I won't get into a lot, but I have this gut hunch that tomorrow, barring drastic action by the Fed., will be one of the bloodiest days in stock market history.
I don't have a ton of evidence, but rather this gut hunch. Perhpas that makes me irresponsible for posting this; I don't know.
Basically, I think that the Fed. is more or less out of options. The consistent drops we've seen in the past five days have all been people eeking out their time in the market, and waiting for a solution and today's talk about a potential buying of equity shares reeks of 'last resort' talk. Moreover, I don't see what the Fed buying shares will accomplish that it won't undo by tipping its hand that whatever company it is buying is in the tank.
Overall, I'm distant and intrigued to watch this happen real time. I know that sounds callous, but this has been something that I have known is a possibility as an abstract concept for years, now I am learning the specifics by watching. I feel like the time I cut my finger and after a nerve block watched the doctor sew it up, and give me a brief tour of the inside of my pinky. The nurse turned a little green, while I'm detached and studious, yet know that what is going on very much affects me as a person.
I hope I'm wrong, and frankly, don't have any experience so it is a high likelihood, but I'm of the opinion tomorrow will beat 777 by a fair margin. Spooky.
Monday
By Koenig (not verified)While it may come, I'd bet on early next week. There are several international finance shindigs this weekend, and I think people will retain a holding pattern until then.
Also, the shift in strategy towards acquiring equity is important, and good. Krugman is all over this.
There will be a bottom, as the amount of fictitious value created by the housing bubble is finite, but the basic exposure of so much of our financial system as an imaginary pretend world of made up things will take years to fully digest.
Well...
By TreslerIt wasn't as bad as I thought, but I'm skeptical. Around 3:15 JP Morgan, BoA, and Citigroup all jumped to nearly precisely 10% positive change.
I have my suspicions that we just saw some of our bailout money used on the hush-hush so that people would regain confidence without thinking the gubment was bolstering things.
I have no proof, but something caused those three stocks to jump in unison, and it seems likely it was coordinated. I believe the quote was, "However, strength appears to be concentrated among those stocks exerting the greatest influence on their index; advance-decline numbers on the NYSE show that most stocks are actually lower today"
Had the last hour behaved... like it has every other day this week, I think it would have been >777.
There's always Monday. Is the market open on Columbus day?
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Agree & disagree
By TreslerI still gots me this bad feeling that it will be today, especially given what happened world-wide last night. However, I don't think the time frame matters all that much; gradual may be better.
But yes, money is not imaginary - see post entitled Monopoly Money. I personally think that it will bottom out in the mid 6,000's, but that is just gut hunch, then have a rise up to stabilizing in the 8,000's, after it bellies out.
I don't think the shift to equity will help anything. I think Britain is a different country with different attitudes toward money in this respect. Seeing the Fed invest directly will just make Americans want to get out all that much more quickly.
Cheerful thoughts. I need some coffee. THanks for the comment.
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