welcome to the slow crash

[rm]

I think this stock market thing will bottom out at DJIA 6,700 and then rebound into the DJIA 8-9,000 range soon there after.

Things to watch:
The collapse of the Australian dollar.
The collapse of the Icelandic banking system.
German real estate.

Comments

[browneyedgirl65.livejournal.com]

I would add, IMF, and calls for global bank regulation and such.
I would also keep an eye on the Euro which does not actually have any single regulatory/overseeing body that can make executive decisions on it, but rather depends on multiple countries agreeing on what to do about it.

Should be a fun ride. :-P

[chickenfried-jo.livejournal.com]

We gotta be careful about how we react to this. Since there's now a standing US Army Brigade to smack us down if we get too uppity. Posse Comitatus

[deslea.livejournal.com]

The Aussie dollar crash is definitely significant, but the drop to 65c this week was, I think, motivated primarily by surprise and is already recovering.

We were one of the last markets hit by the property crash - we peaked about July before starting to fall. As a result, consumer confidence (and therefore spending) was still high until very recently. The Reserve Bank here has been hiking up interest rates, some would say artifically, to slow spending and inflation. Then on Tuesday, they dropped them back again by 1%. The market was surprised because normally our rises and drops are in half-percent increments, and threw a hissy fit accordingly. There was a slight rise because some saw it as a good move, and a big drop because some saw it as cause to panic.

That said, it's a rollercoaster right now, and we may well continue to crash on the back of it and/or other factors. But this week I think is much less significant than it looked on first glance.

[rm.livejournal.com]

That's good, because I was like, WTF? Certainly, I think the markets have pretty much lost all rationality in the last 48 hours or so, and if not, analysts here and in Europe certainly think they have (every article I read is filled with quotes like "people are selling anything they can get their hands on" or "it's a panic market" -- which isn't helping of course).

Meanwhile, I think the Iceland thing is bad though. Like, really, really bad. At least for Iceland.

[starkyld.livejournal.com]

It's unnerving when coverage of the economy feels like disaster journalism.

[darthhellokitty.livejournal.com]

As a fan of several Icelandic bands and musicians, I concur.

[invisible-lift.livejournal.com]

So here's a wacky question (he says, not at all in his usual outfit):

Say someone I knew was to have, sometime in the next two months, a few hundred dollars which are earmarked to be invested somehow rather than spent. What would you do with them at this point? Start a Roth? Savings? CD? Bury in the back yard?

[lllvis.livejournal.com]

Hmmm. Not sure where it's gonna stop, but with what Kramer had said 2-3 weeks ago the Dow falling into the 7k's would not surprise me at all.

[rm.livejournal.com]

Wait. You can't play poker against people who don't know how to play. They're too unpredictable -- they don't bluff, they don't have rhyme or reason, there is nothing to decipher. In a market this volatile and scared, it is impossible to come to reasonable conclusions or for strategies to play out as they should. The market has no idea what the fuck it's doing right now.

[a-hollow-year.livejournal.com]

Yeah, I think we're actually where the dow should be right about now but everyone's shitting their pants so it's going to bottom out pretty low before climbing back. Honestly we should shut the market down for like a week so people can finish flipping out and calm down a little. It's panic mode all over at the moment.

[stardragonca.livejournal.com]

German real estate doing what exactly?
People in Germany are going to get foreclosed on? ;(
The news today that the Canadian banking system was supposedly the most stable in the world was not exactly comforting.

[invisible-lift.livejournal.com]

Right. Invest in water tight box and tracking mechanism.

Perhaps someone could paint a big X on the ground.

(I really should develop a self-preservation mechanism that involves more than amusement at the impending doom.)

[king-chiron.livejournal.com]

Wow, 6700 is going to be a really horrible drop.

[gement.livejournal.com]

So my first instinct of, "Hey, everything's on SALE!" is not necessarily the best? ;-)

This is me sidling away from the Roth IRA that I dumped a couple grand into yesterday because it seemed like a good idea... I should have thought to ask you first, eh?

