It’s A Grizzly Market
Calling this a “bear market” really doesn’t do it justice.
This is a grizzly market, folks … one that seems to get meaner with each passing day.
Just last week, people took $30 billion out of the U.S. stock mutual funds … presumably to go and bury it in the back yard.
Thirty billion … in a week.
From the AP:
The Dow Jones industrial average has fallen 21 percent during Obama’s first seven weeks in office. Count back to Election Day and the results are even bleaker: That afternoon, the Dow closed at 9,625. Now it stands at 6,547, a loss of 32 percent.
Is this the Obama bear market? Or hangover from the Bush administration?
Some investors blame the slow-motion crash on Wall Street’s disappointment with the government’s $787 billion stimulus plan, its seemingly endless bailouts and the lack of specifics on how to rid banks of toxic assets.
Duh … it’s called bankruptcy.
Anyway, it’s doubtful we’ve seen the bottom of this spiral yet, which means its only a matter of time before we start hearing the drumbeat for Bailout III … you know, to avoid an “economic Pearl Harbor” or something like that.
Comments
By Pat Hendrix on March 10th, 2009 at 9:21 am
No, this isn’t the bottom. We have a ways to go before we sort out the fraud and “off balance sheet” accounting that brought us to this meltdown. I’m not sure anyone knows what to do. Sure, it’s easy to carp on the sidelines, but the possibility of systemic failure throughout the entire industry is real and scary. But what adminstration wants with the utter nightmare of nationalizing these banks? Seems to me they are simply keeping the system afloat until they can get their minds around the problem. But the costs to unveiling a crappy, potentially counterproductive plan are significantly higher than the costs of taking another month or two to get it “right” – whatever they may be. However, ultimately it seems clear that the losses in the banking industry cannot be made to go away. Hence, the system needs to be purged of them. The investors in financial firms need to be forced to take their medicine, not keep trying to avoid them. Seems to me that we need to remove the insurance subsidiaries from institutions like AIG, giving an equitable price – perhaps made easier by canceling the debt that they already owe the American taxpayer – and then let them sink, allowing the rest of the losses to find their way to the owners. After it crashes and burns, we can clean up system and bring regulatory reform to the industry. Appears to be the most effcient means to get it over with. But make no mistake, this country will see unprecedented pain as it sorts this mess out.
Then again, I’m a history major. Maybe there is a better way – I hope so because the alternative is scary stuff.
By Brandon on March 10th, 2009 at 4:13 pm
The new buzz is “Vulture Market”.