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Decoupling days are coming ahead.........

IFCI

Posted by : sambala
Price when posted : BSE: Rs 32.65 ( -0.15 % ), NSE: Rs. 32.60 ( -0.15 % )

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``All the talk of bailouts for these big financial companies take the front page on all the papers, but the impact of the economic crisis on individuals is sometimes overlooked. This is a sad and tragic reminder of how quickly people can spiral into a horrible place,`` one blogger lamented.

Neighbours said the Rajarams were a quiet, decent family who pretty much kept to themselves and did not socialize much. The eldest son Krishna, a Fulbright scholar majoring in business economics at his father’s alma mater UCLA, appeared to be visiting home at the time of the incident.

Local school authorities said the two younger kids were also extremely bright and the parents had been very much involved in their education. The family did not appear to be particularly troubled, although some neighbors told reporters that Rajaram was pretty intense.

According to the police, there was no evidence that Rajaram had sought help from mental health professionals. However, the context of the letters and the fact Rajaram had purchased the handgun as recently as September 16 indicated that his actions were ``premeditated,`` they said.

``He had become despondent over his financial situation,`` Deputy Chief Moore related. In one of his letters, he talked of two options: taking his own life or taking his own life and that of his family. ``He talked himself into the second strategy,`` Moore said.

One of the neighbours reported that Rajaram had spoken to her twice in the last two weeks asking whether she would be home this past weekend. He urged her to keep her side windows shut because he had heard of burglaries in the area. He seemed nervous -- shaking, pacing and taking notes on a notepad as he spoke to her, she told the LA Times.

She surmised after the bloody massacre that he was trying to have her close her windows so that she wouldn`t hear anything.

Apparently, no one did, because it was not until Monday when another neighbour rang the Rajarams` bell to remind Subasri, who worked at a local pharmacy, about the carpool ride did the tragic incident come to light. ...

In reply to:

Decoupling days are coming ahead.........

Posted by : sambala

Death of the American Dream: Indian kills family of five, self in LA
7 Oct 2008, 1909 hrs IST, CHIDANAND RAJGHATTA,TNN

WASHINGTON: Multiple gunshots echoed in the upscale home of an Indian family in a quiet, gated, suburban Los Angeles community last weekend, echoing the troubled times in America.

When police turned up on Monday morning after calls from a concerned neighbour waiting for a carpool ride, they found the body of 45-year old Karthik Rajaram, an unemployed financial advisor, lying in one room with a handgun he had used to shoot himself dead.

With him lay his two youngest sons Arjuna (7) and Ganesha (12), both shot dead. In different rooms across the house they found the bodies of Karthik’s wife Subasri (39), his mother-in-law Indra Ramasesham (69), and his eldest son Krishna (19). They all appeared to have been shot to death by Karthik Rajaram.

Police also found two suicide notes – one for the cops and one for extended family and friends -- and a will. In them, Rajaram he spoke of his financial difficulties and took responsibility for killing his family members, police said.

Police did not elaborate on the contents except to suggest that Rajaram appeared to be in dire financial straits.

``This is a perfect American family behind me that has absolutely been destroyed,`` LAPD Deputy Chief Michel Moore told reporters. ``It is critical to step up and recognize we are in some pretty troubled times.``

Rajaram had an MBA in finance from University of California Los Angeles (UCLA), and formerly worked for PriceWaterhouseCoopers and Sony Pictures. But he had been unemployed for several months, according to local media reports citing authorities.

Investigators also determined that he was at least the part-owner of a financial holding company, SKGL LLC, which was incorporated in Nevada, ostensibly to hold his family assets.

The family appears to have been well-off at one time. According to the Los Angeles Times, they sold their home in Northridge in 2006 for $750,000, making a sizeable profit on a home they purchased in 1997 for $274,000. They had also taken out two loans for $241,400.

Rajaram once made more than $1.2 million in a London-based venture fund before he ran out of luck playing the stock market, reports said. A 2001 article in The Daily Telegraph of London, under the headline ``Bust, but big bucks for the big boys,`` called Rajaram a ``winner`` in a deal for NanoUniverse, a LA- and London-based venture fund taken public on the London Stock Exchange. For a 12,500-pound investment, Rajaram, one of the company`s founders, received 875,000 pounds -- or about $1.2 million in 2001 dollars -- after a voluntary liquidation, the newspaper reported.

Although the family rented their current 2800-sq foot home, they lived a typical upper class life. They had two cars, a Chevy Suburban and a Lexus SUV and they reportedly paid their rent on time.

The incident sent shock waves through the neighbourhood, the larger Indian community and American financial world on a day the monetary world saw yet another bloodbath. Indians are widely known and recognized as the most successful ethnic community in the U.S with the highest per capita income among all segments of the population, including Whites.

But the country is now starting to hear of many hard luck stories, including among Indians, although nothing like this. And not in the City of Angels, far removed from the frenzied financial world of New York.

It wasn’t immediately clear if Rajaram’s extreme action stemmed from the ongoing economic turmoil, but even the police, unusually, referred to the troubled times. And as the story burnt the wires, the online community debated the incident heatedly.



Cont.....

Decoupling days are coming ahead.........

IFCI

Posted by : sambala
Price when posted : BSE: Rs 32.65 ( -0.15 % ), NSE: Rs. 32.60 ( -0.15 % )

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Death of the American Dream: Indian kills family of five, self in LA
7 Oct 2008, 1909 hrs IST, CHIDANAND RAJGHATTA,TNN

WASHINGTON: Multiple gunshots echoed in the upscale home of an Indian family in a quiet, gated, suburban Los Angeles community last weekend, echoing the troubled times in America.

