Posts tagged dow
October 28, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged assasination, Bush, consumer confidence, dow, election, fed, interest rate, Obama, oil, skinheads
Oil lost another 4 months of gains since Friday, settling at a 17-month low of $62.73 today. The Dow rallied in the last half-hour of trading to close up 889 points to $9,065, which marked today as the second-largest day of gains ever. It seems as if $8,000 may be the psychological bottom, but consumer confidence is still at a 40-year low so it’s still a waiting game. The Fed meets tomorrow to discuss lowering interest rates, which would ease some of the pressure people who fought to keep their mortgages.
In one week we’ll elect a new President, and with any luck it’ll be Barack Obama in a landslide victory that will send McCain back to the cage he came from. A plan made my some inbred skinheads to kill Barack Obama and cut the heads off of a few black people was averted today, but it makes me nervous that there’s a real possibility I’ll live through an assassination. No one wants to kill Bush because there’s no passion either way for the guy. No one really cares if he lives or dies. I shouldn’t be nervous; I should be excited about the prospect of a charismatic intellectual in office. I should see the glass 90% full instead of 10% empty and dream about the life that Barack Obama will breathe back into our country if elected. I remember driving to work on the day after the 2000 election and passing a woman on the street with a sign that read “Is it 2004 Yet?” At the time, 2004 may well have been a million years away, yet despite not actually electing the guy in 2000, we voted him back in four years later. What’s wrong with us? One week from tonight the map will be up and the voted will be counted, and we can finally put the Bush administration to rest, and in time we’ll forget the last eight years ever even happened. I doubt this time will go down in many history books, except for those focused on economic crisis and bad executive decisions.
October 25, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged dow, existing home sales, oil, OPEC
Existing-home sales jumped in September to their highest [seasonally-adjusted] level in 13 months, and based on this data, 5.1 million homes will move into new ownership this year- a 1.4% increase from a year ago. Analysts had estimated this number to hit 5 million from the 4.91 million that moved in August, so could this be a sign that the sludge is finally clearing? Experts have been saying for a while that we need houses to move for the economy to move, so maybe. But based on this week’s numbers on Wall Street, even if every house sells, something else may need to kick this country out of its funk. Obama? Oh God, please let it be Obama.
The last time I wrote about the Dow’s average- eight trading days ago- it was at $9,311. Within those past 8 days, the average has dropped 10% to close yesterday at $8,378. The Dow is made up of 30 companies, and a quick Google search is enough to find out which ones.
Let’s put this into perspective for a second by dividing both 9311 and 8378 by 1000 to get some numbers we were all used to seeing (if we were lucky) on our high school report cards, or if we went to an A, A-, B+, etc school, the grades we calculated ourselves to buffer report card shock.
Now let’s consider we’ve already taken 29 exams and we’re on the 30th one (30th company in the Dow), and let’s switch the numbers so that we’re now at a respectable 83% and we’re trying to figure out what score we’d have to get on that 30th exam to bump our average up to the much more respectable 93%. Here we go with some high school algebra…
[(83)(29) + x] ÷ 30 = 93
A little cross multiplying, subtracting from both sides.….
We’d have to get a 383% on that 30th exam to bump our grade from 83 to 93.
$8,378 is the lowest the Dow’s seen since April 2003. Everything is down. For a minute there a week or so ago it seemed that maybe the worst was over, but the numbers this past week and a half show that the worst is not over. So when will we see the worst? The worst part about the answer to that question is that no one has any sort of idea about an answer to that question, and even when they think they’ve crunched the numbers hard enough and dug deep enough into the annals of history to see how long it took for the bottom to be hit the last time, we have another Black Monday or Tuesday or Wednesday, or entire week. Most people alive have never seen such a thing, and I’d say all people on Wall Street have never seen such a thing except for in that one history elective they may have had to take in business school where they read about something called “The Great Depression”.
It’s amazing, really. True I’ve lost about half of what I’ve invested since July, but I’ve got time on my side and an overall apathy about money. Yeah I want to turn a little into a lot, but it’s more about the game of it, or the experiment to see if it can actually be done. If I did turn $10k into $100K, what would I do with it? I have absolutely no idea. Maybe I’d buy a house somewhere, but I think people who buy houses usually have a rough idea about where they’d like that house to be located.
