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Archive for Thursday, August 4, 2011

Dow average plunges 513 points, worst drop since 2008

August 4, 2011, 4:26 p.m. Updated August 5, 2011, 12:14 a.m.

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Traders work on the floor of the New York Stock Exchange on Thursday, Aug. 4, 2011 in New York. The Dow plunged nearly 513 points Thursday, its biggest point decline since Oct. 22, 2008.

Traders work on the floor of the New York Stock Exchange on Thursday, Aug. 4, 2011 in New York. The Dow plunged nearly 513 points Thursday, its biggest point decline since Oct. 22, 2008.

— Gripped by fear of a new recession, Wall Street suffered its worst day Thursday since the financial crisis in the fall of 2008. The firestorm of selling that erased more than 500 points off the Dow Jones industrial average then spread overseas.

The sell-off wiped out the Dow’s remaining gains for 2011. It put the Dow and broader stock indexes into what investors call a correction — down 10 percent from their highs in the spring.

In Friday trading in Asia, Japan’s benchmark Nikkei 225 stock average was down more than 3 percent and Hong Kong’s Hang Seng shed 4 percent.

“We are continuing to be bombarded by worries about the global economy,” said Bill Stone, the chief investment strategist for PNC Financial.

Across the financial markets, the day was reminiscent of the wild swings that defined the financial crisis in September and October three years ago. Gold prices briefly hit a record high. Oil fell even more than stocks — 6 percent, or $5.30 a barrel. And frightened investors were so desperate to get into some government bonds that they were willing accept almost no return on their money.

It was the most alarming day yet in the almost uninterrupted selling that has swept Wall Street for two weeks. The Dow has lost more than 1,300 points, or 10.5 percent. By one broad measure kept by Dow Jones, almost $1.9 trillion in market value has disappeared.

For the day, the Dow closed down 512.76 points, at 11,383.68. It was the steepest point decline since Dec. 1, 2008.

Thursday’s decline was the ninth-worst by points for the Dow. In percentage terms, the decline of 4.3 percent does not rank among the worst. On Black Monday in 1987, for example, the Dow fell 22 percent.

Two weeks ago, investors appeared worried about the deadlocked negotiations in Washington over raising the ceiling on government debt. As soon as the ceiling was raised, investors focused on the economy, and the selling accelerated.

On Thursday, growing fear about the weakening U.S. economy was joined by concern in Europe that the troubled economies of Italy and Spain might need help from the European Union.

The European Union has already given financial assistance to Greece and Ireland, two countries that have struggled to pay their debts. A financial rescue package for Italy or Spain might be more than the group of countries can handle.

Traders also unloaded stocks before Friday’s release of the government’s unemployment report for July, which is expected to show weak job growth and perhaps a rise in the unemployment rate, which is 9.2 percent.

Together, they produced “a perfect storm of selling,” said Ryan Larson, head of U.S. equity trading for RBC Global Asset Management.

Until a week ago, Wall Street had mostly convinced itself that the U.S. economy would improve in the second half of the year. Gas prices were falling, and Japanese factories were resuming production after disruptions from the March earthquake.

Then one report after another began to show that the economy was much weaker than first thought.

Manufacturing is barely growing. The service sector, which covers about 90 percent of the American work force, is growing at the slowest rate in a year and a half. People spent less in June than in May, the first decline since September 2009.

And the overall economy is expanding at the slowest pace since the end of the Great Recession. It grew at an annual rate of just 0.8 percent for the first six months of this year, raising the risk of another recession.

In an indication of how frightened investors are, Bank of New York Mellon said it would start charging large investors to hold their cash because they are depositing so much. The bank’s clients include pension funds and large investment houses that are selling stock and need to deposit the proceeds.

Mark Luschini, chief investment strategist for Janney Montgomery Scott, an investment firm in Philadelphia, said his clients saw the move from stocks into cash as “a parking lot to sort things out.”

“With the scars of 2008 still fresh,” he said, “some clients don’t want to miss the chance to pre-empt further damage should it come.”

