Stocks tumble on fresh worries about banks

[Dantheman62]

NEW YORK – The dawn of the Obama presidency could not shake the stock market from its dejection over the rapidly deteriorating state of the banking industry.

Financial stocks, many of them falling by double digit percentages, led a huge drop on Wall Street Tuesday that left the major indexes down more than 4 percent and the Dow Jones industrials down 332 points. Although traders on the floor of the New York Stock Exchange paused to watch the inauguration ceremony and Obama's remarks, the transition of power didn't erase investors' intensifying concerns about struggling banks and their impact on the overall economy.

The market's angst, which began with multibillion dollar losses reported last week by Bank of America Corp. and Citigroup Inc., intensified after the Royal Bank of Scotland's forecast that its losses for 2008 could top $41.3 billion.

The collapse in bank stocks was swift: State Street Corp. plunged 59 percent, Citigroup fell 20 percent and Bank of America lost 29 percent. Royal Bank of Scotland fell 69 percent in New York trading.

"The reason we're having a panic drop is the fact that Europe is catching our cold, and we could have deeper and deeper problems that could require more and more money. And eventually the government is going to have to stop spending," said Keith Springer, president of Capital Financial Advisory Services. "It's a pretty dangerous situation to be in."

http://news.yahoo.com/s/ap/20090120/...re/wall_street

The Dow Jones industrial average fell 332.13, or 4.01 percent, to 7,949.09, its lowest close since Nov. 20, when the blue chips ended at 7,552.29 — their lowest point in more than five years. It was also the blue chips' biggest drop since Dec. 1.

Broader stock indicators also fell sharply Tuesday. The Standard & Poor's 500 index fell 44.90, or 5.28 percent, to 805.22, and the Nasdaq composite index fell 88.47, or 5.78 percent, to 1,440.86.

The Russell 2000 index of smaller companies fell 32.80, or 7.03 percent, to 433.65.

[Steve_A]

Hi Dantheman62,

The beginning of the end.

It's been on the cards for a long time. Bush & Co. successfully cleaned out the coffers and has left a HUGE problem for Obama.

Let's see what he's not got to help him out of the problem.

He can't reduce interest rates any lower, they're almost 0% as it is.

There's no more money left in the kitty. It was already cleaned out before these bailout packages were introduced to the scene.

There's not enough leverage for him to go into a slight national debt as the national debt is already a 8t.

He can print more money but that will weaken greatly the US dollar.

In dollar terms oil will skyrocket. Not because in real terms oil will become more expensive, but because the dollar will weaken.

So what is the answer?

This would be the honest way.

According to many economists there needs to be a swing away from the finance industries and focus on manufacturing, producing goods that could be exported to bring real money back in to the public coffers by ways of export taxes and levies.

The failed financial institutions will collapse, but that's life in any commercial business. The healthy institutions and new ones will take over.

This would be the political way.

Make a war that would absorb all the unemployed as soldiers and create a general economic confusion for the 'enemies' to put everyone on the same financial footing. That would bring the US back in to the picture as a land of new opportunities because of the posibilities of expanion for new companies and services.

Then the whole vicious circle will start all over again, like it did after WWII with the creation of a kind of IMF that would lend money to countries in exchange for cheap natural resources, as very much it is at present.

Then we all end up where we are at the moment waiting for the next economic burn out and the next war.

Best regards,

Steve

Originally Posted by Dantheman62

NEW YORK – The dawn of the Obama presidency could not shake the stock market from its dejection over the rapidly deteriorating state of the banking industry.

Financial stocks, many of them falling by double digit percentages, led a huge drop on Wall Street Tuesday that left the major indexes down more than 4 percent and the Dow Jones industrials down 332 points. Although traders on the floor of the New York Stock Exchange paused to watch the inauguration ceremony and Obama's remarks, the transition of power didn't erase investors' intensifying concerns about struggling banks and their impact on the overall economy.

The market's angst, which began with multibillion dollar losses reported last week by Bank of America Corp. and Citigroup Inc., intensified after the Royal Bank of Scotland's forecast that its losses for 2008 could top $41.3 billion.

The collapse in bank stocks was swift: State Street Corp. plunged 59 percent, Citigroup fell 20 percent and Bank of America lost 29 percent. Royal Bank of Scotland fell 69 percent in New York trading.

"The reason we're having a panic drop is the fact that Europe is catching our cold, and we could have deeper and deeper problems that could require more and more money. And eventually the government is going to have to stop spending," said Keith Springer, president of Capital Financial Advisory Services. "It's a pretty dangerous situation to be in."

http://news.yahoo.com/s/ap/20090120/...re/wall_street

The Dow Jones industrial average fell 332.13, or 4.01 percent, to 7,949.09, its lowest close since Nov. 20, when the blue chips ended at 7,552.29 — their lowest point in more than five years. It was also the blue chips' biggest drop since Dec. 1.

Broader stock indicators also fell sharply Tuesday. The Standard & Poor's 500 index fell 44.90, or 5.28 percent, to 805.22, and the Nasdaq composite index fell 88.47, or 5.78 percent, to 1,440.86.

The Russell 2000 index of smaller companies fell 32.80, or 7.03 percent, to 433.65.

[Dantheman62]

Yeah I am trying to find an article on more and more people joining the military due to the lack of jobs here, but I can't find it.

[orthodoxymoron]

How about getting out of Iraq and Afghanistan immediately, getting out of the U.N. immediately, closing at least half of our least strategic foreign military bases immediately, closing all Alien/Human Deep Underground Military Bases immediately (and deporting the aliens to Nibiru), nationalizing the Federal Reserve immediately, ending all foreign aid immediately? Then adopt a new currency based on something more valuable than air (and charging 0 interest), nullify all executive orders immediately, hold congressional hearings regarding the role of the City of London in the controlled demolition of the economy, etc. I'm just getting warmed up...but I'd better stop...there's a black helecopter circling my house and there's a Delta Force soldier telling me he's here to help. Uh Oh! He's shape-shifting!

[Dantheman62]

Here's some more news....
Microsoft resorts to first layoffs, cutting 5,000
Seeing its profits fall, Microsoft to slash 5,000 jobs in first wide-scale layoffs
Jessica Mintz, AP Technology Writer


SEATTLE (AP) -- Microsoft Corp. said Thursday it is cutting 5,000 jobs over the next 18 months -- more than 5 percent of its work force -- a sign of how badly even the biggest and richest companies are being stung by the recession.

The layoffs appear to be a first for Microsoft, which was founded in 1975, aside from relatively limited staff cuts the software company made after acquiring companies.

The company announced the cuts as it reported an 11 percent drop in second-quarter profit, which fell short of Wall Street's expectations. Microsoft shares plunged 8 percent in morning trading.

The biggest names in the technology sector have been no stranger to layoffs lately. Giants such as chip maker Intel Corp. and even Google Inc. are among the companies that have pulled back on jobs to hunker down in the recession.

http://finance.yahoo.com/news/Micros...-14127574.html