My one regret is that I have too much going on outside Google Finance and Bloomberg.com to really keep up on what is happening day to day. I keep the corner of my right eye on my stocks, but as far as what OPEC’s doing, where the $700 or $850 or whatever billion is going, which companies are failing, who’s buying who (whom? Whatever.), and all that stuff I was able to read about during summer vacation, I’m in the dusk. Speaking of OPEC, I’m reading today they’re going to cut production in an attempt to drive prices up. They’re messed up. But their ploy may not even work anyway since the entire global economy is in the can and we don’t have anything to put their dumb oil in, even if the stuff was being given away. Crude oil fell to a 13-month low on October 23, and closed yesterday at $64.15 a barrel. Go ahead OPEC, try your best you greedy bastards.
As for my plan, I’m waiting for one of two things to happen before I consider averaging down on the stocks I own that are still afloat by then, and maybe even picking up some other ones like Apple (APPL) and Wachovia (WB): the Dow to hit $7,000 or $10,000. I figure that even if $7,000 isn’t an actual bottom, it has got to be pretty close (um, right?) and $10,000 will be a real psychological barrier to break. In all honestly, I’d like to see $7,000 before $10,000, just so I can get in on the super cheap.
October 10, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged AAPL, AIG, Apple, dow, Great Depression, National Debt Clock, November 9, oil, SmartMoney, St. Regis Spa & Resort, wall street
And so ends the worst week in Wall Street history. The Dow is now trading comfortably under $9,000 and every opening bell has become the signal at the gate of a downhill skiing competition. My 403b statement came in the mail today; I won’t look at it. In the envelope it will stay until times are good again and I can look back on this time and laugh.
One year ago yesterday, the Dow hit its highest trade ever at $14,164. As of today, we’re rapidly closing in on half that number. $6,000 is beginning to look like a fair estimate of the bottom. Could it go lower? If this week was an indicator, yes it could go lower.
The National Debt Clock in Times Square ran out of number placements this week because back when it was erected, no one ever predicted our national debt would soar to over $10 trillion. Well it did, and now we need a new clock. If our current debt was divided by the number of people living in the US, we’d currently all owe over $33,000. I wonder if the cost of the new clock, which will be able to track debt up to a quadrillion dollars, will be tacked onto the national debt.
If there is a silver lining to this story it’s torn and tattered but definitely intact in a few areas. For one, strong stocks are being thrown away with the rest of them, making it clear that people are somewhat overreacting. This week, Apple (AAPL) hit a low of $85, yet as we all know, everyone has at least one ipod. I have two. One doesn’t work anymore because it was the second generation mini that wasn’t covered under the bunk battery warranty, and even if it had been covered, the application for refund or repair was too involved. Genius, Apple, genius. So, Apple’s got money- our money.
The second good thing this week brought was lower and lower oil prices. My cheap landlord, after provoking me to tell him I was moving out (“You want to leave? I can get $1,200 for that apartment no problem! You tell me right now! You tell me right now if you want to leave and I’ll get someone else in there! You tell me right now!!) finally put the heat on, which is fueled by oil. So my cold is lifting. OPEC wants to meet soon to talk about the dropping oil prices and whether they should decrease production, but with gas prices still up over $3 a gallon, and people losing their jobs, my suspicion is that oil will continue to fall. And my apartment will continue to be warm.
The third good thing is that lobster prices are way down. Mmmmm….
The last good thing I can see from this mess we’re in is that once it’s over, there are going to be some serious undervalued stocks to scoop up. The fact that Apple is being tossed out with the garbage screams undervaluation. My plan now, since I’ve taken a big hit with the rest of the world, is to wait for the white flag and average down. By then I should be in a good position to pick up a bunch more shares on the super cheap.
But that time isn’t yet. Henry Paulson says he’ll get the plan in place “soon”. How subjective. How soon is soon? That’s as hard a question to answer as “where is the bottom?” I doubt even Paulson knows.
One story that I forgot to write about, but which deserves attention, is the one about the AIG executives on the days following their taxpayer bailout. Just one day after we showered them with $85 billion of our hard-earned tax dollars, a whole bunch of these bald bankers were showering in luxury at the St. Regis Spa & Resort in Monarch Beach, California. For an entire week while we were all trekking to work, they were being treated to facials and manicures, free food and wine. The spa trip cost the company, and in turn you and me, hundreds of thousands of dollars and has caused some AIG big-wigs, and I use that term loosely, to be called to Congress’s carpet.
