35 Responses to Black Monday: Dow plunges -600 points in volatile trading

  1. David says:

    Pollster: Americans Are “Pre-Revolutionary,Just read the comments of any political article on the net. People are mad. People are mis-informed. When you put those two things together, danger is around the corner.

    There is so much propaganda in the media these days, it all goes out in an effort to play the blame game and the people gladly choose their sides and spout whatever baseless propaganda that makes them feel good.

    Sometimes I feel like another revolution is the only chance America has. Other times I fear what a modern revolution would do to our country with all of the mis-information, propaganda and out-right lies, it is hard to imagine we would end up with a better system.

    Most likely things would go further into authoritarian control and more rights being steam rolled.

    I think D.C. greatly under-estimates the anger of the people.



    • Tomwe says:

      Revolution is an easy word, coopted by the ad industry. An actual revolution can be bloody with people of opposing ideologies willing to fight to the death, each with “god on their side”. Unfortunately, opportunists, careerists, and cynics can take control of these revolutions through demagogery or by quoting whatever “holy” scripture they can dig up to justify their atrocities. An enlightened population should be able to resolve differences democratically, but when the levers of democracy are corrupted by corporate, religious, or ideologues, propaganda can lead people astray and absolutely no compromise is possible. I fear for the future if those with the loudest voice and most ruthless weapons come to power.


    • nickk0 says:

      “I fear what a modern revolution would do to our country with all of the mis-information, propaganda and out-right lies, it is hard to imagine we would end up with a better system.”

      David, I agree 100%.

      – Nick


  2. luisport says:


    Take-Two shares to resume trading at 4:25 p.m. EST


  3. luisport says:

    So this is life after AAA, eh?

    But first, the scoreboard:

    Dow: -632.49
    NASDAQ: -174.72
    S&P 500: -79.71

    And now, the top stories:

    It all begin just after 8 PM ET on Friday, when S&P dropped its bomb on America: The AAA rating was done-zo. We were now AA+. The call was controversial. According to Treasury and other reports the agency originally made a math error in its analysis, but in the end, there was no taking it back. The debt ceiling fight was not becoming of a country that’s rated AAA and that was that.
    Markets had anticipated something like this happening soon (so everyone says) but still once it actually came, it was still a shocker. All the analysis about what a downgrade would do was just airy speculation, as nobody knew what the real impact would be.
    Meanwhile, Europe was dealing with a similar crisis… a real debt crisis. Italy is on the brink, and existing bailout mechanisms aren’t enough. On Friday afternoon, Berlusconi and his Financial Minister Tremonti announced plans to accelerate reforms, with the idea being that then the ECB would use its Securities Markets Programme to buy Italian debt. That gave a lift in the afternoon to markets on Friday when that news came out.
    But still, even after that news, it was not clear whether the ECB would bring enough firepower to the game. On Sunday evening the ECB held a call, and word leaked that it would make “massive” secondary bond purchases of Italian and Spanish debt, although in the actual announcement, the ECB did not seem to be bringing out the bazooka. Still, the euro jumped on the news when Monday morning trading began in Asia.
    That being said, the mood was decidedly “risk off” all though not dramatically so. S&P futures swung between losses of about 2% and 2.8%. Gold surged. Initially, life post-AAA felt orderly.
    By the time the morning came to Europe and the US, it felt as though the clouds were lifting. Italy spiked over 3%! Its yields plunged, as the ECB came in with its “bazooka” and US futures were off less than 1%.
    But that proved to be brief relief. Just a couple hours into the day — by around 5:30 AM — markets were clearly coming unglued. Italy went negative. Europe’s core started getting smashed. The DAX (Germany) and the CAC-40 France got killed (oh, did you hear how everyone’s worried that France is the next AAA country to go AA+?).
    Meanwhile, S&P’s rampage continued throughout the day. After holding a conference call in the early going, the ratings agency then proceeded to carry out a range of collateral damage downgrades. Fannie and Freddie got the whack. So too did a lot of municipals. Berkshire Hathaway was put from outlook stable to negative (an amusing payback since this weekend, Warren Buffett slammed S&P).
    And then there were the financials. Bank of America got clobbered, down over 20% as its legal headaches continue to pile up. AIG is the latest to join the lawsuit parade. Citigroup was also down 14.74%. JPMorgan was off 7.58%. All these were well off their lows from earlier in the day.
    Meanwhile, at around 11:00 AM, The White House announced that Obama would give a speech at 1 PM on the downgrade, as well as the tragedy this weekend in Afghanistan. Then the speech got delayed until 1:30 (and the market sunk some more), and then Obama was 21 minutes late for that, and the market sunk some more. And then (!) Obama’s speech was a disaster, as he didn’t say anything at all, but just brought out more tired cliches about working together and the need to compromise on tax reform on the super-committee. And the market plunged some more.
    And in the end, we got today’s big time destruction. Treasuries (which were just downgraded, hilariously) surged. Gold surged 4% to new records. Oil got killed. And so on and so on. At least the Swiss Franc did well. Something remarkable: Every single stock in the S&P 500 fell. Ominously, markets ended right near their worst of the day.
    Oh, and finally, just to make you feel good: Both McGraw-Hill and Moody’s got destroyed, as the market took revenge on the ratings agencies.

