- #1
- 19,573
- 10,377
anyone invest here? what a horrific day eh? I ended up getting hammered and sold most to wait out a few days.
Not for someone who uses put options or someone who uses delta neutral strategies with positive gammas.what a horrific day eh?
gravenewworld said:ahh the first signs of the consequences of carrying massive budget deficits. this is only a tip of the iceberg, where is this great economy now bushies?
Ivan Seeking said:Something else that you seem to be forgetting
Dot-com bubble
If we get to blame Clinton for the fall, then we get to blame him for the phenomenal wealth generated as well. Then of course there is the deficit.
Try doing some research on budget deficits and how they relate to the twin deficit and foreign currency exchange rates. With the massive budget deficits Bush has accrued, something like this was bound to happen. Massive budget deficits also slow long term economic growth for a host of reasons (people write entire books on this), which we are already starting to see signs of.twisting_edge said:You mistake me. I hadn't forgotten that at all.
But, in parallel, have you noticed the market was up a great deal this past year, a great deal more than the 5% it lost so far?
My point is the original poster in that case was exercising a clearly partisan and rather dumb point.
P.S.: As it happens, I do not approve of deficits and cannot stand Bush. I find both his policies and his personal attributes vile.
And where are the massive budget deficits and the Bushes in the rest of the world, to explain why the CAC and the DAX dropped 3%, the FTSE dropped 2.3%, the SMI fell by 3.4%, and the Madrid, Australian and Toronto indexes, all shed 3%, and virtually every major index in the world dropped by about the same fraction as the DOW or the S&P yesterday?gravenewworld said:With the massive budget deficits Bush has accrued, something like this was bound to happen.
It seems that in the global market, when one sneezes, everyone catches a cold.Gokul43201 said:And where are the massive budget deficits and the Bushes in the rest of the world, to explain why the CAC and the DAX dropped 3%, the FTSE dropped 2.3%, the SMI fell by 3.4%, and the Madrid, Australian and Toronto indexes, all shed 3%, and virtually every major index in the world dropped by about the same fraction as the DOW or the S&P yesterday?
What's he going to do - say that he expects a downturn?WASHINGTON (MarketWatch) -- Fed chief Ben Bernanke on Wednesday said his optimism about the U.S. economic outlook hasn't been shaken by recent economic data or the stock market decline on Tuesday.
Gokul43201 said:And where are the massive budget deficits and the Bushes in the rest of the world, to explain why the CAC and the DAX dropped 3%, the FTSE dropped 2.3%, the SMI fell by 3.4%, and the Madrid, Australian and Toronto indexes, all shed 3%, and virtually every major index in the world dropped by about the same fraction as the DOW or the S&P yesterday?
clearly the budget deficit is on the FEDs mind."Bernanke's prepared speech were nearly identical to remarks he delivered to a Senate panel last month. "A vicious cycle may develop in which large [budget] deficits lead to rapid growth in debt and interest payments, which in turn adds to subsequent deficits," he said in his prepared remarks.
He said that over time, the United States needed to move toward fiscal policies that were sustainable and that would promote more saving to support the Social Security retirement program without imposing undue costs on taxpayers. However, he offered no specific policy prescriptions. "
Yes, and when markets in China go down, the rest of the world takes a dive too.gravenewworld said:Gokul, the global economy is extremely intertwined,
But the cause here is not the US markets going down. If that were the case, how did the European markets experience their dip before US markets?when the US markets fail, the world economies go into recession.
Trading started 6 hrs earlier in Europe. Also don't forget after hours and on-line trading. Plenty of time and paths for panic to spread.Gokul43201 said:But the cause here is not the US markets going down. If that were the case, how did the European markets experience their dip before US markets?
And just because trading has not yet begun in a particular location, that does not mean that orders have not already been placed with the brokers. If I decide at 1am that I want my broker to sell off x shares of company xyz, I can place that order on-line in the middle of the night. Large brokers are in a privileged position WRT the market because they can identify and exploit trends long before the markets open.Astronuc said:Trading started 6 hrs earlier in Europe. Also don't forget after hours and on-line trading. Plenty of time and paths for panic to spread.
Is there an example (actual example) that's shows this holds true?gravenewworld said:when the US markets fail, the world economies go into recession.
I agree that the US has a big impact, but why would the WTO be warning the US about an issue where the US is basically in-line with other developed nations?gravenewworld said:The WTO has repeatedly warned the US to control its deficit spending because of the effects it could have on the global economy.
Well clearly, this great sell-off, although it was sort of triggered by an event in China, is really not about China. It's about America and the really dire data that's been coming out of the United States for the last sort of month or two, the collapse of the sub-prime sector, the fears that it could extend to the whole credit sector in the United States. And where the initial reaction was to sell Turkey, sell Poland, you know all these peripheral markets got hit really hard.
Well, much greater levels of debt accumulated in the United States. The U.S. has gone from being the world's biggest creditor nation in the 1908s to it's by far the biggest debtor nation. Personal debt levels have reached historic highs and we've had Americans living beyond their means, driving down the savings rate to lows since the Great Depression, they've been drawing money out of their homes and at some point the economy's going to have to come back into alignment.
russ_watters said:I agree that the US has a big impact, but why would the WTO be warning the US about an issue where the US is basically in-line with other developed nations?
Public debt fraction of gdp:
US: 64.7%
UK: 43.1%
France: 66.2%
Germany: 67.3%
Japan: 158%
[google]
I agree that our public debt should be lower, but it isn't the crisis many people think it is.
russ_watters said:I agree that the US has a big impact, but why would the WTO be warning the US about an issue where the US is basically in-line with other developed nations?
Public debt fraction of gdp:
US: 64.7%
UK: 43.1%
France: 66.2%
Germany: 67.3%
Japan: 158%
[google]
I agree that our public debt should be lower, but it isn't the crisis many people think it is.
Is there an example (actual example) that's shows this holds true?
And that means what? When you go to buy a house, how much you can buy is based on your debt-to-income ratio, because that's what determines how much debt you can support! It works pretty much the same for a country.gravenewworld said:Because the US economy is by far and away the largest economic entity on the planet. 64.7% debt of an $13 trillion dollar economy is much greater than the UK's 43% debt fraction of a $2 trillion dollar economy.
That's true, Russ, but economists look at debt as a percentage of the market total, as well. If you and I were in a room with Warren Buffet and we averaged our debt-to-income ratio amongst the 3 of us, it would be an unrealistic picture. If I suddenly decided to buy a new car and finance it instead of paying cash (the way I have bought most of my vehicles in the past couple of decades) my ill-advised decision would have little effect on the debt-to-income ratio in that room in absolute terms, but would have a significant effect in the raw average. If Mr. Buffet decided to finance some enterprise that equated to a few percent of his net worth, the debt picture in that room would change dramatically (from our perspective in absolute debt, though not much in terms of averaged debt) and that might effect our decisions. As the world's largest economy, fluctuations in the US market can shake smaller markets as their investors try to re-configure their portfolios to avoid large losses and perhaps lock in some gains.russ_watters said:And that means what? When you go to buy a house, how much you can buy is based on your debt-to-income ratio, because that's what determines how much debt you can support! It works pretty much the same for a country.
nd that means what? When you go to buy a house, how much you can buy is based on your debt-to-income ratio, because that's what determines how much debt you can support! It works pretty much the same for a country.
No its not, the EU is bigger!Because the US economy is by far and away the largest economic entity on the planet.
Anttech said:No its not, the EU is bigger!
The US may be the largest national economy in the world, but it isn't the largest economic entity.