Tel Aviv exchange halts trade after 6% fall

[Ghost Dog]

Source: Agence France Presse

AFP - Trading on Israel's Tel Aviv stock exchange was temporarily halted on Sunday after the market fell six percent at the open on news of a US credit rating downgrade, Israeli public radio reported.

Trading opened as normal on Sunday, the first day of Israel's working week, but mandatory suspensions went into effect minutes into the session as the stock exchange plunged.

The leading TA-100 indice was down 5.73 percent at 988.24 points by the time trading was halted, while the blue-chip TA-25 had fallen 5.42 percent to 1,092.41, according to the Tel Aviv Stock Exchange website.

The session was the first on the Israeli bourse since Standard & Poor's rating agency said it was downgrading the United States' credit rating to AA+ from the top notch triple-A.

Read more: http://www.france24.com/en/20110807-tel-aviv-exchange-halts-trade-after-6-fall

[liberal N proud]

1. History will call it Bloody Monday

Monday August 8 will go down in history as bloody Monday in the markets. Thursday will look like a joy ride in comparison.

[Raven]

2. I was about to call for Congress to return to Washington but,

on second thought, that would probably make things worse.

[Blue State Bandit]

4. HA!

[jwirr]

15. Bingo.

[dipsydoodle]

3. "brown trousers day"

more like it.

[MilesColtrane]

20. I suggest "The Great Teaparty Crash".

[wordpix]

21. may be a good day to buy, if you're not faint-hearted

[high density]

5. That's irrational

Nothing has changed in our ability to pay (or not pay) our debt.

[dipsydoodle]

6. For the time being

apart from which its no problem anyway - all you need to do is raises your interest rates progressively higher and higher to sell bonds same as the Greeks have done.

[izquierdista]

22. That's the market for you

If you want rational, go talk to Mr. Invisible Hand.

http://cdnimg.visualizeus.com/thumbs/58/d4/free,market,hand,tom,tomorrow-58d4a0c8d515604848164c1a778a19f7_h.jpg

[Strelnikov_]

7. Or maybe it was due to the protests in Israel by the middle class

That there appears to be an embargo on reporting here in the land of the free.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1681721

[muriel_volestrangler]

10. Significant falls all through the Middle East

Since it's the one area that trades on Sunday:

The only exception is OPEC powerhouse Saudi Arabia, which plunged 5.5 percent when it opened Saturday. It failed to significantly recover Sunday.
...
The Dubai Financial Market's benchmark index suffered some of the region's steepest declines Sunday, tumbling more than 5 percent in early trading. It closed down 3.7 percent at 1,484 points.
...
The Abu Dhabi and Qatar market indexes each slumped 2.5 percent.

Egypt's benchmark EGX30 index fell more than 4 percent. The Egyptian Exchange's head, Mohammed Abdel-Salam, attributed the slide to declines in world markets rather than the fundamental value of the country's companies.

http://www.forbes.com/feeds/ap/2011/08/07/business-ml-mideast-markets_8606787.html

The Tel Aviv index closed down 7%.

[Turbineguy]

8. Margin calls?

[formercia]

9. There will be many Tomorrow, if the US Markets follow this trend.

I hope it doesn't snowball.

[Turbineguy]

19. Other markets in the ME are down too

but not as much. I don't know what the margin requirements are in the TASE. The Tel Aviv market gapped down 6% on open but closed only slightly lower than that.

The European and US markets have an extra day to digest the Friday event prior to open.

[still_one]

11. It is bullshit. The Israeli public radio analysts are just as full of crap as most of our analysts.

Markets overseas are just catching up to our market action from on Friday which was extremely volatile

Funny thing is that U.S. treasuries were booming, and all the nay sayers telling people to short U.S. treasuries for months, have not only been wrong, but will be wrong again as investors will flock to U.S. bonds for safety

Anyone who sells their U.S. bond funds, treasuries, or ginnie maes, because they believe the U.S. will not be making interest payments are fools

If they are selling the stock market, where are they putting their money? I would bet dollars to donuts that money is going into U.S. treasures, and what will the insightful MSM say when the interest rates do not increase?

Watch the U.S. debt market that will tell you what people think about the S&P downgrade

[UndertheOcean]

12. I can never fathom how stock markets work , or if they are even useful for society

is their anything other than herd mentality at play there ?

[still_one]

13. Usually it is catch up to what the U.S. market did on Friday. We had an extremely volatile session

with a 400 point swing

[Lucky Luciano]

14. Long term, the markets will track the economy well.

Short term is all chaos and mayhem and out of that chaos comes long term order.

[plumbob]

18. They no longer have any function but gambling for an insider crew.

At one time, they were useful for actually raising capital to form a new business, but that was too much work.

They are not only not useful, they are killing us. By investing real wages and real profits in these gambling casino, all security is destroyed and volatility is maximized, hardly a desirable outcome for retirement plans.

As any Ponzi scheme, they need fresh money all the time, and they're about out, so they're looking to steal the social security trust fund and other large concentrations of money still left in the economy.

[elleng]

16. European central bankers meeting in phone emergency today.

Just heard on radio. New news:

http://www.nytimes.com/2011/08/08/business/global/as-market-tension-builds-world-leaders-ponder-response.html

[Poll_Blind]

17. Remember that the US provides Israel loan guarantees as well!

A good chunk of Israel's prosperity is based not just on the billions we give it but on the billions we give them in loan guarantees.

What's a loan guarantee?

This article from Slane sums it up nicely:

A loan guarantee is essentially the same thing whether you're buying a car, an apartment, or housing materials for Soviet immigrants. A reliable financial entity (a bank, your parents, the United States) promises to pay off the balance of a loan if the borrower cannot. So when Congress promises Israel $9 billion in loan guarantees (as they did this year), that means the U.S. government accepts responsibility for up to $9 billion that Israel can then borrow from international creditors. And loans guaranteed by the Federal Reserve provide an additional benefit: The interest rates offered are much lower than they would be if Israel (or any small, debt-troubled nation) sought the loan without backers.

It's not entirely surprising that Israeli markets would be hard hit by the S&P downgrade, maybe harder than the US will be. They really need to learn how to swim on their own, don't you think?

PB