Stocks fall as Fed adds more liquidity

[Friday on my mind]

http://news.yahoo.com/s/ap/20070810/ap_on_bi_st_ma_re/wall_street

"NEW YORK - Wall Street headed into its final hour of a volatile week down but off its lows after the Federal Reserve said it would for the third time inject liquidity into the banking system. The afternoon move made for jittery stocks, perhaps raising the notion that troubles in the credit market are worse than perceived."

The house of cards is getting shaky lol.

 

[Jagger69]

I can tell by your "lol" comment that you must not have much of a portfolio.

As for me, I'm :1orglaughing to keep from crying.....

:weeping:

 

[Friday on my mind]

I can tell by your "lol" comment that you must not have much of a portfolio.

As for me, I'm :1orglaughing to keep from crying.....

:weeping:

Cry / laugh its goona be the same in the end.I'm thinnking spend it now it may all disapear with the crooks running the economy.

 

[Jagger69]

Cry / laugh its goona be the same in the end.I'm thinnking spend it now it may all disapear with the crooks running the economy.

Yeah or until global warming kills us all.

:eek:

 

[Friday on my mind]

Yeah or until global warming kills us all.

:eek:

I was thinking that, but I have beaten that drum so much here thought I should ease up.But the 25 years away I probably am from retirement seems very far away and very hazy as to if the world as we know it will be here.

 

[Happy-Fun-Ball]

I'd be ok if the problems remained in the US, but they are radiating out to all stock markets in the world. (Canada for example. And China. And spain. UK, france...you name it.)
Some of my best stalwart, die-hard stocks got beaten up pretty badly today. I can handle a gradual decline, but waking up to a 10% whollop makes you wonder who's more nuts..the sellers or the buyers.

Oh well...

 

[AFA]

Honestly any moron could see five years ago that those interest only loans, below prime adjustables and other "come on" type mortgages were saturated with risk, an accident waiting to happen. Then bankruptcy laws were changed to make it tougher to default. People who bought way beyond their means with an interest only loan or below prime adj. are really getting what they deserve. Greedy, I deserve it, got to have it now mentality. :dunno:

This is news to Wall St.? Last week's market rise and this week's fall are not like decades apart. That's what really pisses me off about it. The conditions are almost exactly the same as they were a year ago, two years ago, etc.

They say 3 million loans worth $600 billion are coming up for upward adjustment this year and next.

 

[Friday on my mind]

Honestly any moron could see five years ago that those interest only loans, below prime adjustables and other "come on" type mortgages were saturated with risk, an accident waiting to happen. Then bankruptcy laws were changed to make it tougher to default. People who bought way beyond their means with an interest only loan or below prime adj. are really getting what they deserve. Greedy, I deserve it, got to have it now mentality. :dunno:

This is news to Wall St.? Last week's market rise and this week's fall are not like decades apart. That's what really pisses me off about it. The conditions are almost exactly the same as they were a year ago, two years ago, etc.

They say 3 million loans worth $600 billion are coming up for upward adjustment this year and next.

I have not understood the rise in the stock market for a long time.I thought all the fundamentals of the economy looked fairly weak.Even though unemployment may be low,real wages have been falling since the 70s for workers.Loss of manufacturing jobs replaced by sevice sector jobs ect.I guess the class divide is so wide now that wall street doesn't feel or see there things as that important to their stocks values.I think they are wrong and are letting the goose that laid the golden eggs(the vast middle class)that fueled the growth we had after WW2 slide downward.They will see the effects on their own portfolios at some point I think.But I have been thinking this for a long time and the party just seems to go on so what do I know.:dunno:

 

[AFA]

I have not understood the rise in the stock market for a long time.I thought all the fundamentals of the economy looked fairly weak.Even though unemployment may be low,real wages have been falling since the 70s for workers.Loss of manufacturing jobs replaced by sevice sector jobs ect.I guess the class divide is so wide now that wall street doesn't feel or see there things as that important to their stocks values.I think they are wrong and are letting the goose that laid the golden eggs(the vast middle class)that fueled the growth we had after WW2 slide downward.They will see the effects on their own portfolios at some point I think.But I have been thinking this for a long time and the party just seems to go on so what do I know.:dunno:

I agree there is no valid reason for the market to be up. Not based on real fundamentals as I've understood, and for that reason it's the greater fool theory. http://board.freeones.com/showpost.php?p=1563736&postcount=1

Years ago industry introduced splitting full time jobs among two people so they would not have to pay health insurance for two part time workers. So, it appears that 2 are employed in one job, and where is the money to buy anything that keeps the rest of us earning a paycheck. Good jobs are shipped overseas where the educational system is better for tech, medicine, science, so what's left other than cleaning tables at McDonalds?

It's estimated this war alone will cost $1.5T over the next 10 years, (I read your list of latin american military engagements by the US with interest).

People are losing their homes in droves, in an era of record government borrowing, corporate bankruptcies, and personal debt is at a record high, but people want to feel complacent and still buy a new car on time to make themselves feel better. (I guess if you can convince others you are well off, it helps you believe it). How can this conceivably be good for the economy, is no more than the smart money getting ready to pull out, or go short in the index, or both.

 

[calpoon]

I'm playing the worlds smallest violin for wallstreet.

