Stock futures freeze as tumble worsens ["We are in a panic mode, I don't know how else to....]

Reuters ^

[Sub-Driver]

Stock futures freeze as tumble worsens Fri Oct 24, 2008 7:17am EDT

LONDON (Reuters) - Stock index futures tumbled so sharply in European trade on Friday, they had to be frozen at several points in the morning.

By 6:27 a.m. EDT December Dow Jones futures were down 6.2 percent, Standard & Poor's 500 futures were off 6.6 percent and Nasdaq 100 futures were down 6.6 percent.

All three contracts lost the maximum amount permissible before the start of futures trading in the United States.

"We are in a panic mode, I don't know how else to describe it and when you're in panic mode, all rational thought goes out of the window," said City Index chief market strategist Tom Hougaard.

"We've just got to let this thing rage. I think we'll see the Dow below 8,000 today."

According to Reuters data, December S&P futures hit a low of 855.20, while Dow Jones futures touched a low of 8,224 -- the lowest levels at which both contracts could trade in a session.

Jeremy Hughes, a spokesman for the Chicago Mercantile Exchange in London, said both contracts were "limit down."

"The limit is calculated at roughly 5 percent down. At that point it can't go any further down but it is still accessible and can go up again," he said.

[justa-hairyape]

Here is the quote from the UPS email.

UPS published rates will change as follows*: The average UPS Ground and UPS Standard to Canada rate increase and UPS Freight® LTL General Rate Increase will be 5.9%. Air and International services will increase an average net 4.9% through a combination of a 6.9% increase in rates and a 2% reduction in the Air and International Fuel Surcharge index.

They can only deliver a 2 % reduction in fuel surcharges.

[petercooper]

Exactly- best time to buy stocks is during a recession. I believe in the long term prospects of this country, and I still strongly believe that we will never have a president with the middle name “Hussein”. At least not in my lifetime.

[DonnerT]

The QJBY bank is holdig all the cash.

[lentulusgracchus]

“This whole thing stinks of self-dealing and manipulation."

"I disagree. This is what it looks like when the government seizes control of the markets.”

Actually, both statements are true. The major manipulators have been the Fed, Treasury, BoE, and the ECB. The Fed and Treasury and their Midtown playmates together constitute the "Plunge Protection Team", formally revealed, when Paulson convened the managing members for the President last March, as "The President's Working Group on Capital Markets".

At last, the "invisible hand" becomes visible: the one that's been hammering down gold, silver, and now oil since the mid-90's, intervening in the stock market to paint volume reversals and key reversal days and squeeze the shorts, and screw around with rulemakings that require people in Europe and Asia trying to sell their collateralized debt vehicles and credit-default swaps to settle in dollars -- kiting the dollar and cratering precious metals and oil.

And they're doing it all on our Platinum Card.

Of course, JMHO if you don't like it.

[lentulusgracchus]

The QJBY bank is holdig all the cash.

Who? English, please.

[Freedom_Is_Not_Free]

Nice distinction between paper and physical. We even see this with gold paper at spot while physical gold is still getting $100 over spot. Well, last I checked.

[Freedom_Is_Not_Free]

When astute observers like you, who have been right all along and have poignant comments to add, begin to say, "Ladies and gentlemen, we are in for some serious times," it makes me very nervous.

[ex-snook]

Where is all of the cash?"

Well year after year of sending a trillion dollars to foreign countries for trade deficits and nation building, cash is done gone with the world winds from Washington.

Recipe for recovery.

MAKE HERE, START NOW.
NATION BUILD HERE, START NOW.

[palmer]

Gold and silver physical prices can catch up (or in this case down) to spot fairly readily. Big dealers just need to take delivery of short term paper futures. It’s still an unknown when the Fed’s inflation will turn the deflation around. One things for sure, they can’t “balance” monetary inflation and credit deflation. Either the monetary inflation gets swamped by deleveraging, or it takes over in very rapid asset inflation followed by yet another deflation.

[Afronaut]

For want of some government intervention, affordable energy was lost.
For want of affordable energy, consumer confidence was lost.
For want of consumer confidence, consumer spending was lost.
For want of consumer spending, American economic growth was lost.
For want of American economic growth, global economic growth was lost.

