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stock market crash - questions and answers.





LGCanada
Hello, this is my first post. In this post I have analyzed certain repeating "statement" from the news.

"The Federal Reserve Bank of New York's came in two operations injecting cash into temporary reserves, a move aimed to help ease a strained financial system in danger of freezing up."
What does it mean to freeze up?
No one is investing.
It resulted in a sharp shrinking of stock buying demand, because there were not enough assets for buying securities.
The Russian government has reduced the interest rates, in order to offset the freeze up.
China buys back stock and cut taxes in order to escape the freeze up.
"Government intervention in the stock market can never work. Buying shares in insolvent companies headed for bankruptcy will never make those shares worth anything no matter how many shares the government buys. Whatever the natural price level of any equity, if the government, any government offers to buy shares above that price, there will be an unlimited supply of stock until the government owns every share."
An interesting reply:
This action is a symptom of two economies that have developed some productive capacity, but few financial institutions including central banking skills. Mix that with almost no political institutions and you have the sort of thing that leads to the labor theory of value. Employment is the central political issue in China and Russia and it is what is valued. By the way Barney Frank likes that idea, and the rest of the collective members of Congress think it is not all that bad. In the end, capital and capitalist are what make production systems work to provide jobs, and without then "other measures" are required like buying securities. It is stupid, but such things are almost inevitable when governments have no theory of how to get an economy to provide jobs. I suspect we are heading into a global recession or worse, but that no one will be able to do much about it before the damage is done.

"The cash infusion was designed to help ease a spike in the overnight lending rate between banks. A sharp rise in such borrowing costs makes banks reluctant to lend to each other, worsening already tight credit conditions."
How much was the spike?
Fed funds were trading at 6 percent, or 4 percent higher than the central bank's target rate for overnight loans between banks, Bloomberg News reported.
The rate dropped to as low as 0.5 percent after the Fed added the temporary reserves
petermilko
should i buy now

and why not?
SpellcasterDX
I doubt you wrote all this. I'm sorry but it seems to be copied and pasted.

Anyway, if the stock market does crash, at least it won't be as bad as it was in the Great Depression so many decades ago.
LGCanada
If you were truly sorry, SpellcasterDX, then you wouldn't have posted the comment Smile.I'm just kidding. aside from that, yes I did write that.

I do this every day, I pick a topic in the news. then I select the main points. I write down my questions and and then i answer.

honestly, I think the inflow of cheap money into the market will cause inflation by devaluing the currency. it's interesting that gold and silver mining companies are actually losing dollar value in the stock market.

also an interesting fact is that China and Russia and some of the EU countries are pretty much devaluating their currency as well.

