NY Times: And You Thought September Was Bad

[marmar]

from Floyd Norris' blog:



October 7, 2008, 6:13 pm
And You Thought September Was Bad


September was the worst month in six years for the stock market. This month is young, but prices have fallen more in October than they did in September.

The rumor that Morgan Stanley’s financing was falling apart — which was denied and which appears to be false — was not the only factor in sending the market down today, but it helped.

Financial stocks led the decline, breaking through their July lows. The S.&P. Financial index ended the day at 215.39, the lowest close since April 28, 1997. That index was down 11 percent today, and is off 22 percent over the last four sessions.

It is gradually dawning on people that the entire financial system is in danger if this cycle continues and no one trusts anyone else. Bob Prince of Bridgewater Associates says there are indications that deposits are moving to small banks from large banks (under the insurance limit, of course) but that the small banks will not take the chance of lending to the large banks.

It was in that atmosphere that the Morgan Stanley rumor spread. The fact that it seems to have been believed by some is a commentary on how jittery people are. .......(more)

The complete piece is at: http://norris.blogs.nytimes.com/2008/10/07/and-you-thought-september-was-bad/

[TACstrat]

1. October will be worse. Over 1,000 jobs lost in Dallas last week alone.