Clipmarks | Crash Clips

Morningstar Ideas

Sat, 11 Oct 2008 18:04:17 GMT

clipped by: Grayson13

Thinking of Buying? Here Are Our Best Ideas

Are you feeling sick to your stomach after this week? Obviously you're not alone. A crash like the one we've experienced over the past few weeks is a rare event in the market. The deleveraging and liquidation cycle is feeding upon itself, but at some point this process will end, and we will find a bottom. We may be getting close given that many high-quality businesses trade at very attractive valuations, but your guess is as good as mine as to when we hit the proverbial "bottom." When the bottom comes, it won't be heralded by trumpets, so we're unlikely to time it perfectly.

Truck Crash

Sat, 11 Oct 2008 05:10:37 GMT

clipped by: nikkimaried

Clip Source: matadornights.com

Ten Market Indicators

Sat, 11 Oct 2008 03:42:19 GMT

clipped by: deb2012
clipper's remarks: charts, signals, and indicators suggest a bounce is due.

Clip Source: bigpicture.typepad.com

RSI's monthly indicator has only dropped below 30 on four occasions: 1929, 1973, 2002, and 2008.

The S&P has given up nearly the entire gain from the 2002-03 period to the October '07 highs.

All 30 Dow stocks are below their 200 day moving average -- a condition that has only occurred once before -- and the last time was right after the 1987 crash.

Investors current allocation to Cash is well above its 21 year mean and are at the highest levels since ’02, ’98 and ’90 lows.

This week has seen three 90% downside days, reflecting massive liquidations.They can only continue for so long.

The percentage of stocks trading over their 200 day moving average is at multi year lows:

The cost of an ounce of Gold is now greater than the S&P500; This last occurred in the early phase of the 1982-2000 bull market -- around 1984.

VIX Deviation From 50-Day Moving Average

10. The following two charts show the 2002 lows, and the current market. Can you tell them apart?

Tags: stock market

Wall Street gives a sign of relief

Sat, 11 Oct 2008 02:54:36 GMT

clipped by: eargueta

Clip Source: thedailybeast.com

After dipping below 8,000 for the first time in five years, the Dow see-sawed to a 8,451.19 close, a 128 point drop, to end one of its most turbulent weeks in history. Today's gyrations began with an early drop of more than 600 points following a panicked plunge in the international markets. Particularly hard hit today were Morgan Stanley and Goldman Sachs. As The Wall Street Journal points out, "The stock market has so far avoided a one day plunge of 10 percent, the traditional definition of a crash. But even in the two instances when such a single-day drop did happen, in 1929 and 1987, the full week bloodletting was not as bad" as this week has been. Not very reassuring, is it?

Vix

Fri, 10 Oct 2008 16:31:07 GMT

clipped by: laveys

Clip Source: pensionpulse.blogspot.com

volatility index (VIX) keeps heading up to record territory, leading some to conclude that it the market has gone down too far, too fast and that it feels like capitulation.

But now that we sliced through key support levels, it could easily get worse. I am very worried that we are heading for a good old fashioned "capitulation crash" where the VIX explodes up exponentially above 100 on massive blow-off volume never before seen.

Tomorrow is Friday and I do not expect traders to be holding positions going into the weekend

Worse still, there are no natural buyers!

Turbulence and Trends

Fri, 10 Oct 2008 15:40:54 GMT

clipped by: deb2012
clipper's remarks: observations of a central banker

Clip Source: londonbanker.blogspot.com

I was reminded yesterday that the vast bulk of “wealth” created during the Greenspan/Bernanke bubble years accrued to the very top percentiles of population – with many in the OECD middle class and lower class either stagnating or getting poorer as they mired themselves in unsustainable debt. While opportunity and employment grew strongly in emerging countries, there too the elites gained disproportionately as income inequalities surged. The crash of global financial markets therefore will have disproportionate effect on the elites, impoverishing them to a far greater extent, although it will be felt throughout society as employment, pensions, investments and public services contract.