But the thing that bothers me most about the whole AIG spa trip thing is not the free pampering or even the gross sense of entitlement these guys still have despite f*cking up all of our lives. What bothers me most about this story is the thought of a few dozen or so pasty white bankers wrapped in only slightly whiter terry towels, sitting around pools and steam room benches talking about whatever it is bankers talk about when they’re not at the office. By God, please tell me the towels stayed on. It’s enough to shift one’s reoccurring nightmare from piles of 401k statements on milk crates within cardboard residences up and down Main Street to dark steam rooms and sweaty, liver-spotted heads. I’m going to be sick.
On a lighter note, the Dow lost a modest 128 points today to settle the week at $8,451. Crude oil closed at a 13-month low of $77.70 today. I’ve likely lost half of my investment, and am doing an OK job at staying positive. My landlord is a drunk who talks big and who won’t really make me leave, my job is secure, and any waken moment that I’m not working or preparing lessons, I’m working on my calculus homework. First test this coming Wednesday- a little nervous. So I’ve been staying occupied. And I know the ship will eventually right, just as it always has throughout time, and out of this crash will emerge some seriously rich folk who took advantage of some seriously good stock deals. I hope to be one of them.
SmartMoney Magazine published a letter I wrote to them one early morning about their September article “10 Things Millionaires Won’t Tell You”. I think it’s pretty hilarious I got published in a money magazine considering that a year ago I didn’t know how to open a brokerage account. Oh how the tides do change.
September 30, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged dollar, dow, euro, fourth quarter, oil, Q3, Q4, stock market, third quarter, TMA, trading, WAMQ, Washington Mutual
Everyone loves a bargain. Yesterday’s loss that evaporated $1.2 trillion from the value of US stocks was just north of half-way made up today by investors scooping up some good deals. Maybe the sentiment is that the bottom has finally been hit. Or maybe it’s the belief that Congress will end up passing some sort of relief bill when they meet back up on Thursday. Even Japan, who’s been in a bit of a slump themselves for a while, is pressing us to pass something and vowed to give money to our banks to keep them liquid. The world is watching our scales turn, ripping money from the rich hands of a few and giving it to the open hands of many little investors who know when a price is right.
I need to do something about my portfolio. TMA and the new Washington Mutual (WAMQ) respectfully made 50% and 140% gains today, and all I made was a combined $75 on the two. After the TMA reverse split, and the fact WAMQ is now trading at 8 cents, these big percentage gains mean little to my combined 450 shares of the two. A 140% increase on an 8 cent stock was barely a nickel move. I need to pick up more shares to take advantage of these huge percentage gains, but this is where my rational self and my irrational self start fighting. My rational self says “forget it, wait it out and pay your credit card off this month,” while my irrational side says, “screw your credit card, this is a once-in-a-quarter-century opportunity to get in on the bottom of the market!” Who will win, who will win…. I get paid Friday.
The Dow closed up 485 points after a steady climb all day to $10,850. Oil gained $4.27 to close the day at $100.64. The dollar made up some ground it had recently lost against the euro; it would now take $1.41 to get one euro.
And so ends the third quarter.
September 26, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged bailout plan, bank, bank failure, dow, oil, Resolution Trust Corp, S&L crisis, Thornburg Mortgage, TMA, wall street, WaMu, Washington Mutual, WM
WaMu closed the day at 16 cents. Its website says “WaMu Customers, Welcome to JP Morgan Chase”. The fail of Washington Mutual is the largest in history, yet it wasn’t nearly as front-page news as other failures. Something’s strange. But like I said, I haven’t a clue what it all means.
A CNNMoney.com article today put the size of WaMu’s failure into terms more easily understood for all us common folk:
“To put the size of WaMu in context, its assets are equal to about two-thirds of the combined book value assets of all 747 failed thrifts that were sold off by the Resolution Trust Corp. – the former government body that handled the S&L crisis from 1989 through 1995.”
My Dad thinks I should get out now. I can’t. Every bank failure and deal has been made over a weekend, so I’m hoping the bailout plan will come this weekend. However, I do really doubt it will do much to my share prices!
