Naaaaaa... It wouldn't happen to have anything to do with technical levels being broken and margin calls hitting various commodity funds ( and one fund in particular that appears to be "swirling" the drain ). That wouldn't be it at all - - - especially here on ET where no one has any clue about "technicals".
That's the problem with guys like you, you think that everything falls under the same set of circumstances, and that it is all textbook. Lets just prescribe a strong antibiotic, that should clear things up! Unless of course it is a nasty virus, which this is. And yes, I am well aware of banks being helped out as you say, (bailed out in my view). In case you were not aware of it, what is happening is the result of your so called "capital formation". Go take Economics 201, you never advanced beyond first aid.
Do you mean Karl Marx econ 101A? so are we in socialism state or moved directly to communism? Although I'm not sure even Marx was advocating to destroy economy through inflation and excessive credit to help some greedy bastards if banks needed help - all their assets must seized, banks must be nationalized and then after privatized to new owners All previous management must be jailed this is the solution - not destroying the economy through rate cuts
Technical levels get breached and broken every single day in something, the fact that all commodities are breaking down hard in unison today on heavy volume is a little more than a broken technical. I have heard about the fund as well, they are not liquidating on a technical breach, they are getting decapitated on loss of capital. You really think they are selling on a mere tech violation?? HAHAHAHA!!!!! I have used technicals for 12 years, and although I find them a useful tool, I have also learned they are not the holy grail. Most technicians such as yourself verify why a move stopped at a level, therefor you have just confirmed something that has already happened. It is far more difficult to predict the future and have it verify. I have seen your technical predictions on this board, they are 50/50.
Commodities always get routed when the US enters a recession. They peak midway into a recession. Naturally, you will here the pundits who say that this time its different. They are concluding that a paradigm shift has taken place citing China, India. You are better off listening to the wise words of Sir John Templeton. "The most expensive words are : 'THIS TIME ITS DIFFERENT' Also do you even look at the valuation of some of these commodity companies. Valuation drives the stock not the chart. Look at Potash its price to book is close to 9. That translates to 900% premium of it reported book value. Yet, 5 -6 years ago they were selling at book value. Funny thing is that they sell fertilizer (isn't that more or less maneur?) and are promoted as high growth companies via CNBC and the other ass clowns. http://www.bmonesbittburns.com/economics/focus/20060721/feature.pdf
Sometimes the most expensive words are 'This time is not different, this is a buying opportunity', just a few days ago Bill Miller was pumping financials because they are cheaper 'than they were in 87'. This sort of 'I will march forward' blind approach might have worked in the last 25 years but when it finnaly WAS different he got destroyed and now lags the S&P by miles.
Edit: I read that quickly as "Value" is lurking. So, please forgive me. In any case I'm going to keep the orginal post here, but with the note that Its not a direct reply to you. Good luck with that. You do realize the devistation that past bear markets have produced? In case you don't I'll provide you two quick examples. The pretty charts that brokers show you never factor in inflation, so they can show you oh the dow always goes up...for the fun of it lets pretend that real people are effected in real ways by inflation and see what happens to our money when that is taken into account. First of all over the last 10 years buy and hold has produced a return of about 1.2% year over year. This does not take inflation into account. Keep buying! Between the mid 60's and the 80s a long term approach to the market (blue chips) also sucked you dry. If you look at the Dow Industrials in constant dollar terms then the secular bear market that started in the 60's saw the Dow peak around 3100. By 1981 it have fallen to around 850, for a wonderful return of around negative 70%. It was not until 1995 that the very patient were made whole again, 30 years of shit. If you have the talent for finding value then more power to you, you will do well. However, if you think value is created simply because the market is down and it "always" comes back up your an idiot and should just go spend your money in vegas at the casinos on craps and whores, you will at least enjoy it and have a chance of actually coming out ahead.
IS IT REALLY DIFFERENT? WHAT ARE YOU BASING YOUR ASSUMPTION. DID YOU EVEN LOOK AT HAS HAPPENED IN THE LAST 25 YEARS? IF YOU GO BACK TO 1974 THE FINANCIALS DROPPED 50%. IF YOU GO TO 1990 THE FINANCIALS DROPPED 48%. ALSO, THE DATA BELOW IS THE CLOSING MONTHLY AVERAGE IT DOES NOT INCLUDE THE LOW POINTS DURING THE MONT. PRESENTLY THE XLF AT ITS LOW POINT IS DOWN 55%. IS IT REALLY THAT DIFFERENT FROM HAS HAPPENED IN THE PAST? A GOOD TRADER IS A PERSON WHO MAKES STATEMENTS BASED ON FACT NOT FICTION. 1969 Feb Peak 94.50 1970 May Trough 70.75 25% 1972 May Peak 118.2 1974 Sept Trough 58.99 50% 1978 Jan Peak 114.2 1980 Mar Trough 87.67 23% 1981 June Peak 127.7 1982 July Trough 81.10 37% 1983 May Peak 122.9 1984 July Trough 80.23 35% 1986 June Peak 121.9 1987 Dec Trough 83.17 31% 1989 Oct Peak 132.5 1990 Oct Trough 69.11 48%
The interest rates will remain the same. Period. But since there are a lot of idiots in this world, the Fed will give them some WORDS so that they guess the wrong direction again (after wrong guessing what will happen tomorrow as evidenced in some posts in this thread). Fed spends WORDS, idiots spend MONEY.