Stock Market News: Circuit Breakers Standing By
Is this the end of the slow motion stock market crash? Will we see a real, honest to goodness crash today? We’ll see. But futures hit their down limits today, and circuit breakers are standing by. We could actually see a trade halt today on the U.S. stock market. Here is what Bloomberg says about circuit breakers:
The circuit-breaker rules, which call for a 30-minute halt should the Dow decline 1,100 points in the 30 minutes after 2 p.m., expire at 2:30 p.m. They would bar trading for two hours if the Dow lost 2,200 points.
The idea, of course, is to prevent all-out devastation in one day. It also serves as a way for traders to take a deep breath and re-evaluate what they are doing.
Bank stocks expected to be massacred
There really is no other term for what was is expected for bank stocks today. Although “pulverized,” “crushed,” and “destroyed” come pretty close. Even companies like JP Morgan and Wells Fargo are likely to take major hits today. Mainly because nobody is looking at quality anymore. Full on panic is the name of the game and everyone is pounding for the exits, trampling those too slow to leave quickly underfoot.
The good news is that for those who remain in (mostly via retirement accounts), there is a good chance that a recovery will come. But it will be long and hard and some people may have to put off retirement. After all, you don’t just rise from a bloodly, trampled pulp on the ground that quickly.
Lessons I hope we’ve learned
As with all instances of great misfortune, there is a chance for lessons to be learned. Hopefully we’ve learned a couple of lessons from this that we can apply, as a society, to create a more stable (though less exciting) stock market and economy:
- Judicious and practical regulation is probably a good idea.
- Transparency should be required.
- Don’t sacrifice long-term success for short-term gains.
- Look at the fundamentals.
- Practice solid finance.
- Don’t over-leverage yourself.
Can you think of any other lessons that should be learned from this mess?
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
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economy, investments, circuit breakers
