WTF just happened?

Okay, our Dow 10,000, 9500 and now our Dow 9,000 targets have been hit.

Where do we go next — are we close enough to a bottom to buy, or are we heading much lower? 

Dow is now off 39% from its highs.

~~~

This cascading waterfall selloff is ugly. Next key level of support is 8750, where we would again be buyers of the market.

If that does not hold, then we are looking at no support until the 2002 levels — about 7250. (I may have to dust off that Dow 6,800 call).

As we noted earlier, tomorrow is that huge Lehman derivative settlement, and I wonder how much of this action is due to that.

Category: Markets

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.

256 Responses to “Dow 8579”

  1. Blackhalo says:

    “I’ve been selling my various short ETFs gradually into this the last few days. I’m kind of regretting it, which is probably the greed talking right now.”

    I know the feeling. It is nice to be right, but I did not expect to be this right.

  2. Transor Z says:

    Following this blog at this time in history feels like being in NORAD when the missiles are on their way. It’s a privilege and a great public service that Barry and the regular contributors are providing to all of us. Thank you!

  3. Charles says:

    Well, VIX just breached 60. If we were into the unknown before we are now just beyond.

  4. BobC says:

    @mhigh – That’s the conclusion I came to a couple of weeks ago, the technicals have no meaning. Picking support levels from 5 or 6 years ago is like predicting where airline fares are going to be based on 6 years ago.

    The trend is your friend and don’t try to catch a falling knife (weren’t these in BR’s Apprentice Investor series years ago). Beyond that, have stops or hedges on all your trades and keep your Depends on.

  5. Kieran says:

    I was once up 30% this year, but I’ve lost nearly all those gains because I tried to game the market and get in early.

    I’m a mixed fundamentalist/technician, too, but my technical analysis has only lost me money in the last month. Until the TED spread gets below 2 (it’s now at 4.23), our economy is a non-economy. Until that gets resolved, I’m watching this game from the sidelines.

  6. boooyahhh says:

    I stepped into this mess and bought some NEM at around 3:30 today. I do think gold is going to explode and the physical is hard to get right now. NEM might be a proxy. Sold all other PUTs earlier this week. Can’t do the woulda-coulda-shoulda for selling too early as we’ve all been burned in past interventions. I’m stunned by what’s happening and have no other investing ideas. It is indeed best to sit onthe sidelines.

  7. Dan Duncan says:

    A 911 close on the S&P….which is where I believe it managed to close on the 1st anniversary of that dreadful day. Markets around the world, dialing 911….

  8. leftback says:

    Well, that was more like real market action with shorts involved and covering at the end, one presumes. A lesson to the powers that be not to mess with the system.

    @Bruce in TN: Nothing wrong with that long-term call. No need to pick up a falling knife until it has stopped falling. I am scared of what happens if the 401K crowd completely lose it here. Three burgers to you this week, and Steve Barry gets burgers for life. He has been right time and time again.

    You’ll be amazed to hear that I bought about 3.35 and actually made money as shorts covered en masse. My fingers were flying. Of course I was trading small. It’s a good thing I don’t care about money and hence do not feel fear. It’s a game.

  9. Byno says:

    Alright Barry: my lizard brain is in full-blown holy shitballs mode. I keep nibbling and getting my ass handed to me.

    So, now I wonder if Black Monday is inevitable. Tomorrow’s open will be Fugly. And, if the buyers aren’t there…

  10. Winston Munn says:

    Well, there are a couple of bright spots. At least these arguments are settled:

    Inflation versus Deflation
    Keynesians versus Austrians

  11. robd says:

    I hear Roubini is working on a book
    “Dow 3600″….

  12. Winston Munn says:

    (edit: sorry, my above post shoud read Nikkei.)

  13. Mike in NOLa says:

    Bruce in Tennessee

    Am reading the alleged memoirs of Jesse Livermore. It does say one thing I wish I had realized was true: sit tight once you’ve taken your position, either bull or bear. In other words, don’t play the bear market rallies and ignore corrections in a bull market once you’ve taken your position.

