DOW In Freefall

[parafly]

[QUOTE=jetstream23;2796602]I just started closing some of my PUTS when the Dow hit around 8600.[/QUOTE]

Why would you close your puts? Do you think this is bottom? I'm thinking of buying some Ultrashorts ETF's, but I'm worried that I may be too late.

[Jets Voice of Reason]

[QUOTE=jetstream23;2796605]So Congress could say they did something.

But, in all seriousness, the bailout is not for the stock market. And, even if the credit markets were thawing (and they really aren't quite yet), it doesn't mean that this economy isn't slowing dramatically. The stock market is reflecting that.

Also, the bailout has been passed but not implemented yet. The Treasury hasn't bought a single security yet and probably won't for a couple of weeks.[/QUOTE]

Just to make it clear to everyone, the stock market isn't the main way that businesses raise funds. Financial institutions are where businesses raise a majority of their funds and the bailout was targeted to provide stability and confidence in the credit market.

[jetstream23]

[QUOTE=bitonti;2796606]short term there's still a ton of money out there and people are still investing it

also short term the volatility is very very high which means it can snap back quick

end of the day you are looking at the stock market with a bias toward upside

and from that point of view it's pretty grim i will agree

but there are shorts and straddles and strangles and all these other strategies to make money on the way down... it's riskier but if you get it right you make a buck...

even a pure upside strategy can make money if you are risk trading, investing in gold mine (literal) companies ... there's a symbol SKF on the Amex "Proshares UltraShort Financials" that went up 28 bucks today. another view to take is the beaten down stock and double up - for example if you bought Wachovia Bank WB on Friday morning around 3.50$ and sold it friday afternoon at around 6$ that's very serious return on investment.

please note Im not recommending any one particular security - im not an analyst and truth be told Im taking the long view, my sports betting account gets more action than my stock account - but you have to think outside the box in an environment like this - and there are winners you can bet on that.

two more pieces of advice, panic is not an investment strategy and if you sell out now you never get a chance to recover the loss.[/QUOTE]

I started selling my SPY Dec 104 puts today. Bought them when the bailout was floundering around Sept. 30th as a hedge against my long positions. It has quadrupled in just over a week but only takes the sting out, doesn't make up for all the losses.

[Smashmouth]

[QUOTE=pauliec;2796596]What the hell was the bailout for???[/QUOTE]

by Catherine Austin Fitts and Carolyn Betts, Esq.

(1) Crime that pays is crime that stays.

There is reason to believe that Wall Street and those they represent are holding loans without collateral, multiple loans secured by the same properties, and other fraudulent instruments among the “troubled assets.” Based on the secret “Treasury Conference Call” with 800 Wall Street insiders, we know the deal proposed to be passed by Congress isn’t the real deal promised to Wall Street.


(2) This smells like obstruction of justice.

Bail-out without due diligence of so called “troubled assets” is a perfect way to hide documentation of financial crimes. It is also a perfect means to launder both the past ill-gotten gains and new federal money spent recklessly and without necessary safeguards and oversight mechanisms. Be very suspicious when they tell you “we just can’t tell what’s in these troubled assets.” We can assure you that the federal government has field offices all across the country that deal with significant amounts of real estate and mortgage assets on a dailyl basis. If Treasury refuses for more than a decade to comply with the laws, with approximately $4 trillion missing (and counting), it is not competent to manage $700 billion of taxpayer money while its arm is twisted by Wall Street.

(3) Wall Street owes the federal government money.


We need to get stolen money back from the banks that served as depositories for the US government (including trillions for which the Pentagon and HUD could not account) and punish them, not create another opportunity for them to game the system and engage in criminal enterprises to rob consumers. To the extent there has been regulatory wrong-doing, let’s not let the miscreants leave town with the evidence.

(4) Good guys are shut out.

A bail-out provides no way for honest leaders to come to the fore and use their creativity and expertise to restore balance and integrity to the system or for unproductive and poorly-managed banks that contribute to current over-capacity in the banking system to die a dignified death.

(5) This results in more investment in the “bubble economy.”

Spending massive amounts on non-productive uses (“buying” worthless credit default swaps, mortgages with no collateral and derivatives, which could even include the derivatives used to manipulate the precious metals markets) as opposed to productive uses (repairing infrastructure, creating alternative energy systems, supporting inventing and production of “green” products) is inflationary.

This bail-out will drive prices of food, water and energy up for the people who can least afford it.

(6) Bail-out does not result in capital circulating in healthy ways.

The bail-out of Wall Street and too-big-to-fail banks and insurance companies that are getting bigger by the minute by swallowing up other failing financial institutions (and creating more institutions that are “too big to fail”) does not result in trickle-down to those whose money was stolen in recent swindles (S&L, dot.com, current housing crisis), i.e., the taxpayers/middle class and working poor.

(7) These arrangements will result in more corruption.

Centralized “fixes” are sure to result in black holes, no-bid contracts and other scandals.

(8) The bail-out drains the real economy, rather than invests in the real economy.

The US economy can’t be productive or grow if consumers don’t have jobs and can’t afford to purchase goods and services. Real stimulation of Main Street is accomplished through productive investment, not bail-outs that shift money to unproductive sectors. We should use all of our precious resources to reinvest in our people in the real economy.

(9) It props up sectors that need to downsize and consolidate.

There is significant overcapacity in the financial and banking sectors. Brainpower and talent needs to stop blowing financial bubbles and shift to economic activities that create real value.

(10) It is a temporary “fix” to keep Wall Street afloat until after the election.

Our resources are better invested in permanent, long-term solutions. This bail-out will not fix anything. Rather, it will help the perpetrators get away and ensure that the ultimate day of reckoning is worse.

