Monthly Archives: November 2008

It may not feel like it, but it is time to Give Thanks. If you are short of things to give thanks for in the stock market and the economy, here are some suggestions: Give thanks that the stock market did not go to zero. It went only halfway to zero. Around 2:45 p.m. last Friday, the S&P 500 made its second touch of the 741 level, down 53% from the October 2007 intraday high of 1576. Then, in less than 15 trading hours to the close on Tuesday, it gained 15%. We can give thanks for that! Three more...

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I was too early last week in telling you to sell your exchange-traded short funds and puts, but I don’t think it will make much difference looking back from 30 days from now. We shall see. As I wrote last week (emphasis added): “It would be very unusual to see this rally extend to, say, 944 on the S&P, and then have a fourth move down to 850. It simply should not be necessary. The only exception to that would be a rapid, one- or two-day drop to the 2002 closing low at 775 on some terrible news, followed by...

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Real estate agents love to sell to Wall Street traders.  Traders walk into a place, look around them, look at the view, and say: “I like it, I’ll take it, I’m outta here.”  The more money they trade, the bigger their egos are, and the biggest of all is Hank Paulson.  “Hey, here’s an idea, let’s borrow $700 billion dollars and buy toxic assets from the banks.  Oh, wait that’s not working.  Let’s buy bank stocks instead.” If any commercial lender provided funds to a borrower who said: “Surprise!  We aren’t going to use the money for what we told...

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The election and the credit crisis are over — they ended on the same day. Yes, many more houses will go into foreclosure and many more banks will fail, but the interbank lending lock-up that has frozen both the credit markets and the economy is over. We know this because on Tuesday the three-month Libor interbank lending interest rate fell to its lowest level since June, the first time it has been at a pre-credit crisis level since Lehman Brothers announced its bankruptcy on Sept. 15. The overnight Libor rate fell to its lowest level ever, from an all-time high...

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