DOW ENDS DOWN 416 POINTS
February 27th, 2007The tapped-out U.S. consumer was like the iceberg that pierced the hull of the Titanic. We moved through a brief phase where the band kept playing and the tumblers were refilled with booze, again and again. (This was when the writing on the wall became crystal clear to people like you and me and we began to calmly move to the exits.)
It’s getting clearer, and clearer now, as the hull begins to creak, the subprime mortgage market collapses, real estate prices fall and it becomes increasingly difficult to leave the U.S. But, as I said before, there are no rewards for those who wait for clarity on the brink of oblivion.
Congratulations to those of you who have eliminated your reliance on luck and minimized the impact of factors that are completely beyond your control. Your hard work is paying off.
Via: Yahoo / AP:
Stocks plummeted Tuesday, briefly hurtling the Dow Jones industrials down nearly 550 points as Wall Street succumbed to a global market plunge sparked by growing concerns that the U.S. and Chinese economies are cooling and that equities prices have become overinflated.
A 9 percent slide in Chinese stocks, which came a day after investors sent Shanghai’s benchmark index to a record high close, set the tone for U.S. trading. The Dow began the day falling sharply, and the decline accelerated throughout the course of the session before stocks took a huge plunge in late afternoon as computer-driven sell programs kicked in.
The Dow fell 546.02, or 4.3 percent, to 12,086.06 before recovering some ground in the last hour of trading to close down 415.86, or 3.29 percent, at 12,216.40, according to preliminary calculations. Because the worst of the plunge took place after 2:30 p.m., the New York Stock Exchange’s trading limits, designed to halt such precipitous moves, were not activated.
The decline was the Dow’s worst since Sept. 17, 2001, the first trading day after the terror attacks, when the blue chips closed down 684.81, or 7.13 percent.
The drop hit every sector of stocks across the market. Riskier issues such as small-cap and technology stocks suffered the biggest declines.
Investors’ dwindling confidence was knocked down further by data showing that the economy may be decelerating more than anticipated. A Commerce Department report that orders for durable goods in January dropped by the largest amount in three months exacerbated jitters about the direction of the U.S. economy, just a day after former Federal Reserve Chairman Alan Greenspan said the United States may be headed for a recession.
the big factor to watch now is the yen carry trade.
how will the hedge funds react?
if they go for broke unwinding their yen borrowings, all hell will break loose before the end of the week.
we’ll just have to wait and see…
Congratulations to you as well Kevin. I linked to your website through LATOC – and read your work re the pipeline in Alaska. You are wise beyond your years. You confirmed the game plan I already had in mind and have been putting in place for a couple of years now.
I think the DOW will attempt to rise again in the next few months or days, but the party is OVER. My father would be 97 if he were alive – and he started in the stock market at seventeen. Penny stocks. He used to pace the floor all night over his losses in the market. I’m been thinking about him a lot in the last few months, wondering what he would think about what I’ve done with his money – that is now used to care for my Mom. Tonight I think that he would be proud of me for reading the writing on the walls.
An Enron redux on a world scale is a bit too much for me to consider at the moment. How many are saying “All gone?”
Ha ha! BBC news reports WTC7 collapse 20 minutes before it actually does. Google video bans it.
Iran too tricky to pull off, bird flu too slow to spread, must be time to ‘pull’ the stock market!
Catch it on Youtube before Sergey ‘do no evil’ Brin yanks it off their new acquisition.
http://www.youtube.com/watch?v=C7SwOT29gbc
I laughed when I read the article today in The Australian that said this dip was caused by a computer glitch….
….nothing to see here, move along 😉
The market was actually down by 546 (4.3%) at one point, before rallying somewhat near the close. I’m sure that this will be marketed as a “minor correction”. In related news, Alan Greenspan is now calling for a US recession later this year.