Close_91508

Wow, that’s a heckuva a haircut there, brownie.

Today
was record volume for NYSE names, 7.9B shares.

Category: Investing, Markets, Short Selling, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

74 Responses to “Dow Close: -504”

  1. ndk says:

    Fed’s gonna have to do something, but what? Is it finally monetization time?

  2. Concerned Citizen says:

    this Mcculley is talking about cutting rates 1.00% Is that screwed or what? Wow! what would that do to the dollar. These guys are saying that there are bargains…what????????????????? Talk your books fellas.

  3. john east says:

    Did you notice the non-announcement exactly 30 minutes before the close that AIG was perhaps to be saved with the help of JPM?

    Pure manipulation.

    It’s glad to see, for once, that the spinmeisters were ignored.

  4. Winston Munn says:

    Kaput-u-lation

  5. CNBC Sucks says:

    Anybody watched the McCulley / Ailman interview with Barforomo? Ailman almost makes McCulley look like a bear (or a bearish John Bolton), and Ailman still calls for a 50 bps rate cut. Ailman even called out investors for his disappointment in them during the last hour’s sell-off.

    What the h*ll?

  6. Mike says:

    I’m glad I didn’t jump on the Haynes/Cramer “Oh-my-God-the-trin-is-at-.60-this-is-a-heckuva-buy-look-at-the-strength” bandwagon at 10:30 this morning!

  7. Concerned Citizen says:

    ndk, haven’t they done what they can do???????? What do you not believe that there comes a time when markets need to find there equilibrium? Not Hank Paulson or Ben Bernanke or a BS consortium’s? OK, keep pissing into the wind Wall Street and keep poking out your eyes Washington!

  8. JL says:

    Concerned Citizen, I also had CNBC on it was a joke. At my volunteer job another retiree spoke today that housing should be near the bottom. I asked him if he received his business news from FOX and he said, yes.

  9. Concerned Citizen says:

    Winston, Kaput! is at 40 45 vix and not before!!!

  10. Winston Munn says:

    ndk wrote, “Is it finally monetization time?”

    Monetization has such serious consequences that I do not expect full utilization until the Fed’s favorite inflation guage is flagging contraction.

  11. BG says:

    This don’t look good.

    I thought today was going to be the big day. I was wrong…it’s going to be tomorrow.

    Plus, you’ve got the Asian markets kicking in tonight. They will be compressing two days of trading into one.

    I am afraid we will see a lot more “deer in the headlights” stares tomorrow if AIG is pushed onto the altar. If they don’t get that $75B in financing, nobody knows where this thing will stop.

  12. down 5 dollars, through the morning low, Wow.

    this, last, looking-glass has been quite the sight..

  13. leftback says:

    -504…

    Brazil off 7% in a single day (they actually have a real currency).

    … that’s a lot of toys got thrown out of the pram today….

  14. Concerned Citizen says:

    JL, you have to think, (I have been following this very close for over two years now…I was shorting home builders before home builders were fashionable), that investors will realize how dire things are, an a true washout will happen. Not a V-bottom bounce but a true, “why the hell am I long in this market,” moment.

  15. Green Mountain John says:

    MER closes up one freakin cent at $17.01 after a 29 bid by B OF A!!! Houston, we have a big, big problem!!

  16. KJ Foehr says:

    Since early last year I assumed Ben would need to go to 1% OR LOWER before this REAL recession was over. (‘90/’91 and ’01 wouldn’t make a pimple on a real recession’s arse. This one is the real thing.)

    And if Greenspan did it, why wouldn’t Ben do it in a WORSE economy? Especially with deflationary forces raging now: inflation is dead.

    The question is, when is the right time to go to 1%? Given Ben’s belief that liquidity must be provided as early as possible to prevent a depression / recession. I am thinking he will start tomorrow with a ¼ point to soothe the market and send the message that he is on the job (again) to save the economy. And we will be at 1% by Christmas. It won’t work, of course, but he has to try!

