The crash of 1929, like the current global economic crisis, came after a prolonged period of economic growth. October 24, 1929, known as Black Thursday, marked the first day of the crash with panic selling ensuing on the Dow Jones. This was triggered by predictions of an impending market crash, leading to a record 13m shares being traded.Later that day, five banks gathered about $20m (£13m) together to buy stock and restore confidence in the market as the Dow closed at 299.47, with the rally continuing into the next day. However, by Monday, termed "Black Monday", panic selling resumed as the Dow dropped nearly 40 points (about 13pc) to close at 260.64.
The crash of 1929, like the current global economic crisis, came after a prolonged period of economic growth.
October 24, 1929, known as Black Thursday, marked the first day of the crash with panic selling ensuing on the Dow Jones. This was triggered by predictions of an impending market crash, leading to a record 13m shares being traded.
Later that day, five banks gathered about $20m (£13m) together to buy stock and restore confidence in the market as the Dow closed at 299.47, with the rally continuing into the next day.
However, by Monday, termed "Black Monday", panic selling resumed as the Dow dropped nearly 40 points (about 13pc) to close at 260.64.
NEW YORK (Reuters) - Stocks tumbled on Friday in a worldwide selloff with investors cashing out of stocks as signs mounted that the global economic slowdown could be deeper than feared and the corporate profit outlook darkened. Forced liquidations by hedge funds and mutual funds to raise cash to meet large-scale redemptions by investors made the losses even steeper, analysts said. Stock markets tumbled around the globe on Friday. By afternoon trading in New York, the MSCI's all-country world index was down 5.6 percent on more evidence of a sharp slowdown in Europe and a rash of profit warnings worldwide. The sell-off on Wall Street did not, however, live up to investors' worst fears after selling in index futures before the marked opened was so severe that trading was halted.
NEW YORK (Reuters) - Stocks tumbled on Friday in a worldwide selloff with investors cashing out of stocks as signs mounted that the global economic slowdown could be deeper than feared and the corporate profit outlook darkened.
Forced liquidations by hedge funds and mutual funds to raise cash to meet large-scale redemptions by investors made the losses even steeper, analysts said.
Stock markets tumbled around the globe on Friday.
By afternoon trading in New York, the MSCI's all-country world index was down 5.6 percent on more evidence of a sharp slowdown in Europe and a rash of profit warnings worldwide.
The sell-off on Wall Street did not, however, live up to investors' worst fears after selling in index futures before the marked opened was so severe that trading was halted.
WASHINGTON (MarketWatch) -- Boosted by foreclosures and plunging prices in the West, sales of pre-owned homes and condos rose sharply in September to the highest level in 13 months, an industry trade group reported Friday. Existing-home sales rose 5.5% to a seasonally adjusted annual rate of 5.18 million, the National Association of Realtors estimated Friday. Economists surveyed by MarketWatch expected sales to rise to a 5 million pace from 4.91 million in August
The real estate bubble has been fueled by abundant credit, low interest rates allowing borrowing much more money for a much longer period and, most of all, by collective ideology pushing people to become first time buyers at any cost (and often, too high a cost), 'cause it will be worth even more tomorrow: real estate is a safe asset, can never go down...
Now, skyrocketing prices and credit crunch have cut the sucker's supply to this giant Ponzi pyramid, and the unraveling there is not going to look any prettier than the stock market... Europeans think a hundred miles is a long way. Americans think a hundred years is a long time.
