Dow plunges 416 points

[Billo_Really]

This is quite a shock.

US Stocks Plunge:
Stocks suffered their worst losses since just after the Sept. 11, 2001, terror attacks, prompted by a huge sell-off in China's stock market, higher oil prices and some disappointing economic news.

Who we gonna blame?

Bush?

Or the Chinese?

Still want to pay for the war?

 

[Kandahar]

This is quite a shock.Who we gonna blame?

Bush?

Or the Chinese?

Still want to pay for the war?

It's no one's "fault" persay, but both the American and Chinese economies seem to be slowing down. It's been about five years since the last recession...I'd say we're due for another one.

 

[danarhea]

This is quite a shock.Who we gonna blame?

Bush?

Or the Chinese?

Still want to pay for the war?

248 points of the blame goes to the computer program that screwed up. The stock market is due for a major correction, but the slide wont be that fast, and probably wont last that long. It is also rumored that the Fed will be cutting interest rates very soon.

 

[Trajan Octavian Titus]

This is quite a shock.Who we gonna blame?

Bush?

Or the Chinese?

Still want to pay for the war?

How about the Democratic congress?

 

[Moot]

It's no one's "fault" persay, but both the American and Chinese economies seem to be slowing down. It's been about five years since the last recession...I'd say we're due for another one.

Greenspan said we're due for another recession. He oughta know since he caused it when he lowered the interest rates so low that it caused the inflated housing bubble that has been supporting the artificially high econimic growth of the last few years.

Lowering interest rates at this point is only going to create more debt that people can't realistically afford. Wages aren't keeping up with inflated housing prices, so who are the borrowers going to be?

 

[PeteEU]

Its Clintons fault and the areebs.

 

[Kandahar]

Sometimes recessions just happen. They're part of the natural cycle of economics. Why can't people just accept that? Why must someone always be blamed?

 

[The Mark]

This is quite a shock.Who we gonna blame?

Bush?

Or the Chinese?

Still want to pay for the war?

All of em.....but how does it effect ME?

And what does paying for the war have to do with this?

 

[Moot]

Now come on, all Greenspan said was that the longer we go without a recession, the more the foces that lead to recession build up, and the more likely it becomes that a recession will occur. Basically, what he said can be summed up in "We tend to have recessions every 5 years and it's been 10 years, make with that what you will" (the actual numbers aren't important). We're due, possibly, but the only reason this garnered any sort of effect is that everyone's so damn used hanging off of every word that Greenspan says, it reached the point a while ago that there's always gonna be a reaction whenever Greenspan talks, just because no one wants to be the person who lost a fortune cause the floor fell out cause Greenspan spooked them.

Whatever the reason, you don't seem to be denying that Greenspan still influences the market. It was only the day before the little tailspin that Greenspan spoke in Hong Kong of a possible recession. So was the Chinese sell-off a reaction to Greenspan's comments or to the rumor of a 20% capital gains tax or both?

But I think you're right, it was easy for Greenspan to predict a recession considering the manufacturing sector is already in one and a slow down in the housing market usually preceeds a recession, making it a self fulfilling prophecy if one should occur.

http://www.nytimes.com/2007/02/28/business/28leonhardt-web.html?_r=1&oref=slogin

Now rumor has it that because of yesterday's little tailspin, the Feds will probably lower interest rates instead of raise them in order to avoid a recession. But who will benefit from lower interest rates, if housing prices are still too inflated from the housing bubble and the central banks aren't going to make loans so easy to get anymore and manufacturing is already in a recesssion and probably won't come out it until the housing market picks up? It looks like a Catch 22.

 

[WI Crippler]

This is quite a shock.Who we gonna blame?

Bush?

Or the Chinese?

Still want to pay for the war?

Ridiculous Billo, stay in the war threads.

 

[Hatuey]

I say we blame Clinton. Obviously one blow job was responsible for this and in turn history will judge that this event will have led to the downfall of America and the destruction of all life on earth as we know it.

 

[ludahai]

Of course, Billo and his ilk would blame Bush and the war.

This is a little surprising because China's market is still smaller than the main markets in East Asia, and compared to markets in Japan, Korea, Taiwan, Hong Kong, Singapore, and Sydney, it is also the least stable and most reliant on stocks that would not even be listed in more developed countries.

