoxx Europe 600 Index plunged 2.2 percent and the S&P GSCI Index of commodities tumbled to the lowest since October. The losses accelerated even as the euro rallied 0.7 percent to $1.2502 after earlier flirting with a four-year low. Ten-year Treasury yields sank to the lowest of the year, down 15 basis points at 3.22 percent. The yen rallied against all 16 major counterparts.

Tomorrow’s expiration of U.S. stock options added to volatility after U.S. jobless claims unexpectedly increased to 471,000 last week and the Conference Board’s index of leading economic indicators fell 0.1 percent. European finance officials meet in Brussels a day before the German parliament votes on the country’s share of a $1 trillion bailout to backstop the euro in the wake of a worsening sovereign debt crisis.

“Put your helmets on if you are long risk here,” Nicolas Lenoir, chief market strategist at ICAP Futures LLC in Jersey City, New Jersey, said in a note to clients before markets opened today. “A lot of stops have been triggered when the S&P future crossed 1,100 and anybody still long will probably have to bail out and head for cover.”

Read more...http://www.bloomberg.com/apps/news?pid=20601087&sid=agPXRT6wLzLs

If you're still invested in equities, get the hell out. The flash crash was only a warning.

[Kelvin Mace]

1. Bad advice

if you are investing for the long haul, which is the only sensible way to invest. You don't pull your money out when the market tanks.

Unless you are retiring soon, you leave your money in the market, and take advantage of the lower stock prices (dollar cost averaging) to improve your long term holdings.

[Common Sense Party]

4. Very sensible counsel

which, of course, will be ignored by all the Chicken Littles here.

I'm not retiring for 23 years. What the hell difference does a 10% drop this month make to my nest egg more than two decades from now?

[RC]

11. Figure out the compound interest on the difference and you will then know.

It will probably make you angry. That is money lost forever.

[JBoy]

15. It's only gone if you take your money out.

[RC]

17. That's what they want you to think.

[Common Sense Party]

30. Who are "they"?

And tell me how I've lost ANY money if I have not sold any mutual fund shares.

[girl gone mad]

31. I guess those people who invested in the Nikkei..

(see my chart below) haven't lost any money, either, if they never sold?

I understand the point that you're trying to make, but it's premised on the notion that "stocks always go up over the long term", and that simply isn't a true statement.

[Kelvin Mace]

38. Define long term

Stock prices in the U.S. have averaged 6-7% a year since the Dow Jones started. Long term for me is DECADES.

If I had pulled my money out of my investments when the market tanked, I would have taken a bath. Instead, I kept investing, and bought cheaper stock. As the stocks have climbed back, my portfolio value has improved since my average stock cost has gone DOWN.

Your needs may vary.

[Kelvin Mace]

37. Only if you sell the stock

and realize the loss.

If I have 100 shares of Microsoft at $100 a share and during the year MS drops to $50, I have lost NOTHING unless I sell. If I then buy another 100 shares in the course of the year at $50 a share, and the stock returns to $100, I know own 200 shares I paid $75 for.

Long term investment for retirement means buying a little every month for decades. With that plan, price drops mean cheaper stock. Of course if the company is moving in a direction (long term) that threatens growth, then you look for a better company to invest in.

This strategy has made Warren Buffet a very rich man.

[girl gone mad]

25. I guess it depends, doesn't it?

You could ask folks invested in this market what difference a 10% decline two decades ago made:



I bet some of them wish they had sold.

[Swede]

32. Good thing this ain't Japan.

[Kelvin Mace]

39. I never chose to invest in the Nikkei, since it is not a market

I understand.

Over the same period of time the Dow went from 760 to over 10,000.

http://finance.yahoo.com/echarts?s=^DJI+Interactive#chart1:symbol=^dji;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

[ixion]

5. Jim Cramer? Is that you?

Sounds like.

[Individualist]

10. +1

[Kelvin Mace]

35. Hardly

since Cramer has people jumping in and out of stocks all the time. The investment strategy I mentioned is the same one Warren Buffet advises people to take.