All for the want of some government intervention.

[Freedom_Is_Not_Free]

You have hit the key point and my key concern? Is inflation a sure bet or could the massive amount of deflation absorb all of the new money the world can print. That is the $64 Trillion question. I know you are pretty well convinced that we are heading for a new round of inflation, but I am finding no consensus about that, with some very credible people predicting either side of the inflation/deflation debate.

Thanks for the gold lesson. I’m not really a gold bug. I want some for a disaster hedge is all. Maybe $10,000. Not as an invesment, but a storage of money in the VERY unlikely currency collapse scenario.

Thanks. I always appreciate your sound and reasonable advice and enlightening posts.

[Attention Surplus Disorder]

While I thank you for the kind words, I’m not only NOT the only one (and you’re not saying that, of course....you know Denninger, Schiff, and Roubini... they have called this with fierce accuracy) but I’ve been wrong on plenty of things.

But make no mistake about it, we are headed for some very challenging times. Nobody can predict how this will play out, more accurately, how much pain will be sustained. The core concept is the coming dislocation in the credit markets. It appears we’re headed into a Japan-like condition, with the Fed fighting off asset deflation with all their might. I cannot encapsulate it; I don’t think it’s quite as dire as Denninger states, but he is much much more right than wrong.

My mantra is as follows: The game must go on. “The game” is the survival of the Wall St. cabal. That cabal has shrunk massively of late, of course. But the most dangerous thing we face, IMHO, is the credit dislocation that can and unfortunately, ultimately MUST occur as we stare at a 10 year bond in the 3.6% range while (consumables) price inflation is running rampant and money creation is going ballistic. Like all counterfeiting operations, the elites who get the money first will benefit, or at least, will suffer the least. Those at the bottom are going to be taken care of by Obamas’ GDP II programs. The middle class is headed for the hamburger grinder, I’m afraid.

[palmer]

The world is absorbing the new money to pay off the old loans that were mainly taken out in Yen, less so in dollars and Swiss francs. The world is not printing enough to do that at this very moment and the markets are heading for their afternoon bath. Printing one's way out of deflation is a very inexact science and the central banks have been cautious so far.

I think they are expecting new lending to pick up the slack but the freight train is still heading in the deleveraging direction. Obviously new lending is not the answer because in the long run it will just lead to the next crisis. But it probably seems like the safest alternative between monetary inflation and credit deflation. As it becomes clearer that it isn't working, I expect monetary inflation to be the tool of choice (it's the only other tool they have).

Fiscally speaking, there is another choice which is govt borrowing to prop up markets and push credit. That works pretty well in this deflationary scenario, but it will be at the expense of our national credit rating.

[ichabod1]

We are all White Russians now.

[GOPJ]

Wow. They’ll stop at nothing to get Obama across the finish line.

That's part of it. Dems- Fannie and Freddie did the "freakout" timing of the mess, but it's based on really bad dem housing regulations -a la ACORN. I'm getting back in around 7500...

[DonnerT]

QJBY = Quart Jar in the Back Yard.

[Centurion2000]

As I posted earlier, UPS is raising its prices next year. So my costs are increasing. Taxes will also be higher.

I'm pretty sure right now FedEx would LOVE to cut you a deal.

[justa-hairyape]

I'm pretty sure right now FedEx would LOVE to cut you a deal.

Left Fed Ex earlier in the year. Have been using UPS next day since then. They have actually had better service over all. Have not missed one next day timeline. I do keep an eye on the weather though. UPS is more expensive, but Fed Ex can get up to 10 % next day timeline failures, sometimes. They are also cutting back on the types of goods they will ship because of their poor delivery success rate. UPS is also cutting back too. Not entirely the shippers fault, since they do not control the weather. For example, both have really drastic restrictions on shipping human consumables, but their enforcement of those restrictions varies from office to office. After reading their shipping restrictions, you would thing that no one could ship food, but many still do. In the end, they are both just simple freight services.

[lentulusgracchus]

lol, got me.