Once we hit bottom of this downturn, some years hence in all probability, we may experience a democratisation of wealth and opportunity like none seen since the end of World War II when education reforms and unionisation laid the groundwork for the rise of the American and OECD middle classes

Tags: economy

Wall Street Woes Spread Overseas

Fri, 10 Oct 2008 07:59:16 GMT

clipped by: jedichique
clipper's remarks: The US credit crisis is turning into a worldwide financial crash. Investors are gripped by fear and this in turn further weighs down recovery.

Clip Source: biz.yahoo.com

Markets in Hong Kong, Australia, South Korea, Thailand and the Philippines were all down more than 7 percent. Shanghai's index was down 3.8 percent.

Kenji Akasaka, 69, president of a local printing company, said he had never seen it this bad in the 40 years he has traded stocks. He said he invests mainly in blue-chips including Toyota Motor Corp. and Nintendo Co.

"There's no bottom to the stock markets now," said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong. There's no clue when it will stop."

Analysts also said there's pressing need for the U.S. to quickly implement the $700 billion plan to buy up toxic mortgage-related securities from troubled banks and financial institutions that are at the core of problem.

Tags: us recession, world financial crisis

High speed crash makes galaxies 'sterile'

Fri, 10 Oct 2008 07:03:34 GMT

clipped by: pokkets

Clip Source: www.abc.net.au

Larry O'Hanlon

A new view of two very well-known galaxies has revealed they are connected by faint, starless filaments of hydrogen gas, which trace back to a very high-speed intergalactic collision.

The smash-up between M86 and NGC4438 had not been suspected before, and may explain why M86, which is visible to the naked eye, is unable to give birth to new stars.

"Stars and gases behave very differently in collisions," says astronomer Professor Jeffrey Kenney of Yale University and lead author of a paper in the November 2008 issue of Astrophysical Journal Letters.

During galactic smash-ups stars rarely collide, since there is so much space between them. But gases do slam into gases. The faster the collision, the higher the temperature the gases reach.

In the case of M86, its gases are millions of degrees in temperature and radiate x-rays.

The new evidence of M86's collision may solve that mystery. What's more, the super-hot gas also probably explains why M86 is unable to produce new stars.

Wall Street crash - parallels between then and now

Fri, 10 Oct 2008 02:56:31 GMT

clipped by: JackieDel

Clip Source: news.bbc.co.uk

Lessons from the 1929 stock market crash

In October 1929 shares on Wall Street fell sharply following a speculative boom during the "Roaring Twenties".

In two days the Dow Jones industrial average fell by 25% (ending on Black Tuesday, 29 October).

The volume of stocks traded set a record that was not broken for 40 years.

When it finally reached its record low in July 1932, the Dow Jones had fallen 89%, and it did not recover to 1929 levels until 1954.

Debates continue over the causes of the Wall Street crash.

With stocks rising four-fold over the previous decade, it had all the characteristics of a bubble, with stocks in new technologies like radio leading the way up.

With lax regulation and few rules on insider trading, dealers were also able to "ramp up" shares, and holding companies built up positions in other companies without putting up any equity of their own.

Individuals were also able to buy stocks on "margin" by borrowing the money against their other share holdings.

Tags: wall street, us economy

worst bear market since 1973-74

Fri, 10 Oct 2008 01:22:07 GMT

clipped by: hvard

Clip Source: economix.blogs.nytimes.com

“It’s nearly as bad as one terrible 12-month period from late 1973 to late 1974. Other than that, it’s the worst decline since 1932.”

I don’t mean to be pendantic, but wouldn’t it be a bit more accurate to just say “this is the worst 12-month period since 1974?”

I say this just because we have seemed, from the outset, to be in a terrible hurry to tie this to the 1932 crash. On some levels this makes sense - there haven’t been many events that have affected so many parts of the overall economic system, so broadly and in such a deep fashion.

But in our rush to tie this so heavily to the Great Depression we ignore the fact that there are measurable differences in both situations. The job market is different, the methods and amounts of leverage are different, and the vehicles of investment don’t bear much likeness to seventy-years ago.

— Scott

Tags: economic crisis, depression, us economy

Mutual Fund Drip Less than '87

Thu, 09 Oct 2008 23:09:24 GMT

clipped by: Victoria Barret
clipper's remarks: Mutual funds are seeing record out-flows, but still less than during the market crash of '87 (as a percentage of equity assets).