    If I had just held on to the ultrashort ETF’s I had right after Hurricane Ike, I would have made 10%-20% on my whole account in the past few weeks even with only 15% at risk. Instead, over the past two weeks I lost a couple of percent.

    Well, guess there won’t be another short opportunity like this in my lifetime.

  14. Peterpaul says:

    Where am I?

    All investments

    Cash – 50%
    Money market- 40%
    Silver/Gold (physical) – 5%
    TLT puts (03/09 at 93.00) 4%
    WB puts (10/08 at 2.50 bought for a nickel on friday) 1%

    I plan to divide the profit from the puts into precious metals and cash…if I can get any of either (wink).

    Good luck to all.

  15. Neil S says:

    The last few days have been very painful for me as I have had to follow Cramer’s advice over yours.

    Oh the self-loathing of it…

    :-)

    Neil

  16. leftback says:

    Mike in NOLa: So true, Steve Barry should write his memoirs as the book of this one.
    He has had it right from the get-go.

  17. Paul in NYC says:

    The biggest tragedy here is that a lot of folks have no choice but to withdraw 401k money now- they are so strapped. Compounded with the general diminshment (by choice) of contributions to plans- this is going to be a very, very, very, long bear market.

  18. Donkei says:

    It took two and half years for the Dow to bottom at 41 after the ’29 crash. That was 89% off its previous high in April ’29.

    Since electrons are a lot faster than ticker tape, I’d say Dow 1600 about mid-year 2009.

  19. Ben says:

    I put up my WHITE FLAG and goes to short from now on if I’m allowed to short!

  20. Ben Esposito says:

    Thoughts on this chart form a while back? I remember thinking it couldn’t be true back then…

    i’d love to see someone do an update.

    http://www.themoneyblogs.com/millionairenow/my.blog/nahb-housing-market-index-and-the-sp-500-79-correlation.html

  21. Knapp says:

    This is truly amazing. 2000 points in just 5 trading days. I tried to pick a trade bottom on Tues and got washed out yesterday. No way I am getting back in without clear signals that a bottom is in place. If we ever get one.

  22. Short Everything (except whiskey & tp) says:

    Comment of floor trader to Maria “Where are the buyers?”

    There are none. When there are none, bids are dropped, bigtime. Again, tommorrow will be a bloodbath, Monday will be worse. Market holiday next week.

  23. Short Everything (except whiskey & tp) says:

    Comment of floor trader to Maria “Where are the buyers?”

    There are none. When there are none, bids are dropped, bigtime. Again, tommorrow will be a bloodbath, Monday will be worse. Market holiday next week.

  24. cloudy says:

    Warren Buffett, I’ve read about J. P. Morgan, and You are no J. P. Morgan!

  25. leftback says:

    Barry Ritholtz wrote: “This cascading waterfall selloff is ugly”

    You have a talent for understatement at times, Baz. BTW, thanks again for the opportunity to share these momentous events with such bright and interesting company. We will probably never see the likes of this again in our lifetimes and you have been a thoughtful (and honest) guide.

  26. Jeff M. says:

    Hats off to Steve Barry. Saved me from losing my shirt with his QID call. That and SRS, SKF are the only things keeping me from doing that right now (GDX will be fine, I think, maybe not?).

    Thanks a lot!

  27. Andy Tabbo says:

    Yowsa.

    Ok. It’s really scary out there right now. I think if you’re short still, you need to cover those shorts tomorrow….we’re about to get a pretty sharp counter trend rally.

    If you have cash, then maybe an OK time to put a little cash out there. We’re going to get a screaming rally in the next few days, which will be another great rally to sell.

    We could see a 15-20% bounce in the next week.

    - AT

  28. insaneclownposse says:

    from a contrarian standpoint, we are probably getting close to a bottom because now most of the comments on this blog reference how much further the markets are going to fall. During the huge drops prior to this, most folks were commenting about what a great time it was to get long.

