Stock Market Crash Tomorrow
Global indicies went down on average over 5 percent today. FTSE was at 5.6 decline, just missing the 5.7 decline after September 11.
Additionally, Bank of China, the state-owned bank, is telling the WSJ it may have to writedown large sums of subprime loans.
If China suffers the kind of shit we are going through as a result of their own subprime mortgage crisis, the global economy will be officially exploding. Economic well-being will drop considerably worldwide. It may be the next Great Depression.
Look for the stock market to crash tomorrow, as in over 500 points. Dow Jones futures are predicitng a 550 point decline tomorrow.
We are still waiting for the bond insurers to drop - one bond insurer, AMBAC, has already had its rating downgraded which means billions of dollars of bonds it insures are in theory supposed to be downgraded. The bond insurers lend their AAA ratings to less credit worthy parties in order to get them cheaper loans. When their rating is downgraded, the loans price increases, etc, etc. If one of the bond insurers go out of business, or if they continue to lose their ratings(others include MBIA and AMBAC) then banks will be forced to put 60 billion dollars of crappy bonds back on their balance sheets. And thus, get fucked.
Bushs plan will not work - the markets have voted.
Additionally, Bank of China, the state-owned bank, is telling the WSJ it may have to writedown large sums of subprime loans.
If China suffers the kind of shit we are going through as a result of their own subprime mortgage crisis, the global economy will be officially exploding. Economic well-being will drop considerably worldwide. It may be the next Great Depression.
Look for the stock market to crash tomorrow, as in over 500 points. Dow Jones futures are predicitng a 550 point decline tomorrow.
We are still waiting for the bond insurers to drop - one bond insurer, AMBAC, has already had its rating downgraded which means billions of dollars of bonds it insures are in theory supposed to be downgraded. The bond insurers lend their AAA ratings to less credit worthy parties in order to get them cheaper loans. When their rating is downgraded, the loans price increases, etc, etc. If one of the bond insurers go out of business, or if they continue to lose their ratings(others include MBIA and AMBAC) then banks will be forced to put 60 billion dollars of crappy bonds back on their balance sheets. And thus, get fucked.
Bushs plan will not work - the markets have voted.
posted by John Liberty at 11:26 AM
11 Comments:
I have to say that the economy has caught my attention now. Things are becoming interesting... not sure how I feel about some of the gloom and doom predictions, though. It's hard for me to compare this to any other time there have economic downturns. Anyway, you sound happy, Liberty. Congratulations, you've gotten what you wanted!
No, I think I have lost something very dear to me.
From billionaire Mort Zuckerman.
Zuckerman: I don't think it's an exaggeration. It's an understatement. You've heard me say here I think we are facing the worst financial crunch and crisis since the Great Depression. You have the entire banking system now that is virtually frozen and there are not just the sub-prime mortgage thing. There are other things called credit default swaps where they're going to lose as much money, 250 billion dollars on. The banks are frozen. They're not making loans because they have such huge debts that they have to take onto their balance sheets and nobody knows how to deal with that because you had a dramatic...you had two bubbles that have burst at the same time. The housing bubble which has collapsed in this country. The first time since the Great Depression that housing values have gone down for a year since the depression and it's going to go down even more next year. The credit crunch, you've just exploded the whole credit system in this country. We were way over leveraged. The banking system was over-leveraged. People didn't even know about it. The bankers didn't know about it. They didn't access the risk. Now that risk is piling in and every body's going to pay the price. Uh it's going to stimulate nothing other, I mean it's going to destimulate the economy. Nobody has money to lend. They're saving all their money to pay off their debts. They're borrowing money or looking at uh the rest of the world to enhance their capital and it's still not going to solve their problems.
Let's not get dramatic, Liberty. While you wipe your tears, here are some lulz:
http://www.cnbc.com/id/15840232?video=624755222
5000, i forgot i was talking to a robot
down 400 points in first two minutes. stop the bleeding!
https://www.blogger.com/comment.g?blogID=17307379&postID=4261382246495105452
John Liberty said...
i personally want a recession
1:11 PM
When did you change your mind? This robot is insulated, at the moment. It's sad that the economy hit the skids, but from all the stuff you put up here, it sounds like we all deserve it... do you really believe that?
You could bottle and sell Bernanke's sweat.
what evidence do you have that i changed my mind?
So "have lost something very dear" to you but you still "personally want a recession." While I can hypothesize why those two things might be consistent, on first glance they appear to be pushing in different directions. Perhaps you could explain?
Can you explain? This sounds like a lot of abstract squirming.
i see what your saying. i guess you thought that i thought you were referring to that specific hope for a recession. i did not think you were referring to that.
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