Wells Fargo Advisers, a financial management company in St. Louis, said clients were more nervous.

“I wouldn’t say they’re totally panicking. But obviously nerves are rattled,” said Scott Marcouiller, chief technical market strategist there. “And I think that is simply because of the speed of the decline.”

AP writers Dave Carpenter, Francesca Levy and Pallavi Gogoi contributed to this story.

Comments

just_another_bozo_on_this_bus 3 years, 4 months ago

Pretty much. His legacy will be a long-lasting one.

Too bad Obama chose to cozy up to Wall Street rather than smacking them upside the head for all the damage they've done over the last twenty years.

Crazy_Larry 3 years, 4 months ago

Just like Bush, Obama knows better than to smack his masters.

just_another_bozo_on_this_bus 3 years, 4 months ago

http://krugman.blogs.nytimes.com/2011/08/05/sp-and-the-usa/

"S&P and the USA: Right's 'Madness' and Agency's Ineptitude Led to Downgrade by Paul Krugman

NEW YORK - OK, so Standard and Poors has gone ahead with the threatened downgrade. It’s a strange situation. Standard & Poor's cut the US credit rating for the first time in history.

On one hand, there is a case to be made that the madness of the right has made America a fundamentally unsound nation. And yes, it is the madness of the right: if not for the extremism of anti-tax Republicans, we would have no trouble reaching an agreement that would ensure long-run solvency.

On the other hand, it’s hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?

Just to make it perfect, it turns out that S&P got the math wrong by $2 trillion, and after much discussion conceded the point — then went ahead with the downgrade.

More than that, everything I’ve heard about S&P’s demands suggests that it’s talking nonsense about the US fiscal situation. The agency has suggested that the downgrade depended on the size of agreed deficit reduction over the next decade, with $4 trillion apparently the magic number. Yet US solvency depends hardly at all on what happens in the near or even medium term: an extra trillion in debt adds only a fraction of a percent of GDP to future interest costs, so a couple of trillion more or less barely signifies in the long term. What matters is the longer-term prospect, which in turn mainly depends on health care costs.

So what was S&P even talking about? Presumably they had some theory that restraint now is an indicator of the future — but there’s no good reason to believe that theory, and for sure S&P has no authority to make that kind of vague political judgment.

In short, S&P is just making stuff up — and after the mortgage debacle, they really don’t have that right.

So this is an outrage — not because America is A-OK, but because these people are in no position to pass judgment."

cato_the_elder 3 years, 4 months ago

That's absurd. Obama and his liberal pals have had 2 1/2 years to improve our economy, which was supposed to be their number one priority, and have utterly failed:

http://www.dailyfinance.com/market-news/

They have, however, proven for all time that Keynesian economics doesn't work.

Crazy_Larry 3 years, 4 months ago

Not one man's doing. The crash and continued economic strife has been brought on the world by crony capitalism. A cabal of rich folk that includes both Wall Street and certain members of the Federal Gov't.--the more you know!--

ManOwaR - Violence & Bloodshed http://www.youtube.com/watch?v=B9Sm8kkqUkc

Flap Doodle 3 years, 4 months ago

Happy birthday, Dear Leader. How's your $40,000 a plate fundraiser going?

beatrice 3 years, 4 months ago

Who is Dear Leader?

Like your teleprompters comment recently, I guarantee you that every person you have ever voted for for president has held fundraising dinners. Are you going out of your way to write comments that demonstrate hypocrisy?

SinoHawk 3 years, 4 months ago

SS: Republicans control 1/3 of government, and have only done that for several months. The problem is that this administration has matched class-warfare rhetoric, anti-business regulation, and massive new spending with an already fragile economy. Small wonder that companies are afraid to hire.

Blessed4x 3 years, 4 months ago

Correction: Republicans control 1/2 of 1/3 of the government. The dems can't even get their own members onboard to support anything this president does. Case in point, how many votes did the president's budget get? That's right, NONE! This is now Obama's baby. Bush was a reckless spender, Obama is a dangerous spender. Time for attitudes to change while there is still time.

