Just as it seemed we were getting past the sub prime woes here we go again. Dow set to open 220 points lower. This is the steepest drop on the open I can remember. For the bulls I'd think it would be positive if the US market can close with a loss of less than 200 points.
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Let me see if I have help your memory out... Summer of 02' when it went from 10K in May to 7,286 in Aug. It would open down 200 and the market is almost DOUBLE what it was so to get the same percentage it would have to open 350 down.. (give or take)Originally posted by SBR_John
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Yes 02 was a bad year. And I remember it was right before the start of football when it was at its worse. But I dont remember the SnP futures at -31, Dow -220 pre open. Im sure its happened plenty but I dont remember it.Comment -
THere is no getting through this 'subprime woes'. This issue is here to stay. In fact, it will get much worse before it gets better.Originally posted by SBR_John
The problem is not only in subprime. Huge cracks are forming in Alt-A and prime will not be spared as well once the real housing meltdown commences.
Did you see the tightenning of the lending standards in the last couple of weeks? That will leave sales even more depressive forcing prices way way down.
Soon, the American consumer will feel the real spending pinch and then it's recession time. Bye-bye US economy...
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I remember seeing DOW futures down 400 points back 5-6 years ago when INTC was the 1st big tech company to warn on an earnings miss the night before.
Having said that I was adding to positions when the S&P500 dipped below 1450 last week.
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SBR_John meet Plung Protection Team... PPT meet SBR_John...Originally posted by SBR_John
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Agree with a most of this gloom and doom prediction. However, the lending standards have taken major hits for years. The real housing meltdown was right there with that change. And the American consumer, those who have homes left, as well as others have been in a spending pinch for some time. Have we bottomed out yet? Nope. Most experts don't foresee any recovery until the bubble completely deflates. Some say 2008, others 2009. Even the high end 7 figure homes are hitting the auction house now. The only positive or silver lining in this correction is the inventory of houses is not being flooded by new starts. In fact, there are almost no new starts in my neck of the woods, and many homes on builder inventory, still remaining from the peak. This is all trickle down economics. People are up to their eyeballs in debt, no money to invest, gamble or recreate.Originally posted by Pedro
There will be a long term pent up demand of new home buyers, because none are selling now. The ones that did not ruin their credit walking away and new younger buyers. I doubt the lenders will be as relaxed, or the underwriters, as this last go round.Comment -
I'm not in the camp that thinks this will have such a spill over effect and unwind into recession. Its too isolated. GDP is surging worldwide including a +3.4% surge last qtr in the US.Originally posted by Pedro
However, it could lead to the repricing of valuations in stocks especially in those industries effected by by subprime credit risks but not limited to that area. Worldwide GDP growth will continue but I could see valuations level off in here keeping markets flat.Comment -
This sub-prime thing is chump change compared to the credit bubble they are JUST starting to talk about... This is a sleeping giant that will wake up sooner or later... Not that soon though it has some more growing to do... I'm going to happily add to that too...
I believe the Stock Market will soar and the US economy will continue to slide down... Before anyone says anything look at the last five years... that's exactly what's happened and what will continue to happen... American companies are not in America relying on American consumers anymore... Somebody said it a while back in another thread.." start thinking global economy not US economy."... I have no doubt still that most people think the US economy is directly related to the US markets... That's become less true by the day...
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Down 270 on the Dow. A fairly orderly retreat. Doesn't look like a snowball building but who knows.. It sure doesnt seem like a rally is going to happen. Looks like we could have some more sideways selling.Comment -
I couldn't understand why the market has held up so well in these times. I am happy with the losses so far not being so great. SP500 is what I follow most closely and if it stays above 1400 through the end of the year I will be more than happy.Comment
