Althouse: "Global Meltdown: Investors Are Dumping..."

September 22, 2011

"Global Meltdown: Investors Are Dumping..."

"... Nearly Everything."

26 comments:

Fred4Pres said...: Even precious metals.

Like I've said, if things ever got really bad, the most precious metals and commodities will be steel, lead and certain chemical compounds.; 9/22/11, 5:35 PM
chickelit said...: Gold, usually a safety play, was sold into the maelstrom as investors raised cash.

That is interesting. I wonder what blake thinks of that.; 9/22/11, 5:37 PM
chickelit said...: certain chemical compounds would include saltpeter.; 9/22/11, 5:39 PM
Fred4Pres said...: Yes chickenlittle.

Canned goods and barter items are always useful too. But if you do not have weapons, what good is property.; 9/22/11, 5:46 PM
edutcher said...: I saw the words "Chinese slowdown" and didn't need to read much more.

If the Reds go belly up, they'll want their money.; 9/22/11, 5:47 PM
The Drill SGT said...: Fred4Pres said...
and certain chemical compounds.

Nitric acid, nitrates abd clorates :); 9/22/11, 5:52 PM
The Drill SGT said...: whoops

chlorates; 9/22/11, 5:53 PM
Kensington said...: Thanks for the memory
Of sentimental verse and nothing in my purse
And chuckles when the preacher said, "For better or for worse"
How lovely it was

Thanks for the memory
Of rainy afternoons that pulls me by the case
And how I jumped the day you trunked my burning toast and prunes
How lovely it was

We said goodbye with a highball
Then I got as high as a steeple
But we were intelligent people, no tears, no fuss
Hooray, for us

So, thanks for the memory
Of sunburns at the shore, darling, how are you?
You might have been a headache, but you never were a bore
I'm awfully glad I met you, cheerio and toodle-oo
And thank you so much

See you all in the breadlines!; 9/22/11, 5:57 PM
The Dude said...: Mmm, fulminate of mercury...; 9/22/11, 5:57 PM
David said...: You ain't seen nothing yet.

As to gold, look back to fall 2008. Gold sold off with everything else. People want cash. Also, many holders of gold are leveraged. People don't want leverage in times like this. When fear mounts everything gets sold.

Gold is a play on collapse in confidence in currencies and governments. We are still early in that story too.

Remember, this selloff is only fear based. It's nothing like the selloff that can happen when the actuality hits. (Euro banking collapse, China real estate bubble bursting. And longer term loss of American ability to borrow at low rates.)

Look for Dow 7000 again, as in 2008. Not a prediction, but a very plausible outcome.

This isn't just an Obama or American problem. World financial leadership (government and private) has been incompetent for decades. But there is nothing to tell us that the current American government has any idea what to do.; 9/22/11, 6:26 PM
Fred4Pres said...: David, that is entirely possible. And there is really no safe haven. Maybe cash and rebuy when things are less expensive but you have to time things right.; 9/22/11, 6:31 PM
Anonymous said...: After Bernanke said no more monopoly money, the game ended.; 9/22/11, 6:33 PM
rhhardin said...: Investors are doing no such thing. Every share sold by an investor is bought by an investor.

The market decided that the shares are worth less, is all.

That results in some people deciding to sell and other people then deciding to buy.

The same thing would happen if nobody sold or bought: the value of the shares would fall to the same thing.; 9/22/11, 6:37 PM
Anonymous said...: "If the Reds go belly up, they'll want their money."

They are slowing because we're going down. They are dependent upon the American consumer, who now has less money to buy their stuff.

It's 1937 redux. The only question is a soft landing or a hard one.; 9/22/11, 6:37 PM
Psychedelic George said...: Gold is going to bottom out soon.

Do a little research on the Dow/Gold Ratio. In 1979-80, it briefly went nearly to 1:1. In other words, the Dow fell to about 850, and gold touched around $850/ounce.

Briefly, mind you, at the peak of economic/global weirdness surrounding Carter's lack of leadership, high US interest rates, the Iraq invasion of Iran, and the Iranian revolution.