The Administration wants to drain the real economy to bail out Wall Street. It seems to us that the more appropriate plan would be to require Wall Street to return the $4 trillion plus that is missing and use that to rebuild the real economy.

We think the time has come to reverse the flow. Go to any business school in the country. That is what they teach. Money should move out of unproductive sectors into productive sectors. The bail-out does just the opposite.

[jetstream23]

[QUOTE=Jets Voice of Reason;2796614]Just to make it clear to everyone, the stock market isn't the main way that businesses raise funds. Financial institutions are where businesses raise a majority of their funds and the bailout was targeted to provide stability and confidence in the credit market.[/QUOTE]

Exactly. The commercial paper market, where businesses go to get short term funding, is basically broken. Banks aren't lending. Companies like McDonald's and GE haven't even been able access credit. THAT is what this is about. The banking system is broken right now.

[gqxluvx]

We are playing REM's End of the World at work today...this is crazy...

[brady's a catcher]

This is very, very scary. Could this be the breakdown of our whole society? Are we about to become the new Roman Empire?

[Smashmouth]

Brady the first thing to go is usually the economy. While I dont think were at that point yet we certainly are heading in that direction. Many people have warned of this for years thats whats scary. I can not claim I know enough about the economy to make such calls but there are people out there who know excatly whats going on and they are really scary :eek:

[teng]

[QUOTE=jetstream23;2796605]So Congress could say they did something.

But, in all seriousness, the bailout is not for the stock market. And, even if the credit markets were thawing (and they really aren't quite yet), it doesn't mean that this economy isn't slowing dramatically. The stock market is reflecting that.

[/QUOTE]

Look, the bottom line is that banks lend money they don't have. It works great when times are good but sucks when depositers start withdrawing money in great numbers.

[jetstream23]

[QUOTE=parafly;2796610]Why would you close your puts? Do you think this is bottom? I'm thinking of buying some Ultrashorts ETF's, but I'm worried that I may be too late.[/QUOTE]

Only closed half of them. I can't time a bottom. And, I think the chances of seeing Dow 9500 are the same as seeing Dow 7500 right now. But, I know a big profit when I see it and I have to take some of that off the table. Not all of it but some of it. It was insurance and, for the past week, it has worked tremendously.

[jetstream23]

[QUOTE=teng;2796657]Look, the bottom line is that banks lend money they don't have. It works great when times are good but sucks when depositers start withdrawing money in great numbers.[/QUOTE]

Agreed. That's why Take 2 of the bailout included raising the FDIC limit to $250,000. They are trying to keep money in the banks.

[XingDaorong]

Don't worry, when Obama is President this will all be straightened out.

[ucrenegade]

I don't know why people are so suprised........jesus said in revelation and daniel that this would happen.....then someone comes along and fixes it and everyone will think he is a miracle worker........it is only going to get worse before it gets better..

[Jetspennyfan]

[QUOTE=ucrenegade;2796669]I don't know why people are so suprised........jesus said in revelation and daniel that this would happen.....then someone comes along and fixes it and everyone will think he is a miracle worker........it is only going to get worse before it gets better..[/QUOTE]

So what is G-d doing when we are in good times? You can't pick and choose what you think is a sign from G-d and what is not.

[Smashmouth]

[QUOTE=XingDaorong;2796666]Don't worry, when Obama is President this will all be straightened out.[/QUOTE]

I think this and most economic problems go well beyond what a President can do to fix the problem. This problem is on so many levels due to a messed up system im not sure anyone has the answer right now.

[Smashmouth]

no rebound today folks dow down 678

[Jets Voice of Reason]

[QUOTE=brady's a catcher;2796647]This is very, very scary. Could this be the breakdown of our whole society? Are we about to become the new Roman Empire?[/QUOTE]

That's going too far. Our economy is broken right now, but that doesn't mean our entire society is about to go under. But I have news for you, unless we have some sort of technological breakthrough or something that drives the economy to growth, we are in for a few years of economic hardship.

It starts with fiscal responsibility in the federal government. That doesn't mean raising taxes necessarily, but this country is driven by debt on all levels and that needs to stop. We need to cut back on spending. Whether that is pulling out of the war or cutting inefficient programs, something needs to be done.

The banking system needs another banking holiday. Okay, maybe not shutdown the banks for a few days, but they need to stop making so many bad loans. The loan market is flooded with lemons at this point and even the financial giants can't get credit right now. The bailout, theoretically, is supposed to be aimed at "thawing" lenders to give out loans. But this is a short-term solution not a long one. As long as Lenders keep giving loans out to lemons, this problem will continue.

[ucrenegade]

[QUOTE=Jetspennyfan;2796672]So what is G-d doing when we are in good times? You can't pick and choose what you think is a sign from G-d and what is not.[/QUOTE]

i did not pick and chose it is in scripture....i am not a false prophet and gonna tell you what i think because i do not know...i am just saying what the bible says.

[Jets Voice of Reason]

[QUOTE=XingDaorong;2796666]Don't worry, when Obama is President this will all be straightened out.[/QUOTE]

What the hell does that mean? Do you have that much faith in the man that he can work magic?

Yes, he can start by being fiscally responsible. HIS part is that he can cut spending so that we aren't running a national debt and we can actually pay off some of it. He can propose that we cut or revamp inefficient programs. (Cough FEMA)

But the man isn't God. The next president isn't going to fix this right away. My hope at this point is that 1) the next president doesn't make this worse 2) The next president gets us into the next direction.

[bitonti]

As long as the roots are not severed, all is well. And all will be well in the garden.

In the garden, growth has it seasons. First comes spring and summer, but then we have fall and winter. And then we get spring and summer again.

There will be growth in the spring!