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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Dow Takes Dive

That was a short rally. Good thing we didn't trust it.

At about 10:30 a.m., Wall Street is down across the board: the Dow is trading down between 180 and 200 points, or 2 percent; the S&P 500 is down 2 percent and the Nasdaq is down about 1.5 percent.

The Dow is now heading toward the 8,000 barrier; another 350-point drop and the first number in the Dow will be a "7."

It looks like the markets are settling in to another day of sell-offs, based on the underlying fundamental of the economy, which are not good.

Here's a quick look at the economic news that has rolled out this morning:

-The Swiss National Bank and the Fed have agreed to buy $60 billion in toxic assets from UBS.

- The cost of living in the U.S. -- judged by the Consumer Price Index -- remained unchanged in September. This means inflation is not a problem and the Fed has more leeway to lower interest rates if it wants to in an effort to unfreeze the credit markets.

- Financial giant Citigroup posted its fourth-straight quarterly loss and will cut 11,000 jobs.

- Industrial production in the U.S. hit a 34-year low in September, thanks to a combo punch from a couple of hurricanes and the ongoing machinists' strike at Boeing. By the way, 1974 marked the beginning of the end of a huge manufacturing component of the United States: U.S. Steel and its employees at the sprawling Gary, Ind., plant, struck an experimental collective bargaining agreement meant to avoid strikes and try to keep an already-struggling steel industry on its feet. It didn't work.

- New jobless claims from last week jumped higher than expected.

Did you know? The average U.S. credit card holder is carrying $10,000 in debt on that card.

-- Frank Ahrens

By Frank Ahrens  |  October 16, 2008; 10:37 AM ET
Categories:  The Ticker  
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And the markets tank AGAIN!

You have to expect this. With the outrageous credit card debt in the US coupled with the collapse of the housing bubble and the consequent near failure of the banking system and the increased taxpayer load from the trillion dollar bailouts, the future looks bleak... because the future _is_ bleak.

By New Years expect the retailers to report the lowest per-capita sales figures since 1932.

Expect massive layoffs between now and Thanksgiving... and expect most of those people who get laid off to be people with overpriced housing that's leveraged to the limit and with no savings and massive credit card debt. Bankruptcy will be their only option and if you think the banks are hoarding cash now, you have seen nothing yet.

The only way this economy can be saved right now would be if people who have no debt and have large savings and paid-for assets go out and buy lots of things they probably neither want nor need. Of course that would leave them with no savings in the bank, but the banks are doomed to fail by Easter in any case.

Posted by: Thomas Hardman | October 16, 2008 11:22 AM | Report abuse

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