Alyosha 3 years, 4 months ago

Agreed. It's quite weird and disturbing that you'd call your President "Dear Leader" as though you were a North Korean official.

What's the deal with that? Is that what you called Bush?

Crazy_Larry 3 years, 4 months ago

January 20, 2009: Stock Market Closes at 7949. August 4, 2011: Stock Market Closes at 11,383.

Yep, 3400 points into the positive side since Obama bought the office of the President. Quite a large change for the better, I'd say.

rockchalker52 3 years, 4 months ago

You mentioned that at the top. I tend to agree that it bears repeating.

just_another_bozo_on_this_bus 3 years, 4 months ago

This is just the obscenely wealthy doing what they always do-- protecting their wealth at everyone else's expense.

gl0ck0wn3r 3 years, 4 months ago

Do you have a 401k? If so, you are one of the obscenely wealthy that got hurt today.

50YearResident 3 years, 4 months ago

Mannipulation of the Markets is happening right before our eyes. Computer controlled buying and selling by unknown people (or countrys) are driving the Stock Marken into ruin. If something doesen't change all legitimate investers will soon be broke. Find out who is behind computer transactions in hundreds of millions of dollars in fractions of seconds. It is not whate it used to be.

Mike Ford 3 years, 4 months ago

stocks and the economy always suck during the summer but the freak out Obama haters would want you to ignore that. They would also want you to ignore the fact that one has to spend money to make money and also that their economically suicidal idea of cutting programs until there's money for them to run themselves mindset that permeated the debt ceiling blackmail job on monday has nothing to do with this. They don't own the fact that since 1980, $14 trillion of debt has been ran up. Historical math; Reagan 1980-1988, Father Bush 1988-1992, Bill Clinton 1992-2000, Dumb Son Bush 2000-2008. Math says that five terms of Republicans who practiced supply side economics and borrowing from China to fund two wars did more damage than anything Mr. Obama has done. Clowns with amnesia choose to ignore this. I said it....It it Bush's fault...oh oh.... tpers and gop's heads explode....this doesn't compute with the BS they're fed on a daily basis from Cape Girardeau Blowhard, Interrupter O' Reilly, or any of the other programmed robots. I'll say it again... It's Bush's fault... and furthermore... The Kochs give these clowns more than any Chicago fundraiser dinner to manipulate this country against it's own interests. Oh I did it didn't I????

overthemoon 3 years, 4 months ago

And since the Boehner announced that he got '98% of what he wanted' in the debt deal, I think we can let him own the reaction both political and economic to what he wanted.

rockchalker52 3 years, 4 months ago

that is an awesomely awesome response to his political smugness.

Kevin Randell 3 years, 4 months ago

Ok......both sides can gripe and point fingers all you want. The bottom line.....if we don't get these a$$ clowns out of office (from both parties) then the dollar isn't going to be worth squat! Then it wont really matter how much money the rich have.....we will all be a broke nation having to learn Chinese so we can speak to our new owners. :)

nut_case 3 years, 4 months ago

'LIKE' x 14 thousand trillion zillion!!

ljwhirled 3 years, 4 months ago

Doubt it. Yes we could have, but Mr. Obama gave that up in the first round of discussions.

Phillbert 3 years, 4 months ago

But ...but...but...Republicans all said that cutting spending would give businesses the magical "confidence" they need to stop hoarding cash and start creating jobs. Could it be that taking money out of the economy actually hurts it? (Yes.)

SinoHawk 3 years, 4 months ago

They didn't cut spending. They didn't cut spending. They didn't cut spending.

