Comments on: Citi: A $9.8 Billion Loss http://www.drinkingisbelieving.com/2008/01/15/citi-a-98-billion-loss/ The party doesn\'t have to end! Fri, 29 Aug 2008 01:15:03 +0000 http://wordpress.org/?v=2.2.3 By: Mark the Market Maker http://www.drinkingisbelieving.com/2008/01/15/citi-a-98-billion-loss/#comment-81 Mark the Market Maker Mon, 21 Jan 2008 18:39:51 +0000 http://www.drinkingisbelieving.com/2008/01/15/citi-a-98-billion-loss/#comment-81 First Citi, Then Merrill, what next? Things are looking down. I just saw a headline about the British exchange. The FTSE 100 is at its worst start since records began in 1936! Recently, its value plummeted 10% within the last 10 days with today being the worst decline since 9/11. So much for the problems being localized. If foreign investment is saving the US markets, then what is saving/will save the foreign markets? In my opinion, I believe that some sort of balance will be achieved globally. The markets are very much based on perception. Why did things suddenly get bad? People started talking. The value of a stock or an entire index does depend on earnings, ROI, etc., but human emotions (perceptions, fears, optimism)play an immensely important role in the overall market stability. What we are seeing now is a combination of gloomy economic reports and intensified fear resulting in massive sell-offs. Think about it. Large companies are posting record losses (losing billions in one quarter), the fed and the president are predicting a "downturn" (NOT a recession - they don't want to say that awful word), and many people are expressing their fears of a weak dollar/weak economy by pulling out. These three factors pave the way for a recession, leaving people to wonder 'when' and not 'if'. Damn, I wish I didn't pawn that solid gold paperweight my grandfather gave me. First Citi, Then Merrill, what next? Things are looking down. I just saw a headline about the British exchange. The FTSE 100 is at its worst start since records began in 1936! Recently, its value plummeted 10% within the last 10 days with today being the worst decline since 9/11. So much for the problems being localized. If foreign investment is saving the US markets, then what is saving/will save the foreign markets?

In my opinion, I believe that some sort of balance will be achieved globally. The markets are very much based on perception. Why did things suddenly get bad?

People started talking.

The value of a stock or an entire index does depend on earnings, ROI, etc., but human emotions (perceptions, fears, optimism)play an immensely important role in the overall market stability. What we are seeing now is a combination of gloomy economic reports and intensified fear resulting in massive sell-offs.
Think about it. Large companies are posting record losses (losing billions in one quarter), the fed and the president are predicting a “downturn” (NOT a recession - they don’t want to say that awful word), and many people are expressing their fears of a weak dollar/weak economy by pulling out. These three factors pave the way for a recession, leaving people to wonder ‘when’ and not ‘if’.

Damn, I wish I didn’t pawn that solid gold paperweight my grandfather gave me.

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