Current stock market?

Can someone please explain what is causing so many gyrations in the stock market and what the current state of the economy is??

The gyrations are caused by a combination of things, from panic, to the fact the government is socializing banks, to the reality that off shoring may have raised profits but is has devasted our economy.

As to the "current state" of our economy, that is widely debated. Some experts are saying we are in trouble, some are saying this is temporary, some blame it totally on banking, some... well, you get the idea.

As a small, manufacturing company owner, this is what I know.

Since the Y2K/Dot com crash, housing & investments were carrying our entire economy. In that time we have off shored millions (estimated to be between 3-5 million) jobs to China (thanks Bill!), and thousands of small businesses are gone/bankrupt.

Small business employs 70% of our non-government workers.

The government, and their spending, has grown to astronomical levels (and every dollar sent to Washington is one less dollar to create a job).

Personally, I think that 2 decades of "free trade" and the fake housing boom are going to devastate our country.

Real employment, where you can pay your bills, is waning, we import lower paid workers to compete for our jobs, the credit companies enticed us to go in debt and now they are tripling our rates, thus forcing former good payers into bankruptcy AND of course, housing.

We are nowhere close to "bottom" and our politicians have made it clear that they like cheap foreign labor.

So, ask yourself, if you earning are halved, and your grocery, heating and gas bills are doubled, how do you think we are doing?

I firmly believe that things are not going to get better for a long time, if ever.

The backbone of our society, hard work & decent paying jobs, has been off shored. And both candidates have promised their biggest supporters, that they will increase cheap labor in America, and keep the jobs flowing to China. After all, China owns Washington and the politicians know they can't stop them now.

Good luck to us all.

This is going to be a long answer ...

1) What's a subprime ; ''Subprime borrowers have a heightened perceived risk of default, such as those who have a history of loan delinquency or default, those with a recorded bankruptcy, or those with limited debt experience.'' (Wikipedia.org) .

Basically banks were giving loans to people that weren't credible and shouldn't have got one .

2)Banks were issuing securities which included mortgages in them .

3) 20 % of the whole mortgage lending in the united states is considered as a ''risk mortgage'' .

4)The real estate in the States was simply overrated , that's why they called it the real estate ''bubble''

I'm not gonna explain you everything that happened but people were taking loans based on the value of their houses . When the real estate prices went down people couldn't reimburse their loans .

When there is too many houses on the market , the prices go down . Banks were seizing houses to get their money back but couldn't sell them back at the right price and couldn't get their money back .

It's really like a snowball. So after real estate market went down , all the big companies that had securities related to mortgages also lost a lot of money , and the big firms like Lehman Brothers and AIG failed .

Now the credit is shrinking , banks don't loan money and so consumption is slowing down such as investment . So everything is going wrong and that's why you see the stock market go up and down.

That's a very vague answer but it should give a general idea of what happened .

The current state of the economy is bad.

Thy stock market is gyrating because major institutions (mostly banks and insurance companies) have shaky assets and too much debt. Many are failing. This is threating to halt the flow of money that the enitre economy is dependent upon.

This is a traders market, volatility rules
There are so many forces at play that you canâ€™t even come close to â€œestimatingâ€ what things will be in 3 months, let alone next year.
http://investment-blog.net/this-is-a-traders-market-volatility-rules/

Current market is volatile base on the umemployement rate, housing and credit crisis, and ugly job market. the most you should pay attention for now is the earning reports for this week and i believe its very tough

http://investment-blog.net/a-very-tough-week-ahead/

Lack of credit . .. and crappy.

There is financial problem in US. So the FIIs who have purchased and invested in Indian companies with huge participation are now selling like hell and hence the prices are tumbling. No Indian FI or individual has the capacity of the FIIs to absorb the shares sold. So naturally the prices come down.
Unless the FIIS return there is no hope of shares going up again to their previous values.

So the time for easy money has gone.

Kind of broad questions, wouldn't you say?

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