Your Questions About What Is Affecting The Stock Market Today

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Mark asks…

Can someone please explain the correlation between credit/mortgage fears and the stock market?

“Major gauges tumble on credit and mortgage market fears; Dow, Nasdaq, S&P 500 all down 10 percent off highs – reaching market correction levels.”

This was the headline on today, and as a person who just bought a house 2 days ago, I would really like to understand what the experts think is happening. How are the two inter-connected, and what it the anticipated outcome of this ‘credit crisis?’

How does it affect me as a homeowner and as an investor?

Justin answers:

I work for one of the largest (still standing) mortgage banks in the county. I’ve been in and out of the industry for 10 years. I got out in the last crash in 1998. By the looks of things, it’s a lot worse than it was 10 years ago.

Right now we are experiencing a “liquidty crisis” on Wall Street. The investors have stopped purchasing loans that us as lenders need to sell. We make money by lending out money as mortgages. We sell these loans to wall street. When they purchase our loans it frees up our capital so we can keep lending it out over and over again.

Loans are pooled together with many other loans and securitized into MBS’s. (Mortgage backed securities). These are sold to pension funds, hedge funds, and various investors around the world. These were considered safe until someone figured out most of these loans were full of fraud and not performing. The investors are now refusing to purchase these securities from wall street bankers like Leahman brothers, merril lynch, goldman sachs, morgan stanley, etc. In turn they cannot lend us (bank or lender) money. The cycle is interrupted and hence we’re in a crisis. People need loans but we are running out of money.

We’ve had to cut back most of programs so many people will not be able to qualify for loans. Many “sub prime” (credit impaired) borrowers took out short term adjustable loans. They loans are now adjusting and defaults are rising. When the loan adjusts most borrowers cannot afford the new payment. They also don’ t qualify for any programs so they’re stuck in their home facing foreclosure.

This is a very serious issue which 99.9% of the public have no clue about. It will most likely launch us into some kind of recession. I expect a market correction of 10-25% in home values over the next 2 years. This seems to general opinion.

First of all, if you purchased a “home” it is not an “investment”. That is the problem with the market. Everyone bought homes they could not afford on “exotic mortgages”. Now the value is no longer increasing and they can’t refi out of their current loan. If you plan to live in your home for the next 7-10 years then the market will recover. If you are holding onto some investment property hoping to flip it for money in the coming year then you’re in for a rude awakening. Hopefully you locked in a long term ARM (7/10 year fixed) or a 30yr loan.

Expected outcome? Of the top 10 banks in the country we’ll be left with 5 when it’s all over. Countrywide, the largest mortgage lender in the country (lends out more than WAMU and Wells put together) is facing bankruptcy in the next 2-3 months if this is not resolved.

William asks…

Question about how much aftermarket stock prices affect the next day stock prices?

If i am looking to enter a stock at say around 10 dollars of asking price, but the after market price soars to 10.5 should i raise my buy limit? Should i just keep my buy limit around what the asking price was at the close of the market today? Do sellers normally show back up enough to counter the surge in aftermarket activity?

Justin answers:

Unless it’s an earnings report or substantial ” breaking news” that causes the price rise….you can surely wait. Afterhours trading is a poor indication of next day or next week’s prices.

Charles asks…

please answer these questions for me!?

Identify 5 factors/events that can affect the stock market.

2. What happened on Thursday, October 24, 1929? Why did it occur? What was percent drop
of the total market value>

3. On October 19, 1987, another stock market event occurred. Identify what
happened and how much of a percent drop of the total market value was involved.

4. What restrictions are on the stock market today that are designed to prevent what
happened in 1929?

5. Giving specific examples and reasons, explain why investing in stocks is not a “sure

and i need the web addresses after each answer. PLEASE HELP!
im in a math class. and i have no clue what some of the answers are. im doing them right now and i’ll add the answers on here when i get them. if anybody has the answers let me know! (:

Justin answers:

Just type in the date in google

John asks…

When the United States became involved in World War I, on what country did they declare war? A. Britain B.?

1.When the United States became involved in World War I, on what country did they declare war?

