Markets break down - Dow plummets below 9,000

Okay, folks, we are in the midst of a pretty serious stock market breakdown.

Yes, we've had bigger down days, but this is on the heels of some of the most concerted behind-the-scenes and out-in-the-open official intervention that we've ever seen.

This means the market has lost confidence, not just in the US authorities' ability to manage the crisis, but more generally in central banking.

Just as ominously, for those who've been watching, the USD has strengthened hugely against the Yen over the past few days, indicating that one more shoe plunking to the ground is the rapid unwinding of a massive Yen carry trade. Note that the Yen is close to breaking the 100:1 barrier.

I am going to reiterate my call that the chance of a general market failure, culminating in a general banking holiday, is now at its highest level ever.

More to come...

This is a companion discussion topic for the original entry at

Normaly i like to trade downtrends, but this time i really get scared. Is there any way this may stop?

Harare has admitted that inflation in Zimbabwe is running at over 200 million % .This has been caused by the Government printing money for its own needs, causing the value of the currency to collapse and the cost of imported goods to escalate.

Doed that sound familiar? Does anyone know of any countries that are busily generating billions and trillions of say, Dollars, Pounds or Euros, to take three currencies at random for the needs of the Govenment?

Can anyone explain to me how deflation could possibly result from the UKs Government to borrow/generate/spend £500 bn ie about $1Trillion to save its banks or indeed from the US Government’s desire to borrow/generate spend Trillions of $s also.

Northern Soul

Chris–If next week starts like this week…we Will see the "holiday" it sounds nice doesn’t it…who doesn’t want a "holiday" EXCEPT—its FROM your Money…

I haven’t seen this mentioned before but if the credit system goes, I’m pretty sure thatthe internet does also. All of us pay by automatic credit card and I don’t know how long Verizon and AOL will keep providing services if they can’t get paid. DARPA may have designed a good system but the Feds didn’t have to pay to use it.

I would prepare to puzzle things out by yourself or with some like-minded folks, offline.


Just my guess.



S&P close 910

Gold 914

It’s been a few weeks now that I’ve come to accept what is. Therefore, I am grateful for this opportunity to learn and to have taken some-what action to secure my future.

I am grateful not only because I have secured my future but because I am alive in a time where we’re living the richest the world has ever seen. We all have legacies to leave because thousands of years from now (mad max days?), they will talk about us and how great our lives were with all the money we had to spend that was created out of thin air. Alas, if history repeats itself (and it will), someday, this crisis will be repeated by more greed like it has today.

I’m truely grateful to be alive. I have a blessed life no matter what happens tomorrow!

the original physical internet no longer exists (the DARPA and MILNET backbones), it was shut down when Tier 1 providers (companines like UUNET/Verizon, AT&T, Level 3, and others) and the associated IPX (internet exchanges, between providers) came to be (in other words the above mentioned companies completely took over, when the government gave up its control of the physical internet). I would be more concerned about electrical power.

There are separate physical networks that only the military uses.

You have to realize that almost all information is transmitted through the internet, and if it is not it is still sent through the same optical fibers and cables using proprietary (non conforming IP) technology.

Quite a few tv networks, credit card transactions, banks, government entities all transverse the same network, the internet whether it is on the actual IP network that is free domain or private network but still on the same cables.



VIX at 64? Dude, I thought I was hallucinating.

As Dr. M. observed yesterday, the Fed (with some help from its friends) threw a rate cut party and nobody came. Obviously, that portended another brisk birch-caning of Mr. Market’s tender white bottom today.

But, you’ve got to admire the firm-handed management by the "authorities." Day after day, they are skillfully guiding the "market" down 5 to 7%, never letting the circuit breakers trip and the lights go out. Because the ugly little secret is, the Masters of the Universe are afraid of the dark! They hide under they beds, pound their fat hairy fists on the floor, and cry for Mommy.

Statistically, this is the third 10,000-year flood in the past 100 years. Let’s face it, the "market’s" fat-tailed extremes do not follow the normal distribution, any more than natural processes such as Nile floods do (as Hurst observed).

Some day, some brilliant scientist will work out the general solution of the "market distribution." But I’ll bet you this: he or she won’t be no "economist." Money mouth

I’ll keep it short and sweet - oops all the sweetner is gone!

The Ted spread just hit 4.23.

Wow, this indicates the high degree of unwillingness of banks to lend to each other.

Were all thinking "it can’t get any worse - and then it does!"

All the kings men tried to put Humpey dumpty back together again - and they can’t.

