Dow Jones stocks suffer worst June since the Great Depression

Wall Street opens for trading tomorrow after a depressing week of losses that pushed the Dow Jones industrial average to its worst June since the Great Depression. The blue-chip index is at its lowest point since September 2006.

Investors are again contending with a relentless stream of troubling news from record oil prices to renewed concerns over the health of the financial sector.

“I think the market is trying to make a bottom, but the question is: Will it hold there or just crash through?” said Alexander Paris, an economist and market analyst for Barrington Research. “It feels just like the top of the technology bubble in 2000 – you know there’s something wrong, but it is hard to time it.”

The Dow closed Friday at 11,346.51, a loss of 4.2 percent for the week. The Nasdaq composite index finished at 2,315.63, down 3.8 percent. The S&P 500 index ended the week at 1,278.38, a drop of 3.0 percent.

Friday’s 107-point decline in the Dow left the index down 10.2 percent in June and on the brink of a bear market. The Dow has plunged 19.9 percent since setting an all-time high in October. Market experts define a bear market as a drop of at least 20 percent from a recent high.

“We are already in a bear market,” said Peter Kenny, managing director at Knight Equity Markets. “Even the good ships get stranded on the beach when the tide goes out.”

One Response

  1. You make some good points, but perhaps are unaware that the banks are the only industry which effectively allow them NOT to put money where their mouth is.

    Politics aside, Ron Paul has been speaking common sense, along similar lines to your article here. The difference is he discovered the ‘smoke and mirrors’ trick in the 50’s and 60’s – and has been trying to educate the Congress and the People ever since!

    Basically a bank takes in $100 dollars of gold, then lends out…$900 to customers and records $1,000 on it’s books – as assets. Yet they still only have the original $100 deposit in the vault!

    If that were a warehouse with 100 house bricks, you still have a hundred, regardless of how many promises you make. If you promise things you don’t have, outside of banking, that is called fraud.

    Right now there is a problem and the response should not be to dilute an already weak currency by issuing more notes. The notes should be coming back in – but not at the rate of the 1930’s – which caused the depression.

    We do have a bubble at present, but the data isn’t available directly anymore.

    Is this summer bubble just a result of inexperienced staff handling the ship?

    Back in 1928 (and before that in 1907) a similar thing occurred. Big dive in the banking sector, followed by big buy ups and a seeming rise.

    This year is in danger of the same thing happening. Don’t let the Olympics distract you, the price of oil will rise before the year end.

    This is despite political veribage from the politicians and quangos that make up the central banks.

    Theoretically if Fannie and Freddie do go under, the ‘posession is nine tenths of the law’ rule would apply to around half of all US mortgage holders…

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