2008 Market Crash?

January 18, 2008

The worst start for the stock market since 1932! And it’s not getting any better. There is plenty of blame to go around; however, many fingers are pointing to the failed American policies of spend, spend, spend and then add more debt and more debt. America has been living as though there can never be any bad financial times. When the party seems to be dwindling add more booze (can you say print more money) to the mix. It’s only a short-term fix. Now the pounding headache comes!

Here are the numbers- 221, 238, 247, 257, 277, and then yesterday 307. Those are the points that the Dow was down on 6 of 12 trading days so far in ’08. Five days were up and one was down just 34 points. So far the RED ink totals 1,151 points down for the Dow. There’s a reason why gold has moved past $900 an ounce and there’s a reason that oil is backing off the $100 level. The Dow is off 6% in just two weeks.

To top it all off, the US looks poised to lose its mantle as the world’s dominant financial market because of a rapid rise in the depth and maturity of markets in Europe as an example. In fact, the change may have occurred. US markets are beset by credit woes, according to research by McKinsey Global Institute, a think-tank affiliated to the consultancy. “We think the differential growth rates are so significant that it is quite likely Europe has overtaken the US,” said Diana Farrell, author of the report. “They are now neck and neck, which means exchange rates are very important. It is a real change.”

China and European markets are now the power- and getting stgronger!

Today could see more RED flowing at Wall & Broad!

In previous decades, most US policymakers and bankers assumed their domestic markets were the largest and most sophisticated in the world, and sought to export their model of financial capitalism to other parts of the globe. But the credit crisis has dented confidence in the health of America’s financial institutions and its model of finance. Meanwhile, since the launch of the single currency in 1999, European markets have been steadily growing in liquidity and size.

The 800 pound gorilla, known as the US market, is weighing in at more like 500 pounds these days- and losing weight weekly. Can it be turned around? Is it too late? It’s not a question of whether we are headed to a recession, but how deep that recession will be and how long it will last. I wish I had better news; however, the sooner we come to the REALITY of life, the quicker we can deal with the issues that got us there and we move on to the healing needed.

Written by Ernie · Filed Under Daily Commentary

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One Response to “2008 Market Crash?”

Black Monday! on January 21st, 2008 12:19 pm

[...] is a holiday in America. Thanks to the Martin Luther King national holiday, our markets are closed. No market crash today! So, the question is have we moved from a Black Monday to a Dark Tuesday instead? There simply is [...]

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