The Dow Jones average broke through the June 15 low of 10,962 today, closing at 10,609. This is an extremely negative technical sign and will almost certainly trigger more selling. In addition, there will be increased selling by those just wanting to get the Hell out or forced to sell to pay down debt or make margin calls. Yeah, I’ve been making money buying puts on financials, but things are getting serious.
How does this affect those not in the market? All sorts of way. The interest rate at which banks lend money to each other is soaring. This means they don’t trust each other. If they don’t trust each other, you think they’ll trust your business or you enough to lend to? Right now, not likely. Getting a mortgage approved now must be nearly impossible. Then too, will be all the hurting businesses and subsequent layoffs.
From The Scotsman. “How the Masters of the Universe ran amok and cost us the earth”.