$110 billion evaporates in market bloodbath

by Swan | January 22, 2008 at 04:13 am

1934 views | 26 Recommendations | 28 comments

People who have read anything I've reported, know that I don't just quote an article. I'll usually take a quote from of the article, then add my own report to the quote.

However, this time, there's simply nothing else to add. I'm dumbfounded. Does anyone know what is causing all this alarming mayhem?

I'm not a person that really knows anything about stocks either. If there is anyone reading this that knows what they're talking about; would they please interpret the data for us?

LOCAL stocks fell more than 7 per cent today, wiping $110 billion from the market's value, in the biggest rout since October 1987.

Europe's main stock markets slumped further in opening trade today, posting losses of between 2.57 and 4.62 per cent and mirroring huge sell-offs in Asia.

London's FTSE 100 index of leading shares plunged by 2.81 percent to 5,420.50 points at the start of trade on Tuesday, while the French stock market plunged 2.57 percent, with the CAC 40 index falling to 4,622.70 after losing nearly 7.0 percent on Monday.

In Frankfurt, the DAX index of 30 leading German shares dropped by 3.88 percent to 6,526.99 points.

Uploaded Video: American's Tightening Their Belts.

Source: CNN.com Living

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Albert Milliron

at 02:46 on January 22nd, 2008

Swan:

The US Market is expected to take a hit when it opens in a few hours. Its resession fears, Housing foreclosures, and leading indicators saying another bubble is busted

Swan

at 04:07 on January 22nd, 2008

Hey Politisite,

Thanks for the flag. :)

Not only the U.S., but India's reporting astonishing losses too, read this!
~ Swan

jdkk

flagged this story as Good Stuff

at 03:33 on January 22nd, 2008

Swan, Wow... you're right on it... probably be the story of the week I'd say.

jayr_patron

flagged this story as Good Stuff

at 04:01 on January 22nd, 2008

The Philippines, as other Asian countries, is also on economic slump...downhill on its 7th consecutive trading day. Fears reflect that of the economic slowdown in the US...but man those are huge losses!

Swan

at 04:02 on January 22nd, 2008

Thanks jdkk,

Frankly, I think it's an ominous sign of more plunges to come. I'm so happy that we don't play the stock market!
~ Swan

Swan

at 04:07 on January 22nd, 2008

Hello Jayr,

Thanks for adding that news to this article. I think this is something important that we should be keeping an eye on for the next day or so.

If anyone else has other figures to report from other countries, then by all means please add your information here.
~ Swan

Obi-Akpere

at 05:01 on January 22nd, 2008

I Think that It (recession) all started from the US Economy which is as a result of crises in major OPEC nations, being that the US economy depends to a large extent on oil revenue (believe it or not). And since US economy is a major player in the world market, she may continue forcing down all the economies she has strong internationally business relation with. I also think underdeveloped economies would not be affected with the recession. This is because they are not active in the world market rather the recession would be in they favour as it will help their currencies to appreciate with low prices of imported goods.

Swan

at 06:30 on January 22nd, 2008

Hello Obi-Akpere,

I think you've made a very good point - especially about underdeveloped countries not feeling the crunch the way we can at the moment.

How is the economy in Nigeria these days?
~ Swan

Obi-Akpere

at 08:33 on January 22nd, 2008

The Economy of Nigeria is currently doing well with the naira (NGN) appreciating almost on daily basis. We are yet to be affected with the market plunge, that is if only we'll be affected.

Rob Walker

flagged this story as Good Stuff

at 05:01 on January 22nd, 2008

Thanks for bringing this to us Swan, here's what's happening in Canadian markets:

The Toronto
Stock Exchange's S&P/TSX composite index plunged 604.99 points, or
4.75 per cent, to close at 12,132.13. Stocks on the exchange lost about
$90 billion in value in the biggest point drop since the tech bubble
burst nearly seven years ago. And yesterday's sell-off was on top of a
7 per cent drop last week that already had wiped out all of the gains
made on the Toronto market last year.

Since Canada's dominant market hit a high in late October, shares on
the TSX have lost more than $300 billion, or 17 per cent, hurting
nearly every Canadian who holds shares, either directly or in mutual
funds or pension plans.

Swan

at 06:42 on January 22nd, 2008

Hello Rob,

Thank you for adding that report for Canada. It seems that she is feeling the same current squeeze as the rest of us.

Just take a look at all the red figures in this report by the BBC News/ Market Data.

Pretty depressing.
~ Swan

Brian A Kennedy

at 05:27 on January 22nd, 2008

CNN is saying that the fed just cut a key interest rate by .75%.

Swan

at 06:45 on January 22nd, 2008

Hello Brian,

Yes, I've just heard that it's their response to the drop in the market. Are you hearing any rumblings in New York that the rest of us haven't heard yet?
~ Swan

Hopenow

at 06:09 on January 22nd, 2008

The markets are vomitting in the gutter like a couple of frat boys at Mardi Gras. America went on a bender of historic proportions and now it is hangover time. What worries me if this: may be America has gone so far, it could have drunk itself to death on debt? Time to save and not spend.

