OT: Dow Plummets More Than 500 Points...YIKES!

[Rocker Chic]

My job may soon be in jeopardy and my husband is still looking for a permanent position. I am nervous as hell and don't know what I'm going to do. I've already updated and uploaded my resume, but soon the NY market will be flooded with people looking for work. It's going to be much harder to compete for jobs now.

Anyone in the market for an admin. assistant with over 15 years experience???

Debbie

[jourmapac]

hey guys how does this translate on the strength of the dollar versus foreign currencies??

The dollar will plummet as overseas investors rip money out of accounts.. which they are already DOING because AIG and Washington Mutual are going to FAIL without bailouts...

AIG fails and the bank runs start - think 1929.

The US dollar plummeted 2 years ago and has been shit ever since (a trend started a few years back when the current admnistration voiced support for a low dollar policy) - hence my drop in income over the last 18 months and my deep desire for a change of US government/policy.

It actually started a rally about 8 weeks ago that has seen things improve a little. So I don't think recent lows will be tested again, there seems to be some support now for the US dollar and cash investments over more speculative commodities.

two three years ago 1USD=56 Pesos now its at 46.5 WITH a low of 39.00 ...

being an OFW (Overseas Filipino Worker) I have felt that plunge and still feeling it and SHARE anyone's desire for a change of US government/policy...

[jrnychick]

We're big CNBC watchers here (my husband also watches Bloomberg, but I don't really like it as much), and I thought armageddon must be at our doorstep last night when I saw most of the CNBC heavy-hitters all on at the same time. Carl Quintanilla (I'm sure I've spelled his name wrong) was still on, and he's one of the early-morning hosts. Jim Cramer must have been on vacation, or I'm sure he would have been there. My husband says that he knew 1 1/2 years ago that the economy was going to be rough due to the sub-prime mortgages, but he didn't think things would get THIS bad. I am really glad that I found a regular job working for someone else this summer and shut down my business. The business taxes were killing me, and the work was really drying up.

My advice to everyone is to make sure you don't have more than $100k in any one bank account right now. Not that many people have a spare $100k, but think about your older relatives who may have all of their retirement money in one checking or savings account. Help them move things around.

[RossValoryRocks]

My advice to everyone is to make sure you don't have more than $100k in any one bank account right now. Not that many people have a spare $100k, but think about your older relatives who may have all of their retirement money in one checking or savings account. Help them move things around.

As I said before it is EXACTLY this type of hysterical reaction that causes the runs on the banks in the first place.

[Ehwmatt]

My advice to everyone is to make sure you don't have more than $100k in any one bank account right now. Not that many people have a spare $100k, but think about your older relatives who may have all of their retirement money in one checking or savings account. Help them move things around.

As I said before it is EXACTLY this type of hysterical reaction that causes the runs on the banks in the first place.

Precisely... but on another note, following jrnychick's advice:

"Hey Grandma, you know that money you've got in your bank? Here, let me move it for you. It'll be safer in my checking account"

[jrnychick]

My advice to everyone is to make sure you don't have more than $100k in any one bank account right now. Not that many people have a spare $100k, but think about your older relatives who may have all of their retirement money in one checking or savings account. Help them move things around.

As I said before it is EXACTLY this type of hysterical reaction that causes the runs on the banks in the first place.

Hysterical reaction??? FDIC only provides coverage for accounts up to $100k. It's just common sense to keep an account under that amount, regardless of the economic conditions. When Indymac shut it's doors and the government took over, I heard stories of people who had all of their retirement money in one account there and they lost thousands of dollars. I have 2 accounts with Washington Mutual, and I'm not concerned. I'm not pulling my money out. Don't insult my intelligence by calling my reaction hysterical. It's common sense.

[Enigma869]

As I said before it is EXACTLY this type of hysterical reaction that causes the runs on the banks in the first place.

