Yesterday, I checked out the trailer for the movie “The Walk,” the 1974 high-wire walk between the Twin Towers of the World Trade Center by French high-wire artist Philippe Petit.  The visual experience is amazing and the movie will be a hit.  Looking back, I couldn’t appreciate the risk involved, but the visual effects on screen should be a wonder to see in IMAX 3D.  Actually, the official trailer was less frightening to watch.

https://www.youtube.com/watch?v=4W6byFcD5uE

Stocks opened lower and simply drifted lower and lower to the point of a controlled freefall.  More stocks hit 52-week lows on the NYSE that were even up for the session.

Breadth	NYSE	NASD
Advancing Issues	322	423
Declining Issues	2826	2286
New Highs	4	16
New Lows	491	345

Much of this year, and even the last few years, have been marked with very little anxiety or fear. However, that’s beginning to change as the ‘fear index’ also known as the volatility index (VIX) has surged to levels not seen since 2011.  No longer are the cool, calm, and collected investors spying the exits, which are crowded.  Ironically, individual investors have been dumping stocks, equity mutual funds, and exchange-traded funds for a long time.

The Carnage

• IBB -6.3%
• S&P -2.6&
• NASDAQ -3.4%
• DJIA -1.9%

The Dow Jones industrial Average garnered all the headlines, down 313 points.   It was the best performing of the major indices as biotechnology moved into full-panic mode.  The index held right at the 16,000 level; I’ve been writing about this and it is now time to make a stand.  It’s hard to see that happening, considering the domino effect that sees our market tip over global markets and global markets tip over ours.

Coming into the week, I thought the worst-case scenario would be a re-test of the August 24 intra-day lows, which could be the case.  With all of this carnage, it’s hard to know if it will make a skittish Federal Reserve even more skittish and uncertain.  It’s really amazing; the stock market was supposed to crater when the Fed hiked rates, but it is begging for a rate hike as a sign all is well in the world.

Then, there’s the jobs report on Friday, which could turn this whole thing around.  Ideally, the Street would need the following:

• 250,000 New jobs
• A nickel increase in wages or more
• 400,000 to return to the labor force

Stocks are mostly oversold, but that doesn’t matter.  When markets fall off high-wires, the bottom is a moving target that feeds on itself; the lower stocks drop, the farther they have to go to hit that emotional terra firma.

Today’s Session

The market will get a slight reprieve at the open and then it has to deal with another confidence reading, which is more critical than normal as we head to the holiday buying season.

Today is the seventh anniversary of the House rejecting the bailout vote by 201 – 178, only to pass a Senate version on October 3rd with a vote of 263 – 175, which resulted in the federal government pouring almost one trillion dollars into the economy.

Coupled with the 600 interest rate cuts around the world, it’s really interesting the world economy is still in trouble and there aren't any more tricks or arrows up anyone's sleeve or quiver.  There's a lot to be said for hard landings.

That being said, the market must fend off a hard landing this week and I think it only happens if we get a stronger jobs report.

 

 

 

Comments

Yes, everyone should pay some taxes. mike on 9/29/2015 9:45:20 AM

Even if the poor are required to pay only 1% in federal income tax (FIT) they should. EVERYONE should have skin in the game. Mark Kramer on 9/29/2015 9:46:04 AM

EVERYONE should have to pay something, should make it harder for gov't to raise taxes with general support kev on 9/29/2015 9:53:44 AM

I feel everyone should pay something. Even a small amount. For instance if you earned $10,000.00 a $100.00 would put some skin in. People on well fare should also pay some kind of tax or put in time doing civil work for the state if they are able. Vern Carlsen on 9/29/2015 9:54:10 AM

I like the 1% minimum tax for even the lowest tax payers. As you say, "even they have skin in the game". And, it would change the whole meaning of One Percenters! Joe Bechely on 9/29/2015 9:56:20 AM

Concept is called tragedy of the commons. If people get something for free (like public housing) there is no ownership, no value to it. It is traeated accordingly. Should everyone not contribute something to the Govt, have soem skin in the game? I think so. Even is that rate for the matrried couple making less than 50K, 5%. we are all in this together, including the 17T deficit. Paul Bogert on 9/29/2015 10:00:17 AM

Getting rid of the estate tax will create a tremendous amount of revenue, as there will no longer be a free stepped basis on inherited assets. This has been a huge loophole in the past. Bruce on 9/29/2015 10:02:31 AM