No hype. Pick good companies, invest over the years. Dividend Reinvestment Plans are tye best and cheapest way to invest (no commissions or fees)

Dollar cost averaging is your friend.

[Andy823]

6. I agree.

Those with the big money are selling off all the stocks they bought up last year at rock bottom prices. They will buy them back up once again when the prices hit a low enough range for them to be able to get a bargain once again.

[Cali_Democrat]

7. Perhaps you're right

I'm relatively young and somewhat of an active manager of my money. I move it around a lot so when the market corrects like this, I usually get out and get back in when there is somewhat of a bottom.

Other people should obviously follow different strategies if they're in different circumstances.

[Kelvin Mace]

36. Every time you move your money

someone gets a fee. The more you move your money, the more money you lose. Pick solid companies. Invest. Leave the money in unless something dire happens.

DRiPs are the CHEAPEST ways to invest (ZERO fees).

[Mike 03]

18. That is good advice,

but you would also hope that intelligent investors would have gone to cash long before now.

But I agree, if you are in today, stay in.

[AllentownJake]

2. The Roof, The Roof, The Roof is on Fire

We don't need no water let the Mother F*cker burn, Burn Mother F*cker burn.

[KurtNYC]

3. Buy after the October dip, sell before the May dip

don't hold stocks during the summer.

As for me, I'll take Canadian bonds and CA dollar futures -- they rise with oil prices.

[JBoy]

16. Unfortunately the CDN dollar has taken a bit of a pounding.

The US dollar goes up when people get panicky.

[catzies]

19. Yep, "Sell in May, go away," my grandfather (RIP) used to say. n/t

[Prism]

8. Pop goes the bubble - just as predicted.

The bubble many of us have been talking about for, what, a year now? We just didn't want to acknowledge the President's awesome economic policies or whatever. Yeah, well.

Roubini has stocks falling another 20%

http://www.cnbc.com/id/37259541

Inflated stock prices and a collapsing European economy do not make for a happy market.

Roubini has been warning of a double-dip recession for ages. No one wanted to listen because the political spin of a super recovery was the really important bit. Well, here we are.

[99 Percent Sure]

12. +1. Yes, he has. "Brown shoots." He also warned--and continues to do so--

about continued high unemployment through 2011, as well as continued stagnant wages. Just as he warned about the housing bubble in 2006, and was labeled Dr. Doom for his trouble.

[Trillo]

9. oh, those naked short sellers.

I'm sure I saw some regulations announced to limit them. Germany, I believe.

Now that it's harder for some entities to short, the market drops? Oh, my. I wonder who was allowed to short, and who wasn't.

[Statistical]

14. Naked short selling is already illegal in the United States.

Generally speaking a ban on short selling does not good.

While you might artificially keep out some of the shorts you scare the living shit out of the longs who simply sell and go into cash. Net-net market still goes lower.

Kinda like when you really scarily say "Ok now don't freak out ...." it tends to freak people out.

[lib2DaBone]

13. ..when Greece falls.. the Hedge Fund Vampires will attack the U.S. Dollar..

..if the banks don't implode by July... we might make it to September.

[Mike 03]

20. There will be a bump, and when the bump comes get the hell out, and

put that money into food, water and cash. IMO.

If you stayed in this market after the crash, as I did, you just got lucky. We should be out by now.

[TheWatcher]

21. Delete.

Posted to the wrong place.

[TheWatcher]

22. Bubbles Burst.

There will probably be a bounce as they try to defend 10,000 and start another all out "All Is Well, Don't Look Over Here" Propaganda Blitz to try and put everyone back to sleep, but this is what many of us have tried to warn everyone about for the past 14 months.

This. Is. Not. Real.

There have been NO Fundamental changes in the Real Economy, and this has been nothing more than an artificially manipulated, algorithm led Bubble that the individual investor has had little participation in.

The Recovery is a LIE.

I do not at this point know what it is going to take to get people to wake up, but once this current Collapse of the current Bubble is complete, if the Public cannot learn from it, then I suppose there is no hope for them.