    I don’t know if it is that simple, but I remember in July 2002, Bill Gross wrote a self-serving blatherscreed about how the Dow was headed to 5000. Most people at the time believed the markets were headed a lot lower than the levels actually reached.

    Hey, we’re within spitting distance of those 2002 lows right now. Amazing!

  29. MadJackMcMad says:

    Dutch bailout just announced. Looks like a copy of the UK plan. 20 billion euro for the banks.

  30. Tosh says:

    i thk Fed is gng to become in effect clearing agent for the fixed income securities (CP, Intra bank deposits etc..) and i thk that will help to unfreeze the credit markets ….i thk that will cheer the markets and we will get a 1000 points rally …Fed will do whatever it takes….

  31. hungryneck says:

    30% rally at a min. soon.

  32. batmando says:

    PPT wet noodle push? from below 8600 @15:50, up 165 @15:55, only to flop back below 8600 at close. no mo’ mojo? tomorrow they have no cojones left?

  33. Nicholas Weaver says:

    My algorithm: The money I have in index funds is staying in index funds. I was tempted to shift some out back around jan-march, but didn’t. So at this point, it doesn’t matter.

    I won’t put any more money into the market until the credit market calms down. The TED spread for LIBOR is a fewer participant, hopefully rational market. The ostensible intelligent people refuse to lend to each other. Once the TED spread drops, THEN I will look at putting more money into the market instead of the mattress.

  34. Jim says:

    Factor in inflation from 2003 – 2008 and we are at the lows. Dow 7300 * 1.19 = 8687

    Either a bounce tomorrow or Global meltdown of 1500-2000 points.

  35. so are we setting a record for losing streaks today?
    http://www.cnbc.com/id/27087687

  36. wally says:

    Patience, patience… never start buying until you KNOW it is on the upslope. The pittance you save by waiting too long is nothing compared to what you lose by getting suckered into buying on the way down by a false hope.

  37. Posted by: NY stock guy | Sep 18, 2008 1:45:22 PM

    I think I offered to accept, did you ever accept my offer?

    something along the line of, you’re on, we’ll clear through BR, just say the word..
    ??

    past that, nice day today, having a bit of Indian Summer, the woodland creatures are putting away stores for the Winter, and was even able to catch a few low UV Rays–Thanks Sun!

  38. Mel says:

    Panic trumps analysis, that it took so long for the market to respond to the expected real estate crash proved manipulation. Free fall is gravity without intelligence. Best bet is to take your money and run.

  39. lalaland says:

    Well, the upside is soon we gonna party like it’s 1999….

  40. constantnormal says:

    @BR — “As we noted earlier, tomorrow is that huge Lehman derivative settlement, and I wonder how much of this action is due to that”

    I think that’s it. If you look at the spot gold prices, they took off in the last 20-30 minutes of trading. People are battening the hatches and expecting maximum fear.

    As Iceland goes, so goes the USofA?

    There might be a trading bottom in here somewhere, although that old adage about catching falling knives might have to be amended to something like a catching a snowflake amidst a hail of anvils. That doesn’t have a good ring to it — superior wordsmiths are hereby called upon.

    We could see that definitive plunge everyone has been looking for, with the Dow covering the space between 9000^H^H^H^H 8600 and 7000 in a single day, perhaps in a single 20 minutes.

  41. Mr Bubbles says:

    How do I know we’re not near a bottom? Everywhere I look people are saying “now is the time to start nibbling on stocks..” etc, etc.

    You heard it here first, we are going to break WELL below the 2002-2003 lows. This thing is like a freight train.

    Wake me up when people are jumping out of windows on Wall Street.

  42. leftback says:

    AT makes sense. I wonder if Barry was right, fear of the Lehman derivative boogeyman? One can hardly wait until tomorrow…

    We are within spitting distance of 880 now, and if any technical support level means anything at all, then that one surely does. If we don’t rally in the next few days we are all going to be back working on the land as subsistence farmers.

    A lot of people I know are still acting like everything is normal, it’s the ups and downs of the market. Denial is still very deep, and I have to say that really does concern me.

