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post #1 of 9 (permalink) Old 03-06-2009, 04:12 PM Thread Starter
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Wall Street11 Trillion Wipeout

11 Trillion Wipeout: Wall Street's Year-and-a-Half of Dangerous Living
Posted Mar 06, 2009 05:03pm EST by Aaron Task in Investing, Recession, Banking
Related: ^dji, ^gspc, GM, C, AIG, XLF, QQQQ

In a fitting end to another desultory week on Wall Street, the stock market did its best to frustrate everyone Friday; first, it failed to sustain an early bounce on not-worse-than-feared jobs numbers, then avoided the cathartic "whoosh" down many were hoping for after the initial rally faded.
After trading as low as 6470, the Dow rebounded to end the day up 32.50 points to 6470. The S&P also managed to eek out a gain to 683 after trading below 667 intraday while the Nasdaq pared much of its early loss before closing down a hair at 1294.

It's hard to remember what transpired in just the past week, during which the Dow and S&P hit their lowest levels since 1997 and 1996, respectively. But it's almost impossible for most of us to remember (much less comprehend) what's occurred in the past year, or since the peak in October 2007.

So here's some (unfriendly) reminders:

The current decline is worse than the 1929-1932 rout.
Based on the Wilshire 5000 Index, the market-cap of U.S. stocks is down $11 trillion since the Oct. 2007 peak, Marketwatch says.

U.S. stocks have lost $1.6 trillion in market-cap since Barack Obama's inauguration, Bloomberg reports.

Nearly 50% of all stocks in the Wilshire 5000, the broadest index of U.S. equities, are trading for less than $5 per share, and 37% are under $3.
As devastating as those statistics are, they fail to capture the psychological damage that's been done by the fall of once hallowed institutions such as Bear Stearns, Lehman Brothers, Merrill Lynch, AIG, Fannie Mae and Freddie Mac, as well as those still hanging by a thread like Citigroup and GM.

Still, there's a case to be made that stocks are now actually "cheap" on a long-term cyclically adjusted P/E basis. Yes, it's probably is too late to dump and run, and the market is certainly due for a short-term rally of some substance. But that doesn't mean major averages aren't ultimately going still lower before the worst bear market of many generations runs it course.

We donít need to restore the American Dream; we need to wake up from it.

When the rich run out of money, itís over.

Smile it makes people wonder what you are up to.
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post #2 of 9 (permalink) Old 03-06-2009, 04:23 PM
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And as soon as the politicians GTFO of the way and people start buying again, it will all be 'recreated'

Provided the USA doesn't get Obamized to the point of now recovery.

1/19/09, the last day of Free America.
Pericles "Freedom is the sure possession of those alone who have the courage to defend it. "

"[T]he people alone have an incontestable, unalienable, and indefeasible right to institute government and to reform, alter, or totally change the same when their protection, safety, prosperity, and happiness require it." --Samuel Adams


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post #3 of 9 (permalink) Old 03-06-2009, 04:42 PM Thread Starter
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I sure hope you ae correct

We donít need to restore the American Dream; we need to wake up from it.

When the rich run out of money, itís over.

Smile it makes people wonder what you are up to.
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post #4 of 9 (permalink) Old 03-06-2009, 06:21 PM
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A wipe out of $11T is just amazing. That is just a huge amount of wealth destroyed. It also is a huge amount of support to "money supply". I know it is not officially considered money supply, I know several people on here that had scoffed at the notion of being debt free. They would say how much more money they could make putting money in the market and being up to there eyes in debt. Most people that thought that way are sunk. They lost all that wealth, are up to their eyes in debt. Now need to cut back on spending to pay off that debt and rebuild their wealth. We will now see a complete change in spending attitudes by most Americans.

Most people don't realize that a 10% loss takes a 11% gain to get back to even. Let alone a 50% loss that takes a 100% to get back to even.
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post #5 of 9 (permalink) Old 03-06-2009, 06:47 PM
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I wonder how the "blind trusts" that high ranking public officials put their money into while they're in office are fairing??

I wonder why they are so "indifferent" to the market turmoil......
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post #6 of 9 (permalink) Old 03-06-2009, 06:47 PM
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Quote:
Originally Posted by TexasDevilDog View Post
A wipe out of $11T is just amazing. That is just a huge amount of wealth destroyed. It also is a huge amount of support to "money supply". I know it is not officially considered money supply, I know several people on here that had scoffed at the notion of being debt free. They would say how much more money they could make putting money in the market and being up to there eyes in debt. Most people that thought that way are sunk. They lost all that wealth, are up to their eyes in debt. Now need to cut back on spending to pay off that debt and rebuild their wealth. We will now see a complete change in spending attitudes by most Americans.

Most people don't realize that a 10% loss takes a 11% gain to get back to even. Let alone a 50% loss that takes a 100% to get back to even.
I believe that the more a term is thrown around ("billion", trillion") it starts to lose meaning, and the people in washington are using the hell out of these terms. The fact that we are even using terms like this should scare the shit out of everyone.

I expect that dave ramsey is doing a booming business right about now.
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post #7 of 9 (permalink) Old 03-06-2009, 06:49 PM
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Quote:
Originally Posted by TexasDevilDog View Post
A wipe out of $11T is just amazing. That is just a huge amount of wealth destroyed. It also is a huge amount of support to "money supply". I know it is not officially considered money supply, I know several people on here that had scoffed at the notion of being debt free. They would say how much more money they could make putting money in the market and being up to there eyes in debt. Most people that thought that way are sunk. They lost all that wealth, are up to their eyes in debt. Now need to cut back on spending to pay off that debt and rebuild their wealth. We will now see a complete change in spending attitudes by most Americans.

Most people don't realize that a 10% loss takes a 11% gain to get back to even. Let alone a 50% loss that takes a 100% to get back to even.
That makes no sense and is only living on false wealth (or true debt).

1/19/09, the last day of Free America.
Pericles "Freedom is the sure possession of those alone who have the courage to defend it. "

"[T]he people alone have an incontestable, unalienable, and indefeasible right to institute government and to reform, alter, or totally change the same when their protection, safety, prosperity, and happiness require it." --Samuel Adams


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post #8 of 9 (permalink) Old 03-06-2009, 06:49 PM
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I'm wondering how the author of that has a job in this hideous economy.
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post #9 of 9 (permalink) Old 03-06-2009, 06:50 PM
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Quote:
Originally Posted by mikeb View Post
I believe that the more a term is thrown around ("billion", trillion") it starts to lose meaning, and the people in washington are using the hell out of these terms. The fact that we are even using terms like this should scare the shit out of everyone.

I expect that dave ramsey is doing a booming business right about now.
He's a bit radical, but makes a lot of sense - makes a hell of a lot more sense now

1/19/09, the last day of Free America.
Pericles "Freedom is the sure possession of those alone who have the courage to defend it. "

"[T]he people alone have an incontestable, unalienable, and indefeasible right to institute government and to reform, alter, or totally change the same when their protection, safety, prosperity, and happiness require it." --Samuel Adams


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