All I can say is that my fun meter is pegged - and bent over!



Above a headline reading "DOW LOSES ANOTHER 7%"," Drudge Report has posted a big photo of a GRIZZLY BEAR.

Mass media fade indicator activated: big bounce due … followed by a retest of the low (and possible failure).

DJIA yields 3.77%, according to BigCharts – close to a neutral, average long-term yield of 4% or so. Not too shabby! But some of the high-yielders in the Dow – for instance, GM at less than a nickel, yielding an eye-popping 21% – are shaky companies.

Maybe the retest occurs when Ford (at an apocalyptic $2.08 a share) files BK. An American icon is about to go under. And then there will be a catharsis, and the phoenix will rise from the ashes. So that’s the broad-brush scenario; I leave it to Dr. M. to winkle out the timing.

I wonder how to envision a banking holiday, unplanned and unforeseen by most, to look and feel like. I’m thinking panic and frustration and how does one small business or non-profit org meets its payroll for example. What happens to those unable to purchase food and needed medicine? IOUs? This would certainly test the bonds of community and maybe establish a baseline from which to build.

Pardon my language and even on the quest to a new way of being: What crappy times.

I think I feel something resembling better!

Back to breathing.



Thanks for info about DARPA. I guess I was thinking more along the lines that if credit lines and cards were frozen, commerce, effectively, would cease outside of local cash transactions.



This is all simply a repeat of 1913, and the Great Depression that followed. They commandeered our currency system. Their plot now is to acquire unregulated legislative powers via panicked political force… much like the Bailout was "forced" on us through threats of consequence if it was not passed. Their long term goal is the eventual consolidation of all banks into a "one world" financial system. This allows them to instill a "one world" currency… and to further entrench their own positions of power. Just more ways of transferring wealth from the middle and poor classes to the super elites.

We saw the headline today that said in effect the Government is considering taking ownership interests in banks. This is a harbinger to the end of the world, and our constitutional rights! With the government watching over every banking transaction, we will have absolutely no privacy from "Big Brother". It will be end of our free society as we know it, if the government suceeds in controlling our financial institutions.

I am grateful for all I have learned on this site which I discovered when googling "End of Money".

My question after carefully watching the Crash Course and reading almost everything posted here is this:

"What’s next?" I don’t mean in terms of survival, I mean in terms of money. What are some probabilities for and types of new monetary systems? How long will it be before a viable replacement can be had? If all this is unknown, unplanned or not analyzed, then it becomes survival of the fittest and maybe we aren’t so evolved after all.

Or maybe some of the "prophecies" are being fulfilled.

Certainly not knowing…


If I were a betting man, and I am, I would bet we are at a short-term low.

But I think there is some sort of news to which I am not yet privy.

GM and Fraud, er, Ford, had very bad days today. Each holds hundreds of billions of dollars of outstanding debt. In times past this prospect alone would have been sufficient to bring the system to its knees.

While I am cognizant of the fact that they stystem is pretty much on its knees today, the reality is that the destruction across the auto industries is mirrored within, well, within every other industry I can find:

As near as I can tell the profit leaders of the past 5 years are now the losers of the day. While I might speculate on a short term bounce - and I certainly would not dump my portfolio here and now - I am also looking at a breadth of wealth destruction that says "be careful, this could be different".

As always, I reserve the right to be wrong.



I’m not really all that surprised that so much industry is doing so bad. For the past year(s) oil has been rising continuously. Only a relatively small part of those rising costs have been being passed onto consumers. So, much like a house with termites, our entire manufacturing substructure has been eaten out underneath us. The structure is unsound, and as such, it is only rational to expect that the great majority of these industries are no longer capable of surviving a downturn.

Some, aren’t even capable of surviving an upturn anymore.

Just wait until the medical, and education bubbles also pop under the ferocity of this event. Both are due complete and annihilating collapses after well over a decade of insane cost increases. The bright side of the medical bubble popping: Those sky high predictions of Medicare costs won’t be so bad. The downside: we won’t have a medical system. Wink

(admittedly, no medical system isn’t much of a change at this point.)


"But I think there is some sort of news to which I am not yet privy."

Indeed. And I’d bet it would probably shock even you, Chris.

These gold charts really make me wonder if some sort of manipulation has been going on in today’s market, as has been discussed in other threads here. The multi-day trend was a steady price escalation. It all went south today for the first time in several sessions. Then at 3pm NY time gold spiked right back to its multi-day trendline. Hmmm…

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For the not so faint of heart, here’s a theory…