Clip Source: www.bloomberg.com

Oct. 9 (Bloomberg) -- Investors pulled a record $52.1 billion from U.S.-managed stock and bond mutual funds in the past week, seeking the safety of government-insured bank deposits as the financial crisis worsened.

The exodus followed $72.3 billion of outflows in September, the most in a single month.

The five largest diversified U.S. stock fund managers, including Fidelity Investments and Vanguard Group Inc., posted an average 28 percent loss this year through Oct. 6, about 2 percentage points worse than the Standard & Poor's 500 Index

Stock-fund withdrawals represented 1.3 percent of equity assets, said Brian Reid, chief economist at Investment Company Institute, a Washington, D.C.-based mutual-fund industry organization. During the market crash of 1987, stock fund outflows were 3 percent of assets, the ICI said.

Tags: stock market, mutual funds, investing, outflows

There's No Easy Way Out of the Bubble

Thu, 09 Oct 2008 21:28:59 GMT

clipped by: Joshua Zumbrun

Clip Source: online.wsj.com

There's No Easy Way Out of the Bubble

By VERNON L. SMITH

Since 2006 the U.S. economy has exhibited the features of a crash following a classic bubble.

But the bulge was not precipitated by general stock-market excesses nor by an economy-wide bubble-crash. The excesses were focused in the housing and related financial markets -- banks, mortgage, and insurance companies -- starting in 1998 and accelerating to 2006. This created the mother of all housing bubbles.

True, the crash has been exacerbated by the increase in oil prices, up from a mere $12 a barrel in 1998, to $90 in January 2008, then a spike to $147 in July. But the economy has rolled tolerably well under that punch, and it does not pose the systemic risk of the housing debacle.

Tags: bubble, burst, easy, way, out

This can't be the kind of news that we wanted to hear - maybe an unemployment fund crash!

Thu, 09 Oct 2008 20:56:28 GMT

clipped by: nedhamson1
clipper's remarks: Brother, Sister, Can You Spare a $10 (used to be a dime but with inflation, now it's at least 10 bucks.) Holly molly things are getting bad all over and the only ones being handled with soft gloves are the well connected. So, who's watching out for the common man and woman?

Clip Source: www.cnn.com

Some state unemployment funds drying up

Story Highlights
Ten states operating on reserves of less than six months of unemployment benefits
Unemployment expected to rise after reaching 6.1 percent nationwide in August
Funds generated by taxes on employers based on number of employees
Economists say states need to restructure tax base to generate more funding

Tags: can you say depression?, globalization, bush league

High-Speed Crash Makes Hot, 'Sterile' Galaxies

Thu, 09 Oct 2008 20:37:46 GMT

clipped by: invictus

Clip Source: dsc.discovery.com

Oct. 9, 2008 -- A new wider view of two very well-known galaxies has revealed a big surprise: They are connected by faint, starless filaments of hydrogen gas which trace back to a very high-speed intergalactic collision.

The smash-up between galaxies M86 and NGC4438 not been suspected before, and may explain why M86, which is visible to the naked eye, is unable to give birth to new stars.

Tags: space, universe, galaxies, science

A Ladder of Annuities Can Hedge Your Bets

Thu, 09 Oct 2008 07:18:22 GMT

clipped by: rmowery
clipper's remarks: This is something I don't really understand -- Annuities, but from the outside looking at this, it looks like another area where things could crash?

Clip Source: www.kiplinger.com

A Ladder of Annuities Can Hedge Your Bets

Smooth out the highs and lows of interest rates, and payouts, by staggering annuity purchases.

In today's low interest-rate environment, locking up a big chunk of your portfolio in a fixed immediate annuity may not seem wise. But if you like the security of guaranteed payments and you believe rates will rise in coming years, you can hedge your bets by laddering annuities.

As with ladders of bonds or certificates of deposit, the strategy calls for buying fixed immediate annuities over a period of time. Instead of spending a lot of money on a single annuity that locks you into one rate for your lifetime, you split your money among several. Perhaps you buy an annuity every year for five years, or every five years over the next 15 years.

Tags: annuities, hedge, life, insurance, economy, income, investment