• Ugh!
    Posted by on March 2nd, 2009 at 6:11 pm

    Today was a wipeout. The S&P 500 dropped below 700 for the first time since October 28, 1996, just days before the 1996 Presidential Election. To add some perspective, Barack Obama was just 35 years old at the time. Neither of his children was even born.
    The Dow dropped to 6763.29. Obviously, traders were glued to this site since the Dow closed within inches of the Fibonacci number 6765.

  • Since September the Dow Utilities are Up 118%!
    Posted by on March 2nd, 2009 at 2:40 pm

    By September, I meant the one in 1929.

  • “They really did things that seemed outlandish”
    Posted by on March 2nd, 2009 at 2:19 pm

    In Vanity Fair, Vicky Ward delivers 5,000 words on Walter Noel and the Noel clan. Either Ward or Noel has been reading too much Fitzgerald:

    Another person who spends time in Southampton recalls, “They really did things that seemed outlandish. The first summer they were here, I won’t forget seeing two of the daughters blocking traffic on Jobs Lane, leaning out of their convertibles, talking to each other and making what sounded like idle plans and blowing kisses, as if they owned the street—literally for five full minutes while a line of too-polite-to-honk Southampton matrons sat in silence.”
    This person also complained, “They lit up their house like a Vegas casino, which shocked some of their neighbors on the pond [Lake Agawam],” who called police several times to complain about noise and music coming from the house at night. “It is not a quality that endeared them to their neighbors, including [investor] Ezra Zilkha, [NBC New York news anchor] Chuck Scarborough, [writer] Tom Wolfe, and [financier] George McFadden [who died last year], who all cherished their quiet summer weekends.”

  • The Dow is Now Below 6900
    Posted by on March 2nd, 2009 at 11:35 am

    The Dow has been as low as 6852 today. For what it’s worth, 6765 is a Fibonacci number. I have no idea what this means, but if you mention it to someone at work today, it will guarantee to impress them.

  • Revenge of the Glut
    Posted by on March 2nd, 2009 at 10:31 am

    The other day I opened my credit card bill and I was surprised by how small it was. I didn’t realize how much I had cut back on consumption. It wasn’t a conscious effort, it just sorta of…happened.
    In macroeconomic terms, what I did was a bad thing. By saving, I’m not spending money which would become someone else’s income. Keynes called this as “the paradox of thrift.”
    Apparently, I’m not alone. The government reported that the national savings rate bumped up to 5% in January from 3.9% in December. A year ago, it was at 0.1%. Here’s a graphical look.
    In yesterday’s column, Paul Krugman said,”we’re suffering from a global paradox of thrift: around the world, desired saving exceeds the amount businesses are willing to invest. And the result is a global slump that leaves everyone worse off.”

  • Saving A Not So I, Not So G
    Posted by on March 2nd, 2009 at 10:15 am

    The Dow dropped below 7,000 this morning. Let’s thanks AIG (AIG) for delivering a quarterly loss of $61.7 billion. That’s the largest loss in the history of the world. To add some perspective, that’s a loss of nearly $23 a share for a stock that’s bouncing around 50 cents a share.

    In the quarter, A.I.G. took a $21 billion charge related to taxes and wrote down $25.9 billion in assets, including mortgage-back securities and credit-default swaps.
    The company’s general insurance business lost $2.8 billion compared with a profit of $2.1 billion in the quarter a year ago. Premiums dropped 16.3 percent to $9.2 billion and earnings from premiums fell 5.9 percent to $10.98 billion.

    The government is injecting more cash into the floundering insurance giant. This is the fourth time the Feds have come to the rescue. Uncle Sam currently owns 80% of AIG. The move was specifically designed so the credit agencies wouldn’t downgrade AIG, which would hurt the company even more.
    Larry Ribstein writes: “The government is bailing out AIG because AIG undermined a system that the government was supposed to be, but wasn’t, protecting. And now who’s in charge? The government, of course.”

  • NPR: Bad Bank
    Posted by on March 2nd, 2009 at 9:41 am

    This American Life followed up their earlier specials on easy-to-understand lessons on the credit crisis with another installment. The first “act” explains what a bank does in very simple terms. The second looks at two guys trying to clean up the toxic asset themselves–they’ve hit the street to buy mortgages.

  • Niall Ferguson Calls for a Great Restructuring
    Posted by on March 2nd, 2009 at 2:39 am

    Niall Ferguson has interesting article in the Australian. He says that we need to ditch our new-found love of Keynes and work on reducing debt not expanding it. He calls for nationalizing banks that no have pulse (ala Sweden) and modifying mortgages. I agree on the banks. On mortgages, Ferguson isn’t worried about moral hazard since he doesn’t believe this bad behavior will be repeated. Hmm. I’m not so sure about that. Still, it’s an interesting take if nothing for the boldness of vision.

  • This Just In…
    Posted by on March 2nd, 2009 at 12:31 am

    Campbell Soup (CPB) has a higher market value than Citigroup (C).

  • Was Google’s Stock Manipulated?
    Posted by on March 2nd, 2009 at 12:17 am

    I’m shocked, shocked to find that manipulation is going on in here!

    Has Google Stock Price Been Manipulated?
    Jerry Wenjiu Liu
    California State University, East Bay
    We present the evidence that the GOOGLE stock, one of the most important stocks in the 21st century, may have been illegally controlled by large Wall Street firms. We identify a group of smart traders, including financial firm proprietary traders and large traders who trade options with large orders. We find that they have advance information about the closing prices on post earning release and option expiration days. These smart traders sell options to the market which would become worthless after the key events, and their high success rate is difficult to be explained by normal trading behavior. Additional evidence from the tape, such as unusually high quoted depth and extremely low narrow quoted spreads during clustering option expiration days, provide direct proof that the GOOGLE stock price may have been manipulated to coordinate the institutional traders’ option selling activities.

    Your capital gains, sir.