What the hell is so "hysterical" about pointing out the deposits are only insured by the FDIC up to $100K??? You do realize that just within the past few months that banks have gone under, and people have lost any of their money that was over $100K, right??? I don't think it's remotely "hysterical" to advise people to be prudent and insure their deposits, by not subjecting anything over $100K to a loss! I know you believe the economny is absolutely stupendous, but that doesn't change the reality of what is actually going on. Do I think the U.S. can't recover from this? Absolutely NOT! I have zero doubt that this country will emerge and that these things are cyclical. I just think it's absurd when a handful of people act like "Nothing is really a big deal", and "there is nothing wrong with our economy" BS.


John from Boston

[jrnychick]

My advice to everyone is to make sure you don't have more than $100k in any one bank account right now. Not that many people have a spare $100k, but think about your older relatives who may have all of their retirement money in one checking or savings account. Help them move things around.

As I said before it is EXACTLY this type of hysterical reaction that causes the runs on the banks in the first place.

Precisely... but on another note, following jrnychick's advice:

"Hey Grandma, you know that money you've got in your bank? Here, let me move it for you. It'll be safer in my checking account"

Kind of insulting, don't you think? If my "grandma" had $150k in one account, I would be a pretty bad grandchild if I didn't call her up and suggest that she move $50k to another bank. Regardless of the state of the economy, I think you're an idiot if you have more than $100k in any one bank account. How's that for insulting?

[jrnychick]

As I said before it is EXACTLY this type of hysterical reaction that causes the runs on the banks in the first place.

What the hell is so "hysterical" about pointing out the deposits are only insured by the FDIC up to $100K??? You do realize that just within the past few months that banks have gone under, and people have lost any of their money that was over $100K, right??? I don't think it's remotely "hysterical" to advise people to be prudent and insure their deposits, by not subjecting anything over $100K to a loss! I know you believe the economny is absolutely stupendous, but that doesn't change the reality of what is actually going on. Do I think the U.S. can't recover from this? Absolutely NOT! I have zero doubt that this country will emerge and that these things are cyclical. I just think it's absurd when a handful of people act like "Nothing is really a big deal", and "there is nothing wrong with our economy" BS.


John from Boston

Thank you, John! At least someone agrees with me.

[conversationpc]

As I said before it is EXACTLY this type of hysterical reaction that causes the runs on the banks in the first place.

What the hell is so "hysterical" about pointing out the deposits are only insured by the FDIC up to $100K??? You do realize that just within the past few months that banks have gone under, and people have lost any of their money that was over $100K, right??? I don't think it's remotely "hysterical" to advise people to be prudent and insure their deposits, by not subjecting anything over $100K to a loss! I know you believe the economny is absolutely stupendous, but that doesn't change the reality of what is actually going on. Do I think the U.S. can't recover from this? Absolutely NOT! I have zero doubt that this country will emerge and that these things are cyclical. I just think it's absurd when a handful of people act like "Nothing is really a big deal", and "there is nothing wrong with our economy" BS.


John from Boston

I have to agree with John here. At the rate that banks, and large banks for that matter, are failing, it is a very good idea to diversify your money in different accounts if you have that much to begin with (I don't... ).

[Michigan Girl]

My advice to everyone is to make sure you don't have more than $100k in any one bank account right now. Not that many people have a spare $100k, but think about your older relatives who may have all of their retirement money in one checking or savings account. Help them move things around.

As I said before it is EXACTLY this type of hysterical reaction that causes the runs on the banks in the first place.

Precisely... but on another note, following jrnychick's advice:

"Hey Grandma, you know that money you've got in your bank? Here, let me move it for you. It'll be safer in my checking account"

Kind of insulting, don't you think? If my "grandma" had $150k in one account, I would be a pretty bad grandchild if I didn't call her up and suggest that she move $50k to another bank. Regardless of the state of the economy, I think you're an idiot if you have more than $100k in any one bank account. How's that for insulting?

Agreed.....EVER!!!

[Andrew]

two three years ago 1USD=56 Pesos now its at 46.5 WITH a low of 39.00 ...

being an OFW (Overseas Filipino Worker) I have felt that plunge and still feeling it and SHARE anyone's desire for a change of US government/policy...

