MyDD :: Hope versus Dow

Hope versus Dow

by Lettuce, Tue Oct 07, 2008 at 04:52:50 PM EST

Just a few thoughts looking at today's epic Dow Jones Industrial FAIL:

The market fell 500 points today
The market fell 375 points yesterday -- nearly 900 points in 2 days.
The market has fallen 1500 points in 4 days.
The market is down nearly 5,000 points in the last year
The market...

...wait, what? 5,000 points in one year?

That's 1/3 of the market's value... in one year?

Christ on a pogostick.

Now, it's impossible to overstate that the Market and the economy are two different things. And frankly, the market may be overperforming the economy still.

The current credit crisis means that in the next few months, we're going to see massive layoffs as payrolls can't be met, massive supply issues as vendors go unpaid. Very few businesses keep enough liquid capital to meet their expenditures during rough times.

Put it another way, if small and medium-sized businesses are the engine of capitalism, credit is the fuel injector.

So, combine these -- businesses unable to borrow. Business worth, as traded on the market, is down 1/3 across the board in a year.

I guess it hadn't really hit me what kind of free fall we were in until I spent some time gazing at the numbers now. But it's uglier than I imagined.

And, to tie this into the election -- I can't be alone in processing this. McCain is toast for a variety of reasons, I've never imagined he'd have lasted this long.

But alot of our faith and trust in the Barack Obama and the Democratic Party are going to be put to the test within minutes of his taking office. I don't know how something like this is turned around -- the banking system in the 1930s was Lincoln Logs compared to the twisted logic pretzels of today's global industry.

In crisis there's always opportunity... but there's little margin for error once Obama takes office. And even a perfect performance by him can be easily lost given the mess he'll be inhereting -- especially since there's only so much even a President and a filibuster-proof congress can do.

I want to believe, as they say. And I have had little doubt since the end of '06 that Obama was best suited to make the best of this bad situation.

But it's hard to have imagined in '06 that this situation was nearly this bad...

Tags: dow, stock market, election (all tags)

Permalink :: 29 Comments :: Post a Comment

Re: Hope versus Dow (2.00 / 3)

Americans' retirement plans have lost as much as $2 trillion in the past 15 months

Motley Moose: Progress Through Politics

by chrisblask on Tue Oct 07, 2008 at 05:01:53 PM EST

Yep...right now the election based discussion (2.00 / 1)

seems trivial to me when compared to the uncertainty of this global financial meltdown...we really don't know what's happening or what we are getting into. I agree, it makes helluva a difference if Obama gets election rather than crazy McCain (who hardly understands anything about Economics or our current economic condition)..But this enormous failure of our financial system is going to overwhelm any other problem that would've been very important in any other election cycle.

by louisprandtl on Tue Oct 07, 2008 at 05:07:44 PM EST
[ Parent ]

We should be prepared to hold off on things (2.00 / 3)

we would like to do for the sake of things we have to do.

Motley Moose: Progress Through Politics

by chrisblask on Tue Oct 07, 2008 at 05:12:31 PM EST
[ Parent ]

Absolutely...I think we need to be prepared to (2.00 / 2)

give Obama and his finance team a lot of leeway on how to tackle this financial crisis. Some of the items on the progressive agenda might need to be on the backburner for sometime...

by louisprandtl on Tue Oct 07, 2008 at 05:15:11 PM EST
[ Parent ]

You can't save the whales when you (2.00 / 1)

can't feed your kids.

As a side note, Palin has taken all the damn fun out of writing colloquially. I just can't bring myself to write "dunno" and "gotcha" and stuff anymore. I find myself adding "g"s to the ends of words that don't even need them.

What an asshole...

Motley Moose: Progress Through Politics

by chrisblask on Tue Oct 07, 2008 at 07:58:29 PM EST
[ Parent ]

Re: You can't save the whales when you (none / 0)

Love your sig line. In my early 20's I had this great t-shirt that read: Nuke a gay, baby whale for Christ.

I think you hit something for me as well. Women in Minnesota have a sort of toughness that allows them to be drawn to Palin. I think it is wearing a bit thin now as she has so obviously become a caricature of herself.

The Moose is on the loose. "And I scream at the top of my lungs, what's going on?"

by Hollede on Wed Oct 08, 2008 at 04:38:28 AM EST
[ Parent ]

Re: Absolutely...I think we need to be prepared to (none / 0)

I hope America will do the same.

We may see from Obama what I wished we'd seen from Bush after 9/11. This crisis might be what it takes to see a leader ask Americans to truly sacrifice for the greater good.

I'm curious to how the country would respond.

Fight the Smears!

by Lettuce on Tue Oct 07, 2008 at 08:02:00 PM EST
[ Parent ]

BTW, that's $1/second for.... (2.00 / 1)

64,000 years. Since, say, the earliest basic human artifacts (shells with holes in them), or almost three times as long as the oldest human figurine (the Venus of Willendorf).

Or $10/second since before the Pyramids were built...

