Thursday, March 5, 2009

Dow Ends 6,594: Second-Worst Bear in 100 Years

Chart courtesy of dshort.com. The Dow dropped nearly 300 points on bad retail reports and concerns that GM faces bankruptcy.

In other bad news:

MORTGAGE DELINQUENCIES AND FORECLOSURES

5.4 million American homeowners with a mortgage (~12%) were either behind in their payments or already in foreclosure at the end of 2008, according to the Mortgage Bankers Association.

That’s about one in eight households with mortgages; about half of owned homes in the US have mortgages. WSJ reports.

Hence the Obama "Making Home Affordable" program.

BANKRUPTCIES

Calculated Risk reports on the Administrative Office of US Courts report that nationwide Bankruptcies are up 31%.

Context: in this area, backruptices are actually up much higher: By December 08, Bankruptcies had soared 695%, Federal Court Records showed, as reported by DP. (That's not a typo, guy.)

Gee whiz. What if these are "the good old days"?

4 comments:

hamish said...

i got out of the market in late october though my broker was shouting about long term gains. there's no such thing as long term gains from this market from this point forward unless you remain brainwashed. i fully expect to see the fives really soon. i'm not alone in this. a six fig loss was enough.

Mark said...

Although I think there are incredible buying opportunities out there, like GE, I think there is more to go.
And President Obama is making it worse with his constant "act now or we may never recover" doom and gloom.
GM needs to go under, some banks need to die, and government needs to get its meddling fingers out of it.
The same Democrats who blamed (partially rightly) that Bush used 9/11 to instill fear and expand government control are using this (what they tell us is a) crisis to refute capitalism and free markets, in order to make this and future generations dependent on government. Sometimes I think they want the Dow to hit 5,000 and keep plunging, so we'll all need them to take over our IRAs and make us all wards of the welfare state.
Nothing sickens me more than seeing former titans of industry like GM and all the banks crawling to government, hats in hand, begging for Uncle Sam to give them our kids' future financial security so that they can stay in business.
THIS IS PART OF THE ECONOMIC CYCLE, PEOPLE! RECESSIONS FOLLOW BOOMS, USUALLY EVERY TEN YEARS! I can't decide which subject our elected "leaders" are more ignorant of: history or economics. Nothing here is unprecedented, except the fact that we all suddenly expect government to erase our collective bad decisions.
Are there any non-socialist democracies left, so I can threaten to move to them?

witness said...

Blue Chips are selling for literally pennies. There's a lot further down to go.

Mark writes,
Nothing here is unprecedented, except the fact that we all suddenly expect government to erase our collective bad decisions.

Actually, what's unprecedented is that the collapse of the US economy and global economies are because of a housing bubble. This has never happened before. The US has had recessions in the past, but not of this scope or magnitude.

Today's report: Fri Mar 6 unemployment at 8.1%. Even the most optimistic economists aren't expecting a recovery until into 2010.

Mark said...

The US has had recessions in the past, but not of this magnitude? Come on! 8.1% unemployment is about 20 points lower than the unemployment figure of the Depression (you know, our ignorant talking heads' era they love to compare today to)
It was also higher in 1983 and 1974, http://4.bp.blogspot.com/_9MYixPWxtF0/SWwSjvhzHAI/AAAAAAAAAWc/H7R1YWNgOtI/s1600-h/unemployment_rates.gif
Not saying it ain't bad; am saying it ain't unprecedented.
Ignorance of history always causes us to think these are the worst of times, and also robs us of lessons we could use to make things better.