US stock mkts large falls o'night

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From: A Jones


Are we entering a point where stockmarket falls could impact heavily on the real economy (particularly in the US)?

Instead of a shift out of the stockmarket and into property (as in 1987-1988)could we be looking at a period of falling business confidence, lower economic activity and falling property prices?

"The Dow Jones industrial average fell
390.23-points overnight (Friday night Australian time), or 4.64 percent, to 8,019.26, the seventh largest point decline in the average's history and the lowest close since October, 1998.

The Nasdaq composite fell 37.90 points, or 2.79 percent, to 1,319.05 and the Standard & Poor's 500 dropped 33.30 points, or 3.78 percent, to 848.26."

 

[Donna L]

Reply: 1
From: Donna L


Who is cashed up at the bottom of the precipice? Warren Buffett, that's who, waiting for those oversold blue chips to drop by.
Donna L

 

[WebBoard]

Reply: 1.1
From: A Jones


Hello Donna,

yes Warren Buffett should do well out of these stockmarket falls.

I spoke with a buyers agent today who has been through quite a few property/stockmarket cycles. He reminded me that property prices stayed level for the three months following the 1987 stockmarket crash. They then moved up as people switched from equities or decided to buy investment property as opposed to equities.

He sees no reason why this will not happen again. At a minimum he sees switching from equities to property providing support for property prices at their current levels.