  17. leftback says:

    http://www.nakedcapitalism.com/2008/09/treasury-honey-i-just-shot-banks.html

    People, there is a really thoughtful discussion on naked capitalism of the effect of wiping out the preferred holders of FNM and FRE rather than giving them a limited haircut. Not only did that impact banks who owned the preferred but it eliminated the option of banks issuing preferred for the foreseeable future.

    Hank and Ben are going to have a busy night, I would say.

  18. david says:

    covered a couple shorts. UP on the day.

    I think I’m done for the year. nice bonus is in the bag.

    till January….latah.

  19. Steve Barry says:

    Green Mountain,

    Good point on MER…saw Maria interview Ken Lewis. If this one human being is wrong about buying MER, heaven help us. It will take everything down. Did they really have time to examine the books? Or is this a Hail Mary pass into the end zone?

  20. D.L. says:

    VIX closed at 31.7 today. Do I hear 35?

    (Futures traders are not worried about October. October VIX futures at only 25.7 today).

  21. AGG says:

    And right now the HEAVY DUTY margin calls are going out. All of you who equate riches with success, stay away from high rise windows. The new growth industry for bankers is adult pampers.
    That said, remember there are a lot of riches out there that will step in now to drink the blood on the streets. So expect more volatility on the way down. I was off on my prediction the sunday before last. I said that the dow would end up last friday below 11,000. So let’s try again. This friday the dow will be slightly ABOVE 11,000. Since we are on a roll, let me clue you in on the friday after that; MARKET CLOSED DUE TO EXTENDED BANK HOLIDAY>>>>
    why? Because the foreign bond holders are going to threaten the USA with a margin call (dollar dump & no foreign wealth fund reps at treasury auctions) unless the fed RAISES rates. And after Bernake resigns, they will raise the rates.
    Be prudent, be patient and be frugal and you’ll do okay. Be greedy and you better stock up on adult pampers.

  22. Steve Barry says:

    Gotta love Stiglitz on CNBC just now…BR should post the interview…we went into a $3 trillion war, with a huge deficit already, and put in on credit card. Borrowed money, borrowed time until it all fell apart.

  23. scorpio says:

    GW bellying up to the bar: “just put the war on my tab… yeh, that’s right, both of ‘em… and the ones nobody knows about… oh, and that FNM and FRE as well, just keep em off the books, nobody will ever know the difference”

  24. Right Away says:

    To David- B of A had less than 24 hours to look at the “books” or what approximated same, probably an ATM teller receipt that Thain had on him-this was a shotgun wedding-and the shotguns were pointed at eachother. Fed told Merrill Friday night it was toast and Thain did a handshake deal while pretending he was involved in a potential LEH rescue. Smoke and mirrors.

  25. Dr. Kenneth Noisewater says:

    WINTHORPE?!?!!
    VALENTINE!??!!!

    Turn those machines back on!
    TURN THOSE MACHINES BACK ON!!!!!!

  26. godot10 says:

    Isn’t this really a government bailout of AIG, creating a synthetic window/facility conduit via JPMorgan and Goldman Sachs?

    AIG takes their junk to JPM and GS, and they take it to the Fed?

  27. Maj Tom says:

    BR – PLEASE PLEASE find cramer’s video of “the bottom is in” – I can’t wait to have him eat crow…

  28. AGG says:

    All the financial hanky panky in the world would not have bankrupted this country. 741 overseas bases and two unneeded (if you are human) wars did the job. The CEO crooks just helped give us the final push. It’s the war, stupid!

  29. aidis says:

    500 points
    that’s called a mini-panic
    even tho everyone is averting the use of that word…
    “market correction” sounds more reassuring, more calm.
    ahhh, all is calm. until tomorrow morning.

  30. John(2) says:

    Steve Barry | Sep 15, 2008 4:48:20 PM

    Stiglitz, like Roubini and also the ed writers at the Economist, is one of the folks whose had this right for years. Those constructing excuses for this trainwreck are a hundred times more creative than they were at running the country. Probably the most creative I’ve heard so far was it was because Clinton signed off on the repeal of Glass Steagall. No matter that the Merrill and BS acquisitions would have been illegal under GS. Let’s reinstate GS and all will be well.