Motley Moose: Progress Through Politics

by chrisblask on Tue Oct 07, 2008 at 05:10:49 PM EST
[ Parent ]

Re: BTW, that's $1/second for.... (2.00 / 1)

Also 8 gigatons TNT equivalent of ramen. Just FYI.

*meh*

by failsafe on Tue Oct 07, 2008 at 07:41:23 PM EST
[ Parent ]

Re: Hope versus Dow (none / 0)

I forgot about that... terrible.

Fight the Smears!

by Lettuce on Tue Oct 07, 2008 at 08:00:47 PM EST
[ Parent ]

The Reagan Revolution comes home (2.00 / 2)

to roost. This didn't happen overnight.

It took Dick Cheney "Deficits don't matter, Reagan proved it" coupled with Tax cuts with no balance of cuts in spending.

An unneccesary war costing a trillion dollars.

A generation of businesses outsourced for the good of "Shareholder value."

Corporations allowed to write the tax codes to their benefit, to offshore their profits, to pay in effect negative taxes in many cases.

And, people fed a diet of fear, be it of gays or muslim terrorists, to make them vote time after time the same group of crooks back into office.

This country is boderline insane IMO, and I mean that in a literal sense.

The man who almost half of the country favors for president's chief economic advisor, Phil Gramm, was the instigator of this world wide economic tsunami.

Yes, the stage was set, but his dead of night change to the SEC laws that allowed these nightmarish Credit Default Swaps to take the place of traditional security based insurance turned this traditional explosive into a Nuclear (pronounced Nuk-u-lar) weapon.

Bottom line is this:either we have SOME prayer that people FINALLY get it and at least give Obama a shot at pulling us back from brink of destruction?

Or, they vote their final moment of fear, and hand the keys back to the team that took the brakes off the car, painted the windsheild black, removed the seatbelts and airbags, and drove America into the economic telephone poll.

If we are that collectively crazy, we are beyond hope anyway.

And, EVEN IF they vote in Obama, we are in for probably years to dig our way out of the mountain of greed, incompetance and corruption the Republicans left us.

I pray Obama is up to at least the start of the task, because pray is about all we can do at this point.

On Nov 4th, we elected "the smart guy" and the world celebrated!

by WashStateBlue on Tue Oct 07, 2008 at 05:17:46 PM EST

we don't have that long (none / 0)

things that should have taken a month to unravel have unraveled in 18 hours.

AMERICA has failed.

Britain is next up to try and hit a home run. At least they listen to the smart folks, there.

yo mir kennen

by RisingTide on Wed Oct 08, 2008 at 09:38:25 AM EST
[ Parent ]

An Unbelievable Month (2.00 / 2)

We've never have had a financial crisis like this in the final month before a presidential election. My small stock portfolio has gotten a lot smaller over the last month. On the bright side, the financial crisis is a wake up call for those who trusted the Republican free market philosophy.

Dizzy Zzyzzy

by Zzyzzy on Tue Oct 07, 2008 at 05:19:35 PM EST

Re: An Unbelievable Month (2.00 / 2)

There is a lot less brightside, the older you are, about that stock portfolio.

I figured I was not going to retire at 65 anyway, and I thank my luck stars I am in one of the few real estate markets that has seen my home appreciate and not tank in the last year.

But, think about the wake up call for retirees who have already started to draw that money out?

But we will all finally wake up?

My take is, after this debate, middle of next week, we will know.

If the polls are still trending Obama, people get it, FINALLY get it.

If McCain has pulled even, if Bill Ayers and Rev Wright swings it back to McCain, give up, we are in for 5 maybe 10 years of an almost bottomless pit of downturn and collapse as we fall and China and India rise to take our place.

On Nov 4th, we elected "the smart guy" and the world celebrated!

by WashStateBlue on Tue Oct 07, 2008 at 05:32:31 PM EST
[ Parent ]

Re: An Unbelievable Month (none / 0)

I would say that if America allows smears about Ayers and Wright to decide the election, this country deserves such a fall...

Fight the Smears!

by Lettuce on Tue Oct 07, 2008 at 08:03:14 PM EST
[ Parent ]

Re: An Unbelievable Month (2.00 / 1)

I would say that, and add on that I'd give up American politics altogether and perhaps go somewhere else, but this is a worldwide crash.

There's no escaping these motherfuckers.