Swan

at 06:50 on January 22nd, 2008

Hello Hopenow,

Thank you for that very descriptive overview of America! ;)
~ Swan

Brian A Kennedy

at 06:11 on January 22nd, 2008

From the New York Times:

[q
url="http://www.nytimes.com/2008/01/22/business/worldbusiness/23cnd-asiastox.html?hp"]The
Federal Reserve, responding to an international stock sell-off and the
likelihood of a sharp drop in America on Tuesday morning, cut its
benchmark interest rate by three-quarters of a percentage point.

Investors at a securities company in Wuhan in China's Hubei Province. More Photos »

The Federal Open Market Committee lowered its target for the
federal funds rate on overnight loans between banks to 3.5 percent,
from 4.25 percent.

In a statement, the Fed said: “The committee took this action
in view of a weakening of the economic outlook and increasing downside
risks to growth. While strains in short-term funding markets have eased
somewhat, broader financial market conditions have continued to
deteriorate and credit has tightened further for some businesses and
households.”

“Moreover,” the statement continued, “incoming information
indicates a deepening of the housing contraction as well as some
softening in labor markets.”[/q]

Swan

at 07:08 on January 22nd, 2008

Hello again Brian,

Quite the panic merchants. Rather than wait a day or so to see if the market recovers, they penalize the rest of the American population who aren't even involved in trading.

Nice one America. Geeze. Thanks for bringing us that report Brian, if you hear anything else, please don't hesitate to add it here.

The video you added here is pretty weird, or I should say the young trader is pretty weird. ;)
~ Swan

Barry ORegan

flagged this story as Good Stuff

at 06:31 on January 22nd, 2008

Swan, Quite the story, asfor your comments what caused this, well for the most part Greed in the US and China for the most part and Investors and Fear mongering by Analysts (Who have a vested interest in getting their own portfolios propped up) who say Get in while the gettings good, Buy, Buy, Buy. I reported on this upcoming collapse weeks ago, as well during the summer, Hell even Prime Minister Harper warned Canadians, limit buying on credit when we are in the good times with a strong dollar, concentrate on saving your money, which I guess fell on deaf ears.

Here are my two stories which I wrote about , which by the way only got a cursory glance by readers more interested in what Britney Spears was doing. My girlfriend is in market analysis, visits Hong Kong, spends hours on analysis and is no smarter than most in the market and as of this morning made 6K on the markets.

http://www.nowpublic.com/crime/greed-stampede

http://www.nowpublic.com/culture/buying-america

Swan

at 07:01 on January 22nd, 2008

Hello Barry,

My husband was basically telling me the same thing just a minute or so ago!

Thank you for adding those links which are very relevant to this story - I recommend everyone take a look.
~ Swan

Barry ORegan

at 17:04 on January 22nd, 2008

Your welcome Swan, like I have always stated to people on Now Public who get screwed by markets or politicians, it is their own damn fault.

People, Investors and Voters are all the same who complain about the state of this country, They all profess to Love the Song, some even Dance to the Tune, yet very few have bothered to Read the Lyrics. It is their failure to read the writing on the (Song) wall that puts them into Financial or Economic Ruin . Do I feel sorry for them? Absolutuely not! "Greed and Self Imposed Illiteracy in their failure to read and understand the Lyrics" did them in,

Swan

at 07:25 on January 22nd, 2008

The image I've just uploaded is the chairman of the Federal Reserve, Ben Bernanke which I found on the BBC News Business web site.

The US Federal Reserve has cut interest rates to 3.5%, a shock three-quarters of a percentage point reduction.

Fighting to stave off a US recession, the move failed to calm investors, with US shares continuing sharp falls as Wall Street opened for Tuesday trading.

Did they really expect that it would?

"This is huge," said the BBC's business editor Robert Peston.

~ Swan

Miyspirit

flagged this story as Good Stuff

at 08:32 on January 22nd, 2008

Swan,wow what a story. A super report and read...a hot story!

Swan

at 09:02 on January 22nd, 2008

Hey Miyspirit,

Yes, as soon as I saw it at 4am PST., I knew that it was something that needed to be reported on now.
Thanks for the flag,
~ Swan

pwalmsley

flagged this story as Good Stuff

at 08:38 on January 22nd, 2008

SwThank for posting this story, Swan.

Pretty intense stuff, eh?

