MURDER, POLITICS, AND THE END OF THE JAZZ AGE
by Michael Wolraich
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Stocks Take Nose Dive On Economic Fears
By Michael Wolraich on Thu, 08/04/2011 - 3:58pm |The stock market is in the midst of its biggest retreat since the financial crisis.
The Dow Jones industrial average plunged as many as 400 points Thursday afternoon. It is now down more than 1,200 points since July 21.Thursday's losses turned the blue-chip stock index negative for the year.
The Standard & Poor's 500 index is down 3 percent, bringing it nearly 11 percent below its recent high of 1,363 reached on April 29. A decline of 10 percent or more is considered to be a market correction.
Investors are increasingly worried about economic weakness in the U.S. and a debt crisis in Europe.
"We are continuing to be bombarded by worries about the global economy," said Bill Stone, chief investment strategist at PNC Financial.
The Dow Jones industrial average was down 330 points, or 2.8 percent, to 11,566 in afternoon trading. The S&P 500 lost 39, or 3.1 percent, to 1,221. The Nasdaq composite shed 86, or 2.3 percent, to 2,606. The losses put the Dow on track for its biggest one-day drop since October 2008.
URL:
http://www.npr.org/2011/08/04/138995046/stocks-take-nose-dive-on-economic-fears
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Wall Street lays another egg.
by cmaukonen on Thu, 08/04/2011 - 4:50pm
Dow closes down more than 500 points with the broader market indices off by over 4%.
With the FTSE and DAX off by more than 3%.
by cmaukonen on Thu, 08/04/2011 - 4:53pm
Canadians like me, after watching helplessly as this drive-by shooting occurred, are now realizing, "Damn, I've been hit. Hope that's not an artery." Canada's economy is resource-based, so it doesn't matter whether individuals invest directly in the U.S. market or not. If it slumps, ours slumps.
The Toronto Stock Exchange/S&P index closed down 3.4 per cent on the day, down 5 per cent since a week ago. On top of which, our dollar (affectionately called the loonie) is back down at $1.02 U.S., a loss of three or four cents over almost the same time frame.
I'm retired, and virtually all my life savings are in mutual funds. No paid-off house. So I can ballpark that my net worth (on paper) has fallen eight per cent directly because of this Tea Party bullshit. I shouldn't complain perhaps, since I'm lucky enough to have some life savings to lose. And a total default would have been worse.
But still, my point is that millions of people with no dog in this fight are being "taxed" billions of dollars (if not trillions) for Republican fat cats' reckless greed. And Democratic gutlessness.
Hell of a way to run an economy, guys.
by acanuck on Thu, 08/04/2011 - 7:10pm
Of course being good provincial Americans most of the focus has been on how this affects us. Not much on what an austerity policy will do
forto others, including Europe's chances of pulling itself out of its own muck, and the ramifications of deterioration in that situation as well as our own for most of the rest of the global economy.by AmericanDreamer on Thu, 08/04/2011 - 7:26pm
It's all part of our master plan to f*ck the rest of the world. The genius of it is that they never expected us to nuke our stock market. I'm giggling maniacally (out loud) at the thought of bankrupting those smug Canadian retirees.
Next time, we'll default for real. That'll teach 'em.
by Michael Wolraich on Thu, 08/04/2011 - 8:37pm
Well, sure, a guy who can live on fermented mares' milk (and like it!) knows something about ravening hordes...
by jollyroger on Sat, 08/06/2011 - 10:14am
Kind of surprising, isn't it, that a month of screaming that the country was virtually bankrupt and might have to simply renege on its debts would undermine investor confidence?
Screaming loudest was Michele Bachmann, who just a few months back went ballistic over suggestions the U.S. dollar might lose its status as the world's reserve currency to a more broadly based basket of currencies. Does she even begin to grasp that the "crisis" she helped manufacture has brought the day of the UN-issued "worldo" so much closer? Nice work, Michele.
by acanuck on Thu, 08/04/2011 - 5:18pm
This is the kind of economic illiteracy we are dealing with in this country, not just among vast swaths of our "citizenry", but among some of our influential elected officials.
I just got a letter from one of my senators, Mark Warner, in response to my letter to him on the debt mess. Warner I have seen as a very bright guy. He is a Democrat, and was a good governor of Virginia, progressive and extremely popular. Reading his letter I am prompted to mail him a pair of green eyeshades. I get periodic missives from his office on what he's doing on jobs. The word "jobs" is not mentioned once in the letter. Here is the key sentence:
The "greatest challenge we now face as a nation" is...deficit reduction. Apparently, on Senator Warner's view of our predicament, the Magic Job Fairy will generate job growth in this country.
I can't say I am shocked given that Warner was one of the bipartisan gang of 6 senators who came up with their own deficit reduction proposal. Just dismayed.
