Russia, two days ago, closed their stock market in the face of a two-day decline of of approximately 27%. That market has not yet re-opened for trading.
What can be expected next in the United States?
Today's trading on the New York Stock Exchange saw the Dow Jones Index lose 450 points.
Shares of the venerable and sole-surviving independent investment banks, Morgan Stanley and Goldman Sachs fell as much as 44%(!!!) and 27%, respectively. Morgan is doomed for sure, Goldman, most likely too.
As the logo's in the post below this one indicate, these two firms have plenty of company.
Does the USG dare halt trading? Do they dare call a "bank holiday," as was done during the other Great Depression in the 1930s? Will such actions only exacerbate the problems?
As of now, there has been no indication of a 1930s-style run on the banks taking place. The public, either because of ignorance or blind faith, has yet to line up at their local bank branch and demand their money. Right now, the first priority of the USG is to prevent such a scenario from developing.
One can surmise that the USG in concert with the Federal reserve System has realized that they cannot be the "lender of last resort" to EVERYONE.
The question now is: Who shall be allowed to fail and how can the consequences of these failures be mitigated, if at all?
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