Read ‘em and weep

All the rules are out the window. We’re in new territory now and nobody knows anything. Don’t believe any predictions you hear because they really don’t know. The DJIA Thursday dropped to 7552.29, its lowest in five years. As my stock market savvy friend advised me, at this point you can be sure it won’t drop more than 7552.29. Hah!

Traditional market thresholds no longer matter:

There was a time when thresholds meant something. The Dow Jones average sinking below 8,000 must mean the bottom is near. The S&P 500 falling 50 percent from its high must signal the end of the free-fall.

Economists, money managers and traders who watch the markets closely say you can’t assume previous bear market measures mean much. They acknowledge they don’t know where the bottom is and anxiety remains high. So does the selling, which continued Thursday.

I’m curious, OneUtah readers, have you felt the pinch? Are you doing things differently because of the financial disasters we’ve seen? Or do you, like me, still feel somewhat isolated from the real pain — so far. My very smart friend predicts that we will all be feeling the pain before long.

Chart credit: MSNBC

  1. #1 by Shane Smith on November 21, 2008 - 7:22 am

    Have I felt the pinch? My wife works for a bank, and gets her bonus based on performance, which I somehow tied to stock (despite the lack of reality there) among other things.

    When I think of the amount of money we won’t be getting this year because of the current market I have to go sit down a while…

  2. #2 by Becky on November 21, 2008 - 7:29 am

    A member of my immediate family was laid off from her very good bank job this past week. She’s getting a good severance package and is hopeful to find something else soon. I hope so too. I might add, being in sales, she was in a pretty vulnerable position once credit dried up.

  3. #3 by Doug on November 21, 2008 - 8:15 am

    We aren’t feeling anything yet, but we have always lived quite frugally. We own our house, don’t have car payments, don’t buy much gas, and ride our bicycles to work. Our part time jobs seem safe at this point, although our retirement and savings have diminished significantly. We were not always in such a good position but kind of thought this was coming. I just wish I had bought some gold.

  4. #4 by Becky on November 21, 2008 - 9:03 am

    Ditto with me, Doug (except for the bicycling). I worry more about my kids and am thankful I still have my large house just in case some of them get into real trouble. At least they’ll have a safety net here.

    And as for retirement, I figure I’ll just try to stay healthy and keep working. I can’t do anything about the losses I have on paper, so I’ll just forget about retirement for now.

  5. #5 by Richard Warnick on November 21, 2008 - 9:03 am

    I read the almost-daily front page economic horror stories in the Salt Lake Tribune, however the crisis hasn’t affected me personally yet. I’ve never gone out on a limb credit-wise, so I don’t have to worry it will get sawed off. As for the stock market, I’m strictly a long-term investor.

  6. #6 by Glenden Brown on November 21, 2008 - 11:15 am

    I work for a distributor and we’re seeing in our office (no details due to privacy, so don’t ask) is some very notable trends. A number of our customers are having a harder and harder time paying – their collection days with their customers are extending and so their payment days with us are getting longer. At the same time, some of our competitors are having a hard time retaining customers since they their cash flow is getting hit and they can’t keep their stock levels up so customers are shopping around more, meaning we’re seeing more movement within our customer base – and less customer loyalty. At the same time, we’re hearing about large contractors etc. suddenly finding themselves without credit lines which is slowing down or even stopping some projects (i.e. the credit crunch).

    For the most part, I haven’t felt to much of the pinch but I think the large portion of my income that is based on overall corporate performance is going to be much smaller than in the past.

  7. #7 by Becky on November 21, 2008 - 11:53 am

    I see UDOT is delaying billions of dollars in road projects for now. Another impact on local businesses and workers.

  8. #8 by Mike on November 21, 2008 - 12:42 pm

    I eat out less and go to cheaper places. Suddenly, $1.95 seems like a lot for a diet coke so I order water. I save a lot more which doesn’t help the economy but makes me feel more secure and hopefully buying more in the 401K when stocks are down will be beneficial in the long run. I drive less and walk more which is good for me but bad for UDOTs transportation projects. I’d like a new car but the current one has no payment so I’m putting it off. Nothing big, but little things that if everyone is doing, add up to problems for the total economy.

  9. #9 by Larry Bergan on November 21, 2008 - 2:10 pm

    So far, so good, but it’s hard not to be worried about our future. At my age, a serious economic depression would be a hard thing to comprehend. I’m hoping our new management will be able to bring us out of this scare somehow.

  10. #10 by cav on November 23, 2008 - 1:38 pm

    What if they gave a Depression, and nobody came?

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