Thursday, 9. October 2008, 20:16:56
crisis, panic, stock market
Dow 8,579.19 -678.91 (-7.33%)
Nasdaq 1,645.12 -95.21 (-5.47%)
S&P 500 909.95 -74.99 (-7.61%)
Another massive fall in the markets today, and no doubt the business pages will be full of reasons from liquidating hedge funds, and/or massive shorting and/or mass consumer panic etc., but these recent huge falls are becoming divorced from all economic reality, credit seizure notwithstanding. I shall be putting in a 'buy' order tonight.
Tuesday, 7. October 2008, 22:31:45
crisis, finance, economy, depression
...
Here are the S.&P. sector breakdowns for the first five days of October:
Consumer Staples, down 7.2 percent
Telecommunications, down 9.7 percent
Health Care, down 10 percent
Utilities, down 11.6 percent
Energy, down 15.8 percent
Consumer Discretionary, down 16 percent
Industrials, down 16 percent
Information Technology, down 16.3 percent
Materials, down 18.2 percent
Financials, down 20.4 percent
Of the 500 stocks in the index, 12 are up so far in October, and nearly all of them are beaten down financials that bounced a bit from very low prices.
From
And You Thought September Was Bad by Floyd Norris, New York Times.
Tuesday, 7. October 2008, 20:28:34
crisis, economy, depression
The S&P 500 extended its 2008 decline to 32 percent, while the Dow's yearly loss widened to 29 percent in the market's worst yearly retreat since 1937. The S&P 500 Financials Index slumped 12 percent to below its lowest level since 1997 even after Fed Chairman Ben S. Bernanke signaled he is ready to cut interest rates.
Worst yearly retreat since 1937 - that puts us squarely in Great Depression terrritory.
Boy, am I glad the house is paid off!
Monday, 6. October 2008, 00:19:20
crisis, Black Monday, economy, collapse
Another Black Monday tomorrow?
Well, no House vote to consider, but we have this news:
Iceland going bankrupt - not just a company this time, but a whole (admittedly small) country.
Hypo Real Estate Gets $68 Billion Bailout From German Government, Lenders - definitely touchy situation this.
The German government said that it would guarantee private savings accountsBNP Paribas to Purchase Fortis's Units in Belgium, Luxembourg- just in time, by the sounds of it.
and
U.S. Stock Futures Drop as Deepening Credit Crisis Prompts Rescue of HypoThe seas are as stormy as they ever were despite Congress's passage of the rescue bill. And will be so for some time yet.
Saturday, 20. September 2008, 17:01:10
bailout, government, crisis, LEGISLATIVE PROPOSAL FOR TREASURY AUTHORITY TO PUR
...
The document proposing the largest financial bailout in U.S. history is refreshing concise. You can read it
here.
It gives the Secretary of The Treasury enormous power:
(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.
but the taxpayer is considered:
In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--
(1) providing stability or preventing disruption to the financial markets or banking system; and
(2) protecting the taxpayer.
Note that the taxpayer is #2 on that list
And an awful lot of zeros are postulated:
Sec. 6. Maximum Amount of Authorized Purchases.
The Secretary's authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time
As we well know, any amount set in a government document is usually only a starting point, and I am sure this will balloon as well.
Oh well. A pretty mess we are in.
Saturday, 20. September 2008, 15:27:53
15 minutes of fame, opera, crisis, being quoted
...
...and I was a tremor.
A quake rocks Wall Street and the tremors rippleBut now there was something new to worry about.
In New York, The Reserve Fund - operator of a huge money market fund - announced it would be forced to do something unseen in more than a decade. Investors put their money in money markets specifically because they are so safe. You may not make much money, but you will not lose anything, or so goes conventional wisdom.
Reserve's Primary Fund, though, had so much invested in Lehman Brothers debt securities that every $1 share would now be worth just 97 cents.
The news broke as Richard Keeling, a research biologist, arrived home in University City, a suburb just outside St. Louis. Keeling had no money in The Reserve. But after watching the markets from the sidelines, his steadfast confidence is shaken for the first time. Keeling is 51 and his house is paid off, but the stock drop had already convinced him to shelve thoughts of an early retirement.
He logged on to his Vanguard account, and stared at the numbers: $10,000, parked in a money market account. What could go wrong?
Better not to wait for an answer.
With a few taps of the keyboard, Keeling moved the money out of the mutual fund and into his savings account. There, it would be safe. That, at least, he still believed.
Yup, that's
me journalist Adam Geller is writing about & how did this unlikely event come to pass?
Through My Opera and
this blog post.
So blogging with Opera really gets you noticed!
Saturday, 20. September 2008, 02:49:26
crisis, Wall Street, economy, nationalization
...
I'm listening to Liszt's "
Mephisto Waltz No. 1", something of concert and piano competition standard and not really my favorite Liszt, but it makes a very apt soundtrack for the extraordinary events on Wall Street this week.
There is a wedding feast in progress in the village inn, with music, dancing, carousing. Mephistopheles and Faust pass by, and Mephistopheles induces Faust to enter and take part in the festivities. Mephistopheles snatches the fiddle from the hands of a lethargic fiddler and draws from it indescribably seductive and intoxicating strains. The amorous Faust whirls about with a full-blooded village beauty in a wild dance; they waltz in mad abandon out of the room, into the open, away into the woods. The sounds of the fiddle grow softer and softer, and the nightingale warbles his love-laden song
This is the program note to the piano piece, and substitute Wall Street for Faust and greed for the Devil (is there really any difference?) and you have just about got it. The nightingale that steps in to soothe us - well, that is the U.S. Government and the 500 billion to 1 trillion dollars of
its our money.
Well, we'll see next week if the song is still sweet. It's clear even now that we've lived through a week of financial upheaval that rivals that of 1929, although, so far, with a happier outcome. No mass panic, people jumping out of skyscrapers and ashen-faced acknowledgements of ruin.
Personally, I think this bailout should have come months ago, but, as in the case of the addict who does not realise the extent of his condition until he or she reaches rock-bottom, perhaps such upheaval was necessary first. Unexpected things are going to continue to happen, but I sense that this was indeed the bottom. The government saw the abyss up close and chose to act. Better that by far than the alternative (although already the dedicated free marketeers are upset - well, they have reason to be, the housing finance industry in the U.S. has been almost wholly nationalized now). That a Republican administration should be behind this is simply boggling, but, as always, political expediency - not to mention being backed completely into a corner - wins out whatever the ideology in the end.
WIDGETIZE