When police turned up on Monday morning after calls from a concerned neighbour waiting for a carpool ride, they found the body of 45-year old Karthik Rajaram, an unemployed financial advisor, lying in one room with a handgun he had used to shoot himself dead.

With him lay his two youngest sons Arjuna (7) and Ganesha (12), both shot dead. In different rooms across the house they found the bodies of Karthik’s wife Subasri (39), his mother-in-law Indra Ramasesham (69), and his eldest son Krishna (19). They all appeared to have been shot to death by Karthik Rajaram.

Police also found two suicide notes – one for the cops and one for extended family and friends -- and a will. In them, Rajaram he spoke of his financial difficulties and took responsibility for killing his family members, police said.

Police did not elaborate on the contents except to suggest that Rajaram appeared to be in dire financial straits.

``This is a perfect American family behind me that has absolutely been destroyed,`` LAPD Deputy Chief Michel Moore told reporters. ``It is critical to step up and recognize we are in some pretty troubled times.``

Rajaram had an MBA in finance from University of California Los Angeles (UCLA), and formerly worked for PriceWaterhouseCoopers and Sony Pictures. But he had been unemployed for several months, according to local media reports citing authorities.

Investigators also determined that he was at least the part-owner of a financial holding company, SKGL LLC, which was incorporated in Nevada, ostensibly to hold his family assets.

The family appears to have been well-off at one time. According to the Los Angeles Times, they sold their home in Northridge in 2006 for $750,000, making a sizeable profit on a home they purchased in 1997 for $274,000. They had also taken out two loans for $241,400.

Rajaram once made more than $1.2 million in a London-based venture fund before he ran out of luck playing the stock market, reports said. A 2001 article in The Daily Telegraph of London, under the headline ``Bust, but big bucks for the big boys,`` called Rajaram a ``winner`` in a deal for NanoUniverse, a LA- and London-based venture fund taken public on the London Stock Exchange. For a 12,500-pound investment, Rajaram, one of the company`s founders, received 875,000 pounds -- or about $1.2 million in 2001 dollars -- after a voluntary liquidation, the newspaper reported.

Although the family rented their current 2800-sq foot home, they lived a typical upper class life. They had two cars, a Chevy Suburban and a Lexus SUV and they reportedly paid their rent on time.

The incident sent shock waves through the neighbourhood, the larger Indian community and American financial world on a day the monetary world saw yet another bloodbath. Indians are widely known and recognized as the most successful ethnic community in the U.S with the highest per capita income among all segments of the population, including Whites.

But the country is now starting to hear of many hard luck stories, including among Indians, although nothing like this. And not in the City of Angels, far removed from the frenzied financial world of New York.

It wasn’t immediately clear if Rajaram’s extreme action stemmed from the ongoing economic turmoil, but even the police, unusually, referred to the troubled times. And as the story burnt the wires, the online community debated the incident heatedly.



Cont........

In reply to:

Decoupling days are coming ahead.........

Posted by : sambala

US economy crisis: Indian kills self, family in LA

Tuesday, October 7 2008 13:26(IST)

Los Angeles, Oct 7: Hit hard by the US financial crisis and unemployment an Indian killed his mother-in-law, his wife and three sons and then killed himself inside a home in an upscale San Fernando Valley neighborhood, police said. Authorities said the man had an MBA in finance but appeared to have been unemployed for several months and had worked for major accounting firms, such as Price Waterhouse, police said.

The two-story rented home is in a gated community in Porter Ranch, about 20 miles northwest of Los Angeles. Officers found the bodies Monday, Oct 6 morning after the wife failed to show up at a neighbor`s home to go to work, Deputy Chief Michel Moore said. The deaths occurred sometime after Saturday, Oct 4 evening.

Assistant Chief from the Los Angeles County Coroner`s Office, Ed Winter identified the suspect as Karthik Rajaram, 45. He said the victims included Rajaram`s mother-in-law, Indra Ramasesham, 69, and his 19-year-old son Krishna Rajaram, a Fulbright Scholar and honor student at UCLA.

Also dead were Rajaram`s wife, 39, and their two other sons, 12 and 7. Some of the victims had been shot more than once and their identities were not immediately confirmed, he said.

Decoupling days are coming ahead.........

IFCI

Posted by : sambala
Price when posted : BSE: Rs 32.65 ( -0.15 % ), NSE: Rs. 32.60 ( -0.15 % )

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US economy crisis: Indian kills self, family in LA

Tuesday, October 7 2008 13:26(IST)

Los Angeles, Oct 7: Hit hard by the US financial crisis and unemployment an Indian killed his mother-in-law, his wife and three sons and then killed himself inside a home in an upscale San Fernando Valley neighborhood, police said. Authorities said the man had an MBA in finance but appeared to have been unemployed for several months and had worked for major accounting firms, such as Price Waterhouse, police said.

The two-story rented home is in a gated community in Porter Ranch, about 20 miles northwest of Los Angeles. Officers found the bodies Monday, Oct 6 morning after the wife failed to show up at a neighbor`s home to go to work, Deputy Chief Michel Moore said. The deaths occurred sometime after Saturday, Oct 4 evening.

Assistant Chief from the Los Angeles County Coroner`s Office, Ed Winter identified the suspect as Karthik Rajaram, 45. He said the victims included Rajaram`s mother-in-law, Indra Ramasesham, 69, and his 19-year-old son Krishna Rajaram, a Fulbright Scholar and honor student at UCLA.

Also dead were Rajaram`s wife, 39, and their two other sons, 12 and 7. Some of the victims had been shot more than once and their identities were not immediately confirmed, he said.

...

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Decoupling days are coming ahead.........

Posted by : treasureddhan

The fall like dow today, In India we would have heard many brokers attempting to commit suicide. Imagine what the brokers in US would be planning now

Live stock market and run a way fastttt.......