    Read more: http://www.businessinsider.com/closing-bell-august-8-2011-8#ixzz1UTGHjiK0


    • Tomwe says:

      Good post. Don’t forget that S&P gave Enron (remember) a triple-A rating; and thought that the shady dealings in the housing market were A-OK. Obama’s speech waas indeed tepid, but I am not sure what he could have said that would have made any diffrerence at all.


  4. luisport says:

    EPIC PLUNGE: -633.78, 6th Largest Drop In Dow Jones History
    Submitted by Tyler Durden on 08/08/2011 – 16:09
    And there you have it: following last Thursday’s massive 500 point drop which so many said was a buying opportunity, here comes a -633.78 plunge in the DJIA, which is the 6th largest absolute point drop in Dow Jones Industrial Average history, following 4 larger drops in 2008 following the Lehman bankruptcy, and one back in 2002. We just made history. If the DJIA can drop more than 800 points tomorrow, which it probably will if Bernanke does not announce QE3 in some form, 2011 will be #1!



  5. luisport says:

    Stocks got destroyed today. You can read the full story about it here.

    Here are some key stats that are worth paying attention:

    The S&P fell exactly 6.66%
    The Dow fell exactly 5.55%
    The small-cap Russell 2000 fell over 8% (!)
    Bank of America fell nearly 20%
    This was the 4th-worst point loss and 10-th worst percentage loss ever (via Nate Silver).
    The yield on the 10-year plunged 22 basis points from 2.56% to 2.34%.
    The Dow Transports fell 7%
    The high-yield Junk Bond ETF (JNK) fell 4.25%
    Again, for a full roundup of today’s action, see here.

    Read more: http://www.businessinsider.com/stats-about-todays-market-selloff-after-the-downgrade-2011-8#ixzz1UTJG44iJ


  6. lauraliz710 says:

    Luisport, I love and appreciate your posts (and Alvin’s, of course!). I am wondering if you could explain how quantitative easing would help us now?


    • luisport says:

      Thank’s lauraliz for your kind words, but it’s difficult to explain for me, because i’m not a english speaker. I’m only an info deliver! ;D


    • Mark T. says:

      Printing money is all they have left in the arsenal, and the market is growing immune to these “steroid” injections into the economy. QE2 failed miserably and so will QE3. Money printing is nothing more than robbing from the people, pure and simple. They’re between a rock and a hard place. Let things run their course and crash, at least we can begin rebuilding right away, or print more money, crash harder later and rebuild then. Not good options eh? That’s the reality of the situation


  7. Dennis E. says:

    And October is not even here yet!


  8. luisport says:

    SAN FRANCISCO (MarketWatch) — Four of the largest U.S. banks accounted for more than 1 billion shares trading hands Monday on the fourth-largest volume trading day ever for NYSE-listed stocks. Bank of America Corp. /quotes/zigman/190927/quotes/nls/bac BAC -1.54% saw about 667 million of its shares exchange hands, compared with an average volume of 174.7 million shares. Citigroup Inc. /quotes/zigman/5065548/quotes/nls/c C -0.78% had about 139 million shares trade hands, compared with an average daily volume of 41 million shares. J.P. Morgan Chase & Co. /quotes/zigman/272085/quotes/nls/jpm JPM -0.44% share volume reached 104 million shares compared with an average daily volume of 36.2 million shares. Finally, Wells Fargo & Co. /quotes/zigman/239557 WFC -8.77% had about 103 million of its shares trade hands, compared with an average daily volume of 37 million. On Monday, NYSE-listed shares had their fourth-heaviest trading volume in history with 9.71 billion shares trading hands. Shares of the banks shed from 9% to 20% on the day.


  9. sinoed says:

    As the world as we know it comes to an end…remember all we have to do is keep the inferstructure going even if that means we all end up back in the fields where we all began


  10. RainMan says:

    @ sinoed, ‘in the fields where we all began’….. the most controversial question made simple 🙂


  11. luisport says:

    No… in Portugal by the way… ;P


  12. RainMan says:

    @ Dennis E. I read Ele does ‘her’ fly by on Oct 16, just my luck, my birthday is the 18th.
    I use ‘her’ repectfully, but, ‘hell hath no fury like a women scorned’….I know 🙂


  13. Golfdad641 says:

    Round Two.. Ding Ding….Asia stocks fall after U.S. stock rout



  14. luisport says:

    The non-stop global selloff continues (once again, where it all started) in Europe, which is getting destroyed.

