The stock market tumbled when Dow Jones erased 345 points (3%) to 11,188.23 Thursday. The S&P lost 3% to 1236.83 and the Nasdaq fell 3.2% to 2259.04. This is the worst decline since June 6 and you should take note seriously because it appears the S&P will break 1,200 while Dow might break the 11,000 level. Remember when I said don’t open the champagne before Dow comfortably sails above 12,000 level not many moons ago? Well, the surge in jobless claim and weak same-store sales report, not to mention the surge in people visiting discounters such as Wal-Mart, adds energy to the Bear.

It’s been quite some time since we talk about subprime crisis. By now everyone who cares to read the financial columns should know what is “subprime” that spooked almost all Americans including the President of the United States. It’s not over yet if that was what you was thinking, at least not the after-effect. After the Freddie Mac and Fannie Mae’s (what a great name!) financial troubles that required bailout, analysts warn that a “financial tsunami” will hit if the U.S. government doesn’t help the average Joes on the street via subsidized home loans. Consumers’ slower spending, waning demand for construction equipment, sluggish auto sales and mortgage cutbacks show the good time is not here yet. Not even the dead of Hurricane Gustav could sustain the stock market rally on Tuesday.

In fact home prices which have already down almost 20% could still be heading south and once it reaches 30%, you have just experience the 1930s Great Depression. The problem is housing markets do not recover in a “V” shape format so it would be a long and painful wait. That is why you should equip yourself with some financial knowledge and able to see what’s happening from the macro-economic point of view. I almost fell off my chair when I read from a blog that suggest the bull is finally here again after the 30-point rally right after the Malaysian 2009 Budget was revealed. Such a shallow opinion that yells “Buy” call could send many beginners to kamikaze mission, don’t you think?

And what do you think about Anwar’s threat to form the next government by Sept 16? With all the spies deployed everywhere even within the palace itself, could it be true that Anwar had actually met the King at the Istana Negara to submit the name of ruling government defectors? Although Anwar denied it but not before he grinned about the rumors. But if it’s rubbish at all then why the trouble and pre-caution plan to ask ruling government MPs (Member of Parliament) to handover their passports for the so-called overseas study trip now? Surely it can’t be coincidence again, can it?

As much as I wish to have a new government that has properly functioning brains to administer the country, the date (Sept 16) is just too near for any major changes to happen. But then the sea was super calm before the deadly Christmas Eve tsunami of 2004 strike. So, going by the same logic PM Abdullah Badawi might have a couple more nights to sleep at Putrajaya before packs his bolsters and pillows. For all you know, Anwar could be bluffing and it was just a strategy to send the enemy into panic state before the actual assault. Who cares if Anwar (or anybody in this matter) were to take over the throne as long as he knows how to administer the country’s economy? I just wish to see if Mahathir will migrate as claimed (here I come Zimbabwe!) if Anwar succeeded in becoming the sixth Prime Minister of Malaysia.

Other Articles That May Interest You …

• Fuel prices set to be revised but the Damage is done
• Budget 2009 is as damaging as Hurricane Gustav?
• People kicked UMNO out of Penang, again? Ouch!

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September 5th, 2008 by financetwitter

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