Oct. 24 (Bloomberg) -- The pound tumbled below $1.53 in its biggest drop in at least 37 years after a report showed the U.K. economy contracted more than forecast in the third quarter, bringing the nation to the brink of a recession. The 5.9 percent intraday decline surpassed that of Black Wednesday in September 1992, when the U.K. was driven out of Europe's Exchange Rate Mechanism. Gross domestic product shrank in the three months through September by more than twice as much as analysts predicted, a report showed today, putting the economy on course for its first recession since 1991. The FTSE 100 index slumped as much as 9.1 percent and the yield on the 10-year gilt headed for its biggest weekly decline in almost nine years. ``This is once-in-a-lifetime stuff, we're all sat under our desks with tin hats on,'' said Neil Mellor, a currency strategist in London at Bank of New York Mellon Corp. ``The U.K. is in the first step toward a recession and the dollar's bid because of repatriation flows.'' The U.K. currency fell to $1.5269, the lowest level since August 2002, and traded 2.8 percent lower at $1.5875 at 4:59 p.m. in London, from $1.6230 yesterday. Against the euro, the pound weakened to a record 81.96 pence, dropping for a fifth day, before trading at 79.93 pence, from 79.69 pence.
Oct. 24 (Bloomberg) -- The pound tumbled below $1.53 in its biggest drop in at least 37 years after a report showed the U.K. economy contracted more than forecast in the third quarter, bringing the nation to the brink of a recession.
The 5.9 percent intraday decline surpassed that of Black Wednesday in September 1992, when the U.K. was driven out of Europe's Exchange Rate Mechanism. Gross domestic product shrank in the three months through September by more than twice as much as analysts predicted, a report showed today, putting the economy on course for its first recession since 1991. The FTSE 100 index slumped as much as 9.1 percent and the yield on the 10-year gilt headed for its biggest weekly decline in almost nine years.
``This is once-in-a-lifetime stuff, we're all sat under our desks with tin hats on,'' said Neil Mellor, a currency strategist in London at Bank of New York Mellon Corp. ``The U.K. is in the first step toward a recession and the dollar's bid because of repatriation flows.''
The U.K. currency fell to $1.5269, the lowest level since August 2002, and traded 2.8 percent lower at $1.5875 at 4:59 p.m. in London, from $1.6230 yesterday. Against the euro, the pound weakened to a record 81.96 pence, dropping for a fifth day, before trading at 79.93 pence, from 79.69 pence.
Oct. 24 (Bloomberg) -- The Treasury began purchasing stakes in a number of regional U.S. banks, as the government stepped up its efforts to halt the freeze of credit to businesses and households. PNC Financial Services Group Inc. said today it is using Treasury funds to acquire National City Corp. for about $5.2 billion in stock. The Treasury will buy $7.7 billion in preferred shares in PNC, the bank said. The capital injection is the first in phase two of a $250 billion program for financial companies, a person familiar with the matter said. An initial $125 billion was allocated to nine of the largest U.S. banks. Regional lenders, already suffering from the housing slump, are now getting hit by rising loan delinquencies as the economic downturn deepens, with unemployment at a five-year high. The 19-member Standard & Poor's 500 Banks Index has lost half its value in the past year. Treasury Secretary Henry Paulson earlier this week said some consolidation of banks may benefit the economy.
Oct. 24 (Bloomberg) -- The Treasury began purchasing stakes in a number of regional U.S. banks, as the government stepped up its efforts to halt the freeze of credit to businesses and households.
PNC Financial Services Group Inc. said today it is using Treasury funds to acquire National City Corp. for about $5.2 billion in stock. The Treasury will buy $7.7 billion in preferred shares in PNC, the bank said. The capital injection is the first in phase two of a $250 billion program for financial companies, a person familiar with the matter said. An initial $125 billion was allocated to nine of the largest U.S. banks.
Regional lenders, already suffering from the housing slump, are now getting hit by rising loan delinquencies as the economic downturn deepens, with unemployment at a five-year high. The 19-member Standard & Poor's 500 Banks Index has lost half its value in the past year. Treasury Secretary Henry Paulson earlier this week said some consolidation of banks may benefit the economy.
