This Was The Worst Week For The Stock Market Since The Financial Crisis Of 2008

[RonZeplin]

It took dumbya 8 years to accomplish what Trump has done in two, F' up the US economy. When does the next round of tariffs & sanctions start?

Just when you thought that things couldn’t get any worse, they did. During normal times, a Friday before Christmas is an extremely boring trading session, but these are not normal times. On Friday, the Dow Jones Industrial Average was down another 414 points, and that brought the total drop for the week to 1,655 points. The marketplace has been completely gripped by panic, and CNN’s Fear & Greed index has just registered the highest “fear rating” that we have ever seen. I keep saying that we have not witnessed anything like this since the last financial crisis, and the numbers clearly back that assessment up. In fact, this was the largest weekly percentage drop for the Dow since October 2008…

The Dow just suffered its deepest weekly plunge since 2008 and the Nasdaq is officially in a bear market.

The miserable performance reflects deepening fears on Wall Street of an economic slowdown and overly-aggressive Federal Reserve.
​

Apprehension about a looming government shutdown and anxiety over higher interest rates were two of the major factors that pushed stocks down on Friday.

Normally trading volume is very, very light in the days leading up to Christmas, so what we just witnessed was extremely unusual. Trading volume on Friday was “really heavy” with “more than 12 billion shares” changing hands…

In a bad sign on Friday, volume was really heavy. More than 12 billion shares changed hands on U.S. exchanges on Friday, the biggest volume in at least two years.
​

When I have warned about a “rush for the exits” in the past, this is the kind of thing that I am talking about.

Many investors were panic-selling on Friday because they wanted to be out of the market before things closed down for the holidays, and stock prices just kept getting hammered lower and lower.

For the week, the carnage was absolutely colossal. The following is how CNBC summarized what happened…

• The Dow lost 6.8 percent and 1,655 points on the week. It was its worst percentage drop since October 2008.
• The Nasdaq lost 8.3 percent on the week and is now 22 percent below its record reached in August, a bear market.
• The S&P 500 lost 7 percent for the week and is now down 17.8 percent from its record.
• The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 12 percent each this month.
• Both the Dow and the S&P 500 are now in the red for 2018 by at least 9 percent.

It should also be noted that the number of stocks hitting 52-week lows right now is at historically high levels. The following comes from ZeroHedge…

Since 1984, there were only eight days when a bigger proportion of shares did so, according to Sundial Capital Research. Two of them were in 1987 — during the famous Black Monday crash, when the Dow Jones Industrial Average lost 23 percent in one day, and then again during the following session. The rest were in the aftermath of the collapse of Lehman Brothers in October and November 2008.

And it isn’t just stocks that are getting hammered. In fact, at this point 93 percent of all asset classes are down for the year.

As so many have already said, 2018 is a year when literally nothing is working.

A similar thing is happening over in Europe, where stocks are on pace for their worst year since 2008. We are watching a truly global meltdown take place, and trillions upon trillions of dollars of paper wealth is being washed away.

https://www.activistpost.com/2018/1...arket-since-the-financial-crisis-of-2008.html

 

[Brian4Liberty]

Pretty much everyone has been waiting for the bubble to burst, it was just a matter of time. All it takes is a trigger.

On the positive side the unemployment rate has supposedly improved. On the bad side, pretty much all of the cash that was on the sidelines went into the stock market in the last 2 years, so there is no more money left to fuel a rising market. As much as anything, that may have been the trigger. It has to go down.

 

[Anti Federalist]

Meh, looks to me like the market fell apart once it became clear that the New Bolsheviks would take back at least the House.

 

[Anti Federalist]

Oh, and of course The Fed raising rates again.

We used to be opposed to The Fed dicking around with the economy around here as well.

Guess that's on the back burner too.

 

[Krugminator2]

The stock market isn't the economy. Stocks perform best when unemployment is best and worst when unemployment is lowest. And what did Dubya do to the economy that was so terrible? I am not saying Dubya was good. He was terrible. But Presidents get way too much blame when things are bad and way too much credit when things are good.

 

[TheCount]

Trump will tax us into prosperity.

 

[Madison320]

It took dumbya 8 years to accomplish what Trump has done in two, F' up the US economy. When does the next round of tariffs & sanctions start?

Why'd you skip Obama? They've all done basically the same thing. Spend, borrow, print.

 

[specsaregood]

Pretty much everyone has been waiting for the bubble to burst, it was just a matter of time. All it takes is a trigger.

On the positive side the unemployment rate has supposedly improved. On the bad side, pretty much all of the cash that was on the sidelines went into the stock market in the last 2 years, so there is no more money left to fuel a rising market. As much as anything, that may have been the trigger. It has to go down.

Your two statements conflict. If everyone has been waiting for the bubble to burst; then it seems reasonable that a lot of smart money stayed on the sidelines or taken out early, waiting for that to happen. I know a handful of people that have been holding cash waiting for it; I know I have. And I'm sure there are people with a lot more money than me just now licking their chops ready to go bargain hunting. Hell, Icahn's partnership has sold about 4billion worth of assets in the past 6 months, I bet he's ready to do some shopping.

 

[RonZeplin]

Why'd you skip Obama? They've all done basically the same thing. Spend, borrow, print.

Because It's the worst week since 2008, the W. Bush years. Obama couldn't quite match the Republicans for bumming out the markets.

 

[Krugminator2]

Your two statements conflict. If everyone has been waiting for the bubble to burst; then it seems reasonable that a lot of smart money stayed on the sidelines or taken out early, waiting for that to happen. I know a handful of people that have been holding cash waiting for it; I know I have. And I'm sure there are people with a lot more money than me just now licking their chops ready to go bargain hunting. Hell, Icahn's partnership has sold about 4billion worth of assets in the past 6 months, I bet he's ready to do some shopping.