Stop paying attention to Propaganda, folks.

Stop believing in the LIES you are being sold.

AT LEAST take SOME measures to protect your liquidity, even if you cannot shake your blind belief in the failed Ponzi System, and you are flat out going to refuse to hear any other point of view to the contrary.

Just two weeks ago the Financial Media whored, cheered and flagellated all over themselves and the rest of us over the 1 trillion dollar "bailout" of Greece, and how permanent prosperity had returned now that the Market shot up 400 points in one day, and that once again "Brave Measures" and "Hopes" had "saved the world" again.

They bought about 1 week.

This has NOTHING TO DO with wanting Obama, the Economy, or The Country to FAIL.

This has to do with merely recognizing and accepting the reality of the circumstances in which we currently find ourselves.

[Mike 03]

23. Thank You. I could not agree more. I hope people listen to you. NT

[TheWatcher]

26. I honestly hope they will too.

Voices that have tried to warn about the false "Recovery" have been quite unwelcome, and have been met with a lot of attacks and hostility over the past year.

And honestly Mike, I understand it to a degree.

NO ONE wants to see everything collapse. No one.

NO ONE wants to see a depression, or ANYTHING like what was experienced in the 1930's. NO ONE.

I think there has been a lot of desperate belief and wishful thinking going on, because people are searching for a sense of normalcy. They just want to "get back to the way things were."

But I don't think a lot of people really understand what has happened, and what began back in September of '08 or the magnitude or the scope of how it is unfolding and is CONTINUING TO UNFOLD.

It would be WONDERFUL if it could be true that it was all fixed in 6 months, and that Helo Ben and Goofy Geithner really are the conquering heroes that many thought they were.

Many of us who have tried to speak out have been accused constantly of being "Debbie Downers", wanting Obama, The Economy, The Country, etc. to Fail, and that we were taking pleasure in the suffering of others and giddy about things falling apart, which by the way wasn't really happening, because the Recession was Over, The Recovery was gaining steam, etcetera, etcetera, etcetera.

That of course, was complete BS.

NOTHING could have been further from the Truth.

Those who have spoken out and tried to raise awareness to what is REALLY going on, have for the most part, been trying to SHED LIGHT on the fact THAT WE ARE BEING LIED TO.

That there HAS BEEN NO RECOVERY, NO FUNDAMENTAL CHANGE IN THE REAL ECONOMY, and that our Government, Congress, the Fed, and EVERYONE ELSE who was in a position of Power to do something about it HAS NOT.

NONE of the problems and issues that led to the Collapse have been fixed or addressed.

NONE of what has needed to be done to foster a TRUE Recovery has taken place.

What has been done is a constant blitz of Propaganda, Happy Talk, Massaged/Cooked Government Economic Data, and a complete "Get Out Of Accountability" Free Card to the banksters and Wall Street, who have laughed all the way to their Failed Banks, and preserved their Ponzi Economic System, at the EXPENSE OF THE REST OF US.

What has been done is the continuation of the Greatest Transfer Of Wealth from the hands of the many, to the hands of the few in HISTORY.

It is time for everyone to stop fighting each other, and start paying attention to what is really going on.

As I have said, time and again, this is not some NFL Sports Rivalry.

This isn't a GAME.

This is REAL LIFE, with REAL LIFE CONSEQUENCES to our future, and the fate of future generations that Will inherit this Festival Of Bullshit and Lies.

I do not hold out hope that people will actually listen this time, because they did not during the previous Bubble Collapses.

Maybe, MAYBE this time, We the People will take a closer look.

We had better.

Because as they say, the Third Time is a Charm.

Only this time nothing Charming is likely to come out of this.

[Mike 03]

24. People used to talk about the Perfect Storm/ What we are in now is like The Perfect Storn

on an exponential speed ramp.

I thought we would not see this for a few years, but it is happening now.

[TheWatcher]

28. There will still be many attempts to paper over all of it, cover it up, and manipulate it to make it

look like that pile of dogshit sitting in front of you is actually a delicious bar of Godiva Chocolate, but it is not going to work.

