New York – Stocks slumped Monday, with the Dow falling to its lowest point in nearly 12 years after insurance company American International Group’s massive quarterly loss battered the financial sector.
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The Dow Jones industrial average (INDU) lost 300 points, or 4.25%, at 6,762 its lowest trading level since April 28, 1997.
The stock losses Monday were in response to AIG, but also a continuation of the worries about the financial sector and the economy, said Bill Stone, chief investment strategist at PNC Financial Services.
“There are reverberations from AIG and also the continued uncertainty around the financial sector as a whole, which is the chorus that never ends,” he said.
“That’s paired with the second chorus that never ends – the weakness of the global economy,” he said. “It’s reflected in the weakness in the industrial, material and energy stocks today.”
AIG: AIG reported a $62 billion fourth-quarter loss, the largest in U.S. corporate history, on turmoil in the credit markets and massive restructuring costs. For the full year, AIG lost $99 billion after reporting a profit of $9.3 billion in 2007.
To keep the company from collapsing and infecting the broader financial market, the government is revising its bailout for the third time and committing another $30 billion in exchange for cumulative preferred stock. The rescue plan now totals $162.5 billion.
Stocks tumbled Friday after the government said it will control as much as 36% of Citigroup’s common stock. Also in play: a report showing the economy shrank at its sharpest pace in 26 years in the fourth quarter of 2008.
Buffett: Adding to the weakness was billionaire investor Warren Buffett’s annual chairman’s letter, in which he talked about the tough 2008 his Berkshire Hathaway company experienced. The influential investor admitted that he “did some dumb things in investments” during the year.
I guess now people will have to start working to make money.
Rachmuna lenitzlan. May it all be over very soon.Teezo
Now here come all the uniformed commentors yapping about how this is obamas fault
i guess buffet wants to die with the same amount of money he had when he was born and like this break another world record .
no one says its obama.. they are blaming bush… still… nevertheless – the economy is spiraling down and out of control. Any advice where to park some money ? certainly not in the bank… stocks… treasuries… real estate – what else is there ? under the mattress >?
Just 3 years ago, everyone was running into real estate and we know how that turned
out. Everyone was funding their retirement accts and spending the money now because their nestegg and house values were growing.
Now we have the opposite -irrational fear on the downside. AIG , Citibank are peeny stks for many years to come.. Investing in AAA corporate 3-5 year bonds, buying debt foreclosed sale issues offered on DEBTX (which u thoroughly check all the details!!!!!!!!!!!!) and only companies with 5-8 years of CASH like IBM, MICROSOFT,
and CISCO are examples. Buying the large lost banks and junk will yeild only tzuris!!
We are in a new ERA and as the mkt breaks here also buy TIP (etf of inflation bonds on AMEX) when rates sart to move up with inflation . Mostly let us daven for Hashems gelp for all those poor , unemployed and lost their money.
This makes me so mad!! How come Bush hasnt done anything about this yet????? Where is he anyway?
Its crystal clear to all that the obama polices are the cause to the tanking markets! All those who disagree please prove otherwise!
of course its bush’s fault! where has he been in all this? we haven’t heard from him in weeks!!! c’mon mr bush do something already!! don’t hide.
When will it get into Obama’s head that fixing the economy starts by creating an environment where people and companies who have money will want to invest it. When you run a sale event, you try to give a cuopon or some incentive to customers who have the ability to buy more than the cuopon is worth. By creating a stimulus package to cater tpo the poor, they will only spend what you give them, so what did you gain.
The Dow was about 13,000 in May 2008, up from 7,000 post 9-11. So all those who say Bush caused this is just listening to the Obama rhetoric that everything is “inherited”. The past is already factored into the market as it is pure speculation, confidence and looking at the future that drives the market. May 2008 was the time when it became clear that Obama would win the nomination and the Dow has gone down 50% since then. There is no better way to crush investment than raising the capital gains tax. The market has been fearful of this and other Obama radical policies and is repudiating those policies. Furthermore companies are (rightfully) fearful that their tax rate will go up – what better way to kill jobs than making companies pay millions more in taxes. When the budget gets cut in these companies, jobs are the first to go. Obama is an amateur with no real world experience who makes his economic policies based on ideology and not proven economics.
btw by berkshire only making north of 100 million in the forth qt who is the richest who are going to pay the increase in taxes ?
can the djia go back to 1000
So here is what we get from Obama. He is going to distribute the wealth by taxing the rich to give the poor. The problem is that he won’t have any rich people to tax soon. They are all losing their pants in the stock market.
