The entire market was on a downward run the entire day. The impending restrictions on naked short selling did nothing to break the financials’ falls, and the bailout of AIG seemed to deepen the “crisis of confidence” in our economy. The dollar was down and oil and gold were suddenly trading way up.
A friend of mine brought up an interesting point yesterday: now that the banks are failing, the price of oil is also failing. In his email to me, he wrote:
“BTW, have you noticed the rapid decline in crude oil now that the banks have to focus on their books and capital? Could the banks have been speculating the price of crude??? Only the shadow knows. WAMU after hours trading closed at $2.55.”
As if the market heard his words directly, a CNNMoney.com article hit this morning titled “Oil rallies as Wall Street gets a lifeline: Crude futures rebound as the Fed steps in to lend insurer AIG much-needed capital, and ahead of the government’s weekly supply report”
Now that the big banks are being shored up, will oil bounce?
My Calculus 2 class starts tonight. Any free time I’ve had will now be absorbed into homework, studying, and stress. If it was possible to do so, I’d buy a few puts on my weight with a January 2009 expiration date so that I could rake in some money in time to buy myself a nice Valentine’s day gift. Calculus stresses me out. Anyway, it may put a damper on my writing. But I guess I said the same thing for when I went back to work, and that didn’t stick, so maybe I have no idea what I’m talking about.
The Dow almost had another -500 point day: it tumbled 449 to close the day at $10,609. Oil rose $6.01 to close at $97.16. The Associated Press chalked up the rise in oil to “an easing of worries that the insurance giant and other financial firms would liquidate commodities holdings to raise cash”. The dollar lost value because of the AIG bailout, too. Typing in “dollar” into Google News returned articles with titles like: “US dollar falls amid wary credit markets”, “Dollar falls vs. euro, yen despite AIG bailout”, “India’s rupee firms against dollar”, “Bonds soar, dollar sinks”, and Oil rallies as dollar weakens”. Seems my friend was right; the oil speculators are back. Time to get back into oil? God was way up, too. The ETF StreetTRACKS Gold (GLD) climbed 11% today.
The House of Representatives, with a democrat majority, passed a bill last night to lift the 26-year old ban on offshore drilling. But because the bill also added on tax credits for clean energy companies, President Bush’s advisors are asking that he veto the bill in its current form.
The ban on naked short selling will take effect tomorrow. We’ll see what happens.