Tata Steel

Posted by : Bhavishyavani
Price when posted : BSE: Rs 357.35 ( 2.03 % ), NSE: Rs. 357.75 ( 2.21 % )

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Live stock market and run a way fastttt

This is my final call to all the small investor just get out immediatly and run away fast from this bubble & Casino stock market...

Live stock market and run a way fastttt...........

Rel Ind Infra

Posted by : Bhavishyavani
Price when posted : BSE: Rs 483.05 ( -4.37 % ), NSE: Rs. 481.10 ( -5.01 % )

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Live stock market and run a way fastttt

This is my final call to all the small investor just get out immediatly and run away fast from this bubble & Casino stock market...

Live stock market and run a way fastttt................

DLF

Posted by : Bhavishyavani
Price when posted : BSE: Rs 302.90 ( 0.41 % ), NSE: Rs. 303.15 ( 0.56 % )

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Live stock market and run a way fastttt

This is my final call to all the small investor just get out immediatly and run away fast from this bubble & Casino stock market...

Countries Can Go Bankrupt Too!

Infosys

Posted by : Bhavishyavani
Price when posted : BSE: Rs 1304.10 ( -1.04 % ), NSE: Rs. 1301.80 ( -1.28 % )

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Countries Can Go Bankrupt Too!

Whilst we ponder the deepening financial crisis where individuals are going bankrupt, corporations are going bankrupt, and lately the biggest banks in the world are going bankrupt. Savers should not forget that countries can also go bankrupt as the Germany of the 1920`s clearly illustrated that was saddled with huge debt burden following the end of World War 1 resulted in hyper-inflation and the systematic destruction of the value of savings as the German government printed money in response to Allied government demands for payment of War reparations, similarly governments now declaring ever larger bailouts and more importantly unlimited savings guarantees that if push comes to shuv would effectively bankrupt the said countries should their bluff ever be called. For the only way such guarantees could be financed would be by printing near unlimited amounts of money which would lead to hyper inflation and a collapse in the value of the currency and hence value of savings and the the whole economy. Therefore bailouts of the kinds that are being proposed are highly dangerous as they could lead to literally an out of control cascading currency collapse and loss of confidence in FIAT currencies which would result in a barter system economy, thus extreme economic deflation along the lines of the 1930`s Great Depression.

In that light, the Irish decision is seen as a highly risky short-term attempt to bolster the collapsing Irish banking system, which would bankrupt Ireland should they have to actually pay out on their promise. However Ireland`s action in part is highly selfish as the country is part of the EURO single currency mechanism and thus creates a huge problem for the other European countries that are witnessing a flight of capital, or mini-runs on their banks in favour of the the Irish banks with 100% guarantees, as all savings fall under the umbrella of the EURO single currency therefore money deposited with Irish banks is effectively collectively insured by all EURO countries in the form currency stability, which under normal conditions market forces would lead to a selling of the currency that is extending its liabilities which obviously is not happening in Irelands case due to the under-writing of Irelands currency by the whole of the EURO block. This will undoubtedly lead to actions amongst other EURO countries or by the European Commission in an attempt to reverse the Irish decision due to the impact on the whole of the European Banking System.

The Irish action is in many ways reminiscent of what followed the great crash during the 1930`s as governments sought to protect themselves by taking actions that destroyed international capital flows and trade. Therefore this could set in motion a chain reaction amongst governments where the net outcome would be to hasten the already trend in motion towards an economic depression as the global credit freeze turns into a credit ice age, especially if the next step is taken where savers suddenly realise that countries could also go bankrupt given the risk under written!

Gordon Brown realising the ramifications of the Irish decision has been calling on the Irish Government to comply with European Union competition law by reversing its decision, however what is likely to happen is that cry`s will go out across Europe to match the Irish guarantee which will meet much resistance from Germany that still bares deep scars from the consequences of hyper-inflation and therefore will be fully aware of the consequences of such action. It will be interesting to see what the outcome will be, for the more countries that follow Irelands example the more likely that the Euro will suffer in relative terms.

UK Banks with 100% Guarantees

The UK government does offer a 100% guarantee on several UK banks which includes National Savings and the Post Office as well as nationalised bank of Northern Rock which has become the toxic waste dump for nationalised mortgage backed securities such as those from Bradford and Bingley who`s savers also have temporarily 100% guarantee.

National Savings
Post Office
Northern Rock
Bradford and Bingley - temporary
Irish banks for 2 years
And again savers should not forget that the first £50,000 is secured at 100% amongst all UK banks under the FSCS (the Financial Services Compensation Scheme).

United States $700 to $820 Bailout Plan

The amended and inflated bailout plan was passed by the Senate yesterday and also looks set to be passed by the House of Representatives today. The key problem with the plan is that a. It is not enough to do the job, and b. That the US Treasury will not be paying market prices, as the whole problem with the frozen mortgage backed securities market is that the banks are not pricing their mortgage securities at the market price as if they were then they would be bankrupt. Therefore despite whatever spin the politicians put on the bailout plan, the US tax payer will be looking at an instant loss of some 50% or more on the price paid. The only positive from the revised bill is the increase in FDIC depositor guarantee from $100,000 to $250,000.

...

Buy Hind Org Chem CMP 45

Hind Org Chem

Posted by : pkjattking
Price when posted : BSE: Rs 24.50 ( -5.59 % ), NSE: Rs. 24.40 ( -6.33 % )

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Hey Hug time 2 load dis puppy now..... coor coor baby.......

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Buy Hind Org Chem CMP 45

Posted by : hugujarati

so king... how much are you scooping? I am going in for 1000 or more shares... I am confident I would get a great return.. what you say???

