Friday, November 27, 2009, 5:40AM ET - U.S. Markets open in 3 hours and 50 minutes.
As shares of Wall Street titans Lehman Brothers, Bank of America and AIG plummeted, the Dow tumbled over 500 points Monday while the S&P suffered its worst decline since 9/11.
The decline was certainly dramatic and painful for those long, but it was not as bad as the "Black Monday" many market participants expected heading into the session. Still, a 1987-like crash cannot be ruled out and investors should take steps such as buying puts to protect themselves against such a "fat-tail event," says Nouriel Roubini, economic professor at NYU's Stern School and chairman of RGE Monitor.
Roubini says Monday's decline could have been worse if not for a series of "new dams" created this weekend and Monday, including:
But nothing has changed Roubini's baseline forecast for another 20% drop in the stock market. The economist, who has been eerily prescient in predicting the ongoing crisis, recommends investors avoid risky assets, including commodities as fears of a global slowdown take hold. On Monday, gold benefited from a "flight to safety" trade in the wake of Lehman's bankruptcy, but oil fell to its lowest level since mid-February.
Meanwhile, NY Post reporter Mark DeCambre notes major Asian markets were closed Monday for holidays. "We could be looking at two days of carnage," he says, when Wall Street reacts tomorrow to the delayed reaction in (most notably) Japan, China and South Korea to Monday's slide and this weekend's drama.
The drama included a special trading session for counterparties to Lehman. As bad as Monday was for the stock market it was much worse in the market for credit default swaps, a somewhat arcane market that is at the epicenter of a great debt unwinding that may just be getting started. (Click here for a discussion of what the coming credit contraction means for consumers and the economy at large.)
What the hell happen now if you owe anybody the will be strong arm to collect. Lord help the middle class and the poor they need it more. Can we say change is need for us. Yes we can!!!!!!!!!!!!!
And meanwhile McCain blames......the Democrats! What? Really, he blames the Democrats because "congress has done nothing". Iraq, trade imbalance, federal deficit, de-regulation of housing market which led to disaster, no economic leadership... I could go on and on. Throw the Republican Party out!
In 1974, Hong Kong stocks were down 92 percent. In 1982, Mexican stocks were down 73 percent. In 1986, Arab stocks were down 98 percent. In 1990, Taiwan stocks were down 80 percent. In 1990, Japanese stocks were down 63 percent. 2008 America? The Fully Misinformed Investor/http://www.broowaha.com/article.php?id=3324
Keep electing idiots like Bush and Mcain and watch us turn into a third world country! Thank You Mr.Pickens for showing more leadership than all of these no good poliiticians. A majority of CEO"S in this country should be required to learn what 8 hrs. of work is like.
All I know is that for the first time in 40 years for me things are going right and I've finally got a good job with good benefits and as a single mother the economy is falling apart and making things very tough and with people all around are loosing jobs and with Boeing on strike mine is at risk and I personally think that SUCKS (I would love to just take my 2 boys on a real family vacation)!!!!!!!
de los, you are truly an idiot ,she is actually going to be vice president !!!
lets short the stock market and then tell everyone the sky is falling. who are these guys? things are bad, but objectivity in the media seems lost.
Hi Chiconabike, where do you want to go on vacation?
Life is good. Palin is an idiot. McCain is a likeable boob. Obama may be wolf in sheep's clothing, but man that guy can consistently deliver hits like, say, Pete Townsend. Oh well, at least my red wine collection is well stocked--probably need to kill one or two bottles tonite though
OH MY GOD, I JUST LOST $100,000... oh, wait, I didn't sell anything.....never mind.....
The Change what repubicans refer to is what is going to be left in your POCKET when this is done! Buy more from China it really really is great from a unemployed mold makers point of view thanks a bunch now it is time to pay the piper
Days like today shake the clowns out of the market. Excuse me while I put my clown makeup on.
Ehm... who is the top economist here? It seems to me that these "top" economists come out of their not so top office every time there is some panic to spread -- sure way to hit the news. Who has an interest in tilting the boat, let's see...
In my opinion still economic is unstable.I believe that as time passes more U.S companies or banks may collapse.Let's remain calm and watch how big is the financial crisis by time. I wouldn't invest anything until the end of the crisis.
I kept warning about derivatives on these blogs. Looks like they are now playing out, their dangers have put us in a critical position. Which domino will be next to fall?
Not sure that I agree with Yahoo's recent move to promote an academic "Roubini" point of view every day as a headline. The guy seems to be the ultimate bear and I've seen him quoted as a "top economist" in addition to them using his name in the headlines. I didn't realize he deserves more headlines than real economists!
So long and Thanks for all the FISH .... :-)
Bernard S. You're right, She would be better than Obama and his underground commie ways. Chiconabike Wish I could help. I wish you the best and hope everything works out for you.
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da loz - Monday September 15, 2008 06:01PM EDT
Oh cool it everybody - it was more fun laughing at Palin...things will turn around if no one panics...things will turn around even if everypone panics actually...but we are still threatened with Palin as President ICE