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October 16, 2008

Global Market Comments for October 16, 2008 1) Rumors of the country's biggest hedge funds closing down savaged the market again, knocking it down 400 at the opening, only to be followed by a 700 point rally. The volatility index (VIX) hit an all time high of 81%. If you feel depressed, go buy a […]

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October 15, 2008

Global Market Comments for October 15, 2008 1) The Dow cratered 7.9% today, the greatest one day loss since 1987. Sell programs from distressed hedge funds hammered the market right into the close. LIBOR is coming down, but not fast enough. The Treasury/Eurodollar interest rate spread (TED) is now 300 basis points, compared to 75 […]

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October 14, 2008

Global Market Comments for October 14, 2008 1) There is no doubt now that we hit the bottom in the stock market on Friday at 7,700. The question now is how long we will bounce along the bottom between 8,000 and 10,000 while the air bubble works its way through the economy. Many smaller banks […]

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October 13, 2008

Global Market Comments for October 13, 2008 Special Post Apocalypse Issue 1) I spent my weekend convincing people that we are not entering a thirties style Depression and not to sell their stocks. We are entering a recession that will be longer and deeper than previously forecast. The net decline in GDP has probably jumped […]

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October 10, 2008

Global Market Comments for October 10, 2008 1) The mother of all margin calls hit the market this morning, opening the Dow down 700 at 7,800, just 100 points above the 2002 low. I went to the next room to refill my coffee and when I came back the market had rallied 800 points, pushing […]

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October 9, 2008

Global Market Comments for October 9, 2008 1) It’s looking like the Treasury will partially nationalize the US banking system, taking equity stakes in hundreds of firms in preferred stock form. This is why secretary Hank Paulson was so mum on the details of his program. Socialization of the American financial system would not have […]

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October 8, 2008

Global Market Comments for October 8, 2008 1) The global interest rate cuts brought the world's stock markets exactly one hour of respite. The Dow rallied 1,000 points, then sold off 900. From top to bottom, the Dow has dropped 1,800 points since passage of the bail out bill on Friday. The Fed is running […]

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October 7, 2008

Global Market Comments for October 7, 2008 1) There was a pretty dramatic improvement in credit spreads today after the Fed announced its entry into the commercial paper market. We saw it in LIBOR, TED spreads, and a stronger euro. One month Treasury yields rocketed up to 0.35%. The Fed is now massively flooding every […]

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October 6, 2008

Global Market Comments for October 6, 2008 1) Treasury Secretary Hank Paulson stood on the roof of the House and screamed fire!, frightening 58 congressmen into changing their votes to pass the bail out bill. Unfortunately, the rest of the country heard him along with Bush, who warned Americans several times last week that we […]

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October 3, 2008

Global Market Comments for October 3, 2008 1) The September non farm payroll came in at 159,000, worse than even the most dire estimates, and the unemployment rate jumped to 6.1%. Q3 will now almost certainly come in with a negative GDP, the new jobs figure indicating a -0.5% rate, delivering a body blow to […]

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October 2, 2008

Global Market Comments for October 2, 2008 1) One month T-bills are at 0.50%. The credit markets are still locked. If the house bill fails, the Dow will drop another 1,000 very quickly. Even if the bill passes, traders are starting to realize that it may bail out the banks, but not the economy or […]

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October 1, 2008

Global Market Comments for October 1, 2008 1) The democrats are going to get the bail out bill through by turning it into a Christmas tree with presents for all of the wavering members. So far on the list: subsidies for mental health, alternative energy, makers of US based wooden arrows, and a tax cut […]

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September 30, 2008

Global Market Comments for September 30, 2008 1) The Bail Out Bill II will be voted on Thursday. That took the Dow up 485. 2) Three month LIBOR hit 7% overnight, a 500 bp premium to Fed funds. During the 1987 stock market crash the premium only got up to 200 bp. Mortgage backed securities […]

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September 26, 2008

Global Market Comments for September 26, 2008 1) The government seized WAMU and sold it to JP Morgan without even telling WAMU's senior management because they were all on a plane to meet with a potential buyer. Common, preferred, and debt holders were all wiped out. Morgan immediately wrote off $31 billion of WAMU's debt, […]

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September 25, 2008

Global Market Comments for September 25, 2008 1) Those who work in the financial industry see the world ending on their screens, then walk outside and see people and cars on the street, shops doing business, the sun shining, and everything appearing normal. It's surreal. Many businesses and banks are months away from shutting down […]

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