The market took a huge plunge today. It happened steadily as the day went on. There were some small attempts at a rally but after the Dow started to gain 10 or 15 points, it went down another 20 points.

Why did it drop? I think it was a lot of people taking profits off the table along with bad economic news from banks with renewed worries about another credit crunch. What was surprising was that Google (GOOG) reported great profits and still barely gained 1% on the day. I did take the opportunity to buy a Google $640 Nov call.  BIDU and AAPL report next week, so it’ll be interesting to see if good news from those companies can get the market back on track. I do have positions in both of those stocks.

Is the world economy going to slow because of the US? There has been some talk about how vital the US economy is to the world economy. It’s not the center of the world economy as it was a number of years ago but any slowdown would definitely hurt the overall world economy. China exports to the US would slow.

I’m no economist but I’m still bullish on the overall economy. Housing and financials may suffer but overall, our economy should be chugging ahead.  I’m just fortunate that I did not invest or buy a personal residence in California. I still have some holdings in Texas and Utah, which I bought for cash flow. Any appreciation are bonuses for those properties. I do realize the chances of selling those homes right now are slim with the credit crunch so I am stuck with the properties.

Tags: , , , , ,