For an eloquent (if not slightly arrogant) explanation of why these events are taking place, I recommend Jim Kunstler's blog, Clusterfuck Nation. A quote:

"The United States is so broke, its people at every level from the Federal Reserve on down don't know whether to shit or go blind. The homeowners cringing in the media rooms of their 5000-square-foot personal family resorts don't know how long they can stay put microwaving pepperoni hot pockets with the default clock ticking. The mortgage "servicers" don't know how they will persuade interested parties like, say, the Illinois State Cafeteria Workers' Pension Fund (holder of X-amount of mortgage-backed securities underwritten by, say, Merrill Lynch or Deutsche Bank) to foreclose on properties scattered everywhere from Key West to Bainbridge Island -- or if there is actually any legal mechanism known to man that would make it possible to "work out" the sliced-and-diced collateral. The millions of maxed-out credit card holders and the issuers of their plastic are stuck together paddling a leaky tub in a sea of troubles every bit as wide, deep, and polluted as the one the mortgage junkies and their enablers are sinking in. The developers of malls, office parks, and power centers are weeping into their filing cabinets as the harsh daylight of insolvency stops the orgy of "consumption" and the retail tenants pack up their unsellable goodies for the liquidators, and the rent checks stop arriving in the mail, and the notes on this mall and that mall enter the eerie realm of "non-performance." And, of course, there are the genius wonder boyz and Wall Street playerz whose algorithms and turpitudes underwrote the script of this horror show -- for all I know they'll end up laughing into sugary skull drinks on a beach in the Cayman Islands, or doing Chinese fire drills in federal prison (or simply ass-fucked on the granite countertops of their Tribecca aeries by mobs of angry, repossessed, swindled former American dreamers pouring into Manhattan from the tract house dormitories of New Jersey and Long Island)."

Swan

at 08:58 on January 22nd, 2008

Hello pwalmsley,

"Intense" is a good word for it, yes.

Jim Kuntstler should say what he means, instead of beating around the bush. ;) One can't say that he's vague, can they? He's very .. uh .. succint with his viewpoint. ;)

Thanks for adding that ...
~ Swan

Obi-Akpere

at 09:16 on January 22nd, 2008

The US government has taken one drastic step on this issue. Read this;
US govt cuts interest rate amid global stock sell-off

Swan

at 09:42 on January 22nd, 2008

CANADIAN UPDATE:

It just keeps getting worse. Another day of harrowing stock-market losses in Toronto and around the world Monday had investors asking: When will the pain stop?

The prospect of a U.S. recession sent the S&P/TSX composite index spiralling down 605 points, or 4.75 per cent, after European and high-flying Asian markets plunged on fears the global economy can't resist troubles in the U.S.

It was the fifth straight day of heavy losses in Toronto and the biggest one-day loss since 2001. The market has now dropped 17 per cent since hitting its peak in July and fallen all the way back to where it was in November 2006. The dollar was also lower.

Source Canada.com

***********************************************************

EUROPEAN UPDATE:

LONDON - European shares sank 5.6 percent by midday on Monday,
threatening their worst one-day fall since the attacks of September
2001 as investors rattled by the spectre of a U.S. recession dumped
stock across the board.

At 1204 GMT, the FTSEurofirst index index
of top European shares was down 5.1 percent at 1,289.42 points, having
earlier hit 1,280.94, a level not seen in eighteen months.

The sell-off tracked global equities losses, as the MSCI's main index of world stocks hit its lowest level in over a year.

Source: Canada.com

***********************************************************

WALL ST. UPDATE:

Amid predictions of another day of heavy losses following Monday's
meltdown, the S&P/TSX Composite Index soared on Tuesday following
rate cuts by the Federal Reserve and the Bank of Canada.

Wall
Street stayed in negative territory after the Fed's emergency 75-point
cut to its benchmark rate, but avoided the grim bloodbath many feared,

Source: Financial Post

***********************************************************

INDIAN UPDATE:

Market Mayhem An Analysis

There's absolutely no good news there I'm afraid.

Source: The Economic Times

***********************************************************

AUSTRALIAN UPDATE:

The All Ordinaries Index closed at 5,220.0, a fall of 408.90 points, 7.26%.

It was the Index's biggest fall since October 1989.

Source: Sky News Map

***********************************************************

Take a look at Sky News' Live Market Data

New Image: A sculpture of a bull is seen through the gates of Bombay Stock Exchange building in Mumbai.

Source: Arko Datta/Reuters

I think that's probably all for now as far as updates go. If you're from elsewhere, please take a moment to give us more information. Thank you!
~ Swan

Swan

at 14:01 on January 22nd, 2008

I guess I'd forgotten about China - they're suffering the same losses there too:

STOCK markets on China's mainland nose dived more than seven percent
yesterday after a more than five percent plunge on Monday and analysts
expect the indexes to sink even further in the coming days.

The domestic market has been "more serious than expected'' influenced by
the US loans crisis and global market corrections, said Wu Yaohui, a GF
Securities' analyst.

Byline: Zhu Shenshen

Source for story and image: Shanghai Daily.com

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Swan

Hillsboro, Oregon, United States

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First Flagged at 3:33 AM, Jan 22, 2008 by jdkk

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