Dow suffers worst 2 day decline in 21 years

This was just another one of these days for the Dow when down 400 has become routine, not good! It's a sad state of affairs when that thought becomes routine. Dow dropped another 443 closing near its lows, decliners over advancers 5-1 & NAZ was down another 73. MLPs, REITs & high yield bonds funds sold off as usual in a negative market.

S&P 500 FINANCIALS INDEX had another big sell-off, taking it near the yearly (really multi year) low close of 179 on Oct 27:

Value 188.49

Change -13.59

% Change -6.7%

The chart below shows how the Dow bottomed recently. Since then it has been sort of range-bound for the last month. However the range has been wide, almost 2K. Today the Dow completed the worst 2 day loss in 21 years. It is clearly on defense & looks like it may be testing the bottom of the range, possible as soon as tomorrow. The VIX jumped 10 today, an enormous gain as fear strengthened dramatically:


Dow Jones Industrials --- 2 months






VIX --- 2 months






The gloominess in the the world economies keeps dragging down oil, down 10 in just 2 days.

CLZ08.NYM

Crude Oil Dec 08

....60.91

.... 4.39 (6.7%)

Last night Greta, had Donald Trump on as a guest (via phone). He repeated a few times that banks today have money thanks to the bailout package, but they are not lending to customers. He knows, that's key to running his businesses.

While the story below is not exactly a big picture story, Sheldon Adelson was one of the richest people in the US running a large business which may not be able to survive. This luxury business has been hurt badly by a global business slowdown, however the $9B in debt demands interest be paid timely. I've no personal stake in this venture & never have been to Vegas, but this is an indication of how the credit crisis can bleed into areas where none of us can imagine, putting an already very troubled economy in even worse shape.


•Adelson's Las Vegas Sands Plunges After Casino Cites Potential Bankruptcy


Bloomberg TV mentioned that Goldman Sachs has an excellent record of forecasting the unemployment number (being announced tomorrow) which everybody is dreading. Many are forecasting 200K increase in unemployment, very bad. Their forecast is 300K, much worse. If they are correct, there will be another major sell-off. More interest rate cuts were announced today in Europe, but I suspect that will will not stimulate more lending as is the case in the US. Hang on for what can be another brutal day.