All that the debt deal did was cut the projected rises in spending. Frankly, your post is a ridiculous straw-man argument, since cutting spending (even if it had been done) was not about stimulus, but rather keeping the country on a strong fiscal footing. If we loose our debt rating, then servicing the US debt becomes substantially more expensive.

cowboy 3 years, 4 months ago

My economy is doing quite well this year , of course I actually work and produce a service. I don't have some hedge fund sitting and betting against me each day. Will Cowboy actually show for work today , produce more , produce less. This false economy , Wall Street , is the equivalent of the biblical money changers. They produce nothing , just get in the middle and siphon off dollars of others , and provide no energy to the project. Shut down Wall Street !

Richard Heckler 3 years, 4 months ago

The stock market is only for those who can afford to lose money. Fortunately it is NOT the economy contrary to popular belief.

Housing starts should no longer be a measure of the economy not only because there are millions upon millions on the market but buying houses require good paying jobs. Between the Bush/Cheney/republican fiasco and corp america sending more blue and white collar jobs abroad where are the good jobs?

Between Reagan,Bush and Bush = 20 years of wreckanomics.

And this: In fact, by the time the second Bush left office, the national debt had grown to $12.1 trillion:

  • Over half of that amount had been created by Bush’s tax cuts for the very wealthy.

  • Another 30% of the national debt had been created by the tax cuts for the wealthy under Presidents Reagan and George H.W. Bush.

• Fully 81% of the national debt was created by just these three Republican Presidents. http://www.dollarsandsense.org/archives/2010/0111orr.html

How can anyone bring back the economy in 2.5 years after 20 years of wreckanomics? Why do people vote republican ever? They are the source of lost jobs, tanked economies,huge Wall Street losses and bank robberies. Not exactly the economic giants of our time!

corduroypants 3 years, 4 months ago

"Stretch Cunningham, the funniest guy on the dock." Best screen name I've seen in a long time :)

Richard Heckler 3 years, 4 months ago

Why do repubs do repeat performances?

**Home Loans - The Reagan/Bush Savings and Loan Heist(Cost taxpayers $1.4 trillion) http://rationalrevolution0.tripod.com/war/bush_family_and_the_s.htm

** Wall Street Bank Home Loan Fraud on Consumers under Bush/Cheney http://www.dollarsandsense.org/archives/2009/0709macewan.html

** Only 3 institutions were clearly in trouble so why $700 billion of bail out money? http://www.democracynow.org/2009/9/10/good_billions_after_bad_one_year

And that tax cuts do nothing to make an economy strong or produce jobs.

** Still A Bad Idea – Bush Tax Cuts - The ENTITLEMENT program for the wealthy at the expense of the middle class http://www.dollarsandsense.org/archives/2001/0301miller.html

Jstanobservation 3 years, 4 months ago

Thank goodness for all the free computers at the library so all the bleeding hearts can keep on defending Obama.

Blessed4x 3 years, 4 months ago

Are you really so arrogant that you don't think that the Tea Bag ideology is one that could legitimately be shared by actual people? The argument that the Bush tax breaks did not affect lower to middle income people has been debunked so many times already. The Bush tax breaks helped everyone. This economy is crap. Borrowing more and more and more money will NOT get us out of this hole. Is that the way you handle your personal finances? Broke? Just call Chase and have them up your credit limit.

ljwhirled 3 years, 4 months ago

Yeah, you're right. If we had just let the Treasury default, the dollar tank, the markets panic and credit markets dry up today would have been much better.

Much better.

Flap Doodle 3 years, 4 months ago

Where have we seen all those posts of merrill's before? Oh, wait, they were right here on this award-winning website. We've seen all those dozens, if not hundreds, of time in the last few years.

rockchalker52 3 years, 4 months ago

No help needed from the likes of me, but just gonna say it. U shouldn't bag on the Snapster. If you see any posters that can pop their point as swiftly, please lemme know. don't get a swelled head, snappie. merrill aside, we prolly don't agree on much, but i pay attention.

kernal 3 years, 4 months ago

If the debt ceiling had not been raised, it's more likely we would have seen a much worse result on Wall Street today as well at markets in other countries we trade with. Keep an eye on Europe because it's also struggling with a bad economy, especially Greece, Italy and Spain.
The U.S. and Europe are affected by each others economy. If a solution can't be found over there, the ride is going to get very bumpy for all of us.