2.Which World War II event gave great momentum to the Allies to liberate other cities from Germany’s hold?
A.Battle of the Bulge
D.V-E Day

3.Which one of the following best describes the Cold War?
A.A division of property between the east and west
B.A psychological rather than physical battle
C.A war between Korea and Vietnam
D.A wintertime war between communism and imperialism

4.How does the stock market affect businesses?
A.Businesses can sell stock to increase their funding, allowing for growth and expansion.
B.Businesses lose power as they sell shares of the company to stockholders, which often results in companies’ ultimate ruin.
C.The stock market gives established businesses the opportunity to share the wealth, offering funds to start-up companies.
D.The success of businesses rises and falls as a result of fluctuations in the stock market.

5.What is the current status of the Korean War?
A.An official cease fire was declared so there was no real winner.
B.Conflict continues today without U.S. involvement.
C.It is at a stalemate, so no further fighting is going on.
D.North Korea claimed victory and the war is over.

6.Who was responsible for the TWA Flight 847 hijacking?
A.Iraqi terrorists
B.Islamic terrorists
C.Lybian terrorists
D.Soviet terrorists

7.Why were Navajo Indians used as radio operators for the Marines during World War II?
A.Their culture had a complicated silent messaging system.
B.Their language couldn’t be deciphered by the enemy.
C.They had developed an innovative radio technology used on the reservation.
D.They were living close to the radio command center in Arizona.

8.Which of the following Axis leaders gained power in his country by bringing the nation out of economic depression?
A.Adolph Hitler
B.Benito Mussolini
C.Josef Stalin
D.Winston Churchill

9.Who was the chief justice of the Supreme Court that used the courts to help define and extend civil rights for African Americans?
A.Dwight D. Eisenhower
B.Earl Warren
C.Martin Luther King
D.Thurgood Marshal

10.How did the everyday person’s life change as a result of the depression?
A.Large companies and the wealthy class prospered; meanwhile, the middle and lower classes were penniless and starving.
B.People lost everything, causing a steep increase in demand; production increased and jobs became plentiful.
C.People lost money when banks closed; they couldn’t find jobs and many resorted to eating out of garbage cans.
D.Since soldiers were away at war, jobs were plentiful, but didn’t pay well; both women and children were forced to work just to survive.

11.Why did Irani student militants take Americans hostage in 1979?
A.America supported the ailing Shah of Iran and didn’t support the new Iranian government.
B.Iranians wanted to exchange American hostages for American weaponry.
C.Iranians were fed up with unwanted American military presence in their country.
D.The American government refused to defend Iran against terrorism.

12.About how much of the world’s trade is represented by the WTO?

Justin answers:

I’ll be nice, and do some of your work for you. I guess this history stuff really cuts into watching Justin Bieber videos on YouTube.

1. C 2. C 3. B 4. 5. A 6. B

It’s a good thing you don’t go to school in Korea. The ones I teach via Skype spend about 4 hours a day doing homework, and they spend about 2 hours longer in school.

Gee, I hope my answers are right…

Ken asks…

(3)After Wilson presented the treaty to the United States Senate?

1: After Wilson presented the treaty to the United States Senate,
the Senate ratified it
only the “irreconcilables” backed it
the Senate rejected it
only the “reservationists” backed it

2: One result of Prohibition during the 1920s was
an increase in alcoholism
a decline in dancing and socializing
the rise of organized crime
the creation of urban artistic colonies

3: Which of the following was a long-term effect of Prohibition?
the consumer economy
the growth of organized crime
an end to alcoholism in the United States
the rise of fundamentalism

4: William Jennings Bryan took up the cause of fundamentalist Christians
at speakeasies in Chicago
on new buses to the suburbs
at the Scopes trial
in Hollywood studios

5: Key features of Republican administrations of the 1920s included
expansionism and business regulation
isolationism and laissez-faire business policy
a buildup of armaments and armed forces
reduction of quotas and

36: Why did many Americans fear Vladimir I. Lenin and his followers, the Bolsheviks?
They promoted a system that was hostile to American values
They refused to pay back Russia’s war debts
They had abolished the Russian monarchy
They encouraged other nations to reject socialism

37: Generally, the 1920s were marked by
rising farm prices
rising stock prices
falling production
falling wages

38: One sign that the economy might be weakening in the 1920s was
uneven distribution of national wealth
underproduction of consumer goods
an increase in personal savings
the collapse of large corporations