    Italy is off over 2%.

    Germany is off 3.2% 5.8%.

    France is off 2.4%. 3.6%.

    Interestingly, Italian spreads are sharply narrower again on the day, suggesting an ongoing ECB presence in the market (enough to counteract the rest of the bearishness), but that ECB action isn’t enough to make waves in other markets.

    Meanwhile, US futures had started higher, but moved into the red, as the world waits for the Fed to act.

    Read more: http://www.businessinsider.com/morning-markets-august-9-2011-8#ixzz1UWLxoT73


  15. luisport says:

    A scary aspect of this selloff: There’s nowhere safe.

    In London, the main index has just fallen 20% from its highs, entering official bear market territory.

    Hong Kong is now off 23% from its highs — again, more bear market.

    Brazil was off about 20% from its highs before its recent plunging. It’s now off about 31% from its highs.

    Meanwhile, the S&P 500 is off just over 18% from its highs. So who knows we might get there today.

    Read more: http://www.businessinsider.com/global-bear-market-2011-8#ixzz1UWMj8bnz


  16. Mike Swayze says:

    600 out of 12000 is like a 5% dip. seems to me it would swing 8-12% in the 70’s and 80’s and everybody thought it was normal. Seems like there is historically a big selloff in august anyway.

    Only real part is that none of the underlying problems have been addressed. The symptoms have been adjusted with the various governments propping up (with tax dollars..) the institutions(now reaping billions..) involved. I’d figure like the ‘great depression’ that something somewheres got to fail to leave enough for the next go round of greed and avarice…
    What seems current is an ever growing governement credit (card) limit- so when does the interest rate get jacked up to 29%, so that the payments are impossible to make? Is the governement going to get a call on a saturday morning that lasts an hour or better to run thru a bunch of ‘cash flow’ info to see if the payments can be made? (I think not- just print more money- so a $1,000,000 per year income is the functional equivalent of poverty level- beware retired baby boomers…). I know of no credit company that will reduce the interest rate once payments are missed- so are the chinese(etc.) gonna come to collect on semi worthless bonds?


  17. luisport says:

    MarketWatch MarketWatch
    por BreakingNews
    U.S. productivity declines 0.3% in second quarter http://on.mktw.net/qmiKOL
    há 6 minutos


  18. luisport says:

    GERMAN CREDIT RISK: An Ominous New Phase In The European Crisis?
    Joe Weisenthal | Aug. 9, 2011, 6:07 AM | 1,787 | 8
    A A A
    x Email ArticleFrom To Email Sent!You have successfully emailed the post.
    inShare.17 An interesting new development in Germany.

    For the first time, its sovereign CDS are now wider than the UK.

    Via FT Alphaville, here’s the chart:

    Of course, the CDS market can be a dicey indicator, but we’d also note that we can’t remember the last day when European equity markets were getting smashed, while yields were HIGHER for German Bunds, as they are today.

    Put another way, we can’t remember any time during this crisis, when people were really concerned with German credit risk at all, except in the most theoretical sense.

    But of course, it’s totally logical. Europe’s weak sovereigns and banks look to Germany for rescue, and though it’s influential in the ECB, that’s not the same thing as having your own currency (like the UK, US, and Japan do).

    P.S.: We take that back about nobody talking about German credit risk. Back in May, CLSA’s Chris Wood was advising clients to buy French and German CDS. And you’ve seen French CDS, right?

    Read more: http://www.businessinsider.com/german-yields-are-higher-on-the-day-2011-8#ixzz1UXMe5WhS


  19. luisport says:

    The White House just announced that all public events have been cancelled today, including a much-publicized appearance by President Barack Obama at a company in Springfield, VA to highlight new fuel efficiency standards.

    Obama has faced criticism over his slow response to the Standard and Poor’s downgrade on Friday and yesterday’s as well as the stock market plunge.

    As the Fed meets today, there is some speculation that Obama is preparing an announcement on the economy — perhaps that he will call Congress back into session from its August recess to pass job-creation legislation.

    The White House laughed off such a proposal in yesterday’s press briefing, but has been facing mounting criticism from both Democrats and Republicans to take more of a leadership role on the economy.

    We’ll keep you posted if anything develops.

    Read more: http://www.businessinsider.com/is-the-white-house-cooking-something-up-on-the-economy-2011-8#ixzz1UXQCrxmP


  20. luisport says:

    Kind of an unbelievable day in the market today.