You cannot print your way and "bailout" your way out of a debt crisis.

You just can't.

It seems that the Stock Market has become a Three Ring Circus used to psychologically manipulate the Public into believing that it IS the Economy, and the only indicator you should look to for signs of everything being OK.

Keeping it inflated in a constant Bubble State has become a matter of National Security, it would seem.

But America MUST learn the final lesson that Wall Street is NOT Main Street.

And the problems are not just limited to this country, but GLOBALLY.

You can't just take 1 trillion Dollars of Electronic Funny Money and say "OK, Europe's Fixed."

There IS NO QUICK FIX.

I'm not even sure if there is going to be a fix available at all if we let Criminals and Foxes keep guarding the Hen House.

We didn't Elect Goldman Sachs to run the country and our Economic Affairs.

Of course some would say that, in a sense, we did, but I don't want to touch that argument right now.

[girl gone mad]

27. I know I get called a Debbie Downer..

for saying the same things.

I don't feel pessimistic or depressed at all, just trying to be realistic about the circumstances we find ourselves in as a nation. This is the fallout from decades of malicious economic policies designed to enrich a small group of people at the expense of everyone else. I think we may yet have a chance to change things for the better. I can honestly say that the initial crash in '08 left me feeling hopeful that we might have a great opportunity to overhaul our financial system, put a leash on the criminals on Wall St and start to rebuild a real economy.

What disturbs me is not the crashes and panics or the general instability, but the government response to these events. After the crisis, this Democratic administration followed the bankers playbook to a T and pilfered our nation's treasury to save the financial elites from their own mistakes while largely leaving the middle class out to dry. They have put us all in a much worse position long term. It's just money in the end, but it is disheartening to know that our government is so completely corrupted that it is willing to potentially trade away our nation's future for relatively small personal financial gains and a rapidly fleeting illusory improvement.

[TheWatcher]

29. You do a lot of wonderful work ggm, and I want you to keep it up.

I do want to address a couple of your points:

I think we may yet have a chance to change things for the better. I can honestly say that the initial crash in '08 left me feeling hopeful that we might have a great opportunity to overhaul our financial system, put a leash on the criminals on Wall St and start to rebuild a real economy.

And you would be right in this assumption if we had leadership in place that would actually take the ball and run with it and institute REAL REFORMS. It was an opportunity of UNPRECEDENTED proportions, but what ended up happening INSTEAD was the biggest Financial Heist in History, and we got to not only pay off the Gamblers Debt, we also suffered the consequences of his actions as well.

The problem is that instead of bringing the Banksters in line, the government has given them an even BIGGER license to loot, rob, and steal, while systematically destroying the foundation of the working class, and failing to create any real, sustainable growth and job creation.

What disturbs me is not the crashes and panics or the general instability, but the government response to these events. After the crisis, this Democratic administration followed the bankers playbook to a T and pilfered our nation's treasury to save the financial elites from their own mistakes while largely leaving the middle class out to dry. They have put us all in a much worse position long term. It's just money in the end, but it is disheartening to know that our government is so completely corrupted that it is willing to potentially trade away our nation's future for relatively small personal financial gains and a rapidly fleeting illusory improvement.

That is pretty much what I said above, although you said it much more eloquently than I. :)

The current Economic Policy of Bubble Economics is going to do nothing but two things. Enrich the Banksters even further, and delay the inevitable. This system is not functional or sustainable, and cannot be long term.

It's like George Carlin once said.....

"They Don't Care About You. It's a Big Club, and you Ain't In it."

"That's why they call it The American Dream. Because you have to be Asleep to Believe it"

We The People have become nothing more than a means to an end to those in Control. We are Cattle.

And until we stand up and stop them, this is what we are going to get for the future and beyond.

[AllentownJake]

33. Yeah

I get called worse. Don't feel bad. I'm the most hated person on this site by a certain crowd.

:hi:

[Odin2005]

34. POP, goes the bubble...