Daily Revolt

October 20, 2007

Stock Market Plunge Friday: Only the Beginning

It is a stock market that bares no relationship with reality. With record oil prices, record low dollar, and collapsed housing market, the continued growth of stocks in previous weeks can only be viewed as madness. The fundamental problems with the economy do not justify a DOW at 1500. We should be seriously concerned, the bubble continues to grow, and when it pops it will plunge us all into a deep abyss:
The Dow Jones Industrial Average slid some 508 points, in a broad movement of panic selling which also came on the heels of a big sell-off the preceding Friday.
For believers in cosmic coincidences, this Friday's action might seem foreboding.

[...]"Friday's action was not a one-day event, it was something at work the whole week, with worries about the economy, then banks warning on earnings, followed by warnings from the industrials."
Also raising anxiety among investors, the dollar hit new lows against the euro while oil surged to a record $90 a barrel.
While cool-headed Wall Street analysts remain unconvinced that a repeat of 1987 is in the cards -- at least on Monday -- they readily admit that the right conditions might still be in place.

[...]Following this summer's credit crisis and worries about the housing market's drag on the U.S. economy, Wall Street went into the third-quarter reporting season hoping that global growth would lift the earnings of major multinationals.
But with the industrials' warnings Friday, the market had nowhere else to turn to.

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