In other news, TMA extended its tender offer- again. Imagine that!
At least it’s the weekend. What a week! I think everyone needs a break. Maybe if everyone gets some rest over the weekend some sanity will return to the market on Monday. The Dow closed up 121 to $11,143. Crude lost $1.12 to close at $106.89.
September 18, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged AIG, American International Group, bailout, banks, dow, economy, financials, first marblehead, FMB, naked short selling, rally, RDN, uptick rule, WaMu, Washington Mutual, WM
Since it had become a matter of market confidence, or really a lack thereof, confidence was bolstered today with the Fed’s announcement it would pump $180 billion into the world’s banking system and the implementation of the naked short ban. I read the news of the naked short selling ban wrong; I thought the ban went into place yesterday. So when yesterday’s market was a total sinker, I figured it was too late for the ban to do anything and that my experiment would soon go bust. I was very wrong. The ban actually went into effect TODAY, not yesterday, and it had a definite effect:
Centerline Holding (CHC): Up 3% to $1.72
Syncora Holdings (SCA): Up 13% to $2.25
Thornburg Mortgage (TMA): Up 13% to 34 cents
Merrill Lynch (MER): Up 14% to $22.06
Ambac (ABK): Up 15% to $6.67
Citigroup (C): Up 18% to $16.65
MBIA (MBI): Up 19% to $11.64
PMI Group (PMI): Up 22% to $2.57
National City(NCC): Up 24% to $4.40
Regions Financial (RF): Up 34% to $14.60
Radian Group (RDN): Up 35% to $5.00
Washington Mutual (WM): Up 48% to $2.99
First Marblehead (FMD): Up 67% to $4.75
MGIC Investment (MTG): Up 74% to $9.50
To be fair, most of the gains made today were only enough to erase just Wednesday’s huge losses, and the last week and a half of loss before today’s rally is still “on the books”. And, there will likely be a fair amount of profit-taking tomorrow. But who am I to complain? I made [up] $2,600 today, and most of that came in just the last hour of trading.
Even American International Group (AIG) had a double digit percentage gain today: up 31% to close at $2.69. The Dow closed up 410 points to $11,019. Oil gained 72 cents to close at $97.88. Today was Wall Street’s best day in six years.
September 17, 2008
· Filed under business, economy, investing, money, politics, stock market · Tagged AIG, banks, dow, economy, GLD, gold, naked short selling, offshore drilling, oil, oil futures, oil speculation, oil speculators, speculators, StreetTRACKS Gold, wall street, WaMu, Washington Mutual
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.
September 9, 2008
· Filed under economy, investing, money, politics, stock market · Tagged ABK, ArthurDental, BAC, C, dow, Fannie Mae, FMH, freddie mac, investing, LEH, Lehman Brothers, MA, oil, OPEC, PMI, RDN, reuters, September 9 2008, STI, TGIC, TMA, trading, Visa, Washington Mutual, WM
My God, what have I done? All across the country, investors in all sectors and companies must be asking themselves the same thing. I know my friends are. After yesterday’s huge [emotional] rally in all sectors but one (energy), today seemed completely irrational. Everything fell. This was more than profit-taking. All of yesterday’s gains, 280 points, were shaved off the Dow as the index slipped all day to close down to $11,230, as investors in the financials asked themselves one extra question: “will any financial survive?”
Lehman Brothers (LEH), Washington Mutual (WM), Radian Group (RDN), PMI Group (PMI), Ambac Financial (ABK), First Marblehead (FMH), MBIA, Inc. (MBI), MGIC Investment (MTG), Triad Guarantee (TGIC), and Thornburg Mortgage (TMA) are just some of the financial institutions that had double-digit percentage losses today, and those are just the ones with losses greater than 10%. Citigroup (C), Bank of America (BAC), JP Morgan (JPM), SunTrust (STI), American Express (AXP), and even Visa (V) and MasterCard (MA) lost today. Lehman Brothers (LEH) is reporting their third quarter earnings tomorrow- a week early- after their Korea Development Bank deal fell through and its stock price lost 45% of its value today. LEH stock did bump up 7% in afterhours trading, so maybe there’s good news on the horizon. But no doubt, this bad news cast even more doubt into the financial sector today and helped push share values down. Today was very, very painful. Luckily I was so busy at work, with teaching, duties, and meetings, that I had no time to sit down and digest what was happening.
