Dow 10,000: As World Stocks Sink, Dow Jones Drops To Lowest Since 2004

For the first time since October of 2004, the Dow Jones Industrial Average has dropped below the 10,000-point mark. It has dropped as many as 700 points today.

Investors are realizing that the Bush administration's $700 billion rescue plan won't work quickly to unfreeze credit markets, and many banks are still having difficulty gaining access to cash. European governments also took steps over the weekend to limit the damage from the growing global financial crisis.

DOW 10,000 BASEBALL CAP PROVES PROPHETIC

Earlier in the day, a trader appeared on CNBC wearing a prophetic baseball cap, bearing the words "DOW 10,000." Both Mark Haines and Erin Burnett made mention of the hat, and of course later in the day, the Dow indeed hit and sank below 10,000. Here's the video of the trader with the hat:

DOW 10,000 NOT LOW ENOUGH?

Last month, Howard Lindzon predicted here on the Huffington Post that 10,000 could be coming in his post "Dow 10,000 -- What Happened, Who Can You Trust and Investment Banking 2.0." See who he recommends around the web for up-to-the-minute information in fast-moving times like these:

These are fun days for the mainstream press as they sink their teeth into the action of the day, but it's in the blogosphere that you will find the best discussions on the subject and find personal accounts of the struggles of the people most affected.

I have been writing (blogging) in the financial/stock market space since late 2005 and developed a great list of 'experts' in certain areas. I believe in the 'less is more' theory of news. If I can cull smart minds of a few people that I trust read just about everything, then I can get more done.

Comments

[LibRS]

Anyone mad about the mortgage mess? If so, watch this.

http://www.youtube.com/watch?v=Yj3YezuNuQo

[rkimball]

there's talk of closing down wall street for a week to stop the carnage. it won't stop the carnage. it will only delay what is to come. it also gives the wealthy a chance to cash in their blue chips while the rest of us fight for the crumbs.

[doogiedude]

It appears the government bailout plan addresses only the supply side of the credit market while ignoring the demand side. I would argue that in the current climate, the credit issue has a lot more to do with demand than supply.

I think the origins of the economic crisis lay in the globalization of labor. Corporations, over the last decade, moved production out of America to lower production costs. Simultaneously, they continued to raise prices for their products in the name of revenue growth so valued by Wall Street.

This exodus of labor has left earnings for the non wealthy on a downward trend, while prices have increased. The only way to get consumers to pay more while making less is with increased credit. Of course this bubble will ultimately burst, hence here we are.

To support this theory, I took a look at national data of tax returns from 1994 to 2006 via the IRS. The bottom 90% of taxpayer"s earnings growth has not exceeded inflation since around 2000.

IMHO, until earnings growth eclipses price growth, the economic crisis will linger. This will only happen when non wealthy real earnings increase or prices decrease or both. Programs such as infrastructure spending, tax cuts only for the non-wealthy, fair trade agreements (not free trade), housing relief (enhanced FHA) are some possible tools to accomplish this. America has to go back to being a production oriented economy as opposed to the consumer oriented economy it is today.

Just sayin

[unite4change]

O supporters, keepth faith. Once the credit markets opens in the next week or two, things will start to turn around. Don't forget, if O is elected he can amend the bailout plan. In the interim, check this out and understand how Wall Street got us into this mess and pass it on to everyone you know. O supported have to stay ahead of the curve. Knowledge is king!


http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml

Obama/Biden 2008

[themodernleader]

When the bankers were threatening market implosion unless they could get their greedy hands on a the last 700 billion of middle American money, nobody mentioned a word about the loss of National Wealth. Since The Age of Reagan, our national wealth of actual assets has been dramatically decreasing. But we have measured wealth by inflated currency. so, our ballooned stock market was our national weath: Borrowing a trillion here and an extra trillion next year didn't matter. But now our balloons are bursting. We find that our debt relative to our assets is shockingly high, so high that we can not pay off the debt. What shall we do? Well, a 700 billion more debt to bail out miscreants is a curiously corrupt start.

[yuppy70]

something here is not right with the banks unwilling to engage in interbank lending story. why will banks not lend to say goldman?? is the fear that goldman will squander the funds to the wrong parties or at the wrong price or something - if so what is this fear based on give that of all the banks goldman is pretty much unscatched? i just hope the "fear" causing banks not to lend to each other - beyond the obvious victims like wachovia, wamu etc - is real and there is not something else going on here..

congress or someone needs to find out exactly what transpired in the meeting of the bank chiefs with the fed and treasury secretary on the weekend that lehman failed and merrill was bought out given that's when this all started. after all fed and hankson are public servants and they have to answer to the public about every action they take purportedly on the behalf of the public..if they can't maybe the bank chiefs will testify when/if asked by congress - or is that a naive assumption?

