Stocks Plunge Again; Dow Drops 250

AP Via Yahoo ^ | 08/16/2007 | Joe Bel Bruno

[zencat]

Wall Street plunged again Thursday after problems at Countrywide Financial Corp. confirmed fears of widening credit woes and the Federal Reserve injected $17 billion into the banking system. The Dow Jones industrial average fell more than 250 points.

[NeoCaveman]

Probably has large holdings in Countrywide Financial Corp.(down another 25% right now)...booyah!

He told us all to avoid banks, lenders, and homebuilders weeks ago. bababababboooya!

[zencat]

He told us all to avoid banks, lenders, and homebuilders weeks ago. bababababboooya!

Two months ago, Goldman Sachs was at ~ 234. It's at ~ 158 today and still dropping like a rock. Ouch!

[proudofthesouth]

I admit that I’m an economics idiot and don’t understand the stock market. As a matter of fact, I’ve looked at the stock market more in the past couple of weeks than I have in the past several decades.

That being said......

How bad IS it going to get? What will it take for it to stop falling? How much does it have to drop to signal a recession?

I know someone who has a couple hundred thou invested and I’m scared to death for them that they may loose it all.

Thanks in advance for your replies.

[napscoordinator]

Good bargains out there. Buy low, sell high!!!!!!!!!!!!!

[Notary Sojac]

Thanks for the Kipling, and back at ya....

[Badeye]

Great time to buy. ALCOA in particular is a good bet from what I’m hearing. It was down 22% yesterday, but expected earnings are 11% over the next five years.

[Justa]

"When is the Fed going to do something to inspire more confidence beyond its cash injections?"

Yeah and where's my Lexus I'm still waiting on?

[NeoCaveman]

How much does it have to drop to signal a recession?

A recession is atleast 2 quarters of negative GDP growth. The stock market has predicted 9 of the last 5 recessions.

Will we get a recession this time? Yes, if the banks won't lend to anyone, anywhere for any reason for a prolonged period, which is what is happening at the moment. We can't go on like this for long.

Hopefully this will be like the LCTM crisis and Asian flu of 1998, those did not spill over into the real economy.

[dragnet2]

How bad IS it going to get? What will it take for it to stop falling?

I don't think anyone knows for sure. But 1 minute ago just heard another so-called expert on a radio financial news segment say lowering interest rates would help immensely. Many, including myself feel they should have lowered them a few months ago.

[NeoCaveman]

Yeah and where's my Lexus I'm still waiting on?

We ain't talking Lexus's here we are talking about people not taking on any risk, that can't go on.

Read Larry Kudlow's take on this

[NeoCaveman]

Two months ago, Goldman Sachs was at ~ 234. It's at ~ 158 today and still dropping like a rock. Ouch!

Get back to me at 100. Until then I only stocks with no debt - MSFT, INTC, XOM, KO, etc.

[zencat]

How bad IS it going to get?

No one knows. I've been following the markets ups and downs and investing since the 1987 crash. My opinion, is we got some serious downside left.

How much does it have to drop to signal a recession?

The market has a fairly good indicator of a upcoming economic activity, but an actual recession is technically a contraction in the GDP.

[Doe Eyes]

Worst economy ever /s

[Greg F]

Dow 12,663.93 - 197.54 (1.54%)
At 1:44 EST

Coming back.

[3niner]

Good point. More recently, (1990-1991?) we had the “junk” bond panic. Investors who bought large assortments of “junk” bonds, when almost everyone else knew that they were worthless, ended up making very large profits.

[N3WBI3]

uh huh, Americans spend more then they make, Buy houses on ARM’s they wont be able to afford, and import far more than they export and you think the fed can fix this?

[3niner]

He told us all to avoid banks, lenders, and homebuilders weeks ago.

Funny, Warren Buffett (Berkshire Hathaway) just bought a big chunk of BofA and increased his holdings in US Bancorp. Who do you think is the better long term investor, foaming Cramer, or Buffett?

[3niner]

I know someone who has a couple hundred thou invested and I’m scared to death for them that they may loose it all.

Not going to happen, there have been several of these fluctuations during my lifetime (including one drop of 20%, mostly in one day). The way to lock in your losses, in these situations, is to panic and sell.

What really counts, in the long run, is corporate earnings, and these are still quite strong for most public companies. Stocks cannot drop to zero value when the assets they represent are still earning lots of money.

[Teacher317]

This is getting scary.

Do you cause a lot of stampedes in your neighborhood, oh skittish one?

[Blue Highway]

On the bright side, I just went outside and the sky is not falling yet, my money is still green and ole’ Al Gore hasn’t shut down the internet.