But my friends did. One of my stock friends, who has made a small fortune day-trading these financials, sent me an article that eased my mind a bit. It definitely crossed my mind a few times in the last couple days that my experiment may not work out after all, but the article he sent gave me some hope. It was titled “S&P Picks and Pans: Wells Fargo, Washington Mutual, TW Telecom, JC Penney, Avery Denison”, and was an article in BusinessWeek online. After all the upgrades and downgrades and rating cuts by people with questionable credentials and too much power, it was nice to read an article from a reputable source deeming one of my stocks, WM, a “hold”. If Washington Mutual is a hold and its going through some actual concrete, documented troubles, then my thinking (and hope) is that yesterday and today’s major sell-offs were out of pure fear. But I still hope the sell-off doesn’t continue!
A Reuters article from yesterday titled “Ambac’s planned muni insurer may be hit by changes” shed some light on what the common sentiment towards the mortgage and bond insurers might be. “In another even more fundamental change, agencies are mulling a shift in how they rate muni debt, using the same scale used for corporate debt. That would result in widespread rating upgrades for municipal bonds, which have a much smaller risk of default than corporate bonds. Higher ratings would in turn reduce the need for insurance.” If there’s less risk of default, then there’s less need for insurance.
One last article I’ll quote, this one from MarketWatch.com titled “Community building ire MarketWatch readers kindle own outrage over Fannie, Freddie takeover” quoted ArthurDental, who is a member of the MarketWatch Community. “”Everyone gets upset about financial aid to the poor,” ArthurDental wrote, “but where’s the outrage when taxpayers foot the bill because some ‘investments’ went sour? So stockholders would be largely wiped out; why then aren’t bondholders made to pay for their mistakes, too?”
It’s telling that this article didn’t hit yesterday when the market soared, but ArthurDental is right. When SSBX failed, I lost my investment. But when Freddie and Fannie exposed themselves to trillions of dollars in bad mortgages and therefore didn’t have the capital to pay the bonds it issued to China, the two lending giants got a slap on the wrist and trillions of our taxpayer dollars. Hey, I made a mistake investing in a company run by a McCain, where’s my money? It ain’t coming and I have to deal. And that’s the way it should be.
That Hurricane Ike took a turn south, and the Organization of the Petroleum Exporting Countries (OPEC) will likely maintain its oil production even though demand is down, caused the price of crude oil to fall to a 5-month low. Crude oil lost $3.08 to close the day at $103.26 a barrel. I lost $1700 today, or in my brother’s terminology, “seventeen hundo”. Ouch.
So what is going to happen now that the rules of the game have completely changed? I don’t dare speculate. But whatever it is that eventually happens seems as if it won’t make itself known for a while. For now, I’ll keep the faith. I took a gamble and put in a limit order for 25 more shares of WM today, and you can imagine my surprise when I signed on later, saw the stock price was at $3.30, and that my order executed at $3.60. When I put the order in, I assumed it was so low that it would expire unexecuted.
And more than anything, tomorrow’s a new day when anything can happen.
September 4, 2008
· Filed under money, politics, stock market · Tagged ABK, bear market, Bill Gross, dollar, dow, euro, market september 4, McCain, MTG, National City, Palin, PIMCO, PMI, RDN, SCA, speech, stock market september 4
“Nobody knows why the Dow dropped 345 points today” was the headline on Bloggingstocks.com. The bottom dropped out of the Dow today- 344 points to close at $11,188!- and speculation is flying about why. All three indices- the Dow, NASDAQ, and S&P 500- fell back into bear markets.
A lot of data was slotted to come out this week, and today’s data showed that initial unemployment claims, and therefore people recently laid off, have risen to a near 5 year high. But retail store sales are up and oil dropped $1.46 to $107.89, a 5-month low. Oil has lost $40 in two months. So why did the market plunge today?
