It sure is measuring up to the past crashes in pass century and given all the massive negative press and reporting that the sky is about to fall. This crash will go down in history as hugely monstreous!

Not even a coordinated barrage of rate cuts could prevent the stock market crash of October 2008 measuring up to those of October 1987 and 1929.
US stocks slid late in the session Wednesday, weighed down by continued tightness in credit markets, the need for capital at financial firms like Bank of America and a disappointing kickoff to the earnings season from Alcoa.
The Dow Jones Industrial Average fell 189.01 points (2%) to 9,258.10, its sixth straight decline and its lowest close since Aug. 11, 2003, more than five years ago.
For the week so far, the Dow is down 10%, on top of a 7.3% loss last week. By comparison, in the worst week of the 1929 crash, the week ended Oct. 19 that year, the Dow took a loss of 8.2%; the blue-chip index lost 13% on the week that started with Black Monday, Oct. 19, 1987. So far in October, the Dow is off 15%, compared with a loss of 20% in October 1929 and a loss of 23% in October 1987.
The broad Standard & Poor’s 500 fell 11.29 (1.13%) to 984.94, its lowest finish since Aug. 13, 2003. As of Tuesday, the S&P 500 had wiped out about $1.48tr in wealth during October, according to S&P.The technology-heavy Nasdaq Composite fell 14.55 (0.83%) to 1,740.33, also its lowest since August 2003.

Don’t believe in everything you read in the press. This perhaps could turn out to be an opportunity of a life time for many people (and not the mass). Take a look at all this from a different perspective. A “blessing in disguise” is the phrase I’d be inspired to in time of extreme crisis. If anything, at least we still have time on our side. Well, most of us anyway, and certainly I.

Let me now spell out how the new paradigm differs from the old one……. Instead of being always right, financial markets are always wrong. They have the ability, however, both to correct themselves and occasionally to make their mistakes come true…….George Soros: The New Paradigm For Financial Markets

In New York, the Dow Jones Industrial Average lost 35 points to 11,807.43 points on thin trading due to anxiety around the Federal Reserve’s interest rate meeting tonight. Inflation concerns underscore the Fed’s decision with recent oil price records adding pressure. General concerns about the economy abound and a report showed that consumer confidence was at a 16-year low. Financial stocks rallied on speculation that HSBC will takeover UBS. UBS shares gained 7% and Lehman Brothers gained 6.8% with the US Financials Index (XLE) gaining 1.2%.

If you’d ever played the stock market, these comments by PAUL B. FARRELL of MarketWatch may ring true to some extent … I don’t fully agree with his views but it makes interesting 5-minute read.

1. You know you’re (almost) never wrong

“Big Mistakes” calls it “confirmation bias,” another name for cognitive dissonance, the unconscious need your brain has to stick with what you already know as “The Truth” (even when it’s secretly “planted” there by Wall Street’s clever ad campaigns).

2. Your ‘mental accountant’ is an embezzler

Your brain loves “mental accounting.” A dollar looks different “depending on where it comes from, where it’s kept, or how it’s spent.” You spend tax refunds fast. But hang onto stock inherited from grandma. Wall Street’s ad gurus know the way into your pocket is through that unconscious 98% that’s manipulating your brain’s “accounting” system.

3. You hate to lose more than love to win

Psychologists call it “prospect theory:” Investors hate to lose so much we often sell winners to “lock in profits.” And we hang onto losers, praying for a miracle.

4. You throw good money after bad

The “sunk cost fallacy” is a favorite brain glitch. Here’s a familiar example: First blunder, pay too much for a house. Second, fail to get out at the top. Third, turn down a bid because it’s less than you paid. You’re stuck paying down a big bad mortgage.

5. Decision paralysis, so you do nothing

How your brain labels options changes the outcome: Whether it’s “one of rejection or one of selection, or whether you view it as protecting a gain or avoiding a loss.” Labeling confusion leads to “decision paralysis,” your brain locks up, does nothing, loses again.

Read more »

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Thought this is rather interesting … and ring so true – at least for me personally.

Hmmm …. what step am I at right now? Anyhow see below!

They are as follows:

1. We accumulate information – buying books, going to seminars and researching.
2. We begin to trade with our ‘new’ knowledge.
3. We consistently ‘donate’ and then realise we may need more knowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our ‘updated’ knowledge.
7. We get ‘beat up’ again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to ‘outside news’ and to other traders.
9. We go back into the market and continue to ‘donate’.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get ‘over-confident’ and the market humbles us.

Read more »

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