Pre-warning, tomorrow is a big day for the economy

[ShaneGR]

Today the DOW lost 150 points. Interest rates are rising, which means possible deflation, and expected layoffs rose 43% last month. If the Dow closes below 9000 tomorrow most of the Sunday news channels will lead with the economy. Pay attention people, perhaps the media will finally have to admit that this supposed economic rebound is a load of bullshit.

http://money.excite.com/ht/nw/bus/20030805/hle_bus-n05278245.html

[LoverOfLiberty]

1. The temporary stock market boost

was due to the tax breaks on dividends. The stock market will continue its general downward trend.

[Merlin]

17. Bingo. That's absolutely right.

It was a once-and-done spike in prices.

Interest rate increases spell inflation. Inflation spells lower stock prices, higher debt costs for the treasury, and more bankruptcies.

Higher interest rates will put the kibosh on refinancing which has been the sole source of strength in the economy for the past two years.

The problem is the enormous, unprecedented consumer and corporate debt overhang. It will not go quietly into that good night. Neither business investment nor consumer purchasing will rebound until these debt levels are worked down.

At some point, too, the media will begin to focus on the real unemployment numbers.

Shrubby is going down.

[SpiralHawk]

2. But, but, but...just wait till the Bush tax cuts for the wealthy kick in

and remember the Republican motto: A rising tide lifts all yachts.

I understand that the pResident* himself is keeping close tabs on the "tide thing" from his perch in a hammock at the Pig Farm in Crawford, TX.

So there's absolutely nothing to worry about. Happy Days are Just Around the Corner. Vote Republican in 2004, and they promise to give us "A pretzel in every American snack bowl (bowls made in China from Middle East petrochemical goop that our troops are protecting with their lives)."

[NewYorkerfromMass]

3. Market hysteria

so people wait for the market to signal the broader picture? Kind of like looking at just one tree for clues to the forest fire IMHO. But while we're on the subject: What's the average P/E ratio change from 5 years ago?

[Redleg]

7. True, the market is only a part of the puzzle..

I think our national fixation on the market over all other aspects of the economy is actually contributing to the problems.

[KoKo]

4. The "Plunge Protection" has been trying to stop this....but agree

tomorrow might be the day........It depends on how many chips are left for the BFEE to call in all over the world to prop our markets up. Saudi's are getting bad press....maybe they won't be so willing to buy our debt.....or the Chinese, or others that we strong arm.

Even with the "strong arming" we have so much debt and the housing situation with "home equity loans" and refinancing bubble straining that I don't know how the BFEE can keep this all afloat.

Dow 9000.......that's the key. Good post....and we need to see how they react.....

[NewYorkerfromMass]

5. don't forget the real estate bubble

could be really bad.

[Jacobin]

11. Yup.

Housing prices move inversely to interest rates.

Interest rates have nowhere to go but up because of the deficits as far as the eye can see

[aquart]

13. States like NY have just desperately raised property taxes.

If the housing bubble bursts, they'll have to revise taxes and the states will be even further strapped than before.

And still the dictator wannabe won't admit that the tax cuts have to be repealed. In toto.

[sendero]

6. IMHO....

... the current economic slump has many fathers. But one of the most important daddies is the American propensity to live on debt.

People cashing out the equity on their homes is a perfect symbol of the folly of living beyond your means. Folks get a bit of equity and cash it out to pay consumer debts, believing their home values and hence their actions are safe.

But are they? I doubt it. If we see a real estate devaluation, katie bar the door, it is but one of several happenstances that could send the whole economy into a Japanese style long term tailspin.

Ok, and the good news is ..... :)

[BushHasGotToGo]

8. You mean inflation right?

I've been predicting this all along.

[revcarol]

10. The amount we are having to finance(the national debt)

is going to be astronomic soon,.Inflation following deflation.Nobody wants to buy the treasuries because they see the inflation down the road.

[goforit]

9. Thanks for the alert!!!............Yep it is comming to a head!!!

We all need to be calm and forthright and
hope that few will suffer!!

[MUAD_DIB]

12. I know of one person in particular that I hope

suffers a great deal, but I feel that he will try to slither out of his predicament by LIHOP or MIHOP again.

[WillyT]

14. Why Wait Til Tomorrow, When It's Today In Japan ???

Nikkei Link: http://www.nni.nikkei.co.jp/

World Markets: http://finance.yahoo.com/m2?u

:shrug:

[WillyT]

16. Whoa... When I First Posted This (20 min. ago) It Was Down 21...

Now it's down 46!!!

:shrug:

[Robin Hood]

15. This economy is no ones fault

excpet for the people that voted for Bush. I am so tired of being broke because of this idiot.

[Gman]

18. We're about to see a minimum 10% - 12% correction

I think the market's going back down to the mid to high 7K's in the next few weeks. My financial advisor agrees. The market's too high. Not enough growth, not enough manufacturing, not enough jobs to support where the market recently peaked.

It'll be a shorty's hayday.

--on edit--

And the Bushies wrongly thought a humongous increase in defense (deficit) spending would spur the economy a la the 1960's. That dog just doesn't hunt anymore. That was another time, another economy.

[Gman]

19. But a good 'ol war is fixing to happen to get Bush reelected

regardless of the economy. Hide and watch.

[maggrwaggr]

20. The bump was largely from the war finally being waged

and completed. The suspense was over.

Has anyone checked and seen that the oil companies all had huge record profits for the 2nd quarter? All because of the long suspense up to the war driving prices nice and high.

Good work, George and Co.! Exactly like we wanted it.

Now that's over and done with, the housing market is FINALLY taking a dump.

The people in charge are shorting stocks as of today and tomorrow. The markets just shot up 25 to 35% in the last few months, you can bet they'll drop right back down.

If you're in the know, you can just keep rakin' it in!

[WillyT]

21. Wow Again, Look At The Indonesian Market Over Night !!!

World Markets: http://finance.yahoo.com/m2?u

They just suffered a major terrorist bombing, and their markets take a 'hit' of a 1.21% INCREASE?!?!?!

How does THAT happen in nature???

:wtf:

[Robbien]

22. Instead of its normal happy speel, CNBC top opening stories

on market events are that EU is filing an antitrust suit on Microsoft and Sprint's overcharging the government. Looks like a red ink day indeed.

[ShaneGR]

23. Microsoft

That's interesting, Bill Gates sold a million shares yesterday.