    I have to go and read Mish later on. Remember those posts: “what can’t happen, is about to”? Yes, it bloody well did. He has been right so often about so many things.

  43. ABK says:

    Just have to say thank you. Small investor with a past history on Wall Street. I have been reading this blog and it gave the the confidence to act on my belief that we were headed into a big problem. I went to cash almost a year ago and wondered if I was simply being stupid. The last few days have left me feeling very, very grateful that this community exists. You have saved my retirement. Thank you. All of you.

  44. Uncle Jeffy says:

    Hey, you guys…

    Empire @3:13:51
    Phil @3:15:32
    AGG @3:19:29
    Ritchie @3:27:04
    Paul in NYC @3:28:36
    CNBC Sucks @3:56:33
    Byno @4:10:59
    Winston Munn @4:11:01
    robd @4:11:35 -

    As Jon Stewart would say, “You Nailed It!”

    Intrade now showing odds of Obama victory at 110% and rising…

    Paulson and Bernanke rumored to be buying large billboard in Times Square. Display (due tomorrow) will read:

    HEY – YOU TRUSTED US. YOU F**KED UP.

  45. Winston Munn says:

    Tosh wrote, “…Fed will do whatever it takes….”

    The Federal Reserve is simply a bank – they are not The One, The Wizard of Oz, or Jesus of Nazareth – there won’t be any Miracle on 34th and Wall Street this Christmas.

    This problem engulfs the Fed’s balance sheet – the only bullet they have left is monetization, which would in effect collapse the dollar and the world economic system.

    No, we will follow the path of Japan, mixing in a decent amount of Great Depression just to call it uniquely American.

  46. blin says:

    Maybe the DOW was aiming for the 38.2% fibonacci.

    If that is the case, objective acheived.

  47. Hangtime79 says:

    7300 is the next stop.

  48. Old Bob says:

    Vince farrell on cnbs saying too late to sell. Of course he’s been saying the same thing for weeks.

  49. NY Stock Guy says:

    Mark E Hoffer: Yes I do recall that. At the time I was joking and didn’t really think this could happen, at least not for another few months.

    Feel free to donate my $20 to the charity of your choice.

    But just think of all the GM stock could buy with it.

  50. ifihadamilliondollars says:

    If people are out there with cash, talk to your lawyers about going George Bailey and consider issuing some short-term promissory notes to small businesses in your area that can’t get LOCs. If the banks aren’t doing it, that means there’s a market for it. Even if you go low-interest and tread water it can help fight inflation losses and is probably about the most genuinely patriotic thing I can think of monied people doing right now.

    “Marry Chressmass, you old Savings & Loan!”

  51. wally says:

    ABK,
    Same here!

  52. Bob A says:

    “I remind myself once again that the Nekkei corrected 75% during the lost decade.”

    yeah and it started as a result of a real estate bubble… remember when they owned Times Square?

  53. Byno says:

    Someone’s buying Spyders after the close.

    Hope Springs Eternal

    Which is bad.

  54. manhattanguy says:

    Now we are a stone throw away from the bottom.

  55. Byno says:

    Winston,

    Monetization is here. I’m not disagreeing with your thesis, but if, and that’s still a tentative if, and the fact that I’m talking about it means it probably won’t happen, but if the market crashes tomorrow or Monday, the government will have no choice.

    And all these texts from my little buddies making 20% on the ultrashort financials today will wonder – along with the rest of us – what good 20% on an inevitably worthless currency is worth.

  56. pj says:

    Can’t see where we are headed. Could it be that this could be the part where they say that the market overshoots, even when it falls? Too much despair all around. Or maybe we haven’t see nothing yet. Just too confusing.

  57. Amos Satterlee says:

    I am now concerned that we will see not a run on The Banks but a run on The Stock Market. This is an attempt to flesh out this idea.

