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How close to capitulation?

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How close to capitulation?

Postby Pedronicus on Mon Oct 06, 2008 10:17 am

Financial crisis at-a-glance: 6 Oct

1534: Russia's dollar-denominated RTS stock market closes down 19%, its worst one-day fall on record. The index closes at 866.39 points, down 65% from the all-time high reached in May this year.

1506: The Federal Reserve acts to boost liquidity in money markets - by making $150bn available for auction on 24-day and 85-day loans.

1435: Trading on Brazil's stock market is suspended half an hour after opening following a 10% fall on the main index.

1430: On Wall Street the Dow Jones opens down 208 points, or 2%, at 10,117.

1350: In the US, the President's Working Group on Financial Markets says it is moving quickly to exercise the new powers it has been given as part of the Wall Street rescue package, saying it will move "with substantial force on a number of fronts".

1218: Iceland's stock exchange says it has suspended trading in all financial shares including the major banks Kaupthing, Landsbanki and Glitnir.

1205: Russia's benchmark RTS stock exchange reopens after a one-hour suspension triggered by a 14% share fall. The country's other exchange, the Micex, underwent a similar shutdown earlier in the day after shares slumped 15%.

1145: The FTSE 100 in London is down 5.4%, the Cac 40 in Paris is down 5.9% and the Dax in Frankfurt has dropped 5.4%.

1115: Key European markets all sharply lower in morning trading. London's FTSE 100 index and France and Germany's main stock markets have all lost about 6%.



Every European Union leader has signed up to the following statement:

"All the leaders of the European Union make clear that each of them will take whatever measures are necessary to maintain the stability of the financial system - whether through liquidity support through central banks, action to deal with individual banks or enhanced depositor protection schemes.

"While no depositors in our countries' banks have lost any money, we will continue to take the necessary measures to protect both the system and individual depositors. In taking these measures, European leaders acknowledge the need for close coordination and cooperation."

So the mayhem of uncoordinated statements and actions over the past few days by the governments of Germany, Denmark, Sweden, Ireland and Greece was simply an accident.

They're all back on the same hymn-sheet today.

Investors seem underwhelmed: the FTSE 100 index is tumbling and shares are currently almost 8% lower.

If sustained this would make it the third worst fall in the history of the FTSE 100 index.

Does this mean we're close to that fabled moment in stock markets - the point of capitulation - when investors lose all hope and dump their stock at any price?

According to the theory, there can be no sustained recovery until the markets are in the clutches of utter despair.
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Re: How close to capitulation?

Postby Frop on Mon Oct 06, 2008 10:19 am

It's inevitable, but anybody could've seen this coming years ago.
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Re: How close to capitulation?

Postby jbrettlip on Mon Oct 06, 2008 11:24 am

I think the correct term is "fornication" the point where you just take it in the ass from the market.
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Re: How close to capitulation?

Postby Frigidus on Mon Oct 06, 2008 3:37 pm

jbrettlip wrote:I think the correct term is "fornication" the point where you just take it in the ass from the market.


I thought that was "sodomy".
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