Posted on 02/20/2009 11:50:45 AM PST by SeekAndFind
* Global stocks slide on economic data, ailing banks fear
* Gold futures shoot above $1,000 in flight to safety
* Government bond prices rise as risk aversion grows
* Oil slumps as deteriorating economy dents demand (Adds close of European markets)
By Herbert Lash
NEW YORK, Feb 20 (Reuters) - Jitters about ailing banks and worsening economies slammed global markets on Friday as investors fled risky assets such as stocks for the relative safety of government debt and gold, which shot above $1,000 an ounce.
The Dow Jones industrials and European shares slid to six-year lows, while the S&P 500, a broad measure of U.S. equities, edged closer to breaking through November lows that would take it to new bear market lows and a levels last seen 12 years ago.
Shares of Bank of America Corp (BAC.N) and Citigroup Inc (C.N) plummeted amid fears that the U.S. government could nationalize them and wipe out shareholders' equity.
A rout in bank shares and a surprise slide in euro zone services and manufacturing activity in February, suggesting the first quarter's economic contraction may be as bad as or worse than the end of 2008, sent European indexes lower.
(Excerpt) Read more at uk.reuters.com ...
All of the other bubbles have burst. Gold will always be worth something yes but the same people who ran these other are definitely in on the gold rush. Just a thought. This is as sketchy of an economic environment that I’ve ever seen or read about historically.
Why is Gold soaring after Obama’s inauguration ? Since markets are generally forward looking and Gold does well in an inflationary environment, does this not tell us that people expect inflation to come back with a vengeance later this year because of Porkulus ? Just wondering.
Actually, it appears that the “plunge protection team” has stepped in to save the day (or the week) for the Obama team. Now, I hear Rush attributing it to a growing belief that the banks will not be nationalized.
It will help investors, psychologically, if the Dow were to finish higher — taking out the November lows would be a bad sign and make for a bad weekend.
What can one expect from “Hope and Change!”
“the only thing we have to fear is... CRISIS! CATASTROPHE!!! HOPE!!!! CHANGE!!!!!!”
Gold is always promoted as a safe haven. It’s more psychological, entrenched in historical investor psyche I think. I can’t claim to know what is going on but I know the the money that ruined and abandoned the previous succession of bubbles is in gold as well. Probably more so by minute.
7500 was breached. It has been touted for some time as a barrier. I’m not sure breaching it again on the positive will invoke a mass buying spree.
I’m watching the S&P 500’s Nov. 20th close of 752.44. If that gets taken out, I think this market could be vulnerable for another 20%. JMHO.
Well, don’t forget ‘irrational exuberance and DOW at 6000’..
Sounded crazy when he first prounounced it but he may have it right.
Equilibrium.
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