Dow down 284.
Posted on 09/21/2011 1:13:03 PM PDT by blam
STOCKS CRATER AFTER BERNANKE ANNOUNCEMENT: Here's What You Need To Know
Joe Weisenthal
Sep. 21, 2011, 4:00 PM
Finally, after all the anticipation, we finally got the big FOMC announcement. And as expected we got Operation Twist. And as for so frequently happens when something expected happens, stocks fell on the news.
But first, the scoreboard:
Dow: -281.36
NASDAQ: -47.32
S&P 500: -34.08
And now the top stories:
* To start, today was all about the Fed. Europe was abnormally quiet, with very few shock headlines coming out. It sounds like Greece is getting closer to a deal with the Troika, though that next tranche of aid is still obviously a ways off. No doubt the Greek story will be back with a vengeance shortly.
* In the US there was some news in the early going. At 10:00 AM new home sales came in better than expected, though the market didn't seem to care much. Then later on, Moody's went on a big downgrade rampage, knocking the long-term credit ratings of Bank of America and Wells Fargo, and the short-term rating of Citigroup. The main reason: The level of implicit government support for the big banks has gone down, and it's more reasonable to assume that the bondholders of a failing institution would get haircutted.
* In other corporate news, it came out the the next iPhone would be unveiled on October 4, and it looks like Hewlett Packard is about to sack its CEO Leo Apotheker. Then at 2:20 we got THE ANNOUNCEMENT. We got the twist! Specifically, the Fed said it would sell $400 billion worth of short-term securities and buy the same amount of long-term mortgage backed securities in an attempt to further compress long-term yields.
(snip)
(Excerpt) Read more at businessinsider.com ...
Dow down 284.
The FED is going to drive Interest rates DOWN by trading short-term debt for long-term debt.
All that will do is fuel SPECULATION. They don’t care about ANYTHING but keeping the markets up through election day.
Now that the traders know Bernanke will only do a bond twist and not do a QE3, the only logical direction is down for the stock market.
This is a continuation of the stock market drop that began in August when Obama refused to cut government spending.
We are also going into the October bad month for stocks.
It seems odd to use the word crater to describe today’s drop, unless you intend to use the word explode to describe the next 200-300 point gain.
These 2 or 3 hundred point swings appear to be norm to anyone who has been watching this market over the past month or so.
If that comes to pass, it would help me. I would try to refi to a 15 year, lose my current PMI at the same time.
I’ll need it...company I work for sent out letters for a ‘voluntary’ layoff this week. I have less than 4 weeks to decide. If they don’t get enough ‘volunteers’, there will be a forced one early next year.
Think inflation.
Obama hand wave secret signal to millionaires and billionaires . . .
Sell, Sell Sell!
The market went down and gold and silver went down. The one common denominator is that they are all valued in dollars. I infer from this that what we saw was an increase in the value of the dollar relative to stocks and commodities.
Or am I being over-simplistic here?
Well, I just refi’d my house at 3.37%. I’m building a large metal building now. Maybe I can get 2% on that loan. 8-D
No, you got it. DEflation. Fueled also by a rush out of the Euro.
Actually, I am reminded of the market of the fall of 2008.
Well, I’ve been expecting deflation followed by inflation followed by hyper-inflation. The cycle is just taking longer than I expected.
Doesn’t it always. 8-P
I agree with that assessment. Pundits seem to forecast one or the other INflation or Deflation or this or that. What would be more valuable to know whould be the state that might exist AFTER those conditions/events.
My belief is that there will be deflation that is the final indication that the Fed has lost control of their silly attempts to prop up the economy via asset prices. It will crush gold, as well. At that juncture, the likelihood that the curative (yeah, right) steps will create massive inflation.
Then what happens? I don’t know any better than anyone else, but I DO know that placing ALL your bet upon what you might think of as the NEXT state is a guaranteed loser. I have plenty of metals, just about all I want. I think they will deteriorate in value, but I own them a lot cheaper, thus I can hold them. But I’m definitely thinking about trimming down.
Now that the traders know Bernanke will only do a bond twist and not do a QE3, the only logical direction is down for the stock market.
This is a continuation of the stock market drop that began in August when Obama refused to cut government spending.
We are also going into the October bad month for stocks.
—I have plenty of metals, just about all I want. I think they will deteriorate in value, but I own them a lot cheaper, thus I can hold them. But I’m definitely thinking about trimming down.—
I don’t have all the metals I want, but then, how much is enough? In my case though, I have to analyze why I am holding them. It is not as an investment. It is an inflation hedge, and I DEFINITELY think it is coming. In the meantime, another good inflation hedge is to have the machinery, tools and shops/garages I need to be self sufficient on my property. Those things are LITERALLY more valuable than precious metals.
I’m putting up a 40x60 building very soon and I just bought my first tractor for the property. It is my road grader, my lawn mower, my hay cutter, my garden plow, my trailer puller, etc. The tractor and building will allow us to survive in the event of a serious collapse even more than silver, which tastes awful!
Completely agree. If I were in a position to invest, today, in the infrastructure required to support and advance self-sufficiency versus dead metal in the corner, I would choose the former. No question in my mind that is the better course. I’m not. I’m in the tail end of settling out my folks’ estate and in a modestly short period of time, I’ll be free to blast off literally anywhere I want.
But I don’t know quite where I would go, geographically. I am single so I only have to worry about myself. If I had a family I would view things completely differently. And the day I pack up the station wagon, the weight of all that metal will scrape the rear end of the vehicle.
It may be ex-US where I decide to go. I am not that eager to expatriate, but I realize it might be desirable. I really haven’t decided. I have researched a number of places and developed some candidates, but no decision yet.
I was looking forward to this thread after the market close today.
.Thank you, Blam, for posting about the Fed’s announcement.
Now, some of us are too old to do the plowing and planting thingie, although we used to do it, along with the canning, cold-storage, and hand milking.
What lies ahead for gold and silver coins? Might not these be the best way to protect savings from either inflation or deflation?
That level of volatility is unacceptable to more and more investors who are leaving in droves.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.