  31. Ben says:

    Just one note: The FED will cut rates tomorrow. Range from 50 to 150 basis points. Do u think the market will turn around right after the cut? Not a surprise to see a 500 Dow points up day tomorrow!

  32. Vermont Trader says:

    everyone who called a bottom, everyone – was wrong as of today’s close.

    at least in the sp 500.

    now you understand why we get new pundits for every market cycle.

  33. Steve Barry says:

    Can’t believe what just came out of Jeff Macke’s mouth…he is angry at Moody’s and S&P ratings…not for allowing this bubble to form with total malfeasance…but for having the guts to downgrade now. Holy backward thinking!

  34. Robert Muncy says:

    So we lost 500 points, only 6 in the all time great drops. So the fed will cut rates, each time they jump it in the the effected last half as long. AIG news will continue to drag, not to mention WAMU is going down very soon. Behind them Wachovia and we have not even got to earnings season.
    My vote OCT 15 dow at 7500.

  35. constantnormal says:

    “heckuva a haircut there” …

    … I believe the official terminology is “bit of a rough patch there”.

    There is plenty of room on the downside — we have this quarter’s earnings coming up, not to mention the prospect of an incredibly dismal Christmas season — unless there is an “election surprise”, with Dubya borrowing a half-trillion from the Chinese (they get the Jefferson and Lincoln Memorials as collateral) and passing it out to voters in late October in the form of prepaid debit cards (ensuring that it will be spent buying Chinese-manufactured products and bringing the spirit of Communist Consumerism to Christmas).

    Personally, I expect a pronounced period of malaise in the early part of next year, with a sell-off sometime before Labor Day, when, battered and whip-sawed by various aspects of the markets and economy, the last bulls capitulate and throw in the towel.

    I have no clue as to what levels the markets will be trading at when this occurs.

    Though it won’t be a vigorous advance from that point, as the housing inventory overhang and rotting corpses in the financial industry will make this one a long time coming back from.

    It’s not the end of the world, but you can see it from here.

  36. natok says:

    “I’m glad I didn’t jump on the Haynes/Cramer “Oh-my-God-the-trin-is-at-.60-this-is-a-heckuva-buy-look-at-the-strength” bandwagon at 10:30 this morning!”

    I caught that too – i had to turn it – I was almost sick it was so pathetic. They were rollicking at the screaming buys.

    That station is largely a joke save a few bright shinning lights.

  37. JustinTheSkeptic says:

    VT, what is your opinion about this market bounces every time off of a big sell-off like today? If we do it can’t last long…IMHO.

  38. JustinTheSkeptic says:

    To add to this thought about a rebound – what really does it mean to suggest that we match other period sell-offs point-wise but not mention where the sell-off comes in percentage wise??? Why doesn’t this sound like another one of those using statistics to paint your own picture?

  39. CNBC Sucks says:

    Steve – I can’t believe Terranova is the one who makes the most sense today, given that I have made fun of the guy on my blog. I haven’t watched Fast Money in about 3 months yet it feels like a repeat – Adami wants you to buy McDonalds, the pony tail guy says blah blah blah, and Macke pulls out his Curly Howard act. Somebody mentioned the GS earnings call tomorrow; that person needs to know Murti’s $150-200 oil forecast was over a long time window and I can’t see GS trading on August and September crude contracts based on such a wide-range forecast. We’ll see.

    Unless something bad happens with GS and AIG, I think we will see a Westbury Bounce tomorrow before returning to the slow motion death march.

  40. Winston Munn says:

    All my available cash is going into two IPOs: “Soup Kitchens R Us” and “Bread Lines ‘n Things”.

  41. RTC says:

    Hi Barry.

    Sure, was a nice haircut, BUT I still see some names bucking the trend notably in the NASDAQ- I am watching Amazon.com– not dipping much at all. + also QCOM- another stubborn stock that wont drop– Is there a rotation to tech going on with those names????