The stk mkt is a leading indicator….. Pres. Obama’s taxing those with over $250,000 has a number of fallacies. 1. 25% of those live in NY the other 25% are in California. His revenue figures fail to take into account the Broch of all those who have lost and still losing high paying and he will end with egg on his face . He should cut corpoate tax rates- lower all mgtge rates to 4 1/4% -4 1/2 for ALL Americans and hold off on the tax increase for 2 years.. 60% of all tax is paid by 1% of the populATION AND THEY ARE HURTING AND DROPPING LIKE FLIES.
The mkt will soon bottom as prices reach panic and irrational fear as we had irrational exuberance 2 years ago.
yippe yay wow love the change O man is bringing what happened I thought all will be better?
that’s how you look when you elect a pres. who has no expirience what so ever & surounds himself with people who’re real left wingers communists etc. IT’S TIME “NOW” TO BEGIN IMPEACHING PROCEDURES THE SOONER THE BETTER
just wondering : how low can this dow really go , would it be possible for us to wittness a dow 2000 or 1000 . is there anything at all to stop this downward spiral at some point ?
The word doomed means nothing…. The whole macro economy was run on credit and speculation, like a casino! How many malls are really necessary in the age of the internet? I rarely visit stores anymore myself. The banks were playing around with fake wealth, and now everything is deflating back to where it should be as a true economy. Guess what? The Zionists are in big trouble now. How can they expect so much gelt from the US taxpayer for arms and support under such circumstances? Who’s going to pay for Israel’s wars? Where is the money going to come from to keep it afloat? Have any of you been reading Zionist news? The whole Zionist economy is IMPLODING and Fischer and company can’t do a thing about it!
Mark my words! When Obama won’t be able to tax people or companies who made profit, as there won’t be much, he’ll start taxing anybody who even owns assets. Very similar to Real Estate and Estate taxes. They’ll start putting a limit on how much a person is allowed to need in a lifetime, and the rest should be available for the democrats to grab and distribute.
From jpost.com:
In an indication of the worsening economic situation, 19,800 Israelis claimed unemployment benefits from the National Insurance Institute in February, a 59-percent hike compared to February 2008.
NII Director-General Esther Dominissini said Monday that the unemployment rate might reach 7.5% by the middle of 2009.
In the first two days of March, 3,100 people lost their jobs, Channel 2 reported on Monday evening.
Reflecting much of the public’s deteriorating outlook on the employment situation, the employment index compiled by the ORS human resources company found that the demand for workers dropped by 9.2% in February compared with the previous month, and by 19% compared with the same month last year. The index showed that in February, three job seekers on average fought for each available position.
World stock markets tumbled Monday, with the Dow slumping below 7,000 for the first time in over 11 years after insurer American International Group Inc. reported a staggering $61.7 billion quarterly loss and stoked renewed concerns about the health of the US financial system.
It was the biggest quarterly loss in US corporate history.
Let’s face facts. Money does exist and some have it. The key to fix the economy is to get them to spend it and keep business going and people employed. Obama is doing the exact opposite. He makes us scared of the future and unlimited taxing, so people WHO HAVE! Yes thet’re the most important here as they can spend and fix the economy, are now hoarding their money because Obama’s tactics is scaring them, instead of encouraging investment!
Time to use your brains, start planting fruit and vegtables, keep a supply of non perishable foods, keep bottled water, first aid kit etc.. no one has any seichel these days and rely solely on the gubmint!
#29,
A market crash would wipe away trllions, bankrupt most company’s, put hundreds of thousands out of jobs and have your dollar worth zilch!
Your a sad sick socialist, btw it was morgan that saved the US economy in the 1880’s not sure what year to be exact when he advanced the gold.
If big business is evil, stop buying anything from them!
Social security is the #1 fraud.. we pay taxes everywhere we turn.. fraud fraud fraud.