Investors Succumb to Fears of Recession

DLF

Posted by : Bhavishyavani
Price when posted : BSE: Rs 302.90 ( 0.41 % ), NSE: Rs. 303.15 ( 0.56 % )

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OCTOBER 7, 2008 Investors Succumb to Fears of Recession
By E.S. BROWNING and IANTHE JEANNE DUGANArticle
Comments
more in Markets Main »The Dow Jones Industrial Average tumbled past the psychologically meaningful 10000 barrier, and European stocks charted some of their biggest declines in 20 years, as investors concluded that the crisis gripping the financial sector is spilling over into the broader economy.
At its lowest point, the Dow was off 800 points Monday afternoon. It regained much of that ground in a late, sharp rally to close down 369.88 points, or 3.6%, at 9955.50, returning it to levels first seen nearly a decade ago, in early 1999.

Michael Nagle for The Wall Street Journal
A trader at the New York Stock Exchange shows the stress Monday as the Dow Jones Industrial Average dropped as much as 800.06 points, the largest intraday decline in history. It rallied to close down 369.88 points.
However, after the market closed, Bank of America Corp. -- one of the largest and strongest institutions in the battered U.S. financial sector -- delivered a nasty new jolt that further hinted at spreading pain in the economy as a whole. Announcing a deep dividend cut and a surprise $10 billion effort to raise new capital, the bank said it is seeing deterioration in people`s ability to repay credit-card and other consumer debt.
Tuesday in Asia, stocks resumed their retreat, with Japan`s Nikkei Stock Average off 3.4% in midmorning trading.
Despite the historic proportions of a credit crisis that is reshaping the foundations of Wall Street, many stock investors until recently continued to hope that any recession, if it even came to that, might be shallow or brief. Now, investors are starting to worry that the stock market has simply been slow to react to problems that have been screaming at investors in the credit markets for months.
"I thought we might actually be able to skirt by without a recession," said Ernest Ankrim of Russell Investments in Tacoma, Wash. "Now I think we are in a recession right now and probably will be in a recession for two quarters and maybe three, maybe even four."
The spreading trouble in Europe undermines the hope that resilient foreign economies could help buoy the U.S.
Investors were startled at the financial crisis`s sudden expansion within Europe, as governments there staged emergency interventions to help rescue banks in Germany and the Netherlands. Major stock indexes fell 7.9% in London and 9% in Paris, the largest percentage declines since 1987. Germany was down 7.1%.
Related Articles
Markets Fall on Doubts Rescues Will SucceedBofA Cuts Dividend, Posts Lower ProfitGlobal Declines Didn`t Spare Many Stock MarketsComplete Coverage: Wall Street in CrisisSome small investors who had been hoping to ride out the storm have begun selling. That could mark the beginning of a process known as "capitulation," market lingo for the moment when a critical mass of investors give up on hopes of recouping losses, and instead sell. It is during capitulation that a selloff starts to run its course, and prices begin to feel for the bottom.
In the U.S., last week`s passage of the $700 billion financial bailout bill didn`t calm investors. In fact, it may have had the opposite effect, as heated rhetoric about the legislation drew attention to the scope of the strains in the credit markets.
Charles Smith, a retired former International Business Machines Corp. marketing manager, hasn`t dumped stocks since the 1987 stock-market crash. But, angry about the state of corporate America and worried about the economy, he is selling stocks, getting out of his index funds and going entirely into cash.
"This isn`t my normal strategy, but these aren`t normal times," said Mr. Smith, 71 years old, who lives in Dallas. "The fact that banks have just ruined their balance sheets and wiped out their ability to function realistically worries me," he said.
Yells of Exasperation
Paul Desmond, president of research firm Lowry`s Reports in North Palm Beach, Fla., is telling clients that the market could bounce, but it`s probably not a true bottom. "You need to knock things down to a climactic capitulation, where people who aren`t feeling good about holding their stocks finally sell, so stocks can turn up," he said in an interview.
In a true capitulation, Mr. Desmond said, investors don`t jump in during the day to snap up beaten-down stocks, as happened late Monday. Instead, they keep selling and selling. That signals to him that the selling isn`t exhausted yet.
After the market`s late-day rally, traders at the New York Stock Exchange gave yells of exasperation. "It`s like a slow crash," said Alan Valdes, a floor trader with Hilliard Lyons.
Adding to pressure on the markets will be investors` quarterly investment statements. They are just starting to land in mailboxes now, "and by and large, it`s ugly," said Lawrence Glazer of Boston-based Mayflower Advisors. "We have investors wanting to put money to work, but they want to have some conviction that the ferocious selling has abated."
Over the past three-quarters of a century, bear markets -- defined as stock-index declines of 20% or more -- that lasted a year or more have seen broad indexes fall an average of 42%, Mr. Desmond said. Currently, the Dow industrials are down 30% from their Oct. 9, 2007, record of 14164.53.
On Monday, 1,973 stocks hit new 52-week lows on the New York Stock Exchange, and only 13 hit new 52-week highs.
The broader Standard & Poor`s 500-stock index is down 33% from its Oct. 9, 2007, high. On Monday it fell 3.86% to 1056.85, a level it first visited in early 1998.
Of particular concern to economists and stock analysts was the continuing decline in the prices of industrial-commodity futures, because it suggests that the world economy is weakening. Crude-oil futures fell 6% to $87.81, the lowest New York finish since Feb. 6. They are down 40% from their July record of $145.29. Copper futures declined 7.4%, and are off 39% from their July record.
It is falling stock markets that now are leading oil down, said energy trader Jonathan Pivnick, who trades on behalf of MBF Clearing Corp. in New York. (Oil-futures trading closed before stocks staged their bounce-back late Monday.)
Gold, a refuge in times of worry, bucked the trend, rising 4.1% to $862.70 per troy ounce.
Some investors are pouring money into gold coins, overwhelming the U.S. Mint. Last week, its supplies of gold-bullion quarter- and half-ounce coins were depleted as investors sought out gold investments. Buyers also virtually wiped out the mint`s supply of all denominations of American Eagle platinum-bullion coins.
Hedge-fund insiders said Monday`s selloff would have been worse if funds hadn`t already gotten more cautious by building up cash reserves and cutting back on their own borrowing. Hedge funds routinely invest borrowed money -- which can amplify profits, but also rack up giant losses. But market gyrations caught many hedge-fund managers off-guard earlier this year, leading many to play it safe going into October.
Still, some hedge funds took a hit from the market`s retreat, and received margin calls, or requirements to provide fresh collateral, on Monday morning from their brokers. That, in turn, forced them to raise cash by selling some holdings, exacerbating the market decline in the afternoon, according to people familiar with the selling patterns.
`Where`s the Bottom?`
For individual investors, the wild ride is forcing them to retreat to safer investments. "It`s kind of nerve-racking -- I`m very nervous and scared. Where`s the bottom?" said Lillian Mittl, a dentist in New York. She and her husband recently asked their investment adviser to be as conservative as possible with their money, and to put it in money-market funds and other investments not at the mercy of the stock market.
Helping spark the selling in European stocks were signs that, although government efforts to repair the U.S.`s lending markets were showing some results, lending markets for European borrowers were continuing to worsen. And stocks followed.
The markets that global banks rely upon for their routine funding remained under severe pressure. The London interbank offered rate, or Libor, which is supposed to reflect the short-term rates at which banks lend to one another, rose for overnight dollar loans to 2.37% from 2% Friday, indicating troubling reluctance among banks to do business with one another. The Federal Reserve`s target for the overnight rate in the U.S. is 2%.
In the U.S. money markets, traders said many mutual funds would lend cash overnight to European banks only at rates above 3%, because of mounting default worries.
—Tom Lauricella, Mary Pilon, Ann Davis, Neil Shah, Serena Ng and Annelena Lobb contributed to this article....

