Black Friday Stock Market Collapse
If ever there was a setup for a Black Friday on Wall Street, this is it.
We can hope it doesn’t happen. But better that investors are realistic about the risks. Global markets and the world economy are at a dangerous point in this debt-fueled debacle, and anyone who says otherwise is a liar.
On Thursday the U.S. stock market suffered its seventh straight loss, and the 7.3% drop in the Dow Jones industrial average — down 678.91 points to a five-year low of 8,579.19 — was the biggest yet in this latest sell-off.
In other words, the get-me-out-at-any-price mentality is more intense than even a few days ago. Many people are morose, demoralized, desperate. They can’t take any more.
“Investors are in survival mode,” said Robert Bissell, chief investment officer at Wells Capital Management in Los Angeles. “Stocks of major companies are at ridiculous prices,” he said, but no one cares. “This is what panics are all about.”
Much of the selling now is forced: Hedge fund managers may not want to let stocks go at these prices, but their clients want their money back. Ditto for mutual fund managers, who are facing a surge in redemptions. Selling begets more selling.
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