OK, I'm still looking for some sensible information about what's going on with the markets. So I came across an article entitled Why are the financial markets tanking?. Sounds pretty straightforward, until I started reading it and ran into statements such as these:

"Ultimately the anxiety-ridden market -- which, is, by the way, impacting not just equities, but commodities, bonds and currencies, as well -- reflects investors’ concerns about global growth."

Reflects investors' concern? I don't think so. I think it reflects the banks, investment houses, and their computerized trading algorithms.

"First, in the short term the fall in oil is damaging to risky asset prices, as oil and stocks are positively correlated from a markets perspective."

Ahhhhh, the fall in the price of oil is damaging risky asset prices. That means bets, not investments, that traders make on the possibilities of commodity price fluctuation. When they're wrong, they need to figure out how to cover those losses and that drags the market down.

"lower oil prices also cancel plans for capital spending."

Unless you are an oil company or a company that supplies products for oil exploration, drilling or transportation of oil products (less than 6% of the economy) it does not reduce the amount of money a company has to spend on capital spending. For a manufacturing company, the lessening of overhead spending for energy and lower freight costs should make more money available for capital expenditures.

"And, the more extreme negative impact on these groups has outweighed a more diffuse upside impact to some of the beneficiary sectors like consumer discretionary."

"Meanwhile, just as China is devaluing the yuan, it has also been selling U.S. Treasuries to prop up its currency, which could put upward pressure on U.S. interest rates."

Huh?

"over 30% of the revenues for S&P 500 companies come from outside of the U.S. and thus are negatively impacted by a rising dollar.

The U.S. manufacturing sector in particular has weakened due to a strengthening currency."

Do those statements seem contradictory to you?

"the junk-bond market, comprised of riskier companies with high debt levels, was under pressure amidst the oil slump, as worries abounded that companies in energy-related sectors would default on their debt."

Again, betting by speculators rather than investing by average people. And who gets burned for these bad risky bets--the average investor in their IRA or other retirement account.

So, after reading the article (which never answered the question of exactly why the markets are tanking) I'm just as mystified as I was before I read it. I guess I need to brush up on my finance speak double talk to better understand what's going on. Right now, I feel pretty stupid . . . So I'm taking G. Gordon Liddy's (you know, the Watergate burglar) and putting all my money in gold. Wait a minute . . . Commodities are down also, including gold. Looks like it's going back under the mattress for a while.

https://www.yahoo.com/finance/news/why-the-heck-are-the-markets-tanking-165146322.html?nhp=1

Last edited by Rongone (1/15/2016 5:24 pm)

Getting worst.... Remain calm all is well!

Dow Tumbles 391 Points Amid Global RoutOil slides below $30 a barrel and China’s Shanghai index falls
3.6%

[url=http://www.wsj.com/articles/global-stocks-fall-on-oil-and-china-woes-1452850130]http://www.wsj.com/articles/global-stocks-fall-on-oil-and-china-woes-1452850130


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Last edited by Common Sense (1/15/2016 7:29 pm)

Global stock markets dive amid oil rout

http://www.bbc.com/news/business-35362397

The UK's FTSE 100, Germany's Dax and the Cac 40 in Paris were all down by about 3%, wiping out the gains recorded on Tuesday.The drop in the FTSE puts it on the brink of a so called "bear market" - a 20% fall from April's all-time high.

The falls came after Asian stocks closed sharply lower. Markets in Dubai closed at a 28-month low, while in Japan shares fell to their lowest level since October 2014.Top emerging market shares and currencies were also caught up in the turmoil, with the Russian rouble hitting a new record low of 80.295 against the dollar.
 

Last edited by Common Sense (1/20/2016 9:37 am)

What, me PANIC ? 




Hard to remember when we see numbers like this is that you only have a loss when you sell. If you have been around long enough you will see many of the bull / bear swings. Some are caused by terrible financial calamities that take the systems to the breaking point. Thusfar this does not appear to be one of them. There ARE some banking issues with the oil speculative loans, but they do not represent the same threat as in 2008. Will this be an up year ? Not likely. But will it be another 2008. I am thinking not. So, unless you are not in it for the long run, then best just to keep a balanced portfolio of stocks, bonds, and liquid investments (cash, etc) and just wait it out. 
 

Nice finish to the week.......16,466.09+396.45 +2.47%