Don't forget that low incomers pay a higher percentage of their income to state and local taxes than others. Jim Roy on 9/29/2015 10:16:53 AM

you're absolutely right. Everyone needs to pay taxes and have a vested interest in America. Everybody needs to believe that there's no free lunch in our society. D. Hogan on 9/29/2015 10:21:08 AM

I agree about skin in the game. The problem is that most low income "earners" not only pay no taxes (except the very regressive social security tax), but they get additional handouts in the form of child credits. This is one of the most abused welfare benefits as many illegals file and get it too. I'd prefer eliminating this benefit from the tax system completely, and make them physically claim it in person. When the average handout through this negative tax is over $20k, a 1 or 10% tax is meaningless to them, and they'll complain we are removing benefits from them. Do away with this "credit" completely and revise the federal welfare system instead. Jim on 9/29/2015 10:23:41 AM

ALL Americans? I'm on SS, haven't I paid enough taxes over the years? First I lost my husband and then I lost everything I've worked for all my life in the crash, don't penalize me again! What I had left after the crash was spent putting our daughter through school to ensure her future. My life now is nothing like we planned and worked for, the last thing I want to worry about is whether or not the IRS will be hounding me. I agree anything I earn over and above SS should be taxed, that's fair, but there should be an income limit on who can collect SS as well; if someone has millions, they should forfeit their SS. I had a housekeeper two days a month fifteen years ago who now receives more than $5k a month from the state because she is raising her loser son and drug-addicted daughter in law's 3 children, and she doesn’t work anymore. I babysit my grandkids for free so my daughter can work in a hospital delivering yet more illegal babies. I'm trying hard not to be bitter but it's tough to remain in faith when things seem so bleak. Hope on 9/29/2015 10:34:10 AM

EVERYONE should pay something no matter how small-skin in the game, as you say. History shows, if the American dream (or any worth while concept) is free it is not appreciated and gets taken advantage of. You have to work for it and contribute to the system to appreciate it and care about who runs the our government. If you are paying in you care more-it's that simple. Scott on 9/29/2015 10:47:34 AM

The problem is, does the average retail investor believe the information coming out of the BLS. Like you have said "the average American still feels like we are in recession". Bill Milem on 9/29/2015 10:50:15 AM

Welfare for all, citizens or not! Why work? no worry,no tax, no country. Everyone should pay some Federal tax. Mary on 9/29/2015 10:50:16 AM

As a result of that Philippe Petite high-wire stunt between WTC1 and WTC1, the bureaucrats put double locks [mechanical and electrical] on the access doors to the roofs. On 9/11, people above the impact points tried to gain access to the roof so they could be helicoptered off. But they could not get up to the roofs. There were helicopters available. But the people could not get up there. So they sat down on the staircase steps and ... they were killed. The buildings were designed for helicopter evacuation AND during the 1993 bombing, people were evacuated by helicopter. But in 2001, the bureaucrats prevailed. [It didn't help that the police were fearless and the fire guys were uncomfortable with helicopter rescue.] And a couple of hundred people died unnecessarily, when they could have been helicoptered off. Helicopters have been used many times elsewhere, but not when the WTC bureaucrats had control. Don't get me started. Al M. on 9/29/2015 10:52:18 AM

Yep, every one should pay something, whether it's 1% or 5% & Kev hits it on the nose! We are retired and still quite bit of tax. Hope does have a point, however, after putting in after- tax dollars for decades SS is once again taxed! Randy on 9/29/2015 10:58:24 AM

Dr. Carson says that if we put a Federal freeze on hiring, that within a very few years, the Federal deficit will start to decline and then the budget will be in surplus. And we will start to pay down the debt. We can also turn over EPA functions to the state DEP's. Ditto with the Federal Education and Energy Depts [except nuclear weapons which would go to the Defense Dept.]. The Defense Dept budget should be 4% or 5% of GDP ... because when the DoD budget falls to where it is now, we get into terrible trouble ... check the Chart Page of the Air Force Association Magazine for the data. The Chart Page is a national asset and the back issues of the Chart Page are outstanding. Al M. on 9/29/2015 10:59:26 AM

Politicians say all kinds of things to get votes. Participation creates inclusion, and equitable tax contributions balance the burden. Why are we having such trouble figuring out what makes a fair share? Patricia Flynn on 9/29/2015 11:26:02 AM