  42. a guy called john says:

    listened today to a coworker on the phone with her broker’s assistant — “I was wondering about Bank of America, I know (the broker) suggested it — do you still think after all this on the news…mmhmm….okay. How much AIG do I own?”

    i was sitting in my cube waving my arms to the walls mouthing the words “oh my gawd, what are you doing?!”

    :x

  43. John(2) says:

    constantnormal | Sep 15, 2008 5:36:53 PM

    Sort of agree although my time frame is not quite as extended. Like you think we can see the end of the world from here. Bottom who knows but some of the predictions here are way too far on the dark side of pessimistic. So pull your horns in for the next 18 months or so, no yacht charters in the Caribbean or weeks at the Salzburg festival, and some uptick late next year early 2010. If you’re not already defensive you’re up the creek without without a paddle. And contrary to popular wisdom I think BAC is going to be a winner.

  44. Steve Barry says:

    Can anyone explain what just happened on Mad Money? Cramer’s live intro was replaced for a few minutes by a rerun of him happy about Fannie takeover? Was this a technical glitch, or designed to make him look like a fool?

  45. tradeking13 says:

    BR, looks like your call for S&P 500 1350 (12.5% above today’s close) at year end was a bit too bullish, at least so far.

    ~~~

    BR: We ditched that number a few weeks later.

  46. Jeff M. says:

    When does Cramer put himself on his own “Wall of Shame?”

  47. Yves says:

    Emphasis mine

    Goldman, JPMorgan Try to Arrange $75 Billion AIG Loan (Update1)

    By Hugh Son

    Sept. 15 (Bloomberg) — American International Group Inc., the biggest U.S. insurer by assets, may be able to plug a $70 billion to $75 billion financing gap with loans arranged by Goldman Sachs Group Inc. and JPMorgan Chase & Co., according to people familiar with the situation.

    Representatives of Wall Street’s biggest firms convened at the New York Fed for a fourth consecutive day, this time to discuss the funding crisis at AIG. The Fed urged AIG to seek private capital and discouraged the insurer from expecting a loan from the central bank, according to two people with knowledge of the discussions.

    New York-based Goldman and JPMorgan are working with AIG to determine how much the insurer needs, said two more people, all of whom declined to be identified because negotiations are private . The loan would involve temporary financing, a so-called bridge loan, through a syndicate of banks , the person said, adding that there’s no assurance an agreement can be worked out.

    “We’re still working on a number of alternatives,” said Nicholas Ashooh, spokesman for New York-based AIG. JPMorgan’s Brian Marchiony and Goldman’s Lucas van Praag declined to comment.

    AIG fell $7.38, or 61 percent, to $4.76 at 4:15 p.m. in New York Stock Exchange composite trading.

    That’s right, it’s private. It does not affect the Citizens of this great country, or does it ? What about representation ?
    Oh yes, I forgot, it is a SYNDICATE OF BANKS

    Just what the Founding Fathers warned us against.

  48. Bruce says:

    Damn, he’s not going to repudiate his bottom call…that is inexcusable.

    He in the south he has earned the title…WPOS.

    He is on Bruce in Tennessee’s Wall of Shame.

    Bruce in Tennessee

  49. JustinTheSkeptic says:

    CNBCsucks, the Westburys are on vacation. I believe I heard they went on a trip around the world to get a look at how things really are.

  50. km4 says:

    Yes John(2) Clinton signed off on the repeal of Glass Steagall but do you know the means to that end ?

    As Mother Jones reported in June, eight years ago, Phil Gramm ( McCain’s guy ) then a Republican senator chairing the Senate banking committee, slipped a 262-page bill into a gargantuan, must-pass spending measure. Gramm’s legislation, written with the help of financial industry lobbyists, essentially removed newfangled financial products called swaps from any regulation. Credit default swaps are basically insurance policies that cover the losses on investments, and they have been at the heart of the subprime meltdown because they have enabled large financial institutions to turn risky loans into risky securities that could be packaged and sold to other institutions.