Crazy_Larry 3 years, 4 months ago

The problem is people who blame the democans or the republicrats. Hello! They're in cahoots! They are the same thing! The left/right BS is meant to divide the people. Division is the first step to creating tyranny.

Fossick 3 years, 4 months ago

Good grief people, a 4% down day in our market is hardly the end of the world. It's not even meaningful. And as much as one would like to blame Obama or Boehner or any other across-the-aisle American, he might want to look to Europe where the same freaking thing is happening. Is Greece in default because of Obama? Is Italy, Europe's third largest economy, heading for default because of Obama? Nope.

Take a deep breath, pour a long, tall rum and coke, and thank your lucky stars you kept a third of your retirement in cash equivalents and a third in metals. Stocks go up and down - it's the way of the world. Obama gets neither the credit nor the blame for your wise or foolish investment allocations.

Crazy_Larry 3 years, 4 months ago

Ouch! I keep saying the same thing, over, and over, and over, and over. Maybe someday we'll all wake up to the truth! Wall Street owns the presidency and many in Washington DC. This is an engineered crushing of the United States of America. Will you be one of the haves, or the have nots? We'll soon see. Drink another beer and relax with the boob-tube--Suckers!

New information discovered in Osama bin Laden's hideout in Pakistan suggests that the United States has been vastly overstating al Qaeda's power for a full decade. The group appears to have spent more time dodging drone strikes and complaining about money than trying to get an atomic bomb.

http://www.foreignaffairs.com/articles/68012/john-mueller/the-truth-about-al-qaeda

Mike Ford 3 years, 4 months ago

If I remember in January 2009, the stocks were around 6600 points. Two years later we're screaming about being at 11383 points. Man, just keep letting the dummies yell over facts. These dummies will take us into the ditch and the wall. I'm glad I took my 401K out of the market July 26th. I look smart now.

beatrice 3 years, 4 months ago

And we are up more than 100 points today. Apparenlty we may not prove to be regressive after all. So when the stock market isn't stuck at the level we found it at the end of the Bush era, are you going to be big enough to admit you were wrong and thank progressives for everything they have done?

tbaker 3 years, 4 months ago

Dummies taking us into the ditch....kinda like when Jimmy Carter was President? Thats the last time the DOW industrial average dropped for nine sessions in a row.

yourworstnightmare 3 years, 4 months ago

"Or just the usual poorly-research copy/paste from whatever turd you find floating in this morning's email inbox?"

Awesome!

Crazy_Larry 3 years, 4 months ago

The Banking Act of 1933, Pub.L. 73-66, 48 Stat. 162, enacted June 16, 1933, was a law that established the Federal Deposit Insurance Corporation (FDIC) in the United States and introduced banking reforms, some of which were designed to control speculation. It is most commonly known as the Glass–Steagall Act.

Provisions that prohibit a bank holding company from owning other financial companies were repealed on November 12, 1999, by the Gramm–Leach–Bliley Act, named after its co-sponsors Phil Gramm (R, Texas), Rep. Jim Leach (R, Iowa), and Rep. Thomas J. Bliley, Jr. (R, Virginia).

the Gramm–Leach–Bliley Act effectively removed the separation that previously existed between investment banking which issued securities and commercial banks which accepted deposits. The deregulation also removed conflict of interest prohibitions between investment bankers serving as officers of commercial banks. Experts believe that this repeal directly contributed to the severity of the Financial crisis of 2007–2011 by allowing Wall Street investment banking firms to gamble with their depositors' money that was held in commercial banks owned or created by the investment firms.

Crazy_Larry 3 years, 4 months ago

Call me crazy, but this looks like bank deregulation to me.