    But first, the scoreboard:

    Dow: +429.62
    NASDAQ: 124.84
    S&P 500: +53.10

    And now, the top stories:

    Obviously, yesterday’s crash and burn stock market cast a shadow across global markets. Asia tanked right off the bat. Europe got creamed in the early going, with the DAX down by over 5% at one point. Ominously, credit default swaps in Germany are rising, a sure sign that the credit risk is beginning to infect the core.
    US futures, through it all, were mostly quiet in the early going, even as Europe burned. Obviously, all eyes were on the afternoon Fed statement (would it go QE3?!).
    By the time markets got going, there was a full-blown rally in effect. Notably, Bank of America jumped 7% right out of the gate, a welcome turnaround from yesterday’s sickening 20% plunge. Other financial rallied as well.
    An interesting thing happened int he opening minutes of the day. Everyone got the same idea at the same time: Sell the rally. After being up over 100, the Dow went flat. But then, because everyone must have thought this was a totally obvious move, stocks spiked again.
    And then after that things were mostly quiet pre-Fed, although the Swiss Franc kept surging all day (against the dollar and the euro) a hint, perhaps, that the market was looking for an “easy” statement from the Fed.
    Bizarrely, the Fed was actually late with its 2:15 announcement. It came around 2:19, as Bernanke performed an Obama. Then the announcement: No new QE was announced, but the Fed promised to stay on hold until mid-2013, an unprecedented level of commitment to cheap money. It did acknowledge the downside risks, and interestingly there were three dissenters, a sign that this practice of leaving money cheap from now until infinity is not uncontroversial.
    The market reaction to that was fascinating. First the entire rally vanished. Then markets rallied back. Then there was a big-time plunge, with the Dow off nearly 180 at one point. Then it came back. And then in the final moments of the day, stocks turned in the face-ripping mega-surge traders have been thirsting for for sometime.
    Besides the stock rally, Treasuries went bonkers as well, with the 10-year yield hitting an all-time low of 2.03% before pulling back a bit. Meanwhile, the Swiss Franc is nearing parity with the Euro, and gold is on fire.

    Read more: http://www.businessinsider.com/closing-bell-august-9-2011-8#ixzz1UZFgIZKR


  21. John Hollis says:


    This link if from Michael Knight, and it reads a real warning. You are so correct – time is running short in very many ways. …

    Click to access thecrisisthatis.pdf


  22. luisport says:

    EUphoria off.

    After a quiet start to the day, markets are diving again in the early going here.

    Dow futures are off 160.

    NASDAQ futures are off 1.8%.

    Europe, which had been rallying earlier, is seeing selling across the board.

    All the Italian banks are getting smashed.

    Stomach turning.

    Read more: http://www.businessinsider.com/pre-market-selloff-august-10-2011-8#ixzz1UdBCcRVb


  23. luisport says:

    France may be downgraded!

    Update: Unicredit halted

    As we predicted yesterday, the Italian market is hating its life right now, with traditional whipping boy Intesa Sanpaolo being halted half an hour ago, resuming trading, dropping 8.2%, and then getting halted again. Same thing with Banco Popolare which was halted down 6.02%, and we expect Unicredit is due for a halt next. The catalyst: a fresh new rumor that France is about to be downgraded, which would send all of Europe into a risk flaring tailspin as it would obviate the EFSF even before it has been launched. The rumor is also rattling the EURUSD, which has dropped about 50 pips from the highs. As a reminder, this is not the first time the French downgrade rumor has emerged, however it is the first time since a rumor about a major AAA-rated country downgrade was proven to be true (ref: last Friday).



  24. luisport says:

    2011 Greek State Budget Deficit Widens 24% Through July
    Submitted by Tyler Durden on 08/10/2011 – 07:39 Remember how the Troika said Greece has its “budget situation” under control, and as such is a worthy recipient of the second €120 billion bailout tranche? Then perhaps they can explain to us how the following makes sense: according to Bloomberg, Greece’s state budget deficit widened to €15.5 billion in the January to end-July period from €12.5 billion euros in the year earlier period, according to an e-mailed statement from the Athens-based Finance Ministry today. So…. after praising the Greek deficit cutting progress, the country comes out and tells everyone it was really only kidding, it kinda sort lied, about its deficit but was more than happy to take European and US capital, and as for collecting taxes, well, they can try it, or at least promise to do so, after bailout #3.


  25. luisport says:


    After a (relatively) quiet start to the morning, virtually the entirety of yesterday’s euphoric, post-FOMC rally is dissipating, and once again Europe is at the center of the concern.

    Except this time, it’s not even about Italy, so much as it is about France.

    French banks, most notably SocGen, are getting destroyed. It’s currently off about 14%.

    Others are off a bit less so.

    The Dow is down close to 300 points.

    Whether the selling is “rumor-driven” or not, this can’t go on much longer.

    The market has chewed through the periphery, and now the core is under threat.

    Read more: http://www.businessinsider.com/pre-market-selloff-august-10-2011-8#ixzz1UdKP4IE1


  26. Krystyna says:

    Thank you, I have been looking for info about this for quite
    some time. It will definitely assist my financial


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