[russgies]

Is it too late to stop payment on that $700 billion check?

[mlaiuppa]

Surprisingly (or not) Bank of America is doing more to help the economy than anyone else I can think of right now.

They are refinancing thousands of bad Countrywide loans at a loss in order for people to stay in their homes. If other lenders take their lead this will do more to stabilize the housing market and help the economy than Wall St. is going to do with their $700 billion. By doing this, everyone who owns a home will benefit, because home value will stop plummeting. And that benefits everyone, even if you *don't* own a home.

I am not a fan of Bank of America (nor Walmart) but I will give them kudos for doing something positive. (And as much as I hate Walmart's politics and ties to China, I do salute their "green" business moves.)

[doogiedude]

Like you I'm not a fan of BofA either.

However, I also have to give them kudos for financing a large portion of the construction of the Golden Gate bridge during the depression.

Just sayin

[maurice46]

Suggestion: All the senators, members of congress and members of the administration who promoted and supported this bailout (and added the pork) should make an act of good faith by pledging 5% of their own annual income to investments in the market.Now­. Don't know who should handle it for them, but I'd prefer not to see a Goldman Sachs (or ex-Lehman, etc, etc type) be named. This way, the people who make a promisory note of our financial future will have to (literally) buy into their own scenario. After all, the legislators and administrators still have jobs, right?

[NicoleAnon]

They can't think about that right now - most members of congress have left so they could campaign for the election so there really isn't anyone in charge.

It's almost scary - we don't have a President because he is passed out on a couch somewhere. We just gave a Goldman Sachs investment banker $700 billion and today he hired another GS investment banker to be in charge of our money and nobody cares. The top donor to the candidate who will probably win the election is GS and Pelosi thinks the bailout is funny for some reason.

[Budokan]

Nice job on the economy, you Republican Rat Pigs...

[nellie]

http://www.mcclatchydc.com/mainstreet/

[FatherWolf]

Mr. President?

Mr. President?

Where are you? Are you going to come out and do some leading?

No? You're going to stay in hiding?

Just as well. The last thing we need is for you to try to stick you nose into this mess.

[yanniraz]

I think that the only solution for us today could be obama.
Look at bush today and McCain, we do not want that.
http://hardmoneyloans.org

[GerryS]

3 weeks ago I was hoping the dow would bottom at 8000-8500

now I think it will be farther to the bottom than that- 6000-6500, and it will be a long time to the bottom.

I also think all of the bailout money, all $850 or more billion will be spent before the election, and for xmas we'll all get to hold the bag.

[NicoleAnon]

I think Paulson is going to give all of it away this month and he will claim he had to do it NOW NOW NOW because the stock market is going down.

He doesn't have much time and he needs to pull off this scam before Bush leaves office. He also needs to give Goldman Sachs contracts that will pay them billions to "manage" our assets for us before the new administration is in place.

[GerryS]

a brave new world--------

without the middle class.

[FatherWolf]

Last Friday I wrote two numbers on my wall:

8,000 - optimistic bottom estimate
6,000 - pessimistic bottom estimate

[Nikola Tesla]

Read "The Third Wave" by Alvin Toffler

http://en.wikipedia.org/wiki/Alvin_Toffler
http://en.wikipedia.org/wiki/The_Third_Wave_(book)

Due to efficiencies in technology up to 80% of all jobs will be eliminated.

Second Wave Economies have been outdated for decades, soon only the Global Corporate Elite will be the ONLY people with income.

As a species, how do we address the fact that MOST humans have become redundant and unnecessary?

The old solutions do NOT answer the new questions.

We are on a precipice.

[WorkingClass]

"As a species, how do we address the fact that MOST humans have become redundant and unnecessary"?

Relax. The human race is on the cusp of a huge die-off. The remnant will be reduced to ragged bands of hunter-gatherers. None of them will be redundant. None of them will be unnecessary.

Until then we just have to put up with people like George Bush and my ex wife.

[xrepublican]

"As a species, how do we address the fact that MOST humans have become redundant and unnecessary?"

My money is on an avian flu pandemic - with a small (but wealthy) number of humans able to afford the miraculously discovered treatment along with a sufficient number of 'essential' personnel needed to keep society running. Sure solves the 'too many people - inadequate resources (not enough OIL)' problem mankind is facing....­..

Shades of "V for Vendetta"