 

[AFA]

It's not Wall St. that loses. It's small investors and small pension funds.

Notice how many more commercials turn up on TV for investment firms when the market is up. Corporate traders and investment firms also make out big time when the market goes down.

Let's see, I remember some famous bad investments, price / earnings ratios in the stratosphere, but still the darlings of Wall St. until they collapsed. Snapple, Boston Chicken, Iomega, several small airlines to name a few. Who do you think lost money?

Oh Enron! Another winner.

 

[free4440273]

Reducing rates to ridiculous rates of 1 per cent after 9/11 was not exactly sensible economics. Futures are suggesting a 100 per cent chance of a reduction in rates in september. This is the last thing we need - the Fed should hold its nerve and hold steady.

 

[AFA]

I don't understand that as well as the rush to take advantage of perhaps the lowest rates in modern history. The loans written were superficially sugar coated with interest only, and ARM's. Bank tried to talk me into an ARM when I was fully qualified for a low fixed. I refused, and refused again. Used every bit of BS they could think up to try to convince me they knew what they were talking about, (some unofficial whispering in my ear too), and I am sure a lot of people fell for it.

All that buying pushed the median home price way up, forcing a lot of people to go all out in debt compounded by ARM's and interest only mortgages. Other people decided to make a fast buck and become real estate speculators and got stuck with big losses on property they can't sell. Either way, the personal debt in mortgages is at record levels as is the inability to pay for them.

But the economy is healthy and doing well I've been told by our elected officials.

Stock brokers make money advertising the trend to customers, no matter what way it's headed.

 

[free4440273]

Like i say, any reduction in rates will create merely a short, temporary reprieve in the stock market. if anything, a reduction will make matters worse long term because China, Japan and Latin American countries will start selling dollars en masse. The dollar index at the moment is already on shaky ground. Even manufacturers are not exactly begging for a wholesale collapse in the dollar just because they can export more. These are dangerous times indeed

 

[Roughneck]

The real problem, of course, is this this "liquidity" is created from thin air. Easy money makes for bigger risks because there is no true estimate of "cost". Value tends to be over-appreciated and when the real bill comes around, we see the "bubble bust" happen.

Currency, by itself, has no inherent value. It only represents something of value.
Printing money drives up inflation - which is worse than unemployment (because EVERYONE across the board loses).

Does any one honestly trust the government when it keep braying that "inflation is low" "inflation is low" ? Do you really think inflation is only 2% or so?

The Federal Reserve needs to go. We need to do away with this arbitrary system that's fucking up monetary value on a colossal scale. The dollar I earned at the end of my Vietnam service is worth less than 40 cents today.

This is madness!

cheers,

 

[free4440273]

Monday week will be interesting - retail sales figures are due. But I beg the Fed not to bail out the market. A dollar collapse would be a catastrophe.

 

[Roughneck]

A dollar collapse would be a catastrophe.

It's only delaying the inevitable, IMHO. If we keep going the way we are, the coming dollar bubble/easy money/free credit implosion will make the Great Depression seem like a tea party.

cheers,

 

[blakey]

I hope this isn't the beginning of the latest global recession - but we'll
not really know for many months / a couple of years

it's getting a little scary though - the old negative equity / houses not worth the loans taken out on them thing
but as pension & investment funds around the world have invested heavily in the american mortgage market if that starts to really go to shit it could be, as a previous poster has already referred to, the first crack in the house of cards
( i've seen the BNP <bank, not racist nutters> has closed three funds which invest in the US mortgage market, for example)

the UK has been "thriving" under blair and now brown with the economy being sustained by immense amounts of consumer credit together with other "growth" based on, and funded by, unsustainable rises in property prices

i think, unfortunately, there will be some sort of "crash" at some point - economies are cyclical after all, and this could be the start ....

 

[AFA]

Like i say, any reduction in rates will create merely a short, temporary reprieve in the stock market. if anything, a reduction will make matters worse long term because China, Japan and Latin American countries will start selling dollars en masse. The dollar index at the moment is already on shaky ground. Even manufacturers are not exactly begging for a wholesale collapse in the dollar just because they can export more. These are dangerous times indeed

The real problem, of course, is this this "liquidity" is created from thin air. Easy money makes for bigger risks because there is no true estimate of "cost". Value tends to be over-appreciated and when the real bill comes around, we see the "bubble bust" happen.

Currency, by itself, has no inherent value. It only represents something of value.
Printing money drives up inflation - which is worse than unemployment (because EVERYONE across the board loses).

Does any one honestly trust the government when it keep braying that "inflation is low" "inflation is low" ? Do you really think inflation is only 2% or so?

The Federal Reserve needs to go. We need to do away with this arbitrary system that's fucking up monetary value on a colossal scale. The dollar I earned at the end of my Vietnam service is worth less than 40 cents today.

This is madness!

cheers,

Good points clearly stated.

Economist Milton Freedman http://en.wikipedia.org/wiki/Milton_Freedman did a series on PBS called Free To Choose from his book of the same title. He pointed out that pieces of green paper called money had no value to the outside world, and with lessening value was not acceptable as payment for the goods produced outside of the US.

 

[Phaeton]

And Rupert Murdoch owns the Dow Jones Index.