Oct. 24 (Bloomberg) -- The Organization of Petroleum Exporting Countries cut oil production targets for the first time in almost two years as the group battles to slow a collapse in prices. OPEC decided to lower supply by 1.5 million barrels a day from November, oil ministers said today at the end of a meeting at the group's Vienna's headquarters. The reduction will be from the existing quota for 11 members of 28.8 million barrels a day. ``Demand is significantly less than what is being supplied, that is the reason the cut was taken,'' Saudi Arabian Oil Minister Ali al-Naimi said after the meeting. Crude oil has tumbled 56 percent from a July 11 record of $147.27 a barrel as the financial market crisis spreads, job cuts increase and fuel consumption slows. Prices fell as much as 7.7 percent today. ``OPEC has offered the market all the ammunition they had,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``With the bearish economic outlook and manufacturing in freefall this accord is not good enough'' to revive prices, he said. OPEC President and Algerian Oil Minister Chakib Khelil said at a news conference that the cut will be ``100 percent effective'' in stabilizing prices.
Oct. 24 (Bloomberg) -- The Organization of Petroleum Exporting Countries cut oil production targets for the first time in almost two years as the group battles to slow a collapse in prices.
OPEC decided to lower supply by 1.5 million barrels a day from November, oil ministers said today at the end of a meeting at the group's Vienna's headquarters. The reduction will be from the existing quota for 11 members of 28.8 million barrels a day.
``Demand is significantly less than what is being supplied, that is the reason the cut was taken,'' Saudi Arabian Oil Minister Ali al-Naimi said after the meeting. Crude oil has tumbled 56 percent from a July 11 record of $147.27 a barrel as the financial market crisis spreads, job cuts increase and fuel consumption slows. Prices fell as much as 7.7 percent today.
``OPEC has offered the market all the ammunition they had,'' said Robert Laughlin, senior broker at MF Global Ltd. in London. ``With the bearish economic outlook and manufacturing in freefall this accord is not good enough'' to revive prices, he said.
OPEC President and Algerian Oil Minister Chakib Khelil said at a news conference that the cut will be ``100 percent effective'' in stabilizing prices.
BEIJING (AFP) -- European and Asian leaders pledged at a summit here Friday to comprehensively and quickly reform the global financial system, as they vowed united action in tackling the unprecedented economic challenges.The more than 40 leaders spent the first day of the Asia Europe Meeting (ASEM) in talks on how to end the worst financial turmoil since the Great Depression of the 1930s, as stock markets around the world once again tumbled."Leaders pledged to undertake effective and comprehensive reform of the international monetary and financial systems," said a statement posted by host China on the ASEM website's home page at the end of the day's meetings."They agreed to take quickly appropriate initiatives in this respect, in consultation with all stakeholders and the relevant international financial institutions."While no specifics were given, the leaders said supervision and regulation of all those involved in the financial system needed to be stepped up.
BEIJING (AFP) -- European and Asian leaders pledged at a summit here Friday to comprehensively and quickly reform the global financial system, as they vowed united action in tackling the unprecedented economic challenges.
The more than 40 leaders spent the first day of the Asia Europe Meeting (ASEM) in talks on how to end the worst financial turmoil since the Great Depression of the 1930s, as stock markets around the world once again tumbled.
"Leaders pledged to undertake effective and comprehensive reform of the international monetary and financial systems," said a statement posted by host China on the ASEM website's home page at the end of the day's meetings.
"They agreed to take quickly appropriate initiatives in this respect, in consultation with all stakeholders and the relevant international financial institutions."
While no specifics were given, the leaders said supervision and regulation of all those involved in the financial system needed to be stepped up.
The US Treasury has drafted in a former banker from Credit Suisse, one of the banks advising the UK Government on its banking bailout efforts, to help run its own troubled asset relief program, rather than continuing its trend of recruiting Goldman Sachs alumni. James Lambright, chairman and president of Export-Import Bank since July 2005, will become interim chief investment officer for Tarp. He previously worked for Credit Suisse, whose talent pool has been favored by the UK government for its bailout program for financial firms. The Treasury said Lambright will serve until a permanent replacement is found. In the meantime, he will offer counsel to Treasury Secretary Henry Paulson and interim assistant secretary for the Office of Financial Stability Neel Kashkari as they begin to deploy Tarp.
