Wednesday, November 26, 2008
Tuesday, November 25, 2008
Wednesday, November 19, 2008
If you want a synopsis of all the government hearings we've had lately then...
watch this summary, it has been reduced into an easy ~2 minute video to watch.
Thursday, November 6, 2008
The Silver Lining: Wild Swings Equal Bottoming Out Process?
From a bearish well respected analyst/economist.
From Merrill's David Rosenberg:-------------------Most volatile month in the 80-year history of the S&P 500From 2003 to 2007, there was not one session which saw a 4% move in the market; there were 9 in October alone. Perhaps this sort of volatility is typical of a bottoming process – we had 8 of these in September 1932, when indeed the market was in a bottoming formation. Be that as it may, we are willing to wait it out and see how the testing process evolves (see more below). The last week of October was, amazingly, the best in 34 years for the S&P 500 – up 10.5%, the best since the week ending October 11th, 1974 (the market had bottomed the week before on October 3rd). Yet, that great week did not stop the whole month of October from seeing the S&P 500 dive 16.9%, in the worst month since Oct/87 (though that was practically a one-day event). The Dow fell 14.7% last month and all 30 stocks were down, but in the final week, it was up 11.3% and all but one of the 30 stocks finished higher.Only 7 out of the S&P 100 were down this week, but only 9 were up for the month (see page B3 of the Saturday NYT). The Russell 2000 also plunged but finished the week with a resounding 14.1% gain. This is unbelievable. Oil prices were down a record 33% in the month; and gold was off 18% for its worst month in 28 years; copper and aluminum suffered their worst losses in 20 years. High-yield bonds endured their worst month ever too – negative returns of 15.5% in the USA and 22.7% in Europe, so the carnage was hardly confined to equities. The only real winner we can see was the 2-year Treasury note, which generated a 1.1% return in October – the fifth straight month of positive returns (now what other asset class can boast that result?).
From Merrill's David Rosenberg:-------------------Most volatile month in the 80-year history of the S&P 500From 2003 to 2007, there was not one session which saw a 4% move in the market; there were 9 in October alone. Perhaps this sort of volatility is typical of a bottoming process – we had 8 of these in September 1932, when indeed the market was in a bottoming formation. Be that as it may, we are willing to wait it out and see how the testing process evolves (see more below). The last week of October was, amazingly, the best in 34 years for the S&P 500 – up 10.5%, the best since the week ending October 11th, 1974 (the market had bottomed the week before on October 3rd). Yet, that great week did not stop the whole month of October from seeing the S&P 500 dive 16.9%, in the worst month since Oct/87 (though that was practically a one-day event). The Dow fell 14.7% last month and all 30 stocks were down, but in the final week, it was up 11.3% and all but one of the 30 stocks finished higher.Only 7 out of the S&P 100 were down this week, but only 9 were up for the month (see page B3 of the Saturday NYT). The Russell 2000 also plunged but finished the week with a resounding 14.1% gain. This is unbelievable. Oil prices were down a record 33% in the month; and gold was off 18% for its worst month in 28 years; copper and aluminum suffered their worst losses in 20 years. High-yield bonds endured their worst month ever too – negative returns of 15.5% in the USA and 22.7% in Europe, so the carnage was hardly confined to equities. The only real winner we can see was the 2-year Treasury note, which generated a 1.1% return in October – the fifth straight month of positive returns (now what other asset class can boast that result?).
Wednesday, November 5, 2008
Consumer Short Term Financing/Discretionary Spending Getting a Punch in the Face
Nov. 5 (Bloomberg) -- Credit card companies were shut out of the market for bonds backed by customer payments in October for the first time in more than 15 years, as investors shunned the debt amid the global credit freeze.
A weakening job market and a looming recession are making it harder for consumers to make monthly payments, eroding confidence among investors about the safety of credit-card-backed bonds. It's the first month since April 1993 that there have been no sales, according to Wachovia Corp. data. Issuers sold $17.1 billion of the debt in October 2007, the data show.
``Nobody is eager to put money to work given the uncertainty in the market,'' said James Grady, a managing director at Deutsche Bank AG's asset management unit. ``When you think it can't get worse, it continues to get worse. There is not a demand'' for these bonds.
Top-rated credit card-backed securities maturing in three years traded at a gap, or spread, of 475 basis points over the London interbank offered rate during the week ended Oct. 30, JPMorgan Chase & Co. data show, 25 basis points higher than the previous week. The debt was trading at 50 basis points more than Libor in January.
The higher cost to sell the bonds makes it more expensive for banks and credit card companies to fund loans to customers. New York-based American Express Co. paid 160 basis points more than Libor at a Sept. 11 sale of the securities compared with 30 basis points over the benchmark at a similar sale in October 2007, Bloomberg data show.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aajOmDkW3xeE&refer=home
A weakening job market and a looming recession are making it harder for consumers to make monthly payments, eroding confidence among investors about the safety of credit-card-backed bonds. It's the first month since April 1993 that there have been no sales, according to Wachovia Corp. data. Issuers sold $17.1 billion of the debt in October 2007, the data show.
``Nobody is eager to put money to work given the uncertainty in the market,'' said James Grady, a managing director at Deutsche Bank AG's asset management unit. ``When you think it can't get worse, it continues to get worse. There is not a demand'' for these bonds.
Top-rated credit card-backed securities maturing in three years traded at a gap, or spread, of 475 basis points over the London interbank offered rate during the week ended Oct. 30, JPMorgan Chase & Co. data show, 25 basis points higher than the previous week. The debt was trading at 50 basis points more than Libor in January.
The higher cost to sell the bonds makes it more expensive for banks and credit card companies to fund loans to customers. New York-based American Express Co. paid 160 basis points more than Libor at a Sept. 11 sale of the securities compared with 30 basis points over the benchmark at a similar sale in October 2007, Bloomberg data show.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aajOmDkW3xeE&refer=home
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