1) Stocks Take Hardest Hit Since Early '09

Bears ran wild Thursday, knocking down any bulls who took Wednesday's positive reversal as evidence the worst was over.

The NYSE composite plunged 5.4%, while the Nasdaq and the S&P 500 fell 5.1% and 4.8%, respectively. Declining issues led advancers by an 11-1 ratio on the NYSE and 12-1 on the Nasdaq.

Volume rose across the board.

The losses were stunning. The Nasdaq suffered the biggest one-day loss since Jan. 20, 2009, when the bear market was still on. Many stock fell in huge volume. Meanwhile, 785 stocks that had been trading above the 50-day moving average fell under it Thursday.

All three major indexes are now more than 10% under their highs, the traditional definition of a market correction. The NYSE composite is 14.8% off its high. The indexes also are at the lowest levels since late 2010. The Nasdaq undercut the 2600 level, where the index had found support in March and June.

The choppiness the market has delivered this year — making market turns tentative and short-lived — has vanished. This sell-off is clear and convincing.

Top-rated stocks have been taking sharp hits, often gapping down forcefully.

While jobless-claims numbers were better than expected Thursday, other fears have shoved aside the occasional bit of positive data. Talk of a double-dip recession is rising. And concerns over European and U.S. government debt linger.

These problems aren't new, but their persistence hasn't let the market dismiss them.

Still, the sell-off eventually could turn into good news for disciplined investors. By now, most investors — apart from the buy-and-hold camp — should be primarily in cash. So a continued downtrend won't do the disciplined investor much harm, and the pain could nourish the soil for a new uptrend.

Market Pulse noted the market had come under pressure on July 26, and it was a time to become guarded. A couple of days later, it became apparent the market was in a correction as distribution days piled up.

Pessimism is the manure that enriches the stock market's garden. But bullishness is still running high, according to Investors Intelligence's most recent weekly sentiment gauge.

The bullish camp among advisers is still at about 46% and the bears about 25%, according to Investors Intelligence. Healthy uptrends often begin when bears have the upper hand.

2) Debt: Quietly, with the debt-ceiling imbroglio behind us, we’ve entered a new era. And, no, that’s not a good thing. Our debt now exceeds the size of our entire economy. Our economy won’t be the same. With this correction, the markets have issued a stinging rebuke to those who believed that with the debt-ceiling impasse resolved we can return to business as usual. We can’t.

Those who carefully watch what the government does are no doubt alarmed it took just one day to raise the debt an additional $238 billion — or nearly 60% of that authorized by the debt-ceiling deal. Next week, we’re expected to add yet $72 billion more. With all this, we have passed a frightful milestone:

Total debt of $14.58 trillion now exceeds gross domestic product, putting uson a near par with such overly indebted
basket cases as Greece, Italy, Portugal, Ireland and Spain. But that 100% of GDP is more than just a number. As we’ve noted before, the most comprehensive study of government debt and what it does to an economy was
published in 2010 by economists Carmen Reinhart and Ken Rogoff. They looked at 44 countries over 200
years, the most ambitious study of its kind ever.

What they found should be as alarming to average Americans as it is plain to those on Wall Street. “Over the past two centuries,” Reinhart and Rogoff wrote in “Growth in a Time of Debt,” “debt in excess of 90% (of GDP) has typically been associated with mean growthof 1.7% vs. 3.7% when debt is low.” A cut of that size in average growth cannot be underestimated. In current dollars, it equates to $286 billion in lost GDP, rising every year with inflation—a huge slice off our future standard of living and quality of life.

Still wondering why the stock market is tanking? With $14.5 trillion in total debt, we’re already in deep trouble. Where will we be in 2021, 10 years from now, when total federal debt is expected to reach as high as $28 trillion and GDP is (generously, inour view) expected to reach $23.8 trillion? Then, by conservative estimates, our debt-to-GDP ratio will be close to 120%.

In short, debt will be a permanent millstone around the neck of the once-vibrant U.S. economy. We may already be seeing the effect of this in recent data. After first-half GDP growth was revised down from over 3% to just 0.7%, economists scurried back to their spreadsheets to lower second-half estimates. A double-dip recession now looms as a real possibility.

We supported this week’s debt-ceiling deal as the best that could be had, especially with Republicans — the
only party showing even a modicum of fiscal restraint—controlling only half of Congress. But the deal leaves much to be desired. By 2021, we’ll still add $8trillion in debt and even more in spending.

With their “stimulus,” regulations and vows of higher taxes,Democrats have done massive long-term damage
to our economy. They’ve controlled Congress for five years and the White House for nearly three. During that time, they’ve vastly increased spending and extended the government’s regulatory reach. They’ve also boosted our debt
by trillions of dollars. They’ve had their Keynesian party, at our expense. Now we get the bill—and the debt hangover.

3) Free Fall: The stock market is highly perceptive, and what it’s perceiving now is that (1) the mediocre recovery of the last two years is stalling out and (2) our leaders in Washington haven’t the vaguest idea of what to do about it.

A big part of this pathetic recovery has to be laid at government’s doorstep. Our top elected and appointed
officials try to blame it on everyone else, but it’s their incompetence that has brought us low. The weak 1.2% average GDP growth since the end of 2008 is a direct result of the financial crisis of 2007 and 2008. And this was itself directly caused by the explosion in sub prime loans—a policy of lending to non-credit worthy borrowers that dates all the way back to 1995.

Congress, the White House and bank regulators told banks then they would have to make as many as half
their loans to people who couldn’t pay them back. If they didn’t comply, they could be sued, or denied a
branch expansion or even a merger with another bank. Using Fannie Mae and Freddie Mac as financing
fronts, the government basically took over the private mortgage market. By 2008, Fannie and Freddie owned
or originated half of the $12 trillion in U.S. mortgages.

Those largely responsible — Rep. Barney Frank, former Sen. Chris Dodd and even President Obama — deny it. They can’t see that government dictating how businesses should run to achieve social goals has never worked—and never will. Think about it: Has government ever run anything well? Yet, after this debacle, they’ve done little to reverse
course.

Fannie and Freddie still exist. So does Too-Big-To-Fail. Stimulus is still with us, as our debt soars. Small businesses that create most of our new jobs now labor under the weight of hundreds of new rules and regulations, and the looming costs of ObamaCare. In July alone, according to Wyoming Sen. John Barrasso, more than 600 new regulations came on line, adding $9.5 billion to businesses’ annual cost.

Once out from under the burden that’s been placed on them, America’s innovators and entrepreneurs will again lead us out of this mess. But first we have to look to the political system that adjusts to and corrects for such problems.
Unfortunately, the most-needed adjustment won’t come until November 2012 — but come it will.

4) looking at the economic outlook, gonna be fun! if u guys can understand below, good for u, if not, nvm la









5) let's check out mid valley property fair this week to see r they in fear or window shopping for fun

This post has been edited by sulifeisgreat: Aug 5 2011, 04:27 PM