The Market Crumbles today...

[KingIsaacLinksr]

I'm....I'm just....wow.....this is so much failure....

http://abcnews.go.com/Business/dow-ends-day-634-worst-day-wall-st/story?id=14253313

The Dow Jones Industrial Average fell more than 600 points Monday after a one-two punch: the first-ever Standard & Poor's downgrade of U.S. debt, then the downgrading of government-backed mortgage debt. The Dow's one-day drop was its biggest point loss in a single day since Dec., 1 2008 and its sixth biggest point drop in its history.

The Dow closed down 634 points, the S&P 500 lost 79 points, and the Nasdaq ended 174 points lower, dropping almost 7 percent.

President Obama spoke this afternoon, saying the United States knew well before the S&P downgrade that it had a debt problem. "The U.S. will always be a triple-A country despite what rating agencies say," he said.

The good news, he said, is the debt is a "solvable" problem that can be addressed through tax reform and spending cuts.

Investors don't seem to agree. The Dow plunged an additional 100 points to hover around 500 after the president's speech.

Today's rout wiped out about $2.3 trillion in investor wealth in the United States.

As stocks reeled, gold surged today by $61 to $1,713 an ounce.
PHOTO: Joseph Dreyer of Knight Capital Americas, LP watches prices on the floor of the New York Stock Exchange August 8, 2011.
Stan Honda, AFP/Getty Images
Joseph Dreyer of Knight Capital Americas, LP... View Full Size
What the Downgrades Mean for You Watch Video
Dow Drops 600 Points; Gold Prices Skyrocket Watch Video
Obama Says America Will Always be a AAA Country Watch Video

Investors were hoping for some sign that the steep market selloff of the last three weeks would abate. Those hopes were dashed when S&P announced the downgrade of the mortgage debt agencies, which are now owned by the U.S. government following their takeover in the 2007 financial crisis. Lower ratings on U.S. bonds and mortgage debt could mean higher interest rates, creating still more drag on the faltering U.S. economy.

Though government officials sought to find fault with S&P's assessment, pointing out that the agency had made a $2 trillion error in its math, others say rampant government spending led to the downgrade.

"If we were running our affairs properly we wouldn't have to worry about S&P, Moody's and Fitch...," Paul O'Neill, Treasury secretary in the Bush administration, told ABC News.

Click Here to See 5 Ways the Downgrading of the U.S. Credit Rating Could Affect You.

Since the late Friday announcement of S&P's downgrade of the U.S. credit rating there were efforts across the world to calm markets. All weekend the White House had been fighting in some very strong language, calling the move "amateurish" and "breathtaking."

A managing director at Standard & Poor's told George Stephanopoulos on "Good Morning America" today that he has no second thoughts about the decision to cut the U.S. debt rating.

With global stocks sinking early Monday, S&P's David Beers said the agency's decision was based on factors including damage done to the U.S. reputation over the controversy surrounding the debt ceiling and concerns that underlying public finances are on an unsustainable path.

Asked if he had any second thoughts about the downgrade, Beers replied, "absolutely not."



I'm....wow. 

King

[Ktrek]

In order to eliminate the U.S. as the dominate force and bring an end to Capitalism you have to destroy the economy of the nation. Then Socialism, as a political ideology, begins to look like a much more viable alternative. There are things at work in and outside of our government to weaken this nation, and they have been, and are being, quite successful.

Kevin

[Bryancd]

Well, let's not get carried away, boys. It's a classic repricing of risk assets. Seen it before, will happen again. Growth is slowing in the US, Europe is in even much worse shape, and emerging economies are still too hot. Let's keep the hyperbole in check and stick tot he facts, not the media fiction.

[KingIsaacLinksr]

Well, let's not get carried away, boys. It's a classic repricing of risk assets. Seen it before, will happen again. Growth is slowing in the US, Europe is in even much worse shape, and emerging economies are still too hot. Let's keep the hyperbole in check and stick tot he facts, not the media fiction.

