When I read the business section I keep picturing a house oif cards that is slowly falling. That is what the economy seems like. The bad news just keeps coming.
The Dow Jones industrial average lost 218 points, falling below 13,000 for only the second time since the summer. The S&P 500 index lost nearly 1.8 percent. The Nasdaq composite declined almost 1.7 percent.This is the result of a lack of regulation. It is the hallmark of the Bush administration. They believe that industry will police itself. That is what gave us the ponzi scheme called the subprime crisis and now the lack of oversight will lead to recession.
Small cap stocks were hit harder with the Russell 2000 falling 2.5 percent.
Treasury prices rose, lowering the corresponding yields. Oil prices rose. Gold prices declined.
Goldman Sachs downgraded Citigroup to "sell" from "neutral" Monday and said the bank will likely have to take $15 billion in writedowns over the next two quarters due to bets on risky debt. Citigroup shares fell 5.9 percent.
Goldman also cut its price target on Merrill Lynch, Morgan Stanley and others in the sector.
The comments sent the overall market lower, as investors were reminded that the breadth of the credit market fallout is not really known and could be a lot worse than has been expected.