Worldcom declared bankruptcy tonight, the largest bankruptcy in US history.
The US markets the past two weeks have plowed deep. Fear abounds. No one seems to trust corporate CEOs, CFOs, nor Bush and Cheney (America’s first management presidential team) with any leadership to turn this crash around. (Well crash may not be the correct word but try telling the media otherwise.)
So step right up and place your SDMB bets. Will tomorrow’s US markets go up, down, and by how much?
For the sake of this crowd pleaser, I am referring to using the DOW average. Yes, other stock averages may be more accurate and provide better analysis but we’re talking only what the general population reads about because the media focuses on the DOW average.
My take? Down hard in early trading, perhaps as much as 400 points. Buyers come into the market with a mid-afternoon rally but at the end of the day the Dow still down some 225 points.
Why? The economic pundits I read/hear today all speak of little light at the end of the tunnel. Greenspan’s speech last week was lackluster. Worldcoms declares bankrupty today, and although not unexpected, it will play heavy in the minds of investors.
And for bonus points, will Worldcom’s bankruptcy have any real effect on the Internet in the next six months? Worldcom’s subsidary UUNet apparently carries half of all Internet traffic. Worldcom’s CEO said the lights will not go out on UUNet no matter what. Does anyone believe this in this day and age? Will the government take a hand’s off attitude if it comes to pass? After all, this government’s attitude is still pro-business (no corporate bailouts - let the free market decide). Then again, the government also says terrorists use the Internet for communications - what better way to stifle their comunications if their communications links go down? The rest of us? Aw, just collateral Internet damage.
I’m betting down 175-200 with a roller coaster ride all day long. Hell of a time for me to have an interview, eh?
And I don’t think the government would allow UUNet to go lights out. At some point it might be forced to nationalize those connections to keep the information flowing. But I’d hate to see what would happen to the economy if we had to go back to 1985 methods and practices.
Volatility mucho. Bargain hunters spark a rally that fizzles. Dow closes down 500
We are screwed.
I went back to 1982 and calculated the furture value of the Dow Jones based on its 7/82 level and going forward to 7/2002.
In Jul 1982, the Dow was at 806. If you assume the markets historical 11% annual interest rate, and plug in 20 years here on my financial calculator . . .
you get a Dow of:
you might not want to read on if you have a weak heart . .
or high blood pressure. . . .
In other words, statistically the market should not bottom out until it hits the mid 6000 range.
Boy, are we a bunch of suckers or WHAT???
Down 140. The bankruptcy isn’t a surprise.
I can’t really offer an opinion on what a given day may bring, just what is happening.
The bottom is almost here. That doesn’t mean that the bottom is any given number. It simply means that capitulation has begun. Remember that word. You are hearing about it lately, you will hear it used much in the next few weeks/months.
You have to have capitulation by a large percentage of investors before you reach the bottom. It’s started, and will continue. Cries of “get me out” will be heard by brokers for the next few weeks/months. When that is all over, you will have bottom.
And then, and only then, will I put my cash back into the markets. It’s been sitting for two years. I can’t wait to go shopping.
Oh, hell. Down 100 for the day. 500 for the week.
I predict that the market will rise briskly first thing in the morning.
It will then have breakfast and a shower, veg out in front of the TV until lunch time, at then retire for a short lie down, very much regreting it’s hurry to get up.
It will re-emerge around 4pm, take a quick trip down to the shops for a newspaper and milk, then return home.
It will watch BB3 in the evening and then head for bed around 2am, after 4 hours playing on its PS2.
It all spells trouble for the world’s economy.
Well, the Dow was up in early trading, waffled at bit then went south dropping 300 points. It was on a recovery in the late afternoon before collapsing again, down almost 235 points.
Well Jonathan how was the interview?
I saw a man on TV say, “…It can only go up…”, talk about willful ignorance…
Down 150, with a late rally. Down as much as 300 at one point, but the bargain hunters will be there.
The interview went fine, thanks. Almost became a mutual admiration society for a time. A planned 1/2 hour phone interview became a 2 hour conversation.
I’m meeting with them face-to-face on Monday. What more do I need.
And I did take home that prediction prize, didn’t I?
It should be dropping all week, as the earnings releases are coming out.