I'm voting for Saxby Chambliss!

by Jess81 on Wed Oct 08, 2008 at 04:30:47 AM EST
[ Parent ]

I'm told NZ is looking pretty nice. (none / 0)

if Palin gets to be president, I move.

yo mir kennen

by RisingTide on Wed Oct 08, 2008 at 09:39:52 AM EST
[ Parent ]

I don't know what we'll see in 3-4 months... (2.00 / 1)

the magnitude of this financial crisis, which is still unfolding, that Obama will face as he takes over office in Jan'09. I don't know what he and his team can do to mitigate the disaster. But I do know McCain is incapable of handling this crisis, hence not fit for office at this moment of time. I do know that Obama had kept his cool and compusure during last few weeks of this turbulence, and demonstrated his willingness to listen to experts in the field without jumping the gun or issuing conflicting opinions without any basis. He had demonstrated definite leadership qualities that we need in a calm leader who is capable of navigating our mother ship in a turbulent sea...

by louisprandtl on Tue Oct 07, 2008 at 05:31:03 PM EST

Re: Hope versus Dow (2.00 / 2)

The markets have been downright mavericky lately

by wrb on Tue Oct 07, 2008 at 06:28:20 PM EST

Re: Hope versus Dow (none / 0)

Ha! I sure can't wait to cease using the word "Maverick" forever. One more month!

Fight the Smears!

by Lettuce on Tue Oct 07, 2008 at 08:03:49 PM EST
[ Parent ]

Re: Hope versus Dow (none / 0)

worse president since herbert hoover.. one of the five worse in our nation's history..

of course thats not news to ME...

it is impossible to see how people could reward the incumbent party by electing mcsame..

but they could..obama has to come out tonight talking about whats going on with the economy and people hurting and how the stock market losing 33% doesn't just affect wall street.. lots of people have 401k's.. moreover they tend to vote more than people that don't.... its important to talk about this loss in wealth that IS affecting the middle class too...my partner is middle class but she has a 401k..she's concerned as she should be...

at the same time he has to hammer mccain on the "just three weeks ago john was saying the fundamentals were strong..".. "john's admitted that he doesn't much understand the economy"..

stuff like that... and don't just be defensive... don't just react to his distortions..take it to him.. you're a few points up.. you can take it to him politely while throwing in your ideas on how to approach this situation..

by obama4presidente on Tue Oct 07, 2008 at 07:12:42 PM EST

many people have lost their jobs this week (none / 0)

they just don't know it yet.

yo mir kennen

by RisingTide on Wed Oct 08, 2008 at 09:40:50 AM EST
[ Parent ]

Far worse than Hoover. (none / 0)

Hoover was an accomplished statesman who did great humanitarian work after he was out of office. There are a lot of parallels between him and Jimmy Carter, actually.

Yes, Hoover was ineffective at forestalling and addressing the Depression. But that crisis was set in motion mostly by economic forces
that predated his term in office and over which he had little control. On top of that, there were few institutional safeguards against symptoms like bank runs, which only deepened the problem.

George W. Bush, by contrast, inherited all of the benefits of a mature, diversified economy. But he treated the vital functions of government with disdain and contempt, thinking only of enriching his political base and installing cronies where competent professionals were needed. On top of that, he is stubborn and very, very stupid. Other than a few things like deciding to go into Afganistan and the do-not-call list, a theoretical President W's place would have done a pretty good job by simply doing the opposite of what Bush did.

James Buchanan was ineffective at forestalling civil war, but that's not the same thing as actively working to discredit government institutions. Nixon, for all his paranoia and criminality, got some legislation passed that did the public a lot of good.

Bush's "43" hat should not only refer to the chronological order of his presidency, but also its ranking. And yes, I know about the Cleveland double counting; that only means the 43 ranking will be precise after Jan. 20th.

by corph on Wed Oct 08, 2008 at 10:12:16 AM EST
[ Parent ]

Re: Hope versus Dow (none / 0)

oh one more thing: PLEASE TALK ABOUT HOW THE REPUBLICANS WANT TO PRIVATIZE SOCIAL SECURITY and all that...hammer mcsame on how the republicans always want less regulation etc..

these are obvious points but he's got to make them and tie them to the people asking him questions...

all delivered with that winning smile!

by obama4presidente on Tue Oct 07, 2008 at 07:20:12 PM EST

Re: Hope versus Dow (none / 0)

Current P/E ratio on the Dow is about 20 to 1. Historically it runs about 14 to 1, so we've possibly still got a 30% further correction coming. Dow 6,000 anyone?

by edg1 on Wed Oct 08, 2008 at 01:13:27 AM EST

Re: Hope versus Dow (none / 0)

While you were sleeping the Nikkei dropped 9.4%, a very bad sign given that Japanese banks are reasonably well capitalised. The Dow has lost 13%, by comparison, in the past five days.

by Shaun Appleby on Wed Oct 08, 2008 at 05:36:52 AM EST

Prediction (none / 0)

If Obama is elected on November 4th, the DOW jumps up at least 500 points on November 5th.

by shalca on Wed Oct 08, 2008 at 05:39:57 AM EST

no, it will drop liek a rock (none / 0)

and then skyrocket. first you sell, then you buy. and the stock market is only able to understand three hours into the future.

yo mir kennen

by RisingTide on Wed Oct 08, 2008 at 09:42:23 AM EST
[ Parent ]

Re: Prediction (none / 0)

well, it's down another 150 at the moment

Fight the Smears!

by Lettuce on Wed Oct 08, 2008 at 10:50:22 AM EST
[ Parent ]

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