I've never seen a meltdown happen but I think I know one when I see one

[Tab]

NEW YORK - Wall Street tumbled Monday, joining a selloff around the world as fears grew that the financial crisis will cascade through economies globally despite bailout efforts by the U.S. and other governments. The Dow Jones industrials skidded more than 300 points and fell below 10,000 for the first time in four years, while the credit markets remained under strain.

The markets have come to the sobering realization that the Bush administration's $700 billion rescue plan won't work quickly to unfreeze the credit markets, and that many banks are still having difficulty gaining access to cash.

Over the weekend, governments across Europe rushed to prop up failing banks. The German government and financial industry agreed on a $68 billion bailout for commercial-property lender Hypo Real Estate Holding AG, while France's BNP Paribas agreed to acquire a 75 percent stake in Fortis's Belgium bank after a government rescue failed.

The governments of Germany, Ireland and Greece also said they would guarantee bank deposits.

The Federal Reserve also took fresh steps to help ease seized-up credit markets. The central bank said Monday it will begin paying interest on commercial banks' reserves and will expand its loan program to squeezed banks.

It may not be a total meltdown, but this can't be good.

Voting for Bush in 2000 I can kinda understand, but how people eagerly voted Bush/Cheney '04 or want McCain now is beyond me.

[still_one]

1. It is a meltdown. The VIX is at 54. It has never been that high, and indicates

record fear

[JackRiddler]

4. This indicates the likelihood of a 54% volatility range within 30 days?

Wow.

[still_one]

5. Yes, and that volatility represents fear in this case /nt

[jojo54]

2. Some are saying "don't worry about it"

but I have to wonder how many more middle class Americans will be living on the street, or with parents/children, in the coming years.

[still_one]

6. People shoud be concerned. They told us not to be worried about

the housing crisis, the financial system, and deregulation also

It could be at least 5 years before this starts to recover

It all depends on your situation and age

[Warpy]

3. You have to remember a couple of things here

First, stocks are overvalued. There was massive inflation in equities fueled by the dotcom bubble in the 90s. People traded their hyperinflated dotcom stock for blue chips as soon as they turned a profit, causing inflation in blue chips. Stupid's economic policies of fattening the wealthy propped these inflated prices up for nearly 8 years. They still have a long way to fall. There is disagreement where the floor is because nobody knows what the true dollar deflation has been. My own guess is that it's around 7000, although it might go lower in the short term. Others on this board have suggested it's over 8000.

Second, the fall now is fueled not so much by the credit crisis but by people cashing out of high risk, high return investments like hedge funds. There's been quite a run on hedge funds occurring and they're dumping stocks and commodities futures to allow people to cash out. Most of those funds will ultimately fail.

Neither housing nor equities have much chance of becoming valueless, though, so hanging on for the wild ride is probably prudent. Unfortunately, the psychology of poverty is starting to take hold as people see their 401K plans lose a tremendous amount of paper value, and the crash of the consumer market is now a distinct possibility.