I'd like to remind him if I could that he's not a governor, bound by the state constitution to balance the budget, any more. Maybe recommend a section in an Economics 101 textbook or get him and a bunch of his colleagues a tutorial with Krugman, or someone else who has a clue.
by AmericanDreamer on Thu, 08/04/2011 - 5:37pm
Sure it will. Takes a lot people to pick up the dead bodies on Wall Street.
by cmaukonen on Thu, 08/04/2011 - 6:34pm
It would be very inappropriate of me to laugh at that, so I'm trying as hard as I can not to.
by Verified Atheist on Fri, 08/05/2011 - 11:21am
Stating that the need to balance our spending priorities with principles of fiscal discipline for the long term is not equated as saying our sole focus should be on deficit reduction. The most one can say it means that while we look at what needs to be spent now given the crisis in the economy it must be balanced with an eye to the fiscal state of the country 10 or 20 or 30 years down the road.
by Elusive Trope on Fri, 08/05/2011 - 10:14am
Trope, I agree with you more often than not, but come on. How can anyone who gives a damn about the people they supposedly represent be looking at an extended period of high-single or low-double digit unemployment numbers and be claiming that "fiscal responsibility" is the number one issue facing the country right now? Without even acknowledging that one of the biggest drivers of our current deficit can be eliminated by getting back to 5-6% unemployment? The Democrats have been so tone deaf on this issue that I want to scream.
But I won't bother; they probably wouldn't hear me anyway.
by brewmn on Fri, 08/05/2011 - 10:30am
It matters because recovery depends in good part on the multinational private sector deciding to spend their reserves on investments and hiring. With the mess in the US and Europe, the current situation looks like the troubles will be never ending. Fiscal responsibility means looking at the short term and the long term. As the last stimulus package showed, just throwing $500 billion at the problem isn't going to make a dent. A trillion probably would not fare much better. Even with the deal, we are still on track to go further into debt with no plan in place to deal with the problems looming decades down the road. The current toxicity of DC alone indicates that such solutions will never come to pass. Right now any long-term investment seems like a bad investment and if one's sole focus is on the share holders (it shouldn't be the sole focus, but it is) the result is to sit and wait and not touch those reserves.
by Elusive Trope on Fri, 08/05/2011 - 10:45am
Now you're getting lost in a house of mirrors. The reason there is no investment is because there is no demand. The reason there is no demand is because consumers are either in too precarious of a financial situation to risk much spending, or are more concerned with paying down their own debt than spending more at this time. So, how do you increase demand? You increase it by putting more money in consumers' pockets. So, how do you do that? By either providing direct aid trasnfer (e.g., unemployment insurance) or by actually paying them to do the work the government needs done.
An austerity program does just the opposite. Unless and until government steps in, we are probably doomed to subpar growth for years, if not decades. The private sector simply cannot be relied on to jumpstart this economy.
And, while we're at it, if all those companies are doing is sitting on piles of cash, why not implement some measures that might let the government get its hands on those piles and put them to productive use?
by brewmn on Fri, 08/05/2011 - 2:49pm
Why, Brew, you sound positively revolutionary...or compared to Trope, anyway.
Of course the looming debt to gdp ratio looks forboding when the denominator has been crippled by years (perhaps to chase decades) of underutilization of labor and plant capacity.
When the pugs whine that the Dems are 'big spenders' because the fedral expenditure totals 24% of gdp and we must get it down to 22% (or 18%!) they ignore the fact that by shrinking gdp you automatically raise the percentage that would be represented by a static or even slightly declining total spent.
Plus, when you raise war spending to it's highest level ever, you are bound to impact the percentages cited, without ameliorating in any fashion the plight of the unemployed.
There are laid off people in their fifties who are never going to work again unless something is done soon.
by jollyroger on Sat, 08/06/2011 - 10:10am
Regarding your last suggestion, I would be all for that. But as I have argued before, it is exactly this type of govenmental intervention in the private sector that is a bridge too far for most of Americans.
Now we have had a limited amount of the stimulus/unemployment benefits, (.5 trillion for the stimulus) and nothing happened except maintain the dire situation. Not getting better, but not getting much worse, overall.
So how much do we need the government to spend to get things going?
One issue is where and on what. Just did a quick google search. Here is one bridge project: the new Benicia-Martinez Bridge Project. The estimated cost of this project in 2007 was 1.057 billion dollars.
Now the federal government dumping that kind of dough into the Bay Area will do wonders for the Bay Area, but it would in and of itself not get much ripple effect on the national and global markets. Meanwhile folks in, say, Topeka will wonder why their tax dollars are going to help those other folks and not themselves.
There are roughly 40 urbans areas with a population of a million or more (based on the 2000 census). So to do a similiar project in all these areas, that would be 40 billion right there. Probably wouldn't be enough. And a lot of states, not to mention regions and cities would be left out, from Oklahoma City to Dayton to Bridgeport to Eugene. It would mean that the state of Indiana would get 1 billion dollars to spend (thanks to Indianapolis).
So what will it take? $3 trillion? $5 trillion? Over 2 years? 3 years?
I'm not saying we should avoid doing this, but unless we actually put out there what we are talking about, we're not going to get the discourse moving forward. At the same time, our debt is already on track to continue to increase even without this additional stimulus. And this is where we get into the notion of fiscal responsibility.
Even the most liberal of people have to admit that there is a point when the US can have too much debt. This is one reason the conservatives have been able to twist the framing of this debate. Right now the US government does not seem to be on track on every bringing in a balanced budget let along in reducing the debt. Eventually we will hit 20 trillion, then 25, then 30. It may be decades down the road, but it will come. If we can't address it now there is no reason we will be able to address it then.
by Elusive Trope on Sat, 08/06/2011 - 12:52pm
Matt Taibibbi of Rolling Stone last year summed up the capabilities of many in DC in an article on John Boehner:
When more US voters look to the national government not as an evil force or another source of theater and entertainment, but as a means to improve the lives of themselves, their families, communities and states, perhaps they will elect people who are at least trying to help the country and not destroy it to gain re-election.
by NCD on Sat, 08/06/2011 - 12:05pm