Neon Vincent (darksumomo) wrote in the_recession,
Neon Vincent

It's been a wild couple of days

First, a Chinese agency downgraded the U.S. credit rating.

A Chinese ratings firm yesterday made financial history and downgraded the US' credit rating from A+ to A. Meanwhile, hot money flowing into hedge funds and gold saw gold prices yesterday shoot to a historic high of US$1,670 per ounce.
It looks like the Chinese think the deal was a Satan Sandwich, too, and that we should have chosen the prize behind Door #3 instead.

Then the stock market crashed.

Stock market tumble

Investors flee economic gloom, policy paralysis
By Edward Krudy
NEW YORK | Thu Aug 4, 2011 7:52pm EDT
Investors around the world dumped stocks and commodities on Thursday and rushed to the security of cash and government bonds, hammering equity indexes to their lowest levels of the year on fears of a spreading debt crisis and slowing growth.

Worries the euro-zone debt crisis was spiraling out of control sent blue chip European stocks to levels not seen since markets recovered from the financial crisis in mid-2009. Italian equities pushed further into bear market territory -- down nearly 30 percent since February.

Major U.S. indexes fell more than 4 percent, with the technology-heavy Nasdaq down 5 percent, erasing gains for the year as the broad-based S&P 500 entered a correction of more than 10 percent from a peak in May.

Intense selling this week reflects frustration with politicians to address pressing concerns over high public debt levels in Europe and the United States as large industrial economies show signs of running aground.
See that bolded paragraph? That's the market's opinion of the Satan Sandwich.
"The big catalyst was fear," said Matt Rubin, director of investment strategy at Neuberger Berman in New York, which manages $199 billion in assets.
We'll see fear later on, this time expressed as numbers.

Wall Street suffers worst selloff in two years
By Angela Moon
NEW YORK | Thu Aug 4, 2011 7:52pm EDT
The S&P 500's drop puts it more than 10 percent below its April 29 high, considered a correction. Nearly 14 billion shares changed hands, the busiest trading day in more than a year. Decliners beat advancers on the New York Stock Exchange by about 19 to 1.

The market's recent malaise stems from a number of factors. U.S. economic data has worsened, suggesting slowing growth from already sluggish pace in the first half. Europe's sovereign debt crisis has defied remedies and threatens to engulf large euro-zone economies Spain and Italy.
The Dow Jones industrial average was down 512.46 points, or 4.31 percent, at 11,383.98. The Standard & Poor's 500 Index fell 60.21 points, or 4.78 percent, at 1,200.13. The Nasdaq Composite Index lost 136.68 points, or 5.08 percent, at 2,556.39.

Some 13.92 billion shares changed hands on the New York Stock Exchange, NYSE Amex and Nasdaq, the highest since June 25, 2010, and well above the daily average of around 7.48 billion.
Big losses on high volume are very significant. It's a sign of utter loss of confidence, if not panic.
The CBOE Volatility index jumped 35.4 percent to 31.66, its highest since July 2010. It was the biggest rise since February 2007.
The Volatility Index, or VIX, is popularly called "the fear index." I told you that you'd see fear expressed in numbers.

Finally, today wasn't much better.

Stocks are falling again on more fears of economic weakness in the U.S. and Europe's debt crisis.

Above post abstracted from three posts at Crazy Eddie's Motie News:

Next Media Animation on the Debt Ceiling Hostage Crisis

The financial markets think it's a Satan Sandwich, too

WXYZ has local reaction to yesterday's and today's stock plunge
Tags: debt, double dips, dow 36000, global financial trainwreck of 2007-?, rating agencies, recessions, s&p 500

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