  51. Steve Barry says:

    What will Kudlow do? Blame Obama gaining in the polls?

  52. natok says:

    “Goldman, JPMorgan Try to Arrange $75 Billion AIG Loan”

    Correct me if I am wrong, but aren’t JPM and GS Primary dealers with the FED?

    A nice conduit for the helicopter-money drop wouldn’t you say?

    The FED – Oh heaven’s no, we have nothing to do with this deal!

  53. Byno says:

    Lots of traffic today Barry. Any thoughts on some kind of intermediate bottom given the bearish traffic running around everywhere?

    Full Disclosure: I am and remain heavily short, but after ganking 10% today, wondering how much longer to stay on this hoop-ride.

  54. JL says:

    If JP Morgan assists in AIG bailout, who bails out WAMU which has been down graded to junk?

  55. John Borchers says:

    Any more geniouses still think we have an inflation problem?

  56. AGG says:

    I guess old Jeb Bush will won’t be getting any more paychecks from Lehman. I wonder if the Florida muni bond problems contributed to Lehman’s demise.

  57. CNBC Sucks says:

    Justin – I think you are right about a “trip” but it was not the traveling kind ;)

    In my eagerness to comment, I did not even notice 7.9 billion shares traded. There’s the volume you’ve been looking for, CNBC!

  58. John(2) says:

    km4 | Sep 15, 2008 6:15:18 PM

    Do give me a break, whatever frig factors that slimeball Gramm slipped in there, messrs Greenspan, Cox and Pitt had lots of opportunities to sort it out. They didn’t. That’s what I mean when I say there has been a regulatory failure. There’s all the regs on the books you need it’s just the Bush political appointees chose to ignore them.

  59. SR says:

    Nolo Contendere…

    http://www.bloomberg.com/apps/news?pid=20601087&sid=a6G_x9PhA26k&refer=home

    OR as (Groucho) Marx once said:”All people are born alike – except Republicans and Democrats.”

    -also-

    “Who are you going to believe, me or your own eyes?”

  60. jimcos42 says:

    A question for you green eye-shade people:

    What should we make of today’s RECORD volume but NOT a record price change?

    Today’s DJIA was the 6th largest nominal drop, but not even in the Top 10 percentage wise.

    From a technical perspective, what might this suggest about the overall trend of things?

  61. Pat G. says:

    It’s been long overdue. The fact that some Asian markets were closed for Holidays only forebodes tomorrow’s markets. Fleckenstein was validated on Fast Money. Bush has now come full circle from the popularity he had after 9-11 to the unpopularity he exits with when the last 500+ point drop occurred on his watch. Interesting to note that the market now expects the FED to lean toward cutting rates again due to the rather large decrease in oil prices. I’ve mentioned this here before, until the reduction in oil per barrel translates to a similiar reduction in gas per gallon nothing changes.

  62. bonghiteric says:

    green mountain et al:

    BoA’s offer for MER is all stock. Don’t expect to see the MER’s share price rise to $29.

  63. Bruce says:

    Let’s see…

    Industrial production down 1.1% today..surprise to the downside

    capacity utilization down 1% today…surprise to the downside

    Pending home sales down 3.2% Sept. 9th..surprise to the downside

    Initial claims Sept 11 445k..5k more than predicted

    Sept 12 Retail sales…down .3%…surprise to the downside

    Sept 11 Trade balance -62.2 billion…weaker than expected..

    The point? The investment bank business actually disguised statistics which show, in my opinion, a significantly and apparently rapidly weakening economy. Once the investment bank news shakes out, we’ll still be left with an economy that has no driver. Not tech, not oil, not retail, not homebuilders, not commodities, ….not anything.

    Just be careful.

    Bruce in Tennessee

  64. Nihilism says:

    …and we have not yet — officially — entered the fall season! Boy I love those fall colors. Green turns to yellow, maroon and red! And finally we bare it all and what is left is just skeleton of the tree!