James Lambright, chairman and president of Export-Import Bank since July 2005, will become interim chief investment officer for Tarp. He previously worked for Credit Suisse, whose talent pool has been favored by the UK government for its bailout program for financial firms.
The Treasury said Lambright will serve until a permanent replacement is found.
In the meantime, he will offer counsel to Treasury Secretary Henry Paulson and interim assistant secretary for the Office of Financial Stability Neel Kashkari as they begin to deploy Tarp.
Oct. 23 (Bloomberg) -- Banks getting $125 billion from U.S. taxpayers to unlock the credit crunch are saying they'd rather hoard the money than use it for loans, the head of the largest independent mortgage company said. Treasury Secretary Henry Paulson is injecting capital into institutions including Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. on the expectation they would step up lending and investing to prevent the economic slowdown from getting worse. That isn't happening, said Lee Farkas, chairman of Ocala, Florida-based Taylor, Bean & Whitaker Mortgage Corp. Many large banks have told Farkas the U.S. rescue isn't boosting their interest in offering or expanding credit lines to lenders such as his, even for borrowing secured by ``low-risk, highly liquid loans,'' he said. ``By their own admission, they're taking the money and they don't want to put it to work,'' he said in an interview during the Mortgage Bankers Association's conference in San Francisco. ``Every single one you talk to, from the biggest to medium biggest, is saying the same thing, they want to de-lever.''
Oct. 23 (Bloomberg) -- Banks getting $125 billion from U.S. taxpayers to unlock the credit crunch are saying they'd rather hoard the money than use it for loans, the head of the largest independent mortgage company said.
Treasury Secretary Henry Paulson is injecting capital into institutions including Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. on the expectation they would step up lending and investing to prevent the economic slowdown from getting worse. That isn't happening, said Lee Farkas, chairman of Ocala, Florida-based Taylor, Bean & Whitaker Mortgage Corp.
Many large banks have told Farkas the U.S. rescue isn't boosting their interest in offering or expanding credit lines to lenders such as his, even for borrowing secured by ``low-risk, highly liquid loans,'' he said.
``By their own admission, they're taking the money and they don't want to put it to work,'' he said in an interview during the Mortgage Bankers Association's conference in San Francisco. ``Every single one you talk to, from the biggest to medium biggest, is saying the same thing, they want to de-lever.''
H/t to ARGeezer.
Is that correct? Truth unfolds in time through a communal process.
L.A. Land: latimes.com --Peter Viles Leo Nordine's advice: Rent now, buy in 2010 Advice from L.A.'s "king of foreclosures," Hermosa Beach real estate agent Leo Nordine: Now is the time to rent and save your money. The time to buy is 2010. ....Nordine, a favorite of this blog for some time, is an unusual figure in L.A.'s real estate world: a soft-spoken, low-key contrarian -- and big wave surfer -- who works in his bare feet, prefers to sell mainly foreclosed houses, and is wildly successful. Don't let the Zen/surfing vibe fool you; his secret is his work ethic. He has sold 3,500 bank-owned houses over the last two decades.... "Try to find another Realtor who has been telling everybody not to buy. ... For someone out there who's renting, I'd recommend saving as much money as possible. Pay down all your debts as much as possible. And seriously look at buying around 2010."
Advice from L.A.'s "king of foreclosures," Hermosa Beach real estate agent Leo Nordine: Now is the time to rent and save your money. The time to buy is 2010.
....Nordine, a favorite of this blog for some time, is an unusual figure in L.A.'s real estate world: a soft-spoken, low-key contrarian -- and big wave surfer -- who works in his bare feet, prefers to sell mainly foreclosed houses, and is wildly successful. Don't let the Zen/surfing vibe fool you; his secret is his work ethic. He has sold 3,500 bank-owned houses over the last two decades....
"Try to find another Realtor who has been telling everybody not to buy. ... For someone out there who's renting, I'd recommend saving as much money as possible. Pay down all your debts as much as possible. And seriously look at buying around 2010."
you are the media you consume.
