What cause stocks to drip on July 26? Where did the globe start rolling?
Was it a foreign investor or a rich person beside deep pockets manipulate the markets contained by many different places at one time? Was it a main investment firm doing same? Or was within a company that was falling from poor subprime mortgages that lead the fall? Is nearby a way to find out what lead the spin? Can we simply follow volume numbers and see where that lead? Should the SEC investigate?
Definitely the housing numbers and the fear of a credit crunch. As you probably know it isn't traditional souk indicators like low interest rates that are driving stock prices difficult but rather the worldwide expansion of the money supply.
The reality the market unseen fairly upbeat information the following daylight has me tremendously concerned that the sentiment now have changed. I think the marketplace needs to really capitulate for a buying opportunity.
The end time money was seriously pulled out of the system is when the Y2K alarm ended up to be a nonevent and you know what happen to the market next.
What exactly is a closed-end administration investment...
A couple things be the main catalysts of the trickle on the 26th. Fallout from the subprime mortgage fiasco was defintely one of them. Another be that a lot of the companies from the S&P 500 reported proceeds this week, with tons of them underperforming wall street's expectations. Housing was another program, as clean home sales fell close to 4%.
My guard pays almost no interest...
Answers:
The housing sector problems have be around for awhile. The subprime problems have be around for awhile. The dollar has be falling vs. other currencies, including the yen, for awhile. The market have been chitchat about, but otherwise ignore those very existing issues for months and continuing to rise.
Here's my theory on why and what have now changed. I feel the private equity buyout boom and continuing availability of relatively easy credit (for businesses) is the root the market continued to rise. Pretty much every Monday, and sometimes other days, there'd be a couple more companies next to buyout offers. Sometimes immense companies. People started to expect that and were thinking that adjectives but the biggest companies could potentially be taken private at a premium. I think a enduring amount of premium was added to the flea market because of this.
What happened a few days ago is some corporate deal (e.g. Chrysler) started to be altered or canceled due to unavailability of credit at favorable terms. Suddenly, family started seeing that corporate credit is tightening. Worries about a credit crunch started surfacing. That probably technique the buyout boom is ending and adjectives corporate profits could be hurt by the tightening credit.
With that rug pulled out from under us, the "M&A" premium surrounded by the market started to disappear. With the open market no longer in an apparently never finish rise, people started paying more attention to the other problems that enjoy been around for awhile but without being seen. The rose-colored glasses are past its sell-by date and the market is starting to have visions the way they really are.
As for the ultimate question, the SEC does not stipulation to investigate. Irrational exuberance and irrational pessimism have be a part of the flea market forever. It's not an orchestrated undertaking. It's just human quality to go to heartfelt extremes and to focus so much on today and tomorrow that you don't think much around the long term.
What happen now? I presume we have a bit of a bounce soon, later drop more over the next few months...probably going too far within the negative direction. Then a seizure will begin and the souk will continue fluctuating up and down, sometimes dramatically, near an overall upward slope of about 10-11% per year - close to it's done for decades. When the pessimism gets extreme, I'll be buying for the subsequent wave up.
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