Having said that, it could also very well be the reaction of the major markets in Asia to the Shanghai Surprise that could have pushed Europe and North America lower. The other regional markets also took significant hits EXCEPT Taiwan, which registered a modest gain on Tuesday. Wednesday saw more losses nearly everywhere in Asia (except Shanghai - modest gain, and again in Taiwan - this time for a public holiday.) Watch out though, today Asian markets are tracking lower (even Taiwan is taking a sizable hit today.)

Ten years ago, problems in a minor economy (Thailand) led to the Asian Economic Flu. China's economy is far more significant than Thailand's. Let's hope this doesn't spiral like the 1997 crisis.

 

[Kandahar]

This is a little surprising because China's market is still smaller than the main markets in East Asia, and compared to markets in Japan, Korea, Taiwan, Hong Kong, Singapore, and Sydney, it is also the least stable and most reliant on stocks that would not even be listed in more developed countries.

True, but it's also much more lucrative in the long-term for those willing to take the risk.

Having said that, it could also very well be the reaction of the major markets in Asia to the Shanghai Surprise that could have pushed Europe and North America lower. The other regional markets also took significant hits EXCEPT Taiwan, which registered a modest gain on Tuesday. Wednesday saw more losses nearly everywhere in Asia (except Shanghai - modest gain, and again in Taiwan - this time for a public holiday.) Watch out though, today Asian markets are tracking lower (even Taiwan is taking a sizable hit today.)

The market is probably about due for a correction...I wouldn't worry too much. There's a lot of speculation that has made those markets quite bubbly.

Ten years ago, problems in a minor economy (Thailand) led to the Asian Economic Flu. China's economy is far more significant than Thailand's. Let's hope this doesn't spiral like the 1997 crisis.

I doubt it. China is in better economic shape than Thailand was ten years ago. Besides, it was precisely BECAUSE Thailand was a minor economy that small events were able to affect it so much. It's much harder for any single event to put a significant dent in the Chinese economy.

The 1997 crisis was inadvertently started almost single-handedly by George Soros. There were other causes, but it's unlikely that any of them would have triggered the events without Soros' currency speculation.

 

[ludahai]

True, but it's also much more lucrative in the long-term for those willing to take the risk. [/qote]

True.

The market is probably about due for a correction...I wouldn't worry too much. There's a lot of speculation that has made those markets quite bubbly.

I agree with this. I actually got out of the Taiwan market a few months ago when it was at about 7400 (up from 4100 when I bought in nearly three years ago.) If this correction brings us back down to about 7000, I think I will buy back in.

I doubt it. China is in better economic shape than Thailand was ten years ago. Besides, it was precisely BECAUSE Thailand was a minor economy that small events were able to affect it so much. It's much harder for any single event to put a significant dent in the Chinese economy.

I have mixed feelings about the Chinese economy. In many respects, it is on shifting sands. Their banking sector is on the verge of collapse and the rule of law is far from firmly established. Their stock market is also very unstable. Their currency regime is also unsustainable in the long term.

Having said that, there are also some positives in China as well. I am leaning toward correction (though a more severe one for China as its market has doubled in the past twelve months.)

The 1997 crisis was inadvertently started almost single-handedly by George Soros. There were other causes, but it's unlikely that any of them would have triggered the events without Soros' currency speculation.[/QUOTE]

Well, it wasn't only Thailand. There was a lot of softness here in the late 1990s. The tech bubble bust a couple of years later didn't help either, especially here in Taiwan. The currency speculation was the trigger, but there were a lot of other factors making regional markets soft that for the most part don't exist right now in the major developed markets (Japan, Korea, Taiwan, Hong Kong, Singapore, and Sydney.)

 

[BubbaBob]

This is quite a shock.Who we gonna blame?

Bush?

Or the Chinese?

Still want to pay for the war?

Neither. The main cause was a computer glitch.

BubbaBob

 

[danarhea]

Sometimes recessions just happen. They're part of the natural cycle of economics. Why can't people just accept that? Why must someone always be blamed?

Let's blame Microsoft.