Investors Succumb to Fears of Recession

Rel Ind Infra

Posted by : Bhavishyavani
Price when posted : BSE: Rs 483.05 ( -4.37 % ), NSE: Rs. 481.10 ( -5.01 % )

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OCTOBER 7, 2008 Investors Succumb to Fears of Recession
By E.S. BROWNING and IANTHE JEANNE DUGANArticle
Comments
more in Markets Main »The Dow Jones Industrial Average tumbled past the psychologically meaningful 10000 barrier, and European stocks charted some of their biggest declines in 20 years, as investors concluded that the crisis gripping the financial sector is spilling over into the broader economy.
At its lowest point, the Dow was off 800 points Monday afternoon. It regained much of that ground in a late, sharp rally to close down 369.88 points, or 3.6%, at 9955.50, returning it to levels first seen nearly a decade ago, in early 1999.

Michael Nagle for The Wall Street Journal
A trader at the New York Stock Exchange shows the stress Monday as the Dow Jones Industrial Average dropped as much as 800.06 points, the largest intraday decline in history. It rallied to close down 369.88 points.
However, after the market closed, Bank of America Corp. -- one of the largest and strongest institutions in the battered U.S. financial sector -- delivered a nasty new jolt that further hinted at spreading pain in the economy as a whole. Announcing a deep dividend cut and a surprise $10 billion effort to raise new capital, the bank said it is seeing deterioration in people`s ability to repay credit-card and other consumer debt.
Tuesday in Asia, stocks resumed their retreat, with Japan`s Nikkei Stock Average off 3.4% in midmorning trading.
Despite the historic proportions of a credit crisis that is reshaping the foundations of Wall Street, many stock investors until recently continued to hope that any recession, if it even came to that, might be shallow or brief. Now, investors are starting to worry that the stock market has simply been slow to react to problems that have been screaming at investors in the credit markets for months.
"I thought we might actually be able to skirt by without a recession," said Ernest Ankrim of Russell Investments in Tacoma, Wash. "Now I think we are in a recession right now and probably will be in a recession for two quarters and maybe three, maybe even four."
The spreading trouble in Europe undermines the hope that resilient foreign economies could help buoy the U.S.
Investors were startled at the financial crisis`s sudden expansion within Europe, as governments there staged emergency interventions to help rescue banks in Germany and the Netherlands. Major stock indexes fell 7.9% in London and 9% in Paris, the largest percentage declines since 1987. Germany was down 7.1%.
Related Articles
Markets Fall on Doubts Rescues Will SucceedBofA Cuts Dividend, Posts Lower ProfitGlobal Declines Didn`t Spare Many Stock MarketsComplete Coverage: Wall Street in CrisisSome small investors who had been hoping to ride out the storm have begun selling. That could mark the beginning of a process known as "capitulation," market lingo for the moment when a critical mass of investors give up on hopes of recouping losses, and instead sell. It is during capitulation that a selloff starts to run its course, and prices begin to feel for the bottom.
In the U.S., last week`s passage of the $700 billion financial bailout bill didn`t calm investors. In fact, it may have had the opposite effect, as heated rhetoric about the legislation drew attention to the scope of the strains in the credit markets.
Charles Smith, a retired former International Business Machines Corp. marketing manager, hasn`t dumped stocks since the 1987 stock-market crash. But, angry about the state of corporate America and worried about the economy, he is selling stocks, getting out of his index funds and going entirely into cash.
"This isn`t my normal strategy, but these aren`t normal times," said Mr. Smith, 71 years old, who lives in Dallas. "The fact that banks have just ruined their balance sheets and wiped out their ability to function realistically worries me," he said.
Yells of Exasperation
Paul Desmond, president of research firm Lowry`s Reports in North Palm Beach, Fla., is telling clients that the market could bounce, but it`s probably not a true bottom. "You need to knock things down to a climactic capitulation, where people who aren`t feeling good about holding their stocks finally sell, so stocks can turn up," he said in an interview.
In a true capitulation, Mr. Desmond said, investors don`t jump in during the day to snap up beaten-down stocks, as happened late Monday. Instead, they keep selling and selling. That signals to him that the selling isn`t exhausted yet.
After the market`s late-day rally, traders at the New York Stock Exchange gave yells of exasperation. "It`s like a slow crash," said Alan Valdes, a floor trader with Hilliard Lyons.