    The single biggest difference between now and 1929 is that people have most of their savings (in the form of IRAs and 401k plans) in mutual funds, i.e. in the stock market. In 1929, most people had their savings in banks. So, if there is a flight to cash, the run will be in the stock market.

    I agree with most that lack of confidence in the markets is a huge problem right now. However, I think that the issue is broader than lack of confidence between institutions to lend each other money. I think that the lack of confidence in the markets is spreading to us, who don’t spend our whole life watching the tickers.

    The general public keys in to the big headlines. And what might boost confidence in the financial professionals can have the opposite affect on the public. While the professionals applauded the coordinated efforts of central banks, I believe the general public’s attitude is that if the situation requires such drastic action, it must be really, really bad. And if that’s the case, why stay in the market? I’ve lost a lot of value already and I have no assurances that I won’t lose a whole lot more. Time to get into cash.

    I believe that the public’s confidence will be restored only when commentators can judge the value of all these funny-money ABCs and XYZs with a certain assurance. Forget the niceties of PE ratios, LIBOR rates and the such. Forget about the inside-baseball issues between the financial pros. Until you can tell me how much GM has on it’s balance sheet, the rest of it is drivel.

    The “new economy” of the internet bubble blew up when it became clear that earnings do matter more than eyeballs. The “new economy” of unregulated derivatives and reserve requirements is now blowing up because proper risk management does matter more than returns.

    How this works out, I’m not sure.

  58. scorpio says:

    holy shite, we’re on a one-way ride to SPY 400, i’m thinking Oct 2010

  59. RJ says:

    We have to dig up Milton Friedman and burn his heart. It is the only way out of this.

  60. ERI says:

    When the monthly statements from the publics IRAs and 401Ks and pensions get opened people are going to have heart attacks.

    I think retail sales will fall off a cliff over the next 6 weeks. The vicious cycle starts to spin.

    Eric in Austin

  61. Chris says:

    Every single one of these comments is bearish. Tradable bottom looks like it’s right……NOW.

    Posted by: Gregg | Oct 9, 2008 3:32:52 PM

    =========================================
    Yowsa.

    Ok. It’s really scary out there right now. I think if you’re short still, you need to cover those shorts tomorrow….we’re about to get a pretty sharp counter trend rally.

    If you have cash, then maybe an OK time to put a little cash out there. We’re going to get a screaming rally in the next few days, which will be another great rally to sell.

    We could see a 15-20% bounce in the next week.

    - AT

    Posted by: Andy Tabbo | Oct 9, 2008 4:25:29 PM
    ========================================

    LOLOLOLOL

    Is that you Hank??

  62. Dr. Kenneth Noisewater says:

    I’m leaning towards selling my SKF and locking in the gain, I’m nervous about continuing financial rule changing especially if the FedGov starts taking positions in this sector.. If they do that and start whacking the rulehammer it’s impossible to predict what could happen…

    *WHACK* CDS contracts are invalid!
    *WHACK* No shorting firms held by the FedGov!

    At this point, plausible :p

  63. CNBC Sucks says:

    Joe Terranova just recommended that the US Government buy up stock index futures.

    What country am I in?

    Stop making poor people pay for your DOW JONES FALSE PROFIT INDEX.

    leftback, I swear I am not on absinthe today.

  64. Jim M says:

    Guys, you have it all wrong. I’m telling all my clients: Dow 36,000. You heard it here first.

  65. Economics 101 says:

    Well,

    We are really screwed now….. watch as the classical economists will be proved correct. Someone in here knows what I am talking about…. if you don’t know then I suggest you read up on political economy and try to understand what it is about. Wealth is always built on the backs of labor. Harmony has to be maintained to achieve balance. A statement….You greedy fools…..You’ve killed us…..

    Econ 101
    Student at a public college.

  66. DL says:

    Andy Tabbo @ 4:25:29 PM

    “We could see a 15-20% bounce in the next week”.

    I’m willing to believe that only if we get another big sell off tomorrow.

  67. BlackSwan2008 says:

    Since this blog hosts the Cramer fanclub, allow me to use one of Cramer’s quotes, ‘DON’T BUY, DON’T BUY,DON’T BUY’….unless it is short and a trade only (my 2 cents).

