Posted on 09/30/2011 1:33:28 PM PDT by blam
STOCKS TANK TO END Q3, MORGAN STANLEY CRUSHED: Here's What You Need To Know
Sam Ro
Sep. 30, 2011, 4:00 PM
Stocks ended the day, month, and quarter in the red.
But first, here's the scoreboard:
Dow: -241
S&P 500: -29
Nasdaq: -65
And now the top stories:
* Futures were already pointing lower before the open, so investors weren't expecting much. Some have suggested quarter-end window dressing was at play. But there were clearly bigger issues affecting the markets.
* Personal income and spending data was mixed. Economists expected income to grow 0.1%, but it actually fell 0.1%. Even worse, last month's income growth number was revised down to 0.1% from 0.3%. However, spending climbed 0.2%, which was in line with expectations.
* On a more positive note, the August Chicago PMI reading came in at 60.4, ahead of the expectation for 55.0. Consumer sentiment climbed to 59.4 from its last reading of 57.8.
* However, favorable economic data could not get it out of people's head that we were on the front end of a recession. ECRI's Lakshman Achuthan told us the US is "tipping into a new recession" and "it is not reversible."
* All of the economically sensitive commodities did poorly today. Copper continued its decent, falling 3% today. NYMEX crude oil settled at $79.20 a barrel, the lowest level of the year.
* China continues to freak everyone out. A source of growth for internationally-exposed US companies, China saw its credit default swaps soar, and Chinese ADRs plunged.
* Morgan Stanley also saw its CDS spreads spike and shares plunged 10.5% on concerns over its European debt exposure. Then again, we should be cautious about what CDS actually tells us.
(snip)
(Excerpt) Read more at businessinsider.com ...
Bush’s fault.
An old friend who works for Morgan Stanley was dusting off his resume and dry cleaning his interview suit last week. His Facebook entry didn’t sound very happy about what the chicken bones he tossed on the table told him.
What could I do to ride out the storm and not lose my hard earned money?
I am 53.
What could I do to ride out the storm and not lose my hard earned money?
BTT
bflr
I’ve been dreading October.
“His Facebook entry didn’t sound very happy about what the chicken bones he tossed on the table told him.”
Did he even bother taking them out of the chicken?
Pay off all debts and cash out. That’s what I did back in 08. Just hunkering down until Hussein is gone.
“What could I do to ride out the storm and not lose my hard earned money?”
AllI can say is, don’t hold dollars.
On the bright side, finally getting a chance to buy back into copper, aluminum, etc. My personal business has held up very well these last few years. My financial house is in order and I'm just trying to fortify as much as I can.
One last note of optimism, if this is bad times, at least for me (knock wood) it ain't that bad.
Be a contrarian.
One last note of optimism, if this is bad times, at least for me (knock wood) it ain’t that bad.”
Well, ya know what they say...if your neighbors are out of work, it’s a recession....if you’re out of work it’s a depression. Bon chance.
Yeah, I’ve heard that. So far, my neighbors and I all seem to be getting by.
Stocks closed at the low today. This is quite ominous for the last day of September.
On Monday we begin October trading and that month has not been good for stocks.
Also, the stock market closed below 1140 on the S&P and that caused some technical damage.
The only good news is that the US stock market has not fallen as much as European markets.
Any advice from FReepers market experts where to go with investments would be appreciated. 7 weeks ago, I went from 85% stocks,10% bonds and 5% cash to 85% bonds,10% stocks, and 5% cash. Just about broke even since.
What could I do to ride out the storm and not lose my hard earned money?
Bonds are at all time highs. Best bet is to be 100% cash so you can buy the corrections that will be happening in the next year.
You did good. We have been expecting inflation a long time, but government austerity worldwide means deflation. That is better than hyperinflation, but not by much.
At some point, the inflators will take over again, and you want to sell your bonds before that is obvious.
A trader can make money with week-to-week fluctuations, buying low and selling medium. An investor should hold only stocks with little financial leverage that do well in recessions. Family Dollar and Dollar Tree come to mind, but they are in competitive business with little barriers to entry. Avoid stocks with beta over about 1.4.
Wait for bargains to appear, and be patient. It’s likely that third quarter of 2012 to early fourth quarter will prove a good entry, assuming that someone other than Romney opens up a large lead vs. Obama. See 1932 stock prices for one example.
But know that this contraction is likely to be the nastiest since 1931-1932. If you were invested 1978-1982, you know how your stomach felt.
Read and understand company financials before investing. Corporate financials - except for banks - tend to be more honest than government reports. The HFT (high-frequency trading) systems run by the big brokerages don’t have the wisdom to take the long view; use that to advantage. Bonds tend to lead stocks, so there may be a time when you want short maturities or cash.
If you think the price of gas is too high, it probably is. But right now I view that as a shrinking of the working class standard of living, due to trade and budget deficits.
Europe and the U.S. are going through the same adjustments the Soviet Union went through in the 1990s. We start with a higher base, so the worst won’t be as bad, but it will take until we elect Herman Cain types to the Senate as a working majority.
Right now, bonds are backwards - bonds up when stocks down - and have been that way for more than a year, due to Fed manipulations. Don’t pay undue attention to doom and gloom forecasts, except to note they hit the state-run media near market bottoms and Republican Administrations.
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