Adding to pressure on the markets will be investors` quarterly investment statements. They are just starting to land in mailboxes now, "and by and large, it`s ugly," said Lawrence Glazer of Boston-based Mayflower Advisors. "We have investors wanting to put money to work, but they want to have some conviction that the ferocious selling has abated."
Over the past three-quarters of a century, bear markets -- defined as stock-index declines of 20% or more -- that lasted a year or more have seen broad indexes fall an average of 42%, Mr. Desmond said. Currently, the Dow industrials are down 30% from their Oct. 9, 2007, record of 14164.53.
On Monday, 1,973 stocks hit new 52-week lows on the New York Stock Exchange, and only 13 hit new 52-week highs.
The broader Standard & Poor`s 500-stock index is down 33% from its Oct. 9, 2007, high. On Monday it fell 3.86% to 1056.85, a level it first visited in early 1998.
Of particular concern to economists and stock analysts was the continuing decline in the prices of industrial-commodity futures, because it suggests that the world economy is weakening. Crude-oil futures fell 6% to $87.81, the lowest New York finish since Feb. 6. They are down 40% from their July record of $145.29. Copper futures declined 7.4%, and are off 39% from their July record.
It is falling stock markets that now are leading oil down, said energy trader Jonathan Pivnick, who trades on behalf of MBF Clearing Corp. in New York. (Oil-futures trading closed before stocks staged their bounce-back late Monday.)
Gold, a refuge in times of worry, bucked the trend, rising 4.1% to $862.70 per troy ounce.
Some investors are pouring money into gold coins, overwhelming the U.S. Mint. Last week, its supplies of gold-bullion quarter- and half-ounce coins were depleted as investors sought out gold investments. Buyers also virtually wiped out the mint`s supply of all denominations of American Eagle platinum-bullion coins.
Hedge-fund insiders said Monday`s selloff would have been worse if funds hadn`t already gotten more cautious by building up cash reserves and cutting back on their own borrowing. Hedge funds routinely invest borrowed money -- which can amplify profits, but also rack up giant losses. But market gyrations caught many hedge-fund managers off-guard earlier this year, leading many to play it safe going into October.
Still, some hedge funds took a hit from the market`s retreat, and received margin calls, or requirements to provide fresh collateral, on Monday morning from their brokers. That, in turn, forced them to raise cash by selling some holdings, exacerbating the market decline in the afternoon, according to people familiar with the selling patterns.
`Where`s the Bottom?`
For individual investors, the wild ride is forcing them to retreat to safer investments. "It`s kind of nerve-racking -- I`m very nervous and scared. Where`s the bottom?" said Lillian Mittl, a dentist in New York. She and her husband recently asked their investment adviser to be as conservative as possible with their money, and to put it in money-market funds and other investments not at the mercy of the stock market.
Helping spark the selling in European stocks were signs that, although government efforts to repair the U.S.`s lending markets were showing some results, lending markets for European borrowers were continuing to worsen. And stocks followed.
The markets that global banks rely upon for their routine funding remained under severe pressure. The London interbank offered rate, or Libor, which is supposed to reflect the short-term rates at which banks lend to one another, rose for overnight dollar loans to 2.37% from 2% Friday, indicating troubling reluctance among banks to do business with one another. The Federal Reserve`s target for the overnight rate in the U.S. is 2%.
In the U.S. money markets, traders said many mutual funds would lend cash overnight to European banks only at rates above 3%, because of mounting default worries.
—Tom Lauricella, Mary Pilon, Ann Davis, Neil Shah, Serena Ng and Annelena Lobb contributed to this article....

Investors Succumb to Fears of Recession

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OCTOBER 7, 2008 Investors Succumb to Fears of Recession
By E.S. BROWNING and IANTHE JEANNE DUGANArticle
Comments
more in Markets Main »The Dow Jones Industrial Average tumbled past the psychologically meaningful 10000 barrier, and European stocks charted some of their biggest declines in 20 years, as investors concluded that the crisis gripping the financial sector is spilling over into the broader economy.
At its lowest point, the Dow was off 800 points Monday afternoon. It regained much of that ground in a late, sharp rally to close down 369.88 points, or 3.6%, at 9955.50, returning it to levels first seen nearly a decade ago, in early 1999.