When I started this site as a full time job, the AUD was at 65-70c against the USD. That was slowly ebbed away to as high as 98c only 2 months back. Great to see my income vanish on a daily basis.
It's now back to 80c in a huge plunge in recent weeks....thanks to a rising USD. Still owes me a packet though.

[Enigma869]

3 companies going under, and M-L was sold so technically it didn't go under, is really not that big a deal.

The problem with your argument as that we are dealing with VERY large companies. Also, you use your 1987 example and the loss of 22% as showing that things aren't nearly as bad today. I would suggest that because all of these companies were able to survive the crash in the late 80's and cannot survive this, that yesterday's 4% loss is far worse than the 22% loss of 1987. Call me crazy, but I think going out of business is far worse!

Lehman will come out of Chapter 11 just fine

I'm not sure even Lehman Brothers shares your optimism!

hell the airlines in this country have had MULTIPLE bankruptcies since 2001 and they are pretty big too, and the world didn't end.

No, the world didn't end, and I don't believe that anyone is suggesting it is going to end. That said, using the airlines as an example is just foolish, considering that entire industry is teetering on the edge of extinction! I'm not sure that anyone can even come up with a list of just how many airlines have gone under, just in the past 5 years. My guess is that within the next 3 years, there won't be more than 2 national carriers left in this country, and the cost of a ticket will be prohibitive for the average American to fly. At some point, the airlines can't keep hemmoraging money, and must raise their prices to reflect the true cost of fuel!


John from Boston

[RossValoryRocks]

As I said before it is EXACTLY this type of hysterical reaction that causes the runs on the banks in the first place.

What the hell is so "hysterical" about pointing out the deposits are only insured by the FDIC up to $100K??? You do realize that just within the past few months that banks have gone under, and people have lost any of their money that was over $100K, right??? I don't think it's remotely "hysterical" to advise people to be prudent and insure their deposits, by not subjecting anything over $100K to a loss! I know you believe the economny is absolutely stupendous, but that doesn't change the reality of what is actually going on. Do I think the U.S. can't recover from this? Absolutely NOT! I have zero doubt that this country will emerge and that these things are cyclical. I just think it's absurd when a handful of people act like "Nothing is really a big deal", and "there is nothing wrong with our economy" BS.


John from Boston

Well I do think things are not as bad as people make the out to be. you do know that the FDIC ensures regular checking and savings to $100K but did you know that most retirement accounts are ensured to $250K? No of course you didn't. You are too busy being a dickhead to research anything.

I think people saying "Get your money out" is what causes bank TO FAIL. There is NO NEED for people to make a run on the banks. Listening to all the experts on the news last night I only heard ONE expert say anything remotely close to that.

You do realize that only 11 Banks have failed so far in 2008. Only ONE was a big bank, IndyMac.

Here is an interesting article on Bank Runs... http://en.wikipedia.org/wiki/Bank_run

As the article says bank runs become a self-fullfilling prophecy.

And I do think it is hysteria and and is not grounded in the realities of the market. It's called a PANIC for a reason and everyone knows that poor decisions envariably happen when people panic.

That's my opinion based on current information, preceding history and current monetary policy. What's your opinion based on??

[RossValoryRocks]

3 companies going under, and M-L was sold so technically it didn't go under, is really not that big a deal.

The problem with your argument as that we are dealing with VERY large companies. Also, you use your 1987 example and the loss of 22% as showing that things aren't nearly as bad today. I would suggest that because all of these companies were able to survive the crash in the late 80's and cannot survive this, that yesterday's 4% loss is far worse than the 22% loss of 1987. Call me crazy, but I think going out of business is far worse!

Lehman will come out of Chapter 11 just fine

I'm not sure even Lehman Brothers shares your optimism!

hell the airlines in this country have had MULTIPLE bankruptcies since 2001 and they are pretty big too, and the world didn't end.