39: Which statement best describes the American economy in the 1920s?
Wages decreased and the economy appeared weak
Unemployment was at an all-time high
Stock prices rose and the economy appeared healthy
Small businesses dominated American industry

40: In the fall of 1929, a wave of panic selling gripped the stock market as a result of
a sudden fall in stock prices
corruption among stockbrokers
business failures
government limits on speculation

41: Not long after Black Tuesday, the stock market crash was affecting
only those who had invested heavily in stocks
wealthy industrialists almost exculsively
millions of Americans, many of whom had never owned stocks
mainly stockbrokers and banks

42: Why did FDR declare a “bank holiday” early in his administration?
to cut of the use of cash
to weaken the banking industry
to inspect the financial health of the banks
to give people in the banking industry a well-earned vacation

43: Which New Deal agency was created to help businesses?
Federal Reserve Board
National Recovery Administration
Civilian Conservation Corps
Home Owner’s Loan Corporation

44: Which of the following did New Deal programs fail to address?
protection of domestic workers
low prices for agricultural products
the decline of industrial prices
Native Americans’ need for schools, hospitals, and irrigation systems

45: All of the following New Deal agencies still endure today except the
Tennessee Valley Authority
Federal Deposit Insurance Corporation
Civilian Conservation Corps
Securities and Exchange Commission

46: What did Italy, Germany, and Japan have in common in the 1930s?
They overturned traditional governments and established democracies.
They were economic giants and together controlled world trade.
They sought to solve their nations’ problems through conquest
They angered other nations by their persecution of the Jews

47: Although Communists and Fascists have traditionally been enemies, in 1939 which Fascist made a pact with which Communist?
Hitler with Chamberlain
Hitler with Stalin
Hitler with Franco
Stalin with Franco

48: Nazism was an extreme form of
none of the above

49: During the 1930s, the United States focused largely on
preparing for war
domestic affairs
international affairs
international and domestic affairs

50: Congress passed Neutrality Acts that were designed to
support other neutral states around the world
support other nations in the Western Hemisphere
limit international involvement
allow nations to purchase weapons on credit

Justin answers:

This is your second question you’ve posted about your homework. My suggestion is stop waiting until the last minute to do your homework and pay attention in class. The answers are in the square book you brought home that says “History” on it. Try cracking it open and reading it instead of trying to cheat.

Thomas asks…

Please revise the following for grammer and mechanics:?