My WoWing was purely on the #s that we dropped.  Which is substantial.  I am not in agreement with Ktrek's sentiments.  I simply do not believe in such conspiracies and even if they are true....oh well, nothing I can do about it...

King

[Bryancd]

The numbers aren't as important as the percentage drop. Yes, this was the 6th largest point drop ever but no where even close to the biggest percentage drop. 600 point off an 11,500 starting number isn't the same as 600 off a 3000 starting value, see how the media plays fast and loose with the math?

[KingIsaacLinksr]

The numbers aren't as important as the percentage drop. Yes, this was the 6th largest point drop ever but no where even close to the biggest percentage drop. 600 point off an 11,500 starting number isn't the same as 600 off a 3000 starting value, see how the media plays fast and loose with the math?

I get that. 

King

[X]

I wasn't worried and Bryan just confirmed my need to not worry. Perspective is great and I'm glad the boards has someone that is a master in this aspect of life.

[KingIsaacLinksr]

Bryan, what are your thoughts on our downgrade from a AAA to a AA+? 

(Note, as much as I wish to bash some political heads over this...I'm keeping it out for the sake of the thread and sanity of the forums ;)) , so just from a financial aspect

King

[Bryancd]

Bryan, what are your thoughts on our downgrade from a AAA to a AA+? 

(Note, as much as I wish to bash some political heads over this...I'm keeping it out for the sake of the thread and sanity of the forums ;)) , so just from a financial aspect

King

It's somewhat meaningless and irrelevant and likely deserved. Nothing we could have done in the most recent budget and debt ceiling debate was going to stop that downgrade. It's somewhat justified and should and has served as a wake up call to our nation. I think it's a good thing that this will now be heavily debated and be a part of the election next year., It's too important an issue, or current debt and spending, to not be part of a Presidential election.
In regards to the practical effects of the downgrade, you don't need to look any farther then how the US Govt. debt markets traded in the weeks prior to the announcements and how they have behaved post downgrade. They have rallied, HUGE. In other words, rates have DROPPED and their value has risen, the exact opposite of what would have been expected on the face of it. The media was getting everyone worried about potential higher interest rates on consumer loans, mortgages, ect. due to rising rates. Didn't happen. Why? There's no where else in the world for capital to go. We have the deepest, most liquid, and still safest bond market in the world and S&P can't change that. They also lack some credibility having missed the entire mortgage derivative market mess. They rated those securities very highly and that proved very wrong.

[QuadShot]

I wasn't worried and Bryan just confirmed my need to not worry. Perspective is great and I'm glad the boards has someone that is a master in this aspect of life.

Now if we can only get him to wear a shirt! :)

[billybob476]

I wasn't worried and Bryan just confirmed my need to not worry. Perspective is great and I'm glad the boards has someone that is a master in this aspect of life.

Now if we can only get him to wear a shirt! :)

Why would you wish for such a thing? Bryan's pics are probably the only reason there are ANY girls on this forum! :)

[Rico]

Well, let's not get carried away, boys. It's a classic repricing of risk assets. Seen it before, will happen again. Growth is slowing in the US, Europe is in even much worse shape, and emerging economies are still too hot. Let's keep the hyperbole in check and stick tot he facts, not the media fiction.

Well said Bryan.  I have confidence this will all rebound.  Just like it has many times in the past.

[Bryancd]

Seriously, I was working in this industry during the internet bubble pop of late 1999 and NASDAQ collapse of 2000, Long Term Capital, ENRON, and Worldcom bankruptcy, the immediate post Sept. 11th 2001 declines and bear market, then the recession of 2008-2009 where I watched the Dow got from 13,000 to 6500! This is nothing. :)

[QuadShot]

Yes Bryan, I agree with you. I see everyone around me just panicking and freaking out "the world is over!! The US is bankrupt.." Blah!! Just like a bad burrito, this too shall pass.

[moyer777]

Yes Bryan, I agree with you. I see everyone around me just panicking and freaking out "the world is over!! The US is bankrupt.." Blah!! Just like a bad burrito, this too shall pass.

Ewww.  Hehehehehe