Archive for the ‘losses’ Category

Since Obama Election, Stock Market Down 929 Points

November 6, 2008

Wall Street plunged for a second day, triggered by computer gear maker Cisco Systems warning of slumping demand and retailers reporting weak sales for October. Concerns about widespread economic weakness sent the major stock indexes down more than 4 percent Thursday, including the Dow Jones industrial average, which tumbled more than 440 points.

Comments from Cisco that it saw a steep drop in orders in October and reports from retailers that consumers are skipping trips to the mall provided fresh evidence of the economy’s struggles. While sales at Wal-Mart Stores Inc. benefited from bargain-seekers, some specialty retailers posted huge drops in monthly sales.

Adding to investors’ list of worries, the Labor Department said the number of people continuing to draw unemployment benefits jumped to a 25-year high, increasing by 122,000 to 3.84 million in late October. It marked the highest level since late February 1983, when the economy was being buffeted by a protracted recession.

While new claims for unemployment benefits dipped by 4,000 to a seasonally adjusted level of 481,000 last week, the levels remain elevated. The findings added to the market’s unease ahead of Friday’s October employment report, a widely watched barometer of the economy’s health.

“I think everybody kind of simultaneously — the consumers and businesses — is tightening belts so that’s triggering a reasonably precipitous slowdown that’s widespread,” said Ed Hyland, global investment specialist at J.P. Morgan’s Private Bank. “This is something that we haven’t really seen, this level of this rapid and significant pullback both in the market and the economy.”

Thursday’s rout follows a drop of more than 5 percent in the market Wednesday that saw the Dow plunge nearly 500 points as investors fretted that weak readings on employment and downcast profit forecasts and job cuts from financial companies to steelmakers signaled broad economic troubles.

Still, the market’s two-day slide follows an enormous run-up since last week so some pullback was expected, analysts said. Through the six sessions that ended Tuesday, the benchmark Standard & Poor’s 500 index, surged 18.3 percent.

Read the rest:
http://biz.yahoo.com/ap/081106/wall_street.html
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By Alexandra Twin
CNN Money
NEW YORK (CNNMoney.com) — Stocks slumped for a second straight session Thursday, bringing the Dow’s losses to 929 points since Election Day, as fears of a prolonged recession sent investors running for the exits.

The Dow Jones industrial average (INDU) lost around 443 points, or 4.9%. The two-session decline of 929 points, or 9.7%, marked the biggest two-session point loss ever and the biggest two-session percentage decline in 21 years, according to Dow Jones.

The Standard & Poor’s 500 (SPX) index lost 5% and the Nasdaq composite (COMP) declined by 4.3%.

The Dow slumped 486 points Wednesday as President-elect Barack Obama’s historic victory gave way to worries about the economy he inherits. Those same worries continued to drag on stocks Thursday.

Read the rest:
http://money.cnn.com/2008/11/06/markets/markets_newyork/index.htm?postversion=2008110615

Revenge of The Left Over Economic Losses Not Limited to U.S.

November 3, 2008

It is not just that the Democrats will win a crushing victory in both houses of Congress, perhaps reaching the 60-seat Senate threshold that lets them steam-roll legislation. It is also that the incoming class of 2008 is of a new creed. Many no longer believe – or actively reject – the free trade and free market catechisms.

As commentator Markos Moulitsas put it in Newsweek: “The big question is, will Democrats nationwide simply ‘win’ the night–or will they deliver an electoral drubbing so thorough that it signals the utter rejection of conservative ideology and kills the notion that America is a ‘center-right’ country?” he said.

By Ambrose Evans-Pritchard
The Telegraph (UK)

No matter that statist policies were responsible for this global crisis in the first place. It was Western governments that set interest rates too low for too long, encouraging us all to abuse credit.

It was Eastern governments that held down their currencies to pursue mercantilist trade advantage, thereby accumulating vast foreign reserves that had to be recycled. Hence the bond bubble. This is the deformed creature known as Bretton Woods II. Protectionist Democrats are right to complain that the game is rigged. Free trade? Laugh on.

But at this point I have given up hoping that we will draw the right conclusions from this crisis. The universal verdict is that capitalism has run amok.

