ALMOST ARMAGEDDON: Markets were 500 trades from a meltdown

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Submitted by SD Transplant on September 21, 2008 - 1:14pm

This is an interesting isight of what could have transpired given NO BAILOUT intervention:

"The market was 500 trades away from Armageddon on Thursday, traders inside two large custodial banks tell The Post.

Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level - a 22 percent decline! - while the clang of the opening bell was still echoing around the cavernous exchange floor.

According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning. "

http://www.nypost.com/seven/09212008/bus...

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The Dow is likely to go to
Submitted by CA renter on September 21, 2008 - 3:53pm.

The Dow is likely to go to the 6,000-8,000 range even if they do bail everyone out, IMHO. These levels were absolutely expected by the long-time bears (with some expecting an even lower number).

Let's imagine they let it go, then what??? The monetary system would shrink, housing prices would drop, stocks would drop and credit would become hard to get. Doesn't sound so terrible to me. At least then, those with money would be able to step in and put a floor under everything (there is still a LOT of money out there). With the bailouts, the period of rising unemployment, falling stock and housing prices, social disorder, etc. will be prolonged...not avoided.

Let's get this over with already!

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Submitted by naive on September 22, 2008 - 1:51pm.

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