No, the world didn't end, and I don't believe that anyone is suggesting it is going to end. That said, using the airlines as an example is just foolish, considering that entire industry is teetering on the edge of distinction! I'm not sure that anyone can even come up with a list of just how many airlines have gone under, just in the past 5 years. My guess is that within the next 3 years, there won't be more than 2 national carriers left in this country, and the cost of a ticket will be prohibitive for the average American to fly. At some point, the airlines can't keep hemmoraging money, and must raise their prices to reflect the true cost of fuel!


John from Boston

On the edge of what??? Oh..EXTICTION...I see your English is as good as your understanding of economics.

You need to read up on bankruptcy law, and several other things before you open your pie hole and start spewing your so call "knowledge".

Do you even understand what the Black Monday of 1987 entailed?? The market took 2 years to recover. This 500 point drop will probably be gone by November or December. Did you even notice the drop in January, which up to this point was the largest single day decline since 9-11.

If 9-11 and the drop after that didn't kill the economy, and wipe out peoples lives this little blip isn't going to do much either.

It's PANIC, and it makes no logical sense.

[strangegrey]

Ugh....this crap is a touchy subject for me. For those of you puckering your labia-walls about this being a political problem, I would humbly request that you educate yourselves a little more on the underlying causes of some of this. This could have happened under B. Hussein Obama's watch or Bill Clinton's watch just as easily. In fact, I would suggest that given Clinton's over-involvement in accounting policy during the 90s, there's a damn good chance it could have happened sooner had clinton been president for another 8 years.

Part of this "crisis" we're dealing with, is a result of market agents and international accounting figures that have been vag-flapping for almost a decade (or more) for a departure from a long-used accounting treatment called "historical cost." Historical cost is booking an asset aquired at the price paid for it, despite what it can be bought and sold for months, years or decades later.

These forces finally won out and in November of last year, a new pronouncement from the Financial Accounting Standards Board called SFAS 157 was put into effect. The new pronouncement gives guidance on marking assets at FMV (Fair Market Value) and provides for 3 "levels" of determining FMV. Without getting into the nitty-gritty, to satisfy the demands of the FMV vag-flappers, SFAS 157 calls for rather agressive write-downs of assets when market-input (comparable sales or 'other' inputs) value or the income stream can not be determined.

The problem of SFAS157 (and I suspect it will get revised in the future to include a fall-back to historical cost) is that it allows for a illiquid market to completely freeze itself...in effect, allowing a run-on-the-bank for an asset market in crissis. That's what's happened here. No one wants to deal in CDS's or bad mortgages right now. The market is completely dead for it...and as a result, everyone has to basically write everything down to satisfy that scenario.

This has, in effect, created an extremely volitile market. When said market is doing well, it allows for more inflated balance sheets, potentially higher interest income, etc. Keep in mind, releasing a new accounting standard takes several years for comments, revisions, discussions, etc. SFAS 157 was likely started back as early as 2002 (I could look it up, but I'm lazy)....when the housing market was exploding with profit. But the converse is true as well. in bad times, there's a potential for more considerable losses.

The financial industry, mortgage market agents and international accounting groups wanted this change and they got it....and now the have to die on their sword. Let's not try to blame Bushie for this one....it doesn't hold water.

[strangegrey]

BTW, let me add...and this is in no way contradicting what I said above....but market analysts are prediciting further losses over the next two days until the AIG issue is resolved in a good way or a bad.

So while I agree with Stu that this isn't cause for depression-era running on the banks or people jumping out of their office windows, I do admit that this has the potential for a few straight days of significant losses.

The market lost 4.4% yesterday (hardly like the crash of 87)....but I don't think it's out of the ordinary to be weary that we could see another 2-3% loss today or tomorrow(AIG's issues are reportedly going to resolve tomorrow)...or both.

[S2M]

I'm telling you.....this is NOTHING compared to when Iran starts 'giving' it's oil away in Euro currency......NOTHING.

