U.S. Stocks Fall in Worst Start to a Year

[Pale Blue Dot]

Source: Bloomberg

an. 20 (Bloomberg) -- U.S. stocks sank, sending the Standard & Poor’s 500 Index to its worst start to a year, as financial shares tumbled to an almost 14-year low on speculation losses will force banks to raise more capital.

State Street Corp., the largest money manager for institutions, tumbled 59 percent after unrealized bond losses almost doubled. Wells Fargo & Co. and Bank of America Corp. slumped more than 23 percent on an analyst’s prediction that they’ll need to take steps to shore up their balance sheets. The Dow Jones Industrial Average plunged 4 percent, the most on an Inauguration Day in the measure’s 112-year history.

The S&P 500 sank 5.3 percent to 805.22. The S&P 500 Financials Index fell 17 percent to below its lowest closing level since March 1995 as concern European banks need more capital also weighed on the group. The Dow average slid 332.13 points to 7,949.09.

>>>

U.S. financial losses from the credit crisis may reach $3.6 trillion, according to New York University Professor Nouriel Roubini, who predicted last year’s economic and stock-market meltdowns.

“If that’s true, it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion,” Roubini said at a conference in Dubai today. “This is a systemic banking crisis.”

Read more: http://www.bloomberg.com/apps/news?pid=20602003&sid=ai_...

---

I guess it's finally time for the complete truth to come out.

[louis-t]

1. It really grinds my gizzard that BoA got billions

in bailout money after 'buying' Merrill Lynch and Countrywide. WE bought them those institutions.

[endarkenment]

2. The Bush Depression is On.

The broad index S&P has lost 13 years if growth.

[regnaD kciN]

17. Except that, since noon EST...

...it will be known in the Republican Noise Machine as "the Obama Depression."

[BanTheGOP]

3. End Capitalism Now

We have a golden opportunity with the crisis to restructure the financial paradigm of this country and lead the world in the destruction of the republicanist Profit Motive / Military / Industrial complex which supports the very being of the republican party. Barack should use as much capital as necessary to socialize and nationalize our industry and tax structures.

[Johnyawl]

4. THAT ain't gonna happen

Obama, like FDR before him, will restructure and reregulate capitalism so that it will survive.

[fed_up_mother]

9. NO, thanks. REGULATE capitalism.

I have no desire to live in a country where "almost" everyone (not counting the party leaders) are equal because everyone has been pushed down to third world levels.

[BanTheGOP]

15. Rejecting capitialism for socialism...

...is always going to be viewed as an "all or nothing" type of argument, especially as promoted and shoved down our throats by the republican cretins for years.

It is time that we spell out the social contract between people and their ability to earn a fair income. Ending capitalism, or allowing most people to achieve a fair, equitable income based on societal need instead of corporate greed, is paramount.

You wanna call it regulation, fine. Just get rid of the current method.

[fed_up_mother]

19. The problem I see is that some folks don't care if we reduce the standard of living

for the vast majority of Americans as long as everything is "fair and equitable." I strongly reject that notion.

We need a basic standard of living that treats people with dignity. However, if the majority of Americans are earning more than them through a regulated free market - good! Then they can look forward to their kids having a better standard of living someday, as well.

[BanTheGOP]

20. We DO have gradations of income!

Frankly, we do have gradations. Even in the most egalitarian wage scheme, the maximum wage would be around 10 times the minimum wage. Some people more extreme than myself have said that there should not be more than seven times the income (not just salary, but total income including stocks) between the highest and lowest allowable wages, but that is rather unobtainable.

But frankly, even if we go with the x7 route, if the minimum wage were $10 per hour, multiply that by 50 weeks x 40 hours per week for 2000 hours. So the algorithm is to double the hourly rate and multiply by a thousand for a yearly salary. Multiply it by 7, and you get the salary of the proposed maximum wage, or 140,000 per year. If both parents made 100,000 per year, that's 200,000 a year for the household, which is well within your own definition of a "regulated free market".

In fact, I went farther and raised the limit to an annual income of 10 MILLION dollars a year before the 100% taxation rate kicked in; in addition, everyone over a million dollars pays 70%. Now, 70% was the rate before 1960, but by 1980 Reagan bastardized the rate by letting billionaires get away with a 28% rate BEFORE they lowered the rate down to damn near 0% with their high priced lawyers.

But in any case, I do not advocate lowering the standard of living downward in any case, and it cannot happen with a righteous tax policy, preferably with a destroyed and impotent republican presence in congress.

[AtheistCrusader]

5. How in the heck does this hit on Inauguration day?

Seriously? Timing? What? Where was this report yesterday?

[BeHereNow]

6. It's the Bush Administration's parting gift to the country.

The timing is no mistake- it's a final fuck-you to
we the people and the new administration.

While they retreat to their ill gotten mansions,
the are chanting, "Let's see you fix THIS, Obama!"

They WANTED to darken the cloud over America on
this historical day, and looks like they did.

BHN

[Purveyor]

8. You haven't seen anything yet. Wait until the Obama team throws open the hood

on this brokendown junker of an economy and discovers the real truth.

[NashVegas]

10. You See Krugman?

He's not high on hope today. Alternet carried his column here:

http://www.alternet.org/workplace/121051/obama%27s_team... /

Some interesting comments back, in particular, an FDR-style bank holiday to give them time to audit all the books.

[WriteDown]

13. Sounds like a nightmare....

Does not look good at all.

[fed_up_mother]

11. New quarterly reports out for various corporations. Doesn't look good.

[GentryDixon]

7. Bush's parting shot.

[lelgt60]

12. A minor bit of good news...

IBM earnings and outlook look good.

Also, RBS $41 billion loss wasn't really a "cash" loss. Only $7-8 billion.

Finally, according to CNBC, a majority of inauguration days have been down stock market days.

[whistle]

14. Hello, there has been a financial meltdown taking place since August 2007

[AngryAmish]

16. Way to go, Bush!

[quidam56]

18. Sean Hannity SHUT UP ! Dick Morris SHUT UP ! Bill Oreilly SHUT UP !

I can hear them now, Obama hasn't been President for even one full day and look at the mess America is in, Bill O will send his minions to investigate. http://www.wisecountyissues.com

[PSPS]

21. No surprise. Bush's "Plunge Protection Team" didn't come to work today.

The PPT, which makes straw purchases, has been the market-manipulation tool of republicans since saint ronnie started it. Since it's been the only thing propping up the market for the past year, it doesn't surprise me at all that the market went down today.