All of these economists talk as if the US has unlimited capacity to issue debt. Somewhere, sometime during the Obama presidency - probably next year but certainly out of the blue - will come a crisis of confidence in the US itself: in its debt and its currency. Nations are progressively hunkering down to defend themselves, and at some point both Japan and China will need their dwindling reserves for their own purposes, not for holding on to Treasuries. Worse, they will probably see that the US left to itself will continue to issue trillions more in debt, making what they already own worth much less. The result is the same thing; the US will no longer have the option of unlimited financing, and it will have to start looking toUS taxpayers to foot the bill. Good luck on that. Obama can play the important role of national pastor while people are hurting, redirecting what resources the US does have to helping people in distress. But to raise the money even for remedial help, he will need a major transformation in his thinking, starting with something he has never mentioned doing: taking on the military. Numerian October 24, 2008 - 12:07pm
All of these economists talk as if the US has unlimited capacity to issue debt. Somewhere, sometime during the Obama presidency - probably next year but certainly out of the blue - will come a crisis of confidence in the US itself: in its debt and its currency. Nations are progressively hunkering down to defend themselves, and at some point both Japan and China will need their dwindling reserves for their own purposes, not for holding on to Treasuries. Worse, they will probably see that the US left to itself will continue to issue trillions more in debt, making what they already own worth much less. The result is the same thing; the US will no longer have the option of unlimited financing, and it will have to start looking toUS taxpayers to foot the bill. Good luck on that.
Obama can play the important role of national pastor while people are hurting, redirecting what resources the US does have to helping people in distress. But to raise the money even for remedial help, he will need a major transformation in his thinking, starting with something he has never mentioned doing: taking on the military. Numerian October 24, 2008 - 12:07pm
THEN, the balloon will go up. Capitalism searches out the darkest corners of human potential, and mainlines them.
THEN, the balloon will go up.
because there's no drug as tasty as exceptionalism, and no bigger come-down after either.... ~Government budget deficits are not nearly as dangerous as the deficits we have created in vital and complex natural systems.~ Naomi Klein.
Japan: The Rising Yen and the Falling Markets | Stratfor
SummaryEquity markets fell worldwide Oct. 24, for two reasons having to do with the Japanese yen. First, the recent jump in the yen's value has spooked "carry traders" who are now unwinding their positions in a massive sell-off of assets. Second, it has also spooked Japanese investors, who have been driven to dump their overseas assets. The long-term outlook for Japan's economy is grim. <...> In the longer term, most of the pain will be felt in Japan. Westerners will be less likely to purchase Japanese exports not simply because they are spooked, but because the rising yen is making those exports much less attractive. Japan faces the probability of a protracted and deep recession from which it cannot recover until Western demand for Japanese goods revives. Remember, the Japanese government is already chronically in debt to the tune of roughly 175 percent of Japan's gross domestic product, and already is engaged in deep deficit spending. There is thus no more room for the government to create a domestic stimulus, even before one considers that the average Japanese citizen is deeply shell-shocked.
Equity markets fell worldwide Oct. 24, for two reasons having to do with the Japanese yen. First, the recent jump in the yen's value has spooked "carry traders" who are now unwinding their positions in a massive sell-off of assets. Second, it has also spooked Japanese investors, who have been driven to dump their overseas assets. The long-term outlook for Japan's economy is grim.
<...>
In the longer term, most of the pain will be felt in Japan. Westerners will be less likely to purchase Japanese exports not simply because they are spooked, but because the rising yen is making those exports much less attractive. Japan faces the probability of a protracted and deep recession from which it cannot recover until Western demand for Japanese goods revives. Remember, the Japanese government is already chronically in debt to the tune of roughly 175 percent of Japan's gross domestic product, and already is engaged in deep deficit spending. There is thus no more room for the government to create a domestic stimulus, even before one considers that the average Japanese citizen is deeply shell-shocked.
The following graph is the yen to euro exchange rate for the past three months:
Truth unfolds in time through a communal process.