    IMHO – we are mirroring the bear market of 1972-74, we still have 10% to go, to reach the 50% mark as in the 70s.

  68. wally says:

    Too many people here looking for reason in unreasonable times.
    Forget the pegs, the signals, the ratios, the comparisons, the ‘capitulation’ and the ‘bottom’.

  69. ardano says:

    BR and TBP Readers:

    First I thought it was LEH cds. But as the indexes rolled in the final hour it had to be more. We killed a few Generals today. The perfect storm continues. Hopefully, GE will provide some support.

  70. Matt says:

    Why political economy matters:
    “the rate of self-expansion of the total capital, or the rate of profit, being the goad of capitalist production (just as self-expansion of capital is its only purpose), its fall checks the formation of new independent capitals and thus appears as a threat to the development of the capitalist production process. It breeds over-production, speculation, crises, and surplus-capital alongside surplus-population.” (Capital, Volume 3, Ch. 15)

  71. Winston Munn says:

    Byno,

    Thanks for your thoughts. The monetization is not full blown, as of yet, although I fear it cannot be stopped. The demand from the Treasury is astronomical, and bid-to-cover is dropping drastically. As the demand increases, the FCBs have fewer and fewer dollars available to support the increased demand – and with the borrowing being used to purchase shoddy collateral, doubt is growing about the very quality of the U.S. Treasury note itself.

    Today was a good example – down 7% in the markets, yet the long bonds didn’t respond in kind. The only pressure was on the short end, and even that was not as severe as one would think, considering the market’s collapse.

    We used to fear a downgrade of the bond insurers – now we need to fear a downgrade of Treasuries themselvs.

  72. mephisto says:

    I would like to point out that Doug Noland and David Tice were also right a year ago. David Tice telling DeeDee Bolton that the S&P would be “cut in half.” Cut in half, how much more right could he have been.

  73. If people are out there with cash, talk to your lawyers about going George Bailey and consider issuing some short-term promissory notes to small businesses in your area that can’t get LOCs. If the banks aren’t doing it, that means there’s a market for it. Even if you go low-interest and tread water it can help fight inflation losses and is probably about the most genuinely patriotic thing I can think of monied people doing right now.

    “Marry Chressmass, you old Savings & Loan!”

    Posted by: ifihadamilliondollars | Oct 9, 2008 4:44:40 PM

    this is, actually, the way fwd: to Rebuilding our Republic.

    The next Revolution is the Evolution to Devolution. IOW, know who you blow.

    “Many a slip between Cup and Lip”

    Centralization, in all things, is contra to the long History of Human existence–we, still, can’t ‘know’ more than 150 peep–see: Evolutionary Biology, Anthropology, Behaviorial Economics–for starters..

    Charlie Merrill should be burned in effigy.

    Maybe, now, the Irony of our biggest MutFund Pimp being named ‘Fidelity’, can be seen..(?)

    Posted by: NY Stock Guy | Oct 9, 2008 4:44:35 PM

    Well, as you can tell, I didn’t think it was going to happen either, for me,it was a more PoliSci type bet–having to do w. keeping Juan McWar viable for 4 Nov.

    time for a different idea~ unless we get some kind of truly miraculous ~30% snapback..which I’m definitiely Not playing, for any wager past U$D 20..

    as far as the donation goes, I’ll put your name on the clubs, that I picked up for The FirstTee, out of the bargain barrel at the local shoppe, today..

  74. ECONOMISTA NON GRATA says:

    EVEN US BEARS GOT DEPRESSED TODAY…!

    Best regards,

    Econolicious

    P S We need a sharply lower, high volume opening tommorow…. I’m not ready to buy into a cyclical correction until that happens.

  75. Matt Rafat says:

    It all depends on GE and Google. That’s it–the double G’s will determine whether we make or lose money. No other real catalyst on the horizon–interest rates have been cut, and money pumped in, so both the money supply and interest rates have been manipulated. After HP’s positive earnings, I am feeling sanguine, despite the blood on the streets.