Its treason! Its excessive taxtation.. and frankly WE THE PEOPLE are sick of it.. billions in pork.. http://www.stimuluswatch.org/project/by_state…
I have counted over 25 billion in FRAUD on that list in the greater miami area alone.. heres one example:
Citywide Street Resurfacing – mill and resurface all City streets Miami FL 3500 $175,000,000 Streets/Roads -21
Port of Miami Tunnel Miami FL 2000 $100,000,000 Streets/Roads -15
Coconut Grove Roadway Improvements (Master Plan), Drainage and Road Improvements Miami FL 1000 $50,000,000 Streets/Roads -4
Citywide Drainage Improvements Miami FL 1000 $50,000,000 Streets/Roads 4
Citywide Storm Sewer System De-silting – remove granular material from manholes, inlets, cross-drains, French drains and slab-covered trenches. Miami FL 900 $45,000,000 Streets/Roads -6
Downtown Infrastructure and Beautification – install lighting, replace sidewalk, add ADA, repave, landscaping Miami FL 600 $30,000,000 Streets/Roads -11
Overtown Greenway Phase II Miami FL 600 $30,000,000 Streets/Roads -6
Health District Roadway Improvements and Streetscapes Miami FL 500 $25,000,000 Streets/Roads -6
Health District Streetscape & Roadway Improvements Miami FL 400 $20,000,000 Streets/Roads -9
Overtown Greenway Phase 2 Miami FL 400 $20,000,000 Streets/Roads -12
Overtown is one of the most crime plagued areas in the country.. pumping BILLIONS in will accomplish NOTHING!!!
This one just about says it all:
Exterior painting of 105 public housing developments.Miami-DadeFL50$9,296,100
9 million dollars when there are people starving ??????/
Let me add a few more comments to the taxation issue.
When Obama will start taxing anyone who has even if they earned it years before, they’ll say it’s because he must have made it off the poor man’s back, otherwise why does he have more than others.
You see, once you believe that government has the right to tax (not for things the country needs as a whole, but) to restribute wealth, it has no end. It means as long as you have more, the government has a right to take it.
You also have to realize that this will never work. This is a ploy by politicians to line their pockets and perpetuate their postions by buying votes with your money. There will always be more people who have less than people who have more.
Once he digs such a large debt hole, even republicans after him won’t be able to dig out without raising taxes.
Also between Federal, State, City, Soc Security, Sales Tax, Real Estate Taxes, Gas Taxes, Estate Tax, & many more I missed, people pay 75-80% in taxes. Seems like it’s not enough!
#42 ,
Theres business tax, air travel tax, high way tax i.e, tolls, taxes on alcohol, cigarettes, death, birth, marriage, education.. and soon there will be a tax for breathing!!
And for this we work 12 hours a day.
Federal tax is a scam, they interpret “the welfare of the state” as to mean that they have a constitutional mandate to tax so they can give out welfare checks whoopiedoo!
Truth is, the constitution is 99,9999 more clear regarding congress and the president’s ability to levy taxes to fund a army, as opposed to social benefits program..
Of course liberals dont actually care WHAT the constitution means..
You know, ive heard / read dozens of places of dozens of big rebbe’s and roshey yeshiva calling america “malchus shel chesed”
Not because the government gives out free money, but because you can live free.
Even the torah does not allow us to give more than a 5th! Yet the federal government takes over a 3rd!!
Sorry guys, if you think this is gonna go over smooth you are in dreamland.. mainstream america is MAD..
If the economy is so bad why is the US giving 900 million to the Palestinians in Gaza who are still firing rockets into Israel?
Understand how the Dow works before worrying about it. The DJIA is the sum of the stock prices of the 30 components, divided by a number that takes into account stock splits and dividends over the years. That number is currently 0.125552709, so every $1 move in a Dow stock price becomes almost an eight point move in the Dow.
What the Dow average doesn’t take into account is the stock’s volatility, or sensitivity to the rest of the market (e.g. beta, for the financial chachems). The Dow is heavily weighted toward companies that aren’t going anywhere, like IBM, Pfizer, Wal-Mart and Coca-Cola.
The Dow is just one part of the financial picture – look at the S&P 500 or the Wilshire 5000 if you want to see a broader picture, but as anyone who took first year statistics can tell you, all these are measures of central tendency, and don’t tell you how skewed things are.
#47 ,
L’maaseh, I have bh a consumer electronic business, I can tell you that the sales of blackberry’s to US consumers has dropped over 75%. Now about 65% of my site blackberry sales go to buyers from south america.
Moreover, I have seen a upward spike of my refurbished electronic computer goods.
I have seen a downward spike of availability in terms of refurbished items available from mnfctr’s like Logitech and Netgear which is a proven scale that theres a drop in retail purchases hence low returns hence limited refurbished.
I have been in business bh for over 5 years, the market is bleak.. theres no spending.. and its not about consumer ends.. I have corporations that used to buy 50 blackberry’s now buy 0.