Michael Nagle for The Wall Street Journal
A trader at the New York Stock Exchange shows the stress Monday as the Dow Jones Industrial Average dropped as much as 800.06 points, the largest intraday decline in history. It rallied to close down 369.88 points.
However, after the market closed, Bank of America Corp. -- one of the largest and strongest institutions in the battered U.S. financial sector -- delivered a nasty new jolt that further hinted at spreading pain in the economy as a whole. Announcing a deep dividend cut and a surprise $10 billion effort to raise new capital, the bank said it is seeing deterioration in people`s ability to repay credit-card and other consumer debt.
Tuesday in Asia, stocks resumed their retreat, with Japan`s Nikkei Stock Average off 3.4% in midmorning trading.
Despite the historic proportions of a credit crisis that is reshaping the foundations of Wall Street, many stock investors until recently continued to hope that any recession, if it even came to that, might be shallow or brief. Now, investors are starting to worry that the stock market has simply been slow to react to problems that have been screaming at investors in the credit markets for months.
"I thought we might actually be able to skirt by without a recession," said Ernest Ankrim of Russell Investments in Tacoma, Wash. "Now I think we are in a recession right now and probably will be in a recession for two quarters and maybe three, maybe even four."
The spreading trouble in Europe undermines the hope that resilient foreign economies could help buoy the U.S.
Investors were startled at the financial crisis`s sudden expansion within Europe, as governments there staged emergency interventions to help rescue banks in Germany and the Netherlands. Major stock indexes fell 7.9% in London and 9% in Paris, the largest percentage declines since 1987. Germany was down 7.1%.
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Markets Fall on Doubts Rescues Will SucceedBofA Cuts Dividend, Posts Lower ProfitGlobal Declines Didn`t Spare Many Stock MarketsComplete Coverage: Wall Street in CrisisSome small investors who had been hoping to ride out the storm have begun selling. That could mark the beginning of a process known as "capitulation," market lingo for the moment when a critical mass of investors give up on hopes of recouping losses, and instead sell. It is during capitulation that a selloff starts to run its course, and prices begin to feel for the bottom.
In the U.S., last week`s passage of the $700 billion financial bailout bill didn`t calm investors. In fact, it may have had the opposite effect, as heated rhetoric about the legislation drew attention to the scope of the strains in the credit markets.
Charles Smith, a retired former International Business Machines Corp. marketing manager, hasn`t dumped stocks since the 1987 stock-market crash. But, angry about the state of corporate America and worried about the economy, he is selling stocks, getting out of his index funds and going entirely into cash.
"This isn`t my normal strategy, but these aren`t normal times," said Mr. Smith, 71 years old, who lives in Dallas. "The fact that banks have just ruined their balance sheets and wiped out their ability to function realistically worries me," he said.
Yells of Exasperation
Paul Desmond, president of research firm Lowry`s Reports in North Palm Beach, Fla., is telling clients that the market could bounce, but it`s probably not a true bottom. "You need to knock things down to a climactic capitulation, where people who aren`t feeling good about holding their stocks finally sell, so stocks can turn up," he said in an interview.
In a true capitulation, Mr. Desmond said, investors don`t jump in during the day to snap up beaten-down stocks, as happened late Monday. Instead, they keep selling and selling. That signals to him that the selling isn`t exhausted yet.
After the market`s late-day rally, traders at the New York Stock Exchange gave yells of exasperation. "It`s like a slow crash," said Alan Valdes, a floor trader with Hilliard Lyons.
Adding to pressure on the markets will be investors` quarterly investment statements. They are just starting to land in mailboxes now, "and by and large, it`s ugly," said Lawrence Glazer of Boston-based Mayflower Advisors. "We have investors wanting to put mone...

`What we learned then`

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`What we learned then`
Lessons of the Depression from Mainers who endured it


By BOB KEYES, Staff Writer

October 5, 2008



Staff photo
This photo shows the front page on Oct. 30, 1929, a day after the stock market’s crash.

Associated Press file photo
Media coverage of the troubled stock market draws onlookers to Wall Street on Tuesday, a day after the Dow lost 777 points on news that the House had voted against a financial bailout.


Associated Press file photo
A frightened crowd gathers by Federal Hall in New York’s Wall Street district on news of frantic trading on Oct. 24, 1929, five days before the historic crash.


Associated Press file photo
Thousands of unemployed people wait to register for federal jobs at the New York State Temporary Emergency Relief Administration in New York City on Nov. 24, 1933.

Associated Press file photo
Two vendors try to earn a living selling apples on the streets of New York City on Nov. 30, 1930, during the Great Depression, which lasted the better part of a decade.

Doug Jones/Staff Photographer
Doug Guy, 93 ... says his father’s dental practice suffered.

Doug Jones/Staff Photographer
Florence Litzerman, 91, of Portland: "I don`t think the Depression ever leaves you."

Doug Jones/Staff Photographer
Helen Deschenes, 93 ... says her family canned food to make ends meet.

Doug Jones/Staff Photographer
Al Morin, 85 ... and his family were forced off their potato farm.


Doug Jones/Staff Photographer
Frieda Lundberg, 99 ... remembers food rationing, soup kitchens.
The economists continue to tell us that we have learned the lessons of the Great Depression, and that safeguards built into our financial system since then will prevent America from sliding into a similar economic meltdown today.

Florence Litzerman of Portland isn`t so sure. By no means does she consider herself an expert on the economy, but she knows what she sees.

Litzerman, 91, lived through the Great Depression. She can`t help but make a comparison between the 1930s and what`s going on today, given the housing slump, rising unemployment and bank failures that led to legislators approving a $700 billion financial bailout plan last week.

"I don`t think the Depression ever leaves you, when you see people with fear written in their face. They don`t know where they are going to go, or what they are going to do," Litzerman said.

"You don`t ever forget it. The first time I ever saw a grown man cry, he had lost his job after 30 years and had to come home and tell his family. I`ve remembered that ever since."

Litzerman was among a group of Portland-area senior citizens who shared their memories of the Great Depression last week.

By the end of 1929, just two months after the great stock market crash of Oct. 29, American investors had lost around $40 billion in the markets.

In the decade that followed leading up to World War II, America was knocked to its knees. Banks failed. Millions of people lost their homes, their jobs and their savings.

Factories were locked down, and stores closed from coast to coast. Tent cities and bread lines sprang up in cities across the country.