[Just Mindy]

Frank...from what I read Lehman severely overextended itself on investments. Is it because they showed more realized income on the books giving them more to play with, or was it just shitty investment decisions? I'm very curious about this...I used to work as an accountant in mutual funds but haven't kept up with things since the kids came along. I don't understand why FASB changed this...

[Enigma869]

Well I do think things are not as bad as people make the out to be. you do know that the FDIC ensures regular checking and savings to $100K but did you know that most retirement accounts are ensured to $250K?

Nowhere in my post did I ever mention anyone's retirement account. It still doesn't change the fact that many people lost their deposits that were in excess of $100K. I endless stories on the news about it, so I'm quite sure that it actually happened.

No of course you didn't. You are too busy being a dickhead to research anything.

Go fuck yourself!

You do realize that only 11 Banks have failed so far in 2008.

Only 11 banks??? Oh, is that all?? What a moronic statement! What you fail to point out is that the 11 banks that have failed thusfar (and there will be more before the year is over) doesn't include three of the top 5 investment banks. That number also represents more bank failings in less than one year than the number that have failed in this country over the past 6 years!

That's my opinion based on current information, preceding history and current monetary policy. What's your opinion based on??

Listen you pompous, condescending fuck...just because you think you're omnipotent, doesn't make it a fact. You're on this board daily, claiming to be the smartest fucker on the planet about everything related to the U.S. Government. Take your "current monetary policy" and shove it up your ass!


John from Boston

[RossValoryRocks]

Well I do think things are not as bad as people make the out to be. you do know that the FDIC ensures regular checking and savings to $100K but did you know that most retirement accounts are ensured to $250K?

Nowhere in my post did I ever mention anyone's retirement account. It still doesn't change the fact that many people lost their deposits that were in excess of $100K. I endless stories on the news about it, so I'm quite sure that it actually happened.

No of course you didn't. You are too busy being a dickhead to research anything.

Go fuck yourself!

You do realize that only 11 Banks have failed so far in 2008.

Only 11 banks??? Oh, is that all?? What a moronic statement! What you fail to point out is that the 11 banks that have failed thusfar (and there will be more before the year is over) doesn't include three of the top 5 investment banks. That number also represents more bank failings in less than one year than the number that have failed in this country over the past 6 years!

That's my opinion based on current information, preceding history and current monetary policy. What's your opinion based on??

Listen you pompous, condescending fuck...just because you think you're omnipotent, doesn't make it a fact. You're on this board daily, claiming to be the smartest fucker on the planet about everything related to the U.S. Government. Take your "current monetary policy" and shove it up your ass!


John from Boston

Better go check again about the bank closing issue...and Bear Stearns and didn't fail...the FDIC didn't pay a dime on that...I using the point on ONLY 11 to illustrate that it had been predicted that there would be 300 bank failures by this time in 2008 earlier this year. And all in all the banking system is pretty healthy...

http://mjperry.blogspot.com/2008/01/his ... lures.html


Yup that's me, call me Captain Condescension! Just because you are ignorant is no reason to get mad at me! Geez...or maybe it just more fun to bait you whining inbred types and watch you EXPLODE.

[X factor]

ASIDE from a retirement account, do any of you actually KNOW people with more than 100K in a checking account?

If so, we definitely don't run in the same circles!

[Michigan Girl]

ASIDE from a retirement account, do any of you actually KNOW people with more than 100K in a checking account?

If so, we definitely don't run in the same circles!

It's not just checking accounts...savings, cd's etc.
It's just plain silly to have more than 100k in any one type of account!!!

[S2M]

ASIDE from a retirement account, do any of you actually KNOW people with more than 100K in a checking account?

If so, we definitely don't run in the same circles!

It's not just checking accounts...savings, cd's etc.
It's just plain silly to have more than 100k in any one type of account!!!

FDIC only insures up to 100k anyways.....

[Michigan Girl]

ASIDE from a retirement account, do any of you actually KNOW people with more than 100K in a checking account?