Crazy_Larry 3 years, 4 months ago

Yes, I'm telling you that. What? You can't read now? "The deregulation also removed conflict of interest prohibitions between investment bankers serving as officers of commercial banks. " and "Experts believe that this repeal directly contributed to the severity of the Financial crisis of 2007–2011 by allowing Wall Street investment banking firms to gamble with their depositors' money that was held in commercial banks owned or created by the investment firms."

You're amazing. One minute you read like someone with intelligence and wit; the next minute you're an idiot. It's not the number of words, it's the power contained in them. Are you that freakin' dumb?

Crazy_Larry 3 years, 4 months ago

Capitalist Fools by Joseph E. Stiglitz. American economist and professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences (2001) and the John Bates Clark Medal (1979). He is also the former Senior Vice President and Chief Economist of the World Bank.

"Glass-Steagall had long separated commercial banks (which lend money) and investment banks (which organize the sale of bonds and equities); it had been enacted in the aftermath of the Great Depression and was meant to curb the excesses of that era, including grave conflicts of interest."

"Commercial banks are not supposed to be high-risk ventures; they are supposed to manage other people’s money very conservatively. It is with this understanding that the government agrees to pick up the tab should they fail. Investment banks, on the other hand, have traditionally managed rich people’s money—people who can take bigger risks in order to get bigger returns. When repeal of Glass-Steagall brought investment and commercial banks together, the investment-bank culture came out on top. There was a demand for the kind of high returns that could be obtained only through high leverage and big risktaking."

"The most important challenge was that posed by derivatives. In 1998 the head of the Commodity Futures Trading Commission, Brooksley Born, had called for such regulation—a concern that took on urgency after the Fed, in that same year, engineered the bailout of Long-Term Capital Management, a hedge fund whose trillion-dollar-plus failure threatened global financial markets. But Secretary of the Treasury Robert Rubin, his deputy, Larry Summers, and Greenspan were adamant—and successful—in their opposition. Nothing was done."

"The incentive structure of the rating agencies also proved perverse. Agencies such as Moody’s and Standard & Poor’s are paid by the very people they are supposed to grade. As a result, they’ve had every reason to give companies high ratings, in a financial version of what college professors know as grade inflation. "

Crazy_Larry 3 years, 4 months ago

The best choice of words regarding these To Big to Fail management types is still offered by Matt Taibbi... "a group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream."

Whom We allowed because we have been too busy working to take the time to learn the truth. We come home worn out, eat, watch a little TV, maybe get online for a while, go to bed, get up and do it all over again. Deep in debt, we have become slaves to the powers that be.

Neil Young - Johnny Magic

Crazy_Larry 3 years, 4 months ago

Whatever...I quoted a Nobel Prize winning economist who said specifically about Glass-Steagall: "...deregulation also removed conflict of interest prohibitions...this repeal directly contributed to the severity of the Financial crisis of 2007–2011 by allowing Wall Street investment banking firms to gamble with their depositors' money that was held in commercial banks owned or created by the investment firms."

Again, the number of sentences removed does not matter. What matters is the power contained within the sentences removed. And in this case, the sentences removed specifically separated commercial and investment banks. You must live in Bizzaro World.

jayhawklawrence 3 years, 4 months ago

I don't see how you fix the economy without increasing revenue and it seems like a lot of very wealthy people and corporations are not taking responsibility for the economic health of our nation.

In a way, they have been misled by political propaganda just like the rest of us. They are constantly hearing about class warefare and the welfare state and all the political propaganda associated with those issues instead of being told we need to contribute more in order to save our country.

Self serving politicians who have perfected the art of lying have infested our government just like a colony of termites. They would rather destroy the country than save it if it will justify their poltical egos.

Some of these people have even developed their own theology as the foundation for their political fundamentalism. They are spawning a new kind of social gospel and declaring God's approval as if they are part of a divine providence.

A 14% congressional approval rating by the American people demonstrates clearly that we all see the same thing.

The consensus is that we can get rid of waste in government but we can only do that with good management and careful analysis and continuous quality improvement, not a Brownback style of governing. Just as fundamental is a carefully managed change in our tax policies and a hard look at corporate welfare in a time of great hardship for the most Americans.