In any case the damage caused as credit retrenchment squeezes real industry is likely to be so great that Barack Obama may have to pursue unthinkable policies, just as Franklin Roosevelt had to ditch campaign orthodoxies and go truly radical after his landslide victory in 1932. Indeed, Mr Obama – if he wins – may have to start by nationalizing the US car industry.

For those who missed it, I recommend Edward Stourton’s BBC interview with Eric Hobsbawm, the doyen of Marxist history.

“This is the dramatic equivalent of the collapse of the Soviet Union: we now know that an era has ended,” said Mr Hobsbawm, still lucid at 91.

“It is certainly greatest crisis of capitalism since the 1930s. As Marx and Schumpeter foresaw, globalization not only destroys heritage, but is incredibly unstable. It operates through a series of crises.

“There’ll be a much greater role for the state, one way or another. We’ve already got the state as lender of last resort, we might well return to idea of the state as employer of last resort, which is what it was under FDR. It’ll be something which orients, and even directs the private economy,” he said.

Dismiss this as the wishful thinking of an old Marxist if you want, but I suspect his views may be closer to the truth than the complacent assumptions so prevalent in the City.

To those who still think that business can go on as normal now that EU taxpayers have had to rescue the financial system, I can only say: what will happen to London if EU exchange controls are imposed, or if leverage is restricted by draconian laws – as demanded by the German, Dutch, and Nordic Left?

Does the UK still have a blocking minority under EU voting rules to stop a blitz of directives that could shut down half the activities of the City – or the ‘Casino’ as they say in Brussels? I doubt it.

Who thinks that the three key Commission posts – single market, competition, and trade – will still be held by free marketeers when the new team comes in next year?

In Germany, Oskar Lafontaine’s Linke party now has 23pc support in Saarland on a Marxist pledge to nationalize banks and utilities. Needless to say, the Social Democrats (SPD) are shifting hard Left to protect their flank.

“The rule of the radical market ideology that began with Margaret Thatcher and Ronald Reagan has ended with a loud bang,” said Frank-Walter Steinmeier, Germany’s foreign minister and SPD candidate for chancellor next year.

Read the rest:
http://www.telegraph.co.uk/finance/comment/ambroseevans_
pritchard/3366575/Revenge-of-the-Left-across-the-world.html

All that money you’ve lost — where did it go?

October 11, 2008

By ERIC CARVIN, Associated Press Writer

NEW YORK – Trillions in stock market value — gone. Trillions in retirement savings — gone. A huge chunk of the money you paid for your house, the money you’re saving for college, the money your boss needs to make payroll — gone, gone, gone.

Whether you’re a stock broker or Joe Six-pack, if you have a 401(k), a mutual fund or a college savings plan, tumbling stock markets and sagging home prices mean you’ve lost a whole lot of the money that was right there on your account statements just a few months ago.

A money changer counts out US dollars at a currency exchange ... 

But if you no longer have that money, who does? The fat cats on Wall Street? Some oil baron in Saudi Arabia? The government of China?

Or is it just — gone?

If you’re looking to track down your missing money — figure out who has it now, maybe ask to have it back — you might be disappointed to learn that is was never really money in the first place.

Robert Shiller, an economist at Yale, puts it bluntly: The notion that you lose a pile of money whenever the stock market tanks is a “fallacy.” He says the price of a stock has never been the same thing as money — it’s simply the “best guess” of what the stock is worth.

“It’s in people’s minds,” Shiller explains. “We’re just recording a measure of what people think the stock market is worth. What the people who are willing to trade today — who are very, very few people — are actually trading at. So we’re just extrapolating that and thinking, well, maybe that’s what everyone thinks it’s worth.”

Read the rest:
http://news.yahoo.com/s/ap/20081011/ap_on_bi_ge/where_s_
the_money;_ylt=AkKucZ8sq3OvinoJZ3KzHyms0NUE

Passers-by stop to view a screen displaying markets news, with ...
Passers-by stop to view a screen displaying markets news, with Moscow’s Micex index displayed, Friday, Oct. 10, 2008, Paris. Regulators in Russia ordered Moscow’s MICEX not to open for regular trading at the usual time, and the opening of the RTS was also postponed until further notice, the state-run RIA-Novosti news agency said.(AP Photo/Thibault Camus)