Conspiracy theorists think the rich of the world sold off for a reason and are keeping tight-lipped about why. Maybe it was a hedge fund sell off. A story came out yesterday predicting the fall of many hedge funds because commodities are falling. Maybe it’s just a manifestation of the extreme volatility the market has seen this summer. Bill Gross, the head of Pacific Investment Management (PIMCO), recognized and announced August’s light trading volumes, and warned of an imminent “financial tsunami”. Maybe this scared people? What the heck is a financial tsunami? Was today’s selloff a reflection of a weakening global economy? The dollar is up to its highest against the euro since the year began, and it now takes just $1.43 to get one euro. The euro was created, in part, as a similar exchange to the US dollar, but $1.43 is a great improvement from the $1.5903 it would have taken to get one euro on July 15. And isn’t it true that if the US economy improves it will lead the world back out of the hole?
Maybe Sarah Palin’s dirty nomination speech made everyone run. “When [Obama] you’re done parting the waters and healing the world…”? Was she serious? Maybe when she’s done slinging mud she’ll focus on what she’ll do about the desperate economy and enormous national debt.
It’s unclear what happened today, but what I know for myself is that I lost $300 today when the Dow lost 345, and I gained $1,000 yesterday when the Dow gained just 15. Five of my financial stocks- PMI, RDN, ABK, SCA, and MTG- had double digit gains yesterday, so I expected a selloff today; but I expected it to be a lot worse than it was after [fighting my internet connection and finally] seeing that the market took such a hit today. National City’s (NCC) rating was cut today by S&P but the stock price fell less than 6%! First Horizon’s (FHN) rating was also cut, and its stock price fell just over 6%. If I can make large gains when the market makes small ones, and have medium losses when the market has big ones, then I’ll be sure my experiment is working.
Data on the total unemployment rate comes out tomorrow, and it is believed to be at 5.7%. Will this data spike the market again? A lot of questions are unanswered.
It’s easy to read between the lines that I’m voting for Barack Obama, but to stay aware of both sides, I have been watching speeches from both sides and John McCain’s speech scared me tonight. By the end of his speech, it seemed that if he had a gun he would have started popping caps in the air. I’m not sure I’d feel safe with him in the same room as the red phone and bomb button.
In the hopes that Mary Caraccioli had some insight into today’s market, I stayed up past McCain’s speech and then past Comcast Channel 3’s insightful commentary on McCain’s speech to catch Money Matters Today. It’s usually on at 11PM (and rerun the next day at 11AM) but to my dismay, the show was completely run over by the McCain commentators and was not pushed up to a later time. The sports show Out of Bounds came on instead. Typical. I guess tomorrow will be a complete surprise.
August 21, 2008
· Filed under money, stock market · Tagged dow, financials, first marblehead, fmd, investing, money, oil closed at, russia, shana donohue, shanadonohue, stocks, Thornburg, TMA, trading
This morning was filled with even more doom and gloom, until around 10AM when Freddie turned, taking other financials with it. One by one, red turned to white turned to green, but not before I picked up more shares of MGIC Investment (MTG), Radian Group (RDN), and 100 initial shares of First Marblehead (FMD). Yeah I know what you’re thinking: “where’d she get the money?” I did an awful thing- I took a credit card advance. But just until tomorrow! This week’s downs were too good to pass up, so I took the advance for two days until I get paid. OK, now that I’m all confessed…
FMD came out with earnings after the closing bell today, and of course posted a loss. But considering this week’s terrible performance across the sector has nothing to do with actual company performances and all to do with worries about the imminent government bail out of Freddie, I’d say FMD is a decent bet under $4. This stock has a 52-week high of $41, which by my very scientific calculation yields a fraction under 0.1. If First Marblehead rebounds, it could potentially multiply my investment by ten.
By 10:45AM, Freddie blinked back into red, essentially ending the morning’s rally. It saw green again for a bit later in the day, but the window closed. On the other hand, Fannie Mae (FNM) was one of the financial sector’s big gainers today. Thornburg mortgage (TMA) that on Wednesday saw a crash, hit 50% above open by 11:30 AM on no [public] news at all. TMA closed the day up 35%.
But oil was the day’s real leader. It was up all day on news that Russia may disrupt its oil flow (Bloomberg reported them as being the world’s second largest oil producer) because of yesterday’s signing of a missile-shield agreement between the US and Poland. Once everyone realizes that the US has no plans to piss off Russia, oil will again fall. Oil closed the day up $5.62 to $121.18 per barrel. The Dow traveled sideways today and closed up just 12 points to $11,430. The dollar fell against the euro; it would now take $1.487 to get one of them.