And what is wrong with that?

Crazy_Larry 3 years, 4 months ago

LOL! I suppose. Wall Street does own half the people in Washington DC and therefore 'the government' is manipulating the economy.

Crazy_Larry 3 years, 4 months ago

Ask yourself this question: Is the country better off now? Or, 30 years ago when we had higher tax rates on corporations and the top 2%? Also ask yourself this: If lowering taxes on the top 2% is supposed to stimulate the economy and create jobs, what happened? George Bush cut taxes 10 years ago and look where we are today.

BorderRat 3 years, 4 months ago

Saw another article saying there was a massive recall on turkeys. Was there an election I missed?

yourworstnightmare 3 years, 4 months ago

Thanks GWB and Dick "deficits don't matter" Cheney.

Also thanks to the teapublican anarchists for recently undermining the full faith and credit of the US government.

yourworstnightmare 3 years, 4 months ago

My own fix:

Thanks GW "tax cuts for the wealthy" B and Dick "deficits don't matter" Cheney.

Also thanks to the teapublican anarchists for recently undermining the full faith and credit of the US government.

melott 3 years, 4 months ago

I like Bob Reich's comment. The Republicans said they got 90% of what they wanted in the debt ceiling deal. So now they will want to claim 450 of the 500 point drop in the Dow.

Jay Keffer 3 years, 4 months ago

Weren't we warned that if we didn't increase the debt ceiling the stock market would tank?

Funny, just the opposite happened.

What a bunch of horse squeeze.

yourworstnightmare 3 years, 4 months ago

No, what is a bunch of horse squeeze is your simplistic linear thinking. We cannot know what would have happened had the debt ceiling not been raised. Maybe the market drop would have been worse. Maybe not.

However, all indications from both democrats and the GOP were that it would have hurt the markets. One could argue that this market drop is because of the teapublicans undermining the full faith and credit of the US government by raising the spectre of default and in fact welcoming it.

The fact that the teapublicans brought us this close to the brink of default, and the fact that default was being discussed as an option, can only have a chilling effect on bond investors.

TheYetiSpeaks 3 years, 4 months ago

When are you people going to face the realization that we are all complicit in the downfall of this country? Republicans and Democrats for faulty leadership, and the rest of us for not demanding more from them. We were apathetic on a ship heading for an iceberg that we all saw well ahead of time, when only a slight shift would have been needed to miss it. Now, the iceberg is upon us and we all scream and shout but even cranking the wheel wont save us now. Pleasant dreams, America.

riverdrifter 3 years, 4 months ago

-$8200 out of the old TSP account in a single day. Ouch. Today was better though.

Sigmund 3 years, 4 months ago

melott (anonymous) says… "The Republicans said they got 90% of what they wanted in the debt ceiling deal. So now they will want to claim 450 of the 500 point drop in the Dow."

And tonight S&P decided to lower the AAA rating, held by the United States for 70 years, to AA+. Oddly, it wasn't because Republican's got too much and they cut spending too much, but too little. http://www.washingtonpost.com/business/economy/sandp-considering-first-downgrade-of-us-credit-rating/2011/08/05/gIQAqKeIxI_print.html

Crazy_Larry 3 years, 4 months ago

Who pays the S&P? Wall Street. What happens when the USA's credit rating is lowered? Interest rates go up. Who gets the interest? Wall Street. Something's amiss here. A corporation is down grading the government's credit rating, which harms the government and its people! LOL! The government should take away that corporation's charter.

tbaker 3 years, 4 months ago

“It’s now impossible to deny the obvious, which is that we are not now and have never been on the road to recovery.”

-- Liberal economist Paul Krugman writing in the New York Times.

Crazy_Larry 3 years, 4 months ago

More tax cuts for the top 2% should fix everything!

riverdrifter 3 years, 4 months ago

I call BS: Not ringing true. Publicity stunt. She knew exactly what she what was up.

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