Y*****g
发帖数: 158 | 1 "In the later part of July 1998, the stock market began to suddenly fall
apart, just as it did in 2011. The initial drop stabilized into mid-August
and then accelerated. One reason for the 1998 selloff was well-know, but the
one that caused the final low was only revealed later on. Is there
something important that investors don't know yet in August 2011?"
http://www.etfguide.com/research/624/23/Today%27s-Market-Looks- | d****a
发帖数: 2901 | | t**u
发帖数: 1572 | 3 Today's Market Looks A Lot Like August 1998
By, DARYL MONTGOMERY
Aug 18, 2011
In the later part of July 1998, the stock market began to suddenly fall
apart, just as it did in 2011. The initial drop stabilized into mid-August
and then accelerated. One reason for the 1998 selloff was well-know, but the
one that caused the final low was only revealed later on. Is there
something important that investors don't know yet in August 2011?
Something is seriously bothering the stock market and the news that's out
there isn't enough to justify what is going on. Such was the case in August
1998 as well. What caused the sudden bear market to appear out of nowhere in
1998 became fully evident only after the fact. The same could be the case
in August 2011.
Perhaps the flash crash in October 1997 was a warning of things to come,
just as the flash crash in May 2010 may have been a prelude to today's stock
market drop. In the second half of July of 1998, stocks began to nosedive
suddenly, just as they did in 2011. Some stabilization took place in the
market toward the middle of August in 1998 and then a new deeper plunge
began. Today, the Dow Jones Industrials (NYSEArca: DIA) were suddenly down
over 500 points this morning on what could only be considered minor bad news
.
There were actually two problems causing the market debacle in 1998.
Everyone knew about one of them - the Russian debt default and devaluation
of the rubble, which took place on August 17th (less than half of the
eventual market decline took place before this date). Only Wall Street
insiders knew about the second one - problems at Long-Term Capital
Management (LTCM) - that almost brought down the financial system.
Trouble in Russia was evident as early as October 1997 and it resulted from
the fallout from the Asian financial crisis, which in turn started as a
currency crisis in Thailand in July of that year. Today, Europe is
undergoing a crisis with the euro that began in Greece in 2010. By August
1998, the Russian central bank had spent a great deal of its dollar reserves
defending the ruble and decided to give up. The default had a number of
ripple effects, but the most important one on LTCM wouldn't be known by the
public until late September, only days before the market finally hit bottom.
After the Russian (NYSEArca: RSX) debt default, stocks plunged until the
beginning of September. The market was close to its ultimate low at that
point, but only because of the subsequent successful rescue of LTCM. Stocks
then rallied for approximately three weeks. A bailout of LTCM was arranged
by the Federal Reserve on September 23rd. The market then sold off until
early October hitting a new low and then the decline was over.
In the rally that followed the stock market experienced huge gains led by a
bubble in tech stocks. This was a consequence of the Fed lowering interest
rates and pumping too much money into the financial system. The Fed had a
lot of leeway to do both in 1998 and still there were serious negative
results between 2000 and 2002 when the tech bubble collapsed. Inflation wasn
't a concern back then because commodity prices had been declining for
almost two decades and were around their lows. It should be assumed that a
failure to have successfully rescued LTCM would have caused a much bigger
drop in stocks (as happened when the Fed didn't bail out Lehman Brothers in
September 2008).
The Fed has a lot less ability to maneuver in August 2011. Fed funds rates
have been at zero since December 2008. The Fed has already expanded its
balance sheet by approximately $2 trillion since the Credit Crisis began.
Commodities are closer to their all-time highs now, not their lows. Another
bailout like the one in 1998 (which was minor compared to what occurred
during the Credit Crisis) could send inflation assets into a bubble. Gold is
already trading over $1800 today and seems to be leading the way. | t**u
发帖数: 1572 | 4 大银娃一出来，股版遭殃
【在 d****a 的大作中提到】
: 写这种文章的很自恋…
| s********i
发帖数: 17328 | |
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