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The stock market just booked its ugliest Christmas Eve plunge — ever
@Ted I just looked again and still don't see this headline...and I just got a new pair of computer glasses! Merry Christmas to you too from rain soaked Western Oregon...
@davfor: You don't need new glasses, the Christmas Eve historic drop in the market was mentioned in my MarketWatch link from the "Closing Bell", but it's different from yours. My mistake ! Merry Christmas, Ted
@Ted That's good to hear. I paid big bucks for specialized prescription computer glasses to make my time in front of a monitor more enjoyable....
@Anna I posted the headline mostly because its of historic interest. Its hard for me to understand how people can be too upset about a bad stock market year after an amazing 10 year run. Its about time for some of the zombie companies to get shaken out of the system!
I was mostly pointing towards the Feds moves to normalize its interest rate policy. There was a large amount of low interest rate corporate debt used in recent years to finance buybacks and to help keep marginal companies afloat. There has been some specific focus recently on the large increase in BBB debt, its vulnerability to downgrade, and the significant effect that could have on the overall bond market. Those impacts -- if large enough -- could have a ripple impact on the stock market.
Here is a quote from an interesting article I read this afternoon that points towards one aspect of what I was suggesting:
There are some rumblings of things that could go wrong in the financial system. Companies that loaded up during the era of ultralow interest rates are facing high debt burdens. Some may find themselves in bankruptcy.
Comments
Merry Christmas,
Ted
Merry Christmas,
Ted
@Anna I posted the headline mostly because its of historic interest. Its hard for me to understand how people can be too upset about a bad stock market year after an amazing 10 year run. Its about time for some of the zombie companies to get shaken out of the system!
I was mostly pointing towards the Feds moves to normalize its interest rate policy. There was a large amount of low interest rate corporate debt used in recent years to finance buybacks and to help keep marginal companies afloat. There has been some specific focus recently on the large increase in BBB debt, its vulnerability to downgrade, and the significant effect that could have on the overall bond market. Those impacts -- if large enough -- could have a ripple impact on the stock market.
Here is a quote from an interesting article I read this afternoon that points towards one aspect of what I was suggesting: https://www.nytimes.com/2018/12/24/upshot/the-economy-is-still-strong-the-risk-for-2019-is-that-leadership-turns-a-mild-shock-into-a-crisis.html
Unless you just dove in head first sometime during the last 18 months you should still be sitting pretty after a 10 year bull run.
Merry Christmas all ...
yes, corporate debt has been bruited for some time now
(figure GE's plight has been baked in for some time now)