The stock market is over.

[Trom]

@Scylla

In some of my earlier posts here, I tried to make it clear that I thought the real bad guys were the ratings companies, not the short sellers.

Ahh. I misjudged your post then. The following paragraph is what confused me:

@Scylla

Hedge funds were already having a bad year and looking to recap losses. Short sellers were in a feeding frenzy. This was like ringing the dinner bell.

If you shorted a stock and drove its price down, it’s rating would drop. Most credit covenants require additional collateral when a rating drops which means the company has to put up more money. Of course they can’t get it easily because their rating just dropped. This makes the stock go down. The short sellers go nuts, and maybe the rating gets cut again. They need more liquidity, can’t get it, and the whole thing becomes a self-fulfilling prophecy. The act of shorting the company kills it. It becomes almost a true one way bet.

The time period you’re referring to above is what I was referring to in my question on why buyers weren’t supporting these companies while they were being hit by the shorts. (Bolding mine.)

@Scylla

I didn’t notice unusual spreads except at the open. Are you sure you were looking while the market was open and not the premarket or after hours trading?

Yes. Premarket and after hours spreads are usually meaningless.

@Scylla

At 1:00 on Thursday Morgan Stanley was around 10. It closed right around 22. We were up around 400 points Friday. I consider that buying.

I’d consider that an artificial, panic move up due to a malfunctioning market brought about by government intervention.

[mangeorge]

Well hell!
Looks like it happened after all.
What’s-his-name, which I just forgot, says the stock market as we know it is gone.
I’m paraphrasing here. Maybe he said Wall Street.
One thing for sure, we are living history.

[mangeorge]

I just want to sure nobody took The Leap.
I hope you are all surviving. What a rush, eh!
Peace,
mangeorge

[gravitycrash]

Naw, anybody who is seriously invested in the stock market knows that you will take your lumps. Anybody who feels like jumping off a tall building after this just doesn’t understand how the market works.

Warren Buffet just said last week that this is an ideal time to jump back in. I think he qualifies as an expert.

[mangeorge]

@gravitycrash

Naw, anybody who is seriously invested in the stock market knows that you will take your lumps. Anybody who feels like jumping off a tall building after this just doesn’t understand how the market works.

Warren Buffet just said last week that this is an ideal time to jump back in. I think he qualifies as an expert.

Your username is just a coincidence to this post, right?
Anyway, I went back and re-read the OP, and my concers and seem valid for what’s going on right now, including agencies (FBI, etc) looking for signs of wrongdoing.
And it does seem pretty obvious that the whole system will be going through some pretty profound changes. It looks like gonernment oversight will be the answer.
I know little about the markets and such. All I know is what I get from watching The McLaughlin Group.

[msmith537]

@gonzomax

You need to feel sorry for Hank Greenberg, He ran AIG for many years. He retires with 1.5 billion in stock. It now is worth 100 mill. It may be even less after the last couple days. Poor old guy had it made. He bitched at management for months offering to help them out. They did not need him. They had it under control.

And yet somehow I think he’ll manage to make ends meet.

@mangeorge

Well hell!
Looks like it happened after all.
What’s-his-name, which I just forgot, says the stock market as we know it is gone.
I’m paraphrasing here. Maybe he said Wall Street.

Probably “Wall Street”. When times are good, people don’t care about where the money goes, they just say “yaaaaay”. When everyone’s investments drop 25%, people are like “who the fuck is paying some 28 year old douchebag enough money to drive around in a Ferarri and sip Crystal at some club in the Meatpacking District and why?”

@gravitycrash

Naw, anybody who is seriously invested in the stock market knows that you will take your lumps. Anybody who feels like jumping off a tall building after this just doesn’t understand how the market works.

Warren Buffet just said last week that this is an ideal time to jump back in. I think he qualifies as an expert.

People who are “seriously invested” in the markets tend to be investing someone elses money.
It probably is a good time to jump back in. Well, not that good since I jumped in last week and am down about 5%. But it should be fine in a few months.

Except the DOW is down close to 40%. If you lost 25% of your investment, it sort of feels like you just shit money away. Second, how long will it take for the market to recover 40%!?