No idea what will happen. That said, the SPY is down 17% this quarter. Here are all the times it has sold sold off more and their 1 year returns.

This is the 4th worst quarter for the Russell 2000 at down 24% since it has existed. Here are the forward 1 returns every time it has sold off like this.

There are obviously times where the market continues down for another year. But the reality, it is VERY rare for the market to have back to back low single digit or negative years. 1973/74 and 2000-2002 are it since the Depression.

 

[Danke]

Because It's the worst week since 2008, the W. Bush years. Obama couldn't quite match the Republicans for bumming out the markets.

The end of QE1 was in June 2010. Then came QE2 and later QE3.

 

[Madison320]

Because It's the worst week since 2008, the W. Bush years. Obama couldn't quite match the Republicans for bumming out the markets.

I'd call that 3rd grade logic, except it's an insult to 3rd graders.

 

[Zippyjuan]

Oh, and of course The Fed raising rates again.

We used to be opposed to The Fed dicking around with the economy around here as well.

Guess that's on the back burner too.

Wasn't that long ago people here were complaining about zero percent interest rates saying they needed to be higher. "Low interest rates punish savers! They are inflating the stock market!" Now the Fed has been raising them and the stock market is starting to deflate and people are still getting upset.

 

[RonZeplin]

I'd call that 3rd grade logic, except it's an insult to 3rd graders.

 

[Madison320]

Pretty much everyone has been waiting for the bubble to burst, it was just a matter of time. All it takes is a trigger.

I call BS on that one. I've been one of the very few posting about the bubble. I can't tell you how many times I've read thru a thread on how great Trump made the economy and I'm the only one who mentions it's a bubble. Or a thread on how Trump will win in 2020 (a popping bubble will end Trump's chances). If everyone knew it's a bubble they simply wouldn't be posting stuff like that. And that also includes the Obama cheerleaders as well.

The bubble has been growing ever since the last crash in 2008. You can't keep rates at 0%, borrow 12 trillion, print 4 trillion and run half trillion trade deficits without causing a bubble.

 

[Madison320]

The stock market isn't the economy. Stocks perform best when unemployment is best and worst when unemployment is lowest. And what did Dubya do to the economy that was so terrible? I am not saying Dubya was good. He was terrible. But Presidents get way too much blame when things are bad and way too much credit when things are good.

Signed every spending bill. Nominate ultra dove Ben Bernanke. Gave away money to people so they could put a down payment on a house they couldn't afford. Nationalized the banks.

 

[Krugminator2]

Signed every spending bill. Nominate ultra dove Ben Bernanke. Gave away money to people so they could put a down payment on a house they couldn't afford. Nationalized the banks.

Government spending played little role in the financial crisis. Ben Bernanke played little role and did a pretty good job handling the crisis. Greenspan set the rates ultra low. Bush had zero to do with housing lending standards.

Bush did a lot wrong. The tariffs were bad. The spending was bad. The regulatory increases were bad. The tax credits were bad. The expansion of Medicaid and government education were bad. And of course the wars.

 

[oyarde]

Been a pretty good week for me .

 

[Brian4Liberty]

Your two statements conflict. If everyone has been waiting for the bubble to burst; then it seems reasonable that a lot of smart money stayed on the sidelines or taken out early, waiting for that to happen. I know a handful of people that have been holding cash waiting for it; I know I have. And I'm sure there are people with a lot more money than me just now licking their chops ready to go bargain hunting. Hell, Icahn's partnership has sold about 4billion worth of assets in the past 6 months, I bet he's ready to do some shopping.

I call BS on that one. I've been one of the very few posting about the bubble. I can't tell you how many times I've read thru a thread on how great Trump made the economy and I'm the only one who mentions it's a bubble. Or a thread on how Trump will win in 2020 (a popping bubble will end Trump's chances). If everyone knew it's a bubble they simply wouldn't be posting stuff like that. And that also includes the Obama cheerleaders as well.

The bubble has been growing ever since the last crash in 2008. You can't keep rates at 0%, borrow 12 trillion, print 4 trillion and run half trillion trade deficits without causing a bubble.

Perhaps I need to be more specific. By “everyone” waiting for the market to tank, I am talking about the two major business networks that have been calling for it for years. *

And when I said that the money on the sidelines had jumped into the market based on Trump’s election, I was talking about all of the money that actually poured into the stock market in the past couple of years, not necessarily the “smart” money. There are statistics on the amount of money sitting in cash, and the bankers and brokers know when there is cash sitting there available, as a broad statistic. Of course there is still cash out there, it’s a matter of how much. Those statistics now say that there is no longer a huge surplus of cash. Thus they know there is no big upside potential right now.

Plus the big boys make their money by driving the market higher, cashing out, shorting, and then buying back in at the bottom. Rinse, lather, repeat. The casino always makes money.

* i.e. a quote from mid-2017:

The talking heads on CNBC have been pushing doom for years, and it was extra heavy this week. Eventually they will be right.

 

[CaptUSA]

Well, shit. This can't be good: https://www.reuters.com/article/us-usa-treasury/top-trump-official-calls-bankers-will-convene-plunge-protection-team-idUSKCN1OM0LJ

WASHINGTON (Reuters) - U.S. President Donald Trump’s Treasury secretary called top U.S. bankers on Sunday amid an ongoing rout on Wall Street and made plans to convene a group of officials known as the “Plunge Protection Team.”...

...The Treasury said in a statement that Mnuchin talked with the chief executives of Bank of America (BAC.N), Citi (C.N), Goldman Sachs (GS.N), JP Morgan Chase (JPM.N), Morgan Stanley (MS.N) and Wells Fargo (WFC.N)

“The CEOs confirmed that they have ample liquidity available for lending,” the Treasury said.