  76. CNBC Sucks says:

    Oops, I meant FALSE PROPHET INDEX, but I guess FALSE PROFIT applies too.

    Cool, Dylan Ratigan just whipped up the panel talking about marital infidelity. I love these little glimpses of Dylan’s personality on Fast Money, like when he brought up rear ends and hookers (http://cnbcsucks.wordpress.com/2008/06/12/i-like-dylan-ratigan/).

    Physical appearances on CNBC are a great economic indicator. Boy, did Bob Doll look like shit today.

  77. Blackhalo says:

    “We could see a 15-20% bounce in the next week.”

    Why?

    Have home prices stopped falling? Have the CDS issues been resolved? I’m still waiting until MS GS and JPM are in receivership, before I start calling a bottom. Although GS might survive with a little extra help from Paulson and Buffett.

    Until the bad paper is off the books or valued a zero, there is no way to evaluate the true worth of any stock. Who knows who has that toxic waste on their books until it all unwinds. Ford, GE, everyone?

  78. Posted by: Economics 101 | Oct 9, 2008 5:05:07 PM

    as you know, by this: ” Harmony has to be maintained to achieve balance. ”

    Bastiat was one of the Great ones..

    Past that, Stay Well, and Keep Thinking~

  79. jagamohan Swain says:

    Tomorrow either we crash or we rally hard.There is no in between.That much is sure.But it’s fast appearing to me that investors are throwing baby with the bath water.This is nasdaq 2000 Inverse bubble.

  80. SkyGuy says:

    Yea all. I have been a lurker at several of these economic blogs for the last 18 months. A big thanks to all you guys, I don’t quite know you on a first name basis, but I have been reading excellent commentary from this community for quite a while, and I am in much better shape because of it. I’ve seen everything this year: my ARPS got frozen, my SKF got funky during the shorting ban, and many a fed intervention/sunday announcement has hosed my Monday morning market buy/sell (I don’t do that anymore!). And somehow I’m still up AT LEAST 8% for the year. I’m now in all cash, (Many different currencies), and some gold and silver. Any rally of any kind I will reload minor shorts/puts, but I honestly feel no real need or desire to extract any more booty from this carnage. Time to go to a desert island try to forget/deny this nightmare is in full tilt. Anyone have any safe bank ideas, especially outside the US, that would be greatly appreciated.

    Good luck guys, and a big thank you from a non-broke investor. If I had let my old financial manager continue his buy and hold with such great financials as WM, MS, and BAC…

  81. Joe McCann says:

    As of today, completely in cash 100%.

  82. Mike in NOLa says:

    Guess no rally tomorrow: Citi has broken off negotiations over Wachovia. There are some really stupid pr__ks out there. No wonder they are in such trouble.

    Maybe the only way to save it is for Hank to take a baseball bat to Vikram. It’s hard to imagine Ben holding one.

  83. Jeff M. says:

    If we crash tomorrow, we’ll get a rally next week.

    Won’t we? I hope……maybe…….

    Can we?………please?

  84. A small fish says:

    This is a crash. How do you set targets?

    There are no buyers. All said and done, if you have money and you don’t invest at these prices – you are a window shopper.

  85. Gavin Reid says:

    “catching a snowflake amidst a hail of anvils.” Quote of the Year!!!

  86. Patrick says:

    I heard that 30% of the hedgies are at risk of going under – a factor that would flood the market with shares and fire torpedo into the side of the HMS Dow. I also heard that the latest arb is to short stocks that sit in struggling hedge funds portfolios…

  87. jm says:

    Surveying the news reports and watching the market action late yesterday and earlier today, I got the feeling that prices were beginning to stabilize, and the bear-market rally Barry was semi-predicting might be imminent. So I sold out my Proshares Ultrashort positions. I keep reminding myself that no one ever went broke taking a profit. But the tens of thousands more I could have had! Ach!.