In Maine, the Depression had limited impact relative to the rest of the nation because the state`s core industries of fishing, textiles and timber had been in a depressed state since the 1890s, said Richard Judd, a professor of history at the University of Maine at Orono.

"The joke was that people in Maine didn`t realize they were in a depression because Maine people had been dealing with economic adversities since the late 19th century," Judd said.

But it still hit hard, especially in the cities. Following the federally mandated bank holiday that began March 6, 1930, people in Portland had to wait two weeks for access to their money.

Three banks failed to reopen, including the largest financial institution in Maine, and the local economy spiraled out of control.

Raymond Oransky, 84, was just 5 years old when the market crashed. He doesn`t recall seeing soup or bread lines, but he does remember Depression-era meals of bread and butter, or a plate of beans. And he remembers his family`s financial foundation crumbling after the market crashed and the banks failed.

His father, Joseph Oransky, owned a successful shoe store at Temple and Middle streets in downtown Portland. He played the market, and took a beating when it crashed. Soon after, he lost the building that housed his shoe business when the bank called in the loan.

He was able to save the business by downsizing and moving the store to another location.

"It was tough," Oransky said. "Hopefully, what we learned then will prevent another economic depression. We had nothing then that we have today for safeguards. I don`t think we can avoid a recession, but I am pretty sure we can avoid a depression. We`re going to go through hell, but hopefully it won`t be quite as bad as it was back then."

Many economists agree with Oransky`s assessment. The financial system has evolved to include protections to prevent a full-scale meltdown.

But the conditions leading to today`s situation and the sequence of events that led to the Great Depression are similar.

...

The Nasdaq Bubble

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The Nasdaq Bubble
After the 1987 stock market crash, the global markets resumed their previous bull market trend. This powerful trend was driven by computer technology. Many of the technology stocks were listed on the Nasdaq exchange, which is an electronic marketplace.

In the early 1990’s, the personal computer was rapidly gaining acceptance for business and personal use. The computer was at last becoming more reasonably priced and more user-friendly. Computers were no longer the fodder of geeky hobbyists. They were veritable business tools, which were vital in gaining a competitive edge. Business applications were invented to aid the user in accounting, calculating taxes and word processing. Computers also began to compete with televisions as a form of entertainment, as PC video games flooded the marketplace. Corporations such as Microsoft prospered enormously as almost every computer system contained their operating system software.

During this time, the US computer industry focused more upon computer software versus hardware. This is because software was an extremely high margin product, due to it not being a physical product, like chips. Software companies produced a markup from selling licensed information, which costs very little to reproduce. Computer hardware became a commodity product, i.e. virtually indistinguishable from the product of any other competitor. Commodity products produce very little profits as each competitor constantly undercuts each other’s prices. Asian companies, with small manufacturing costs, produced virtually all of the hardware components at this point. Software, however, was protected as intellectual property with patents. Therefore, a product such as Microsoft Windows is a one of a kind product. This creates a strong barrier to entry, a benefit which is highly sought after in business.

...

The Nasdaq Bubble

Reliance

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The Nasdaq Bubble
After the 1987 stock market crash, the global markets resumed their previous bull market trend. This powerful trend was driven by computer technology. Many of the technology stocks were listed on the Nasdaq exchange, which is an electronic marketplace.

In the early 1990’s, the personal computer was rapidly gaining acceptance for business and personal use. The computer was at last becoming more reasonably priced and more user-friendly. Computers were no longer the fodder of geeky hobbyists. They were veritable business tools, which were vital in gaining a competitive edge. Business applications were invented to aid the user in accounting, calculating taxes and word processing. Computers also began to compete with televisions as a form of entertainment, as PC video games flooded the marketplace. Corporations such as Microsoft prospered enormously as almost every computer system contained their operating system software.

During this time, the US computer industry focused more upon computer software versus hardware. This is because software was an extremely high margin product, due to it not being a physical product, like chips. Software companies produced a markup from selling licensed information, which costs very little to reproduce. Computer hardware became a commodity product, i.e. virtually indistinguishable from the product of any other competitor. Commodity products produce very little profits as each competitor constantly undercuts each other’s prices. Asian companies, with small manufacturing costs, produced virtually all of the hardware components at this point. Software, however, was protected as intellectual property with patents. Therefore, a product such as Microsoft Windows is a one of a kind product. This creates a strong barrier to entry, a benefit which is highly sought after in business.

...

Can we Learn from others mistake?

Reliance

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Can a bear market last for 14 straight years? Well, this is exactly what occurred in Japan, starting in 1991.

After World War II, Japan was devastated-several of its major cities were obliterated and its economy was virtually nonexistent. Due to much effort and hard work, the Japanese economy slowly began to stabilize and recover. Additionally, the United States helped Japan rebuild, and provided capital and military protection, as well. The value of military protection should not be overlooked, as this is usually the highest expense of any government. This benefit allowed the Japanese economy and government run more freely and efficiently.

Factories were quickly built and peasants became factory workers. Middle and upper class men became white collar workers, called salarymen. Salarymen and factory workers were offered lifetime employment. This caused salarymen to have fierce loyalty towards their employers. Most Japanese workers at the time were highly frugal, saving much of what they earned. Many companies merged together to become large industrial and banking conglomerates, called zaibatsu.

The zaibatsu gained their competitive edge by copying and improving Western products and selling them for much cheaper. The cheaper products won Western customers and started to hurt US companies. Tremendous economic growth occurred allowing the zaibatsu to evolve into even larger business alliances, called keiretsu. The keiretsu philosophy was one of cooperation, where all facets of business and government worked hand in hand. As the Japanese stock market soared, the keiretsu purchased each other’s shares.

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