    It will be a beautiful slide thru’ the winter…Just a hunch as GWB ends his final term.

    Posted by: Nihilism | Sep 4, 2008 9:15:20 PM

  65. John Borchers says:

    Why no rate cut today? Why would the rate let negativity build?

    That seems like a bad idea. The more people lose the worse this gets. The Fed needs to delay the loss of all values.

  66. Eric says:

    Okay, even I underestimated the extent to which Cramer would try to distance himself from this downturn by using his “if only the government had listened to me” hedge. Here are his headlines **JUST FROM THE PAST 24 HOURS**. (1) “I had always hoped that somehow people in government would get wise to my black-hole theory.” (2) “We’re Deep in the Hole and Need Some Help.” (3) “Without Help, Our Financial World’s Sunk.” (4) “Cramer: Fed and SEC Dropped the Ball” (5) Cramer: If Only the Fed Would Slash Rates

  67. Anybody have a read on MutFund redemptions?

    Any takers on a 4-digit DOW?

    That might be the claxon, necessary, to shake them out.

    If herd startles, we’re going to see a whole new level of non-linearity.

    I’m thinking that, if it is the plan to hold this together til 4 Novo, the ramps better be put in place soon.

  68. John(2) says:

    Bruce | Sep 15, 2008 6:54:55 PM

    Basically Bruce you are 100% right the real economy which Joe Sixpack experiences everyday is in deep doo doo. All this turmoil on WS only means something to about 25% of the population despite the claims that about 45% of Americans own shares. The reality is the shares owned by individuals in their mutual funds etc by that bottom 20% would scarcely buy you a haircut. Of the 25% who have a significant chunk, the top 5% are barely going to notice it, the next 20% who have significant equities in their IRA’s and 401k’s already winced when they opened last months numbers a few days ago and when they open the September numbers they are going to have a shock, many will prefer not to open them at all. A buddy of mine owns the local VW dealership and things are bad, believe me. This is going to be the worst Christmas sales season for many a long year and all those Euro tourists, particularly the brits, are not going to be there to prop up the numbers. In the real lives of ordinary Americans this is going to be a pretty bad year ahead whatever way you cut the mustard. I’m doing ok but in the past couple of weeks I’ve put off a trip to Europe, decided not to decorate part of my house, and cancelled a three day stay in NYC which I usually take in early December with some buddies from Hilton Head. Multiply this by a few million and…….?

  69. Spud says:

    Kudlow said it was a “tough day” today. … another for the translator.

    Oddly enough, I did agree with him when he said Mr Paulson did the right thing, and that worries me a great deal. Now Mr. Bernanke on the other hand..

  70. John(2) says:

    They had Roubini, Rogoff and Swonk on the Newshour tonight. The only sensible news program basically. Roub was his usual laconic self telling his story which we know only too well. Rogoff basically agreed with Roub but didn’t think it was going to be quite as bad, he then contradicted himself by saying firstly that Paulson did the right thing on LM but that ultimately he was, get this, going to have to come back to the table with taxpayers money to sort this out and that it was regrettable but necessary. Swonk gave us a commercial for the company she now works for which had a completely forgettable name but has apparently gained market share. She made Gasparino look good.

  71. D.L. says:

    Steve Barry @ 6:20:17 PM

    “What will Kudlow do? Blame Obama gaining in the polls?”

    ………………

    Probably.

    But then, for his part, Obama is blaming all of this on “tax cuts for the rich”.

  72. Spud says:

    Any more geniouses still think we have an inflation problem? — John Borchers | Sep 15, 2008 6:26:12 PM
    <<<<<<<<<<<<<

    Last time I looked at our deficit numbers (even though the chimperor tried to hide them), yes! Well, after almost 8 years he is trying to make some progress. Now he’s SELLING weapons to the middle east – hey, why not outsource our future wars and make some money!

  73. Eric Sebille says:

    I wonder how Easy Al Greenspan looks himself in the mirror when he wakes up.