Thanks Venkat,
My 401 is already reduced lot in last 6 months and i can take some more hit before i really think of moving it to money market or just bonds. My thinking may be wrong but I think / consider that number of units in my 401k is same just the value has gone down. So when market recovers, i might recover all. However I can sell all now and buy again at low level but don't know how much i will make/loose. What you think about it?
somehow i had feeling that CISCO will not impact much on market today. as of 2:00 pm dow is up almost 100 points. lets see how long can it stay in green.
Venkat, like BSE hits lower circuit don't dow has value based formula that s&p can't go beyond certain level? US is in recession now. only question is how long will it last?
today MBIA sold 750 mil $ worth shars to maintain their rating. I am sure US govt will come to rescuse and save them to retain rating. else this is going to be huge huge. FED screwed up so much by lowering rate , they won't mind bailing out bonds issuers.
Let come march 18th and we will see one more rate cut. it can be 25 or 50 basis points. hopfully oil prices will go down and inflation might stay within limit.
Edit: ahhh that green didn't last too long. Sorry i was wrong.
On an average DOW declines 27% during a mild US recession and 'up to' 37% during a severe recession. Most claim this to be a mild recession but some experts are now moving to the severe recession camp. The way Fed cut rates last month indicates they fear a severe recession.
Having said that, both US and Indian markets are not free. In the Indian markets the finance minister calls insurance companies to stall a free fall. In the US most believe in the existence of a Plunge Protection Team (PPT) made up of the feds, treasury and major banks.
Cisco is going to have a big impact on the tech sector and thus the general market. For some reason tech companies were seen as weathering this crisis but cisco just said that they are having problems as well.
Based on previous slow downs, DOW will go to about 10.5K and BSE 13K. It could be different this time.