I think everybody need to pay something for what we get. I like the 10% flat rate Karen Harrion on 9/29/2015 12:14:51 PM

If you give away the milk for free....who is going to buy the cow ? Maybe that's why they treat us like sh*t! Bonnie on 9/29/2015 12:35:32 PM

While I agree with tou on most things, the slap in the face of being taxed on EVERYTHING we need as consumers, I have plenty of skin in! We lost our home and building business in the recession. At 62, no light at end of tunnel. PS no ins as Obamacare went from up two hundred percent and it became a way of life filing paperwork. I gave up. Thank you for all you do. The emails are wonderful and informative Gloria cato on 9/29/2015 12:41:38 PM

Definitely everyone needs to participate and contribute to society! Plus Trump wants to give them all healthcare on top of that? gjohnson on 9/29/2015 12:53:10 PM

Couldn't agree more, Charles!! Not having to pay, at least a little in income taxes, makes one lose appreciation of those who do. R. Reid on 9/29/2015 1:13:15 PM

Don't these people who say everyone should pay some tax realize that everyone pays the payroll tax even if they pay no income tax. And now they have to pay something for medical or a tax if they do not have medical. Rodman Johnson on 9/29/2015 2:04:17 PM

A simplified tax code will not happen. The accountancy lobby is too strong. e on 9/29/2015 3:24:54 PM

Drop the income tax totally. Institute a VAT on everything but food. Then everyone will pay according to their consumption. Arthur Carlson on 9/29/2015 3:33:13 PM

Charles, I just took some time and figured what I am paying in total taxes for 2015 and came up with $305/day !!!!I I work everyday and manage my investments and am a very responsible person but something has to give. I just settled my Mother's estate and mailed a $3.5 million payment to WA, just made me sick after seeing how hard my parents worked their entire lives. I have NEVER cheated on my taxes but maybe will have to so I can leave something to my family when I am gone. barton harrison on 9/29/2015 4:03:08 PM

How about the other over 75 tax items we pay, they are only getting bigger. The middle class is getting killed with taxes. Less Fedral tax is just a drop in the bucket. Ken on 9/30/2015 4:53:49 PM

We have almost $20 trillion reasons to want a "skin in the game" tax system! BRENDA BRADFORD on 9/30/2015 5:13:45 PM

I totally agree. Everyone in this nation should have some skin in the game. Sharon on 10/1/2015 3:15:17 PM

Even though you pay no income tax, there are: SS tax, Sales Tax, Property Tax, Utility taxes, State taxes, vehicle taxes, etc. I would say that we do have "skin in the game." Joanne Rooney on 10/9/2015 4:51:07 PM

Everybody needs to pay. That's why I believe in a commodity tax. I also believe everybody needs to serve this country in military. Bring the draft back. Bring patriotism back. Gene Lipscomb on 10/9/2015 7:10:25 PM

I like everyone having skin in the game but there are income levels that make it hard to support families. How about combining the zero tax rate on the lower income levels with the elimination of government assistance like the earned income tax credit. Jeff Bozzuto on 10/14/2015 10:30:57 AM

There are some things government is REAL good at. Don't worry, they'll take your skin when they want it. Frank Di Costanzo on 10/16/2015 5:15:37 PM

Hi Charles, We really enjoy watching you on Fox and are so inspired by your life story. As a very small business owner who makes less than $20,000 a year and works 7 days a week I would like to answer your Question OTW from my perspective. I, like everyone else, is required to pay payroll taxes already which I feel meets your "skin in the game mentality". We don't take vacations, drive a 12 year old car and pay 1/3 of our income for my husband's medical coverage (I have none). Our "entertainment" budget is zero and we often come close to having our electricity turned of. We rarely eat out and we have to calculate the gas cost when we visit a sick friend who lives 100 miles away. I am stressed out every month about whether we will have enough money to pay for the basic necessities. Even though we are all in Republicans I don't have a problem with the "working poor" not paying Federal Income Taxes. When an individual barely has enough money to pay for food, medicine and basic housing I don't see how paying more taxes is going to be a motivating factor. The Obama economy has devastated the finances of so many small businesses and families. The answer is to improve the economy and business climate so that everyone is making enough money to cover the basics AND pay reasonable taxes. Thanks for asking! JW on 10/17/2015 11:37:22 AM

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