Dow plunged 389, decliners over advancers 9-1 & NAZ had a bigger percentage drop (down 105). Bank stocks were heavily sold. The Financial Index dropped 10 (an unusually large drop) to 173.
The MLP index dropped 7½ to 360 & the REIT index was off 11 to 222. Junk bond funds, reflecting anxieties in the stock market, were down about 1%. A flight to safety brought buying in Treasuries with the yield on the 10 year Treasury falling well below 2%. Oil fell as Italian bond yields surged to euro-era records after a clearing firm increased the deposits it demands for trading the Italian securities, intensifying the European credit crisis. Gold, like stocks, did not find friends today.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
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The drive by Greek Prime Minister Papandreou to put together a unity gov descended into disarray as rival parties fell to squabbling over the next premier, undermining their bid to secure bailout funds. He met with President Papoulias to resign as criticism grew over delays in naming a new prime minister. “Despite our differences we leave clashes and sterile opposition to one side,” Papandreou said in an address to the nation. A new prime minister was not named in his speech. The 2 biggest political parties agreed to name parliament speaker Filippos Petsalnikos to head the gov rather than a former ECB Vice President. Chaos continues in Greece & that must settle down before getting bailout II.
Greek Unity Deal in Disarray Amid Squabbles
Dems criticized a plan by Reps to cut the US deficit by overhauling the tax code as a windfall for the wealthy even as the plan signaled a new willingness by Reps to include tax revenues in any agreement to slash the deficit. A Dem analysis said the plan would lower rates for high-income Americans while raising taxes on the middle class. But Reps say the plan includes $300B in higher tax revenue to help cut the deficit, most of which would come from reducing tax breaks for the wealthy. As a result, efforts to reach agreement are stalled on a $1.2T deficit-cutting plan by the supercommittee as it approaches its Nov 23 deadline. This plan would provide a “significant tax cut for those with income above $200K,” according to the Dem analysis. Reps proposed setting the top marginal tax rate as low as 28%, compared with the current 35%, while reducing individual tax deductions, exclusions & changing the way income tax brackets are indexed to inflation. It also would raise the Medicare eligibility age to 67 from 65. The super committee is supposed to be non-partisan, but forget that. Arguments will be as bad as those in Greece today.
Goldman Sachs faces lawsuits over almost $156B in mortgage securities, a more than 30-fold increase from the amount disclosed 3 months earlier! The figure, up from $485M previously, does not represent how much money management estimates it may lose on the litigation. GS lifted that estimate of "reasonably possible" losses to $2.6B from $2B. GS also added 3 European financial firms to a list of parties that have threatened to sue it. Much of the increase comes from a lawsuit filed against the bank in Sep by the Federal Housing Finance Agency, which accused GS of misrepresenting the quality of $11.1B worth of residential mortgage-backed securities. The stock dropped about $9 to below $100 in what has been a dismal year for GS.
Goldman Sachs Group, Inc. (The) (GS)
This was a very bad day for the markets & the chart below shows there have been quite a few in recent months. As a reminder, 10.6K had served a ceiling for the Dow for much of the summer & now Dow wants to test is strength to serve as a floor. Falling thru will be a major bearish signal & that test could come as soon as tomorrow. The volatility shot up in today's massacre of stocks. The VIX jumped 8+ to 36, into very high territory, after lumbering around the mid teens when the market was doing better. European debt problems seem like they will drag on forever & the American debt problems don't show any sign of going away soon.
The MLP index dropped 7½ to 360 & the REIT index was off 11 to 222. Junk bond funds, reflecting anxieties in the stock market, were down about 1%. A flight to safety brought buying in Treasuries with the yield on the 10 year Treasury falling well below 2%. Oil fell as Italian bond yields surged to euro-era records after a clearing firm increased the deposits it demands for trading the Italian securities, intensifying the European credit crisis. Gold, like stocks, did not find friends today.
ALERIAN MLP Index (^AMZ)
DJ REIT INDEXDJR (^DJR)
Get the latest daily market update below:
Treasury yields:
U.S. 3-month | 0.005% | |
U.S. 2-year | 0.226% | |
U.S. 10-year | 1.954% |
| CLZ11.NYM | ...Crude Oil Dec 11 | ....95.91 | ... 0.89 | (0.9%) |
Photo; Yahoo
The drive by Greek Prime Minister Papandreou to put together a unity gov descended into disarray as rival parties fell to squabbling over the next premier, undermining their bid to secure bailout funds. He met with President Papoulias to resign as criticism grew over delays in naming a new prime minister. “Despite our differences we leave clashes and sterile opposition to one side,” Papandreou said in an address to the nation. A new prime minister was not named in his speech. The 2 biggest political parties agreed to name parliament speaker Filippos Petsalnikos to head the gov rather than a former ECB Vice President. Chaos continues in Greece & that must settle down before getting bailout II.
Greek Unity Deal in Disarray Amid Squabbles
Dems criticized a plan by Reps to cut the US deficit by overhauling the tax code as a windfall for the wealthy even as the plan signaled a new willingness by Reps to include tax revenues in any agreement to slash the deficit. A Dem analysis said the plan would lower rates for high-income Americans while raising taxes on the middle class. But Reps say the plan includes $300B in higher tax revenue to help cut the deficit, most of which would come from reducing tax breaks for the wealthy. As a result, efforts to reach agreement are stalled on a $1.2T deficit-cutting plan by the supercommittee as it approaches its Nov 23 deadline. This plan would provide a “significant tax cut for those with income above $200K,” according to the Dem analysis. Reps proposed setting the top marginal tax rate as low as 28%, compared with the current 35%, while reducing individual tax deductions, exclusions & changing the way income tax brackets are indexed to inflation. It also would raise the Medicare eligibility age to 67 from 65. The super committee is supposed to be non-partisan, but forget that. Arguments will be as bad as those in Greece today.
Goldman Sachs faces lawsuits over almost $156B in mortgage securities, a more than 30-fold increase from the amount disclosed 3 months earlier! The figure, up from $485M previously, does not represent how much money management estimates it may lose on the litigation. GS lifted that estimate of "reasonably possible" losses to $2.6B from $2B. GS also added 3 European financial firms to a list of parties that have threatened to sue it. Much of the increase comes from a lawsuit filed against the bank in Sep by the Federal Housing Finance Agency, which accused GS of misrepresenting the quality of $11.1B worth of residential mortgage-backed securities. The stock dropped about $9 to below $100 in what has been a dismal year for GS.
Goldman Sachs Group, Inc. (The) (GS)
This was a very bad day for the markets & the chart below shows there have been quite a few in recent months. As a reminder, 10.6K had served a ceiling for the Dow for much of the summer & now Dow wants to test is strength to serve as a floor. Falling thru will be a major bearish signal & that test could come as soon as tomorrow. The volatility shot up in today's massacre of stocks. The VIX jumped 8+ to 36, into very high territory, after lumbering around the mid teens when the market was doing better. European debt problems seem like they will drag on forever & the American debt problems don't show any sign of going away soon.
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