If so, we definitely don't run in the same circles!

It's not just checking accounts...savings, cd's etc.
It's just plain silly to have more than 100k in any one type of account!!!

FDIC only insures up to 100k anyways.....

That's why it's silly, stick to basketball S&M!!!!

[S2M]

ASIDE from a retirement account, do any of you actually KNOW people with more than 100K in a checking account?

If so, we definitely don't run in the same circles!

It's not just checking accounts...savings, cd's etc.
It's just plain silly to have more than 100k in any one type of account!!!

FDIC only insures up to 100k anyways.....

That's why it's silly, stick to basketball S&M!!!!

I'm thinking about sticking to S&M!

[strangegrey]

Frank...from what I read Lehman severely overextended itself on investments. Is it because they showed more realized income on the books giving them more to play with, or was it just shitty investment decisions? I'm very curious about this...I used to work as an accountant in mutual funds but haven't kept up with things since the kids came along. I don't understand why FASB changed this...

I'm not arguing that these companies didn't act prudently with their investments. From my reading, it seems that what's killing these companies is their investments in Credit Default Swaps.....reportedly, AIG has the hugest cache of them out of anyone, which is why I think...if they go down, the fit's *really* going to hit the shan. I can't even remotely suggest I know enough about CDS's to even feel comfortable discussing them....but the sad thing, is 99.99999% of the people out there are in the same boat as I.

If I recall, I did say that SFAS157 was part of the problem, perhaps I need to clarify that it might not be the whole reason....but I feel it's a significant chain in the spokes right now, as valuation seems to be the big underlying problem. No one knows how to value these assets (because the basis for valuing them in a completely frozen market seems to be to value them at zero)...

Now there's an argument that can be made that what I've said regarding sfas157 isn't valid, because that suggests it's only a paper loss....but I think some underlying bad decissions were made regarding mortgage securities and CDS's....and that SFAS157 seems to be magnifying the problem significantly (and driving the market into a near illiquid state)

I wish I could tell you why the FASB released this. I actually had a discussion last week with a Phd in accounting regarding this, and he's still shaking his head....partly pressures to converge with IFRS, partly pressures from the mortgage industry looking to reap larger profits when things were good in the mortgage industry, partly because of the increased focus on trying to value IP in a way that is more relevant. But really...I wish could sound off more authoritatively on this aspect...I cant, beyond what I said already.

[RossValoryRocks]

ASIDE from a retirement account, do any of you actually KNOW people with more than 100K in a checking account?

If so, we definitely don't run in the same circles!

It's not just checking accounts...savings, cd's etc.
It's just plain silly to have more than 100k in any one type of account!!!

FDIC only insures up to 100k anyways.....

Retirement accounts are insured to $250K.

[jourmapac]

two three years ago 1USD=56 Pesos now its at 46.5 WITH a low of 39.00 ...

being an OFW (Overseas Filipino Worker) I have felt that plunge and still feeling it and SHARE anyone's desire for a change of US government/policy...

When I started this site as a full time job, the AUD was at 65-70c against the USD. That was slowly ebbed away to as high as 98c only 2 months back. Great to see my income vanish on a daily basis.
It's now back to 80c in a huge plunge in recent weeks....thanks to a rising USD. Still owes me a packet though.

It must be sickening seeing your income vanish on a daily basis, but at least with the spike you also see that income grows on a daily basis...

my self i don't want to think anymore of what I lost, I just hope that USD continues to improve AND I also hope that I am not speaking to soon that this 500 plunge on the DOW did not affect yet the strength of the dollar ...

[Michigan Girl]

ASIDE from a retirement account, do any of you actually KNOW people with more than 100K in a checking account?

If so, we definitely don't run in the same circles!

It's not just checking accounts...savings, cd's etc.
It's just plain silly to have more than 100k in any one type of account!!!

FDIC only insures up to 100k anyways.....

Retirement accounts are insured to $250K.

Yes......I was referring to accounts other than....sorry for the confusion..