[stardragonca.livejournal.com]

When Iceland's taking desperate measures, things are desperate.

[stardragonca.livejournal.com]

I can't believe the neo-cons aren't having to take the rap for this cluster fuck.

[coridan.livejournal.com]

I guestimate that things will calm down after the election, and that the market will be back up to 10,000 in january. Also note that October is traditionally selling season for the equities market, and January is traditionally window dressing month (buy hold em stocks for mutual fund portfolios and the like.)

CB

[muggy-wump.livejournal.com]

Oh no! My Australian dollars! *cuddles them*

[cantkeepsilent.livejournal.com]

Much more than Iceland is going down from the Icelandic bank crash. From what I was hearing on NPR this morning, they had a lot of depositors in England (and who knows how many other European nations). Plus no depositor insurance, so I'm kinda gathering that you're SOL if you had an account there. The UK government decided that they would cover their own citizen's deposits out of their own pocket, but then apparently belatedly found out that a whole bunch of their towns were heavily invested as well. Brrrrr...

/em huggles FDIC.

[jonquil.livejournal.com]

Jesus, Australia too? (scurries off)

[cwoolard.livejournal.com]

*shrug*

Can't imagine one brigade (about 5000 troops) making a difference one way or another. Especially considering that's probably about that number of gun owners in any one major city.

Not that I think it'll ever come to that. They want us to be afraid of what they might do, so we won't pay as much attention to what they're actually doing...

[wcg.livejournal.com]

Why 6700?

[antelope-writes.livejournal.com]

I'm keeping a very, very nervous eye on the Aussie banking system. Not a happy time to be an american expat living in New Zealand, because as goes the kangaroo, so goes the kiwi.

[rm.livejournal.com]

Okay if you're really hellbent, invest in mining company stocks that focus on gold. Gold is a refuge in times like these, eventhough gold prices have been coming down. The global recession means that India won't buy as much jewlery but those stocks should at least be stable.

Also, coal.

Wait a couple of weeks and see if the GE news stabilizes -- might be a good time to get in there low.

[rm.livejournal.com]

No, see that's okay, because it's a long-term investment. Don't look at it. Just don't look at it, and it will be fine.

[chickenfried-jo.livejournal.com]

Penn State comes to mind. They don't have to kill all of us. One of us is too many.

[gement.livejournal.com]

Ah, good. That was the plan. My thought was, "If the entire economy somehow totally crashes, we'll all have bigger troubles, and if it doesn't, this might be a good time to put a good chunk toward my retirement." I'm definitely not thinking about fiddling with anything that I intend to pull out in the next ten years.

[sethg]

Roth IRA CD.

If the bank goes bust, you're insured by the FDIC. If you need cash later, you can get your principal back (you'll face penalties for cashing the CD early, and taxes on any interest you withdraw...but if you need the money, you won't care about such details). If both you and the bank weather the downturn, then interest on that CD will accumulate tax-free until you're retirement-age.

[sethg]

I'm definitely not thinking about fiddling with anything that I intend to pull out in the next ten years.

...which is a wise strategy no matter what the state of the economy is.

[rm.livejournal.com]

We've already blown by the 9K barrier, and may blow the 8K today because sentiment it wack. The weekend should calm everyone down, but mid-next week this shit will probably start up again because of any one of like ten different things that are brewing, and which point people will flip and we'll blow the 7K. At that point every idiot in the world will get back into the market _cautiously_ and we'll power back up to about 8700 by mid-November.

[wcg.livejournal.com]

I hope you're right that going below 7000 will inspire people to get back in. It's been brutal lately.

[sethg]

The concept of not just the Icelandic government having a financial crisis, but possibly getting bailed out by Russia...wow. I see what Charles Stross meant when he said it's hard to write near-future SF these days.