Tuesday September 16, 2008

S&P 500 sinks most since 9/11, Dow Jones drops 504.48 points on financial system meltdown

bloomberg.com :

US stocks tumbled, pushing the S&P 500 to the steepest drop since 9/11, as Lehman Brothers bankruptcy and declining commodities increased speculation that credit-market losses and the economic slowdown will worsen. Stocks erased more than $600 billion in value as AIG sank 61% and Washington Mutual decreased 27%. AIG may need to raise $20 billion to ease a cash crunch brought on by the collapse of US mortgage markets. Bank of America retreated 21% after agreeing to purchase Merrill Lynch for $50 billion. Lehman Brothers was forced into bankruptcy and sank 94% to 21 cents after Barclays and Bank of America abandoned takeover talks. Citigroup declined 15% to $15.24.

The S&P 500 declined 59 points, or 4.7%, to 1,192.70, the lowest level since October 2005. The Dow Jones Industrial Average tumbled 504.48, or 4.4%, to 10,917.51. The S&P 500 has fallen 23% since an October record as bank losses from the first nationwide decline in US home values since the Great Depression reached $514.6 billion. Concern the US is heading for a recession pushed oil lower, prompting a drop in energy stocks, and sent General Electric down 8%.

- This is no longer just a stock market meltdown, or a commodities correction. This is a financial system meltdown. A wholesale meltdown of the financial system is about the only thing that can propel gold higher while everything else is in freefall. This is the situation we are in right now. If the US government still continues to be reluctant to turn on the liquidity taps, they can watch the financial system collapse around them. One would suppose that it would not be a very good policy for an election year. Already, speculation is building for a Fed rate cut, but it would take much more than that to avert a total system collapse.

See also :

1. Fannie, Freddie too big to fail, else a trillion dollar meltdown
2. NYMEX crude oil falls $10 on deep recession fears amidst stock market meltdown

(2008-09-16 08:31:36 SGT) [Biz] Permalink

Most popular blog postings on lowem.log :

1. 2010 Nissan Leaf electric car specifications : 107hp, 24KWh lithium-ion batteries, 100-mile range
2. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
3. 2010 Honda Civic Hybrid preliminary specifications released
4. Singapore SIBOR rate falls to 0.69% in Jan 2009, lowest since Apr 2004
5. How to insert currency exchange rates into Google Spreadsheets
6. Singapore : Nuclear power not ruled out
7. Live spot gold price quotes chart on COMEX
8. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option

Featured articles on lowem.log :

1. 2010 Honda Civic Hybrid preliminary specifications released
2. 2010 Honda CR-Z hybrid, 2010 Honda Fit/Jazz hybrid models confirmed
3. 2010 Toyota Prius specifications released : 50 mpg, 1.8L, 134hp, Ni-MH, solar roof option
4. Honda, GS Yuasa JV to make lithium-ion batteries for 2010/2011 Honda Civic Hybrid
5. New efficient nanotech materials may boost enhanced geothermal power systems
6. NYMEX crude oil recovers from $32.40 low after 2.2 mbpd OPEC production cut announced
7. Singapore property market recovery seen as private home sales surge 52% in Jul 2009
8. Singapore SIBOR rate falls to 0.69% in Jan 2009, lowest since Apr 2004