The Great Depression, the worst economic crisis to affect America, has shaped the conditions of today. Though Americans during the Great Depression faced many problems, the government took action and made several attempts to provide solutions. With attempts such as the Townsend Plan, the government tried to solve problems like unemployment. The Great Depression saw a fair amount of problems and solutions.
Large quantities of problems were faced during the Great Depression. Problems such as starvation and unemployment caused the Great Depression to be a bad time period. One problem that people faced during the Great Depression was starvation. “…for food she depended almost entirely on occasional dinner invitations from her friends.” (Document #3) This describes how this woman ate on rare occasions because she, like most people, did not have the money to afford it. Many people attended soup kitchens and breadlines which were places that offered free food or drinks because many were suffering from starvation. These events took place in large urban areas serving many unemployed people because of the absence of government relief programs during 1932. Doughnuts, bread, soup and coffee are some examples of what were offered. These events were usually organized by volunteer organizations, church groups, or community groups. While going hungry, surplus food couldn’t be sold for a profit. Starvation was mainly caused by the fact that many Americans did not have wages. Unemployment was another problem that citizens faced during the Great Depression. In 1929, the unemployment rate was a little less than 4% but in 1932, it skyrocketed up to approximately 24%. (Document #1) The high unemployment rate made people mobile in order to find jobs as well as food. With 15 million people unemployed, mostly industrial cities in the east and midwest were hit the hardest by this occurrence. By 1933, about 40% of factory workers and 67% of construction workers were unemployed in Ohio. The reason for such high unemployment was because of the stock market crash. At first, people bought many stocks on margin because it seemed the market was going to go up. In reality, these stocks were inflated and build on dreams. As the market went down, banks demanded their money back, forcing people to sell their stocks low. People then rushed to banks to withdraw all their money. Causing banks to collapse, they ran out of money. Only those who were fast enough were able to withdraw their money, which caused many people to lose their life savings. As banks closed, businesses closed as well and left many people jobless. Without wages, people were unable to pay mortgages and rent leaving them on the streets without a home. Without money, food was not affordable and many suffered starvation. During the Great Depression, people suffered because of starvation and unemployment.
The government took action in order to solve the problems presented during the Great Depression. New Deal programs and the Townsend Plan were examples of efforts made by the government to solve these problems. New Deal programs were an attempt to solve problems faced during the Great Depression. A cartoon depicts Franklin D. Roosevelt as a doctor using a bag of New Deal remedies with an elderly woman’s permission to cure a hobo. (Document #6) Franklin D. Roosevelt created many New Deal programs to help the depressed U.S. Congress passed these programs in an attempt to pull America out of the Great Depression by offering jobs directly. These programs helped fight the Great Depression through relief, recovery and reform. Creating jobs, it provided many Americans with an income which helped them get through the depression. Some of these programs also promoted forms of entertainment such as art, music, theatre, and writing. Because of the expensive cost, some programs were closed while others still exist today. This would solve the problem of unemployment. Another solution the government presented was the Townsend Plan. “…over the age of 60 years may retire on a pension of $200 per month on the following conditions.”(Document #7) The Townsend Plan was a plan proposed by Mr. Townsend which provided a pension to the elderly if they follow three provisions. One provision was to “engage in no further labor, business or profession for gain.” This gave the young people more opportunities to get jobs because the elderly no longer worked since they received a generous pension provided by taxes. The second provision was that the person must be free of criminality. They included this because they wanted to reward the people that are good and haven’t done anything bad during the duration of their long lifetime. Also the third provision forces the person to spend their money in the United States on consumer goods or services. This would help stimulate the nation’s feeble economy by creating new jobs.
Therefore, actions were taken by the government to provide solutions for the problems faced du

Justin answers:

The essay looks good.. The only concern I have is the way you are citing the sources… Generally you would reference by last name or publication depending on the source. What I am going to do, is I will attach a link that I use all the time, and it will show you examples of MLA formatting, hope this helps!


Joseph asks…

Don’t you think its shame for all of Indians that giving bribes to bank officials is accepted as “old habit”?

The Stock markets in India were expected to fall drastically today. But that did not happen. As politicians – builders – bank officials – LIC nexus is well know to everyone. Also another striking fact is that one can make LIC to buy any shares you want or bailout the public issue by bribing LIC officials. While we are doing so great on Information Technology and Scientific research front, such news affect our credibility as nation ? What are your views ?

Justin answers:

There is a saying in sanskrit “Yaachakaha yachakoho shatru ” means A beggar has no other enemy than another beggar. This is the case of the question. We just spit upwards to the sky, which falls on our own face. I am Indian and I announce the weakness and ignorance of other Indians, and the result is that the outsiders make the remark both on myself as well as all Indians.
It is generally a person who says bad things about others is the real bad person. It can be proved on a close watch on him. The thief knows how to steal and he also knows how the other thieves steal. This is why in olden times the Emperors were appointing the great thieves as their intelligence officers.
A person whether Indian or western should be assessed and if a person of a country is doing wrong, we want ourselves to be free from such crimes, by blaming the country or the citizenship as a whole.
Let us stop this habbit first and then let us forward to remove other ill-fames.
By announcing such cases, or giving publicity to the weak side, we are encouraging the weakness.
It is the story of the waste bin on the side of the road.
Once a residents association decided to instal a waste bin at the corner of a main junction . Many supported and collected donations and brought one big plastic waste bin. Surrounding people started to throw their daily waste into the bin. But they started to purchase more plastic bags and packed food and every attractive items from the shops and after reaching, emptying it and keep aside, to throw them in the waste bin by night. They did not keep any limitations or methods, but ‘there is a place to throw waste’ and as such the waste bin was found filled every morning. Corporation appointed extra sweepers. But next day they were surprised that after the waste bin was filled and overflowed, wastes are spread in its surroundings, because people from the neighbouring towns also took the waste in their cars and buses to throw them in the official waste bin.
Like then when you spread a roumour, there are people who are more smart than you to announce it to more places and thus the whole Nation would be famous for its ‘bribary cases’.

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