How Bad Will The Markets Get Slammed on Monday?
 

Anybody with a good track record in market timing have a good idea?

Re: How Bad Will The Markets Get Slammed on Monday
 

If it does it will be the opportunity of a lifetime for some.

Re: How Bad Will The Markets Get Slammed on Monday
 

being in a bear market you have to look in the mirror and ask

youself what is your "time-frame" ???

One school of thought that this will bring us out of a recession

I know how absurd this sounds but what a heck I am a contrarian.

One more 'food for thought' typically war is bullish. This however is 'not your grandfathers war'.

Re: How Bad Will The Markets Get Slammed on Monday
 

Well, I'm certainly not a market expert but here is my opinion. When there is a crisis the market usually drops, but then it recovers. Now that assumes the market stays open. So if the market would have been open on Wednesday it probably would have dropped sharply and by Friday be back to where it started form


I suspect we will see something similar this week. The market might drop at first but then it will come back. We'll see if I know what we are talking about soon.

My Thoughts
 

I think the market will be down tomorrow in the 3-5% but I'm certainly not very good at making 1 day predictions. Expandding the time frame a bit, if there is anything I've learned about the markets it is that when the economic risk goes up, prices come down and vice versa. What I find interesting about the current situation is that there are many competing factors is assessing the economic risk. The uncertain nature of what will come in the war on terrorism certainly increases the economic risk. Also the economy probably hasn't bottomed in the current business cycle. Consummer confidence numbers were bad on Thursday and the best guesses are that the consummer is going to pull his horns in a little more so to speak because of this crisis. As Jack pointed out war is usually bullish but we're probably breaking some new ground here in fighting this war. I think it's fair to say that there will be a substantial increase in defense spending on all fronts. This will be stimulative to the economy in many ways. Also the Fed is supplying massive liquidity to the system and I'm quite sure that they will lower interest rates yet again. There is also quite a bit of speculation that there will be coordinated effort by the European and Japaneese central banks to lower interest rates. Even though the economy hasn't responed that well to lowered interest rates this year they are stimulative eventually. So the consummer is retrenching but the government spending is increasing a great deal. What about investment (capital) spending? I expect it to pick up a great deal in the subsequent quarters due to the increase in government spending. Lastly the net exports will probably rise due to a decline in the dollar and I expect more investment spending in Europe as well. So I think that GDP growth will indeed be given a shot in the arm due to the govt spending just as Keynes would have recommended. Perhaps consummer confidence will get a lift if we have some early success in our war and the increase in government spending abates the trend in increasing unemployment.

Re: How Bad Will The Markets Get Slammed on Monday
 

One thing to remember is that the market was tanking anyways before the terrorism. The attacks certainly played a part in the carnage, especially in the airlines, but the market was headed south big time anyways. Businesses were slowing down travel expenditures in a big way and they are by far the bulk of the airline business. Wall Street is simply spinning this and using the terrorism as an excuse because they have had buy ratings on just about everything throughout this whole bear market. The things you have to worry about are the airlines and perhaps "destination" entertainment like Vegas or Disney theme parks. Otherwise I think life will go on even with a war...I mean if you were less inclined to buy new clothes or a new car today is it because of some terrorist attack or because you're worried about your financial situation?


I love how companies are leading their earnings warnings with how the terrorism is going to affect their bottom line as if 1) They weren't going to miss estimates had not the WTC been attacked and 2) They have all sorts of experience as to how terrorism affects the economy and their markets. Ridiculous.