For example China's buying back stock's of really bad companies such as its ancient banks which can't really compete in the near future. it is interesting to note that iShare's China ETF holds many of these banks which have no future since they are government run and are becoming obsolete. So basically whoever invested in the China ETF is buying these companies. Which is actually kind of funny.
standready
I like the fact that our government got lobbied (read as officials lined their POCKETS) by Wall Street for deregulation. So the government did. Government kept questioning Wall Strret about pracitices. Wall Street replied (lied) everything is fine (we are making ourselves tons of money and then relined officials POCKETS).
Now, us taxpayers have to bail them. Necessary, sadly yes but so wrong. Will the government help out small businesses like mine that did not line their POCKETS? Perfect quote to end this from the movie: "Greed is good!"
cu2nite
I don't know much about shares and the economy, but my understanding is that it goes and comes periodically? Because everything seems like it's hit rock bottom, you think it's a good time to invest?
Silk2008
Hyperinflation is coming!!! You can't print $700 billion and inject it into the economy without there being inflation. Buy gold and silver now! For years and years now people have been saying that the rise of gold is at hand, I have until now ignored them. The fundementals are now truly there to support a price explosion. Convert stocks and securities into hard assets. Food, gold, silver, any hard asset that you can get your hands on. Especially the necessities. The current crash in the market was purposely engineered by the banking elite to get the American people to beg for some kind of solution, which happened. What did we get? Another step twards a global currency run by private global banks. Read InfoWars.com and learn what is happening right in front of you. You owe it to yourself, your family, and the future of this great country! Don't be another cow with your head stuck in the butt of the cow in front of you while your herded into the slaughter house. Arm yourself with knowledge of history and know that it does repeat itself. No-one ever said that being a patriot means that you trust and love the current gvernment. It just means that you believe in the constitution and know that the men who set this country up knew exactly what they were doing, and were genious. Before you even reply accusing me of being a conspiracy theorist, do your homework! Research the Federal Reserve system, and fiat currency.
Google the "Gulf of Tonkin incident" and learn how the U.S. staged an attack on Navy warships to get the American people behind a war in Viet Nam. Now think about 9/11 and the war in Iraq! Wake up people! Do some freaking homework and take back this country![/b]
BigGeek
Silk2008 wrote:
Hyperinflation is coming!!! You can't print $700 billion and inject it into the economy without there being inflation. Buy gold and silver now! For years and years now people have been saying that the rise of gold is at hand, I have until now ignored them. The fundementals are now truly there to support a price explosion. Convert stocks and securities into hard assets. Food, gold, silver, any hard asset that you can get your hands on. Especially the necessities. The current crash in the market was purposely engineered by the banking elite to get the American people to beg for some kind of solution, which happened. What did we get? Another step twards a global currency run by private global banks. Read InfoWars.com and learn what is happening right in front of you. You owe it to yourself, your family, and the future of this great country! Don't be another cow with your head stuck in the butt of the cow in front of you while your herded into the slaughter house. Arm yourself with knowledge of history and know that it does repeat itself. No-one ever said that being a patriot means that you trust and love the current gvernment. It just means that you believe in the constitution and know that the men who set this country up knew exactly what they were doing, and were genious. Before you even reply accusing me of being a conspiracy theorist, do your homework! Research the Federal Reserve system, and fiat currency.
Google the "Gulf of Tonkin incident" and learn how the U.S. staged an attack on Navy warships to get the American people behind a war in Viet Nam. Now think about 9/11 and the war in Iraq! Wake up people! Do some freaking homework and take back this country![/b]


Well I'm not gonna call you a conspiracy theorist, I'm gonna call you a smart person that has done thier homework!

Yup it is finally here, actually I'm quite a bit older than a lot of folks around here, and I'll tell you, as far back as 1982 and Ron Regan, when he proposed the first huge deficit, and expanded the military and the government with deficit spending, there were articles then that said it was the first step toward collapsing the economy and devaluing the currency. They were accusing them back then of working their way to a one world bank and one world currency. Which is probably true, and if so, this plan has been engineerd and step by step executed for 25 years probably longer since some say it started when Nixon took us off the Gold Standard. That would put it 35 years old. So yeah, this is something that was started long ago, and has been slowly implemented step by step to produce what we are seeing today. They finally got it done, and like you said those that see it, and understand what has heppened are just gonna be called nuts and conspiracy theorists. Oh well, you get used to hat after a while Laughing
GLOBALSTRATEGY
Investors should probably more cautious when buying in the stock exchanges. Crisis are cyclical, and the recovery of the investment can take time. If you sell when the shares or bonds fell, you loose. But on the other hand, we must remember that for example, those who bought stocks on Wall Street in 1929, at its peak, only got their money back in real terms in 1959. It seems there is no clear cut strategy, but only the general advise of checking well what stocks you purchase putting more emphasis in buying in sound business as a more important criteria than profit.
grashopa
Exactly - we need a bit more caution...

The underpinning of the stock market is profit as buying the stock is like buying a piece of that profit. Over the long term the profit for the stock market as a whole cannot grow faster than the world economy grows. Therefore stock prices should not grow much faster than the economy / inflation. If they do then stocks are at risk of a collapse such as we have had in order to bring prices back to reality.
gandalfthegrey
Watch Zeitgeist: Addendum
It explains everything about our economic, monetary and reserve systems.

http://video.google.ca/videoplay?docid=7065205277695921912
ptfrances
Thank you for this link. Very interesting Wink
smasha
As all the info has pointed out this was bound to happen. I just hope we don't keep making the same mistakes!
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