Is this what will happen to our market tomorrow?

bailey bud wrote: Well - oil contracts are dropping like lead.....

I'd guess it's a buying opportunity.

I am still thinking about getting into the market.

And to respond to Viking about Obama partying/fiddling while Wall Street burns?

Maybe if sets off the wrong tone, but telling people to put on sweaters and turn down their thermostat might make people sit on their wallets even more.

"We're going to party like it is Obama's first term!"?

Havn't read this entire thread- my computer at home is having DSL problems.

Obama has been making speeches all last week - he wants us to keep borrowing and spending- exactly the behavior that led to this downgrade. He has been asking for people to call congress and support his wanting to borrow more and spend more.

It's like the family who bought a $500,000 house and a lexus and BMW- and furnished the home with new furniture on credit cards- all on a $40,000/year income- and all the wife wants is a new bedroom set!

I actually think this downgrade is the best news we Americans have heard in 3 years of a socialist administration because it will eventually lead to the government in-ability to keep on spending. Whatever happens to the market- it will be a reflection of the real economic trouble we were already in. People like me were warning about this more than a year ago. Here it is.

Maybe now these foreign countries will stop buying our bogus debt- and the government will have to stop growing so fast- we could not stop the spending by electing level headed conservatives- but if the people who buy all this debt stop buying it- it will be good news for us in the end.

People say this will make it harder to us to borrow money- I got news for them- it's already hard to borrow money- this just makes it harder for government to borrow money- and that's a GOOD thing!

http://finance.yahoo.com/blogs/breakout/u-gets-downgrade-deserves-133206142.html

Tali Arbel, AP Business Writer, On Monday August 8, 2011, 9:18 am
NEW YORK (AP) -- The price of gold streaked past $1,700 an ounce for the first time Monday. Investors, beset by worries about the U.S. debt downgrade, Europe's financial crisis and slowing global growth, sought safety in the metal as stocks tumbled around the world.

Gold's allure stems in part from fears that the world's major economies are dangerously indebted.

http://finance.yahoo.com/news/Gold-price-tops-1700-as-apf-129713227.html?x=0&sec=topStories&pos=2&asset=&ccode=

SS109 wrote: Looks like prices on US treasuries are actually rising! Maybe, as bad as our debt issues are and as unlikely as we are to solve them Europe is even more hamstrung.

US Treasuries are such a big market, where else are you going to go with 16 Trillion dollars. I am almost starting to believe in permanently lower interest rates.

About the only thing that would change the dynamic is a collapse of the dollar.

Joe wrote:

SS109 wrote: Looks like prices on US treasuries are actually rising! Maybe, as bad as our debt issues are and as unlikely as we are to solve them Europe is even more hamstrung.

US Treasuries are such a big market, where else are you going to go with 16 Trillion dollars. I am almost starting to believe in permanently lower interest rates.

About the only thing that would change the dynamic is a collapse of the dollar.

I am having trouble understanding why interest rates are still so low. With all the money QE2 put out there and gold rising, food and energy prices rising, why aren't we seeing mortgage interest rates going up to 10%?

Because the US gov't is pumping money into Fannie/Freddie and rates are tied to 10-yr Treasuries. The markets are not functioning normally, they are being manipulated by printed money.

But would you be locking in your savings for a 10 year payoff of 2.5% in these inflationary times? I guess you can store your funds there and turn them over once interst rates start to rise.

Because the US gov't is pumping money into Fannie/Freddie and rates are tied to 10-yr Treasuries. The markets are not functioning normally, they are being manipulated by printed money

Exactly right=

This economy is propped up like a house of cards.

Joe wrote: Stocks down CHECK!
Gov't Bonds -interest rates even lower, opposite if popular thinking CHECK!
Gold up CHECK!
Oil down CHECK!
Dollar down TBD, looks like the dollar is up slightly vs. Europe, down vs Japan

SS109 wrote: But would you be locking in your savings for a 10 year payoff of 2.5% in these inflationary times? I guess you can store your funds there and turn them over once interst rates start to rise.

I don't know who in their right mind would be owning long bonds right now. The risk of big price drop vs. tiny interest income is huge. Same for bond mutual funds. The big traders can hedge against price drops.

Short term high quality corp bonds are the place to be I think.