In 2000, the ratio stood at about 40:1. In other words, it took 40 ounces of gold to "buy" where the DJIA stood.

Today? The ratio is about 6:1.

We will see at some point in the near future something similar happen again. It might be Dow 6,000, gold $6,000 or Dow 4,000, gold $4,000. People will think it's the end of the world. But it won't be. It will just be an opportunity to sell gold.

Is gold in a bubble? It won't be in a bubble until magazines like Real Simple, the magazine for tidy mommies, tout gold as an investment. Check out page 230 of the October 2011 issue which tells readers "Don't be caught up int he gold rush." Why? Because gold is like commodities such as cotton. Problem with the comparison is that people have not historically used cotton as money. And when people get afraid, they go to gold.

This message has been brought to you by the American Gold Council. Keep gleaming, America.; 9/22/11, 6:37 PM
rhhardin said...: Hoard chocolate.

Be careful that you don't resort to cannibalism too soon.; 9/22/11, 6:40 PM
Carol_Herman said...: You just figured this out?

The retail customers left the marketplace back in 2008. They havena't come back in!

And, real estate is also NOT selling. Bankers have been trying to steal money. (Trillions fell into their pockets.)

While in Europe the EURO is about to go kaput. DEAD. Or dead-beat. Take your pick.

Which is one of the reasons there's such a dumping going on right now.

It doesn't affect the retail customers.

(It's also what I said awhile back. Obama is just staying out of the debris path.) He's dithered. He's not involved.

He can be re-elected.

Tony Blair? Bill Clinton?

Whose gonna invite them to the A-list parties? (The "A-List" just took a crap. And, is finally going underwater.)

You want a better name? Call it THE TITANIC. (The ship built that promised it wouldn't sink.)

It got sunk.

Meanwhile, up ahead, Myrle Streep will win an Oscar for her portrayal of Margaret Thatcher. In IRON LADY.

I hope those who've been on top at the BCC ... and London's Financial Times. Are forced to eat raw sewage.; 9/22/11, 6:40 PM
Carol_Herman said...: Bad times make for interesting stories.

Watch for Michael Lewis' BOOMERANG. Out on October 3rd.

And, over in England, GUILTY MEN will be published. Written by Peter Osborne. (Odd, Amazon hasn't listed it, yet. They try to hide stuff that blesses conservatives.)

Real conservatives.; 9/22/11, 6:42 PM
Ignorance is Bliss said...: rhhardin said...

Be careful that you don't resort to cannibalism too soon.

I managed to hold off until last week. I'm kinda proud of that.; 9/22/11, 6:53 PM
Fred4Pres said...: I have held off eating human flesh too.

But a couple of cats and dogs have gone missing in the neighborhood.; 9/22/11, 6:59 PM
ricpic said...: Until the world is wrested from the hands of committed statists there is no way to wring the poison of control freakery out of the economic sphere, so that mistakes and those who have made them are punished by the market mechanisms, which left to themselves would create a short severe downturn and then the return to health.; 9/22/11, 7:00 PM
chuck said...: Canned goods and barter items are always useful too.

Cigarettes were the unofficial currency of Germany immediately after WWII ended.; 9/22/11, 7:48 PM
Conserve Liberty said...: Actually, the dollar rose in gold terms, not the other way around.; 9/22/11, 9:34 PM
Wince said...: The hedge position I opened this year using VIX volatility ETNs has, so far, worked.

My VIX hedge gain Thursday was twice my long position loss.

That hedge now puts me at highes for the year.

While the hedge trade has provided great peace of mind through the turbulence, the hard part now is knowing when to step off, admittedly to maximize speculative gains greedily outside the simple hedge strategy, which creates its own anxiety.; 9/23/11, 12:44 AM
sorepaw said...: The current selloff has all the marks of extreme panic.

People who are panicking do things that don't form a consistent pattern...

If the dollar continues to tank, investors won't keep selling everything else off, including gold and silver, and buying US Treasuries.; 9/23/11, 10:58 AM
X said...: Paul Rudd: You know how I know the DOW is down?

Seth Rogan: How?

Paul Rudd: Because garage isn't posting DOW updates.; 9/23/11, 12:34 PM