Thursday, October 16, 2008

Thursday bloodbath

I glanced at the All Ordinaries at 10-25 am today and the index had fallen just under 6% in 25 minutes. This is fearful stuff.  Last night the S&P on Wall Street fell 9% the biggest decline since 1987.  Oil prices have hit a low of $75-90.

The fear is that the US is now in recession. Although this can probably taken for granted given the events of the last few weeks - the assesssment that the US is in recession is based on data covering the time period before the current upheaval.  Thus expectations are for a deep and probably prolonged recession.

Update: By 2-30 am the index had fallen 6.4%. BHP-Billiton had fallen $4 to around $26. At about this time I received the following clip from The Times Online - 'the world prepares for a long recession'.

5 comments:

jc said...

It's very unnerving.

US retail sales spooked the market which is really quite surprising as I would have thought slower sales and a recession were pretty much discounted.

Spiros said...

Amazingly, I agree with JC. The bad news moves share prices down when it is predicted and then again when it actually happens. This makes no sense.

The stock market is right now driven by primeval sentiment, feelings, angst and euphoria, with no basis in fact or analysis. You might as well go to the casino. While the odds are stacked against you in a casino, at least you know what they are.

jc said...

Markets are going up from here (US Stocks mainly) and will continue to through to Xmas. I loaded up during the week starting last Friday and we're heading a lot, lot higher.

the great monetary expansion has begun and the worst place anyone can be is in cash. Watch the Europeans scrounge around looking for returns when their rates go to 2%

The big sell off we saw the other day was in the last hour of trading when a large mutual fund hit with redemptions had to sell out.

This is it.

Even Warren thinks so. Pity he never called me and asked my opinion. :-)

http://www.nytimes.com/2008/10/17/opinion/17buffett.html?_r=3&oref=slogin&oref=slogin&oref=slogin

hc said...

JC, The market went down today.

jc said...

Yea it did because of the miners. The big miners are fine to begin stepping into as people are pricing hell.

The small miners can't be touched as they don't have financing.

There's plenty of good stuff around if you look through the trash... QBE looks great.

It's not the time to be negative now, Harry... at least selectively.
We're down 40% from he highs which is pricing in Armageddon.