    Now I’m wondering whether this might be a sign that the bulls we used to get those rallies from are all wiped out and have no ammo left to buy with — and that maybe many others of the bearish persuasion are, like me, scared stiff of being whip-cracked by one of those good-ole-fashioned 700-point up days and are sitting safely on the sidelines, leaving no shorts to be squeezed.

    If so … might stock prices be on their way down to a level at which they’d be justified by dividends — with the downside price risk factored in? A real old-fashioned bottom with the dividend yield at 6%?

    How low would that be? How low will it be with profits at the level they’ll be when this developing recession bottoms out?

    Dow 3,600? Lower?

    What thinkst thou, Barry?

  88. bk says:

    LOOKING AT A BLACK SWAN FACE TO FACE IS TERRIFYING INDEED…THE HORROR IS FINDING OUT THEY BREED LIKE FUCKING RABBITS.

    tread lightly folks..

    bk

  89. wtf says:

    I gotta agree with another commenter who said this blog gave him confidence to go to cash last year. Same here, I got out in the spring based on the logic of those here and Calculated Risk.

    So THANKS MUCH from me too!!

    One question. In 1990 the Dow was at 2442. Factoring inflation where would that be in today’s dollars? Not implying anything, would just like to know.

  90. Patrick Neid says:

    At times like these it is good to remember that famous Confucious proverb:

    “Man who pick bottom usually have shit on finger”….

    That said, I’ll be smelling mine when I’m hopefully buyig everything I can get my hands on between 700-800 on the spooz by the end of October. That’s where we should have our panic low in a replay of 1974.

  91. j says:

    where are the patriotic americans to save us? BUY people BUY! I am dripping every other day until i run out.

  92. Pat G. says:

    Here’s some facts. One year ago the DOW and S&P closed at their all time highs. Since then the DOW is down 39% and the S&P 42%. The last time oil was this low we were paying $2.90 a gallon. Haven’t seen that yet. The last time you could buy a share of GM for $4.75 was in 1950 when a new car cost $3000 and gas was .25 a gallon.

  93. John Bruso says:

    I’m not looking to even think about buying back into this market until the TED spread returns to normal:

    http://www.bloomberg.com/apps/cbuilder?ticker1=.TEDSP%3AIND

  94. Short Man says:

    I think the system is too fundamentally broken to rely on technical support levels. Margin calls, deleveraging, fear and uncertainty will drive this market down past recent support (2002 and 1998).

    I’ve been taking profits along the way (regrettably) but still hold about 30% of my portfolio in SRS (down from nearly 50%). Commercial real estate has not been discussed much in recent weeks except for an article here and there which has been lost in the mix of the credit/banking news. Obviously going into the toilet.

    My current setup:
    Cash 50%
    SRS 30%
    Puts 10%
    Gold stocks 10%

  95. jwk says:

    Well, if it had averaged 5% over that time (likely high), then the Dow would be equivilent at around 5800

  96. Patrick Neid says:

    I bought a new Olds Cutlass Supreme laid to the bone for $2700 in 1973 and gas was 25 cents in Michigan just before the embargo.

  97. Mike in NOLa says:

    Dr. Kenneth:

    SKF’s may use swaps. The prospectus allows it, although they don’t tell you if they do. With the problems in the swap market, the could fail or lock up. I would be more concerned about that than anything other than Ben and Hank engineering a short squeeze.

  98. Jeff M. says:

    @j: “Patriotic Americans” are getting their asses kicked in the markets and are taking the money (what’s left of it) and going home.

    Until the big players decide to get back in, this carnage will continue.

  99. Dan says:

    Not only does today mark the peak of the bull market, but it also marks the day S&P 500 closed at a low in 2002 at 777…

  100. scorpio says:

    agree, the C news is hilarious. if Vikram Panic was still at his hedge fund he’d be bankrupt and out of the business like most of the rest of them. instead he’s sitting on taxpayer-subsidized deposits and having a tantrum. priceless. and no one in this gobmint has the stature to call bullshit. just keep buying worthless pieces of paper on Mom & Pop’s dime