After a rebound rally on Tuesday, reality set back in on Wednesday and sent the major averages sharply down with the Dow losing some 237 points. Financial stocks tanked again with Fannie Mae and Freddie Mac leading the charge by dropping an astonishing 13% and 24% respectively and reaching price levels of the early 90s. The major indexes have now …
Explaining The Obvious
If the entire Subprime/credit crisis disaster would not have had such dire consequences, the following story could be considered a joke as the “Fed plans new rules to protect future homebuyers.” Here is one of the highlights of these proposed revolutionary changes: Under the proposal unveiled last December, the rules would restrict lenders from penalizing risky borrowers who pay loans …
Cliff Diving
If you look at yesterday’s chart of the Dow (thanks to MarketWatch), the word cliff diving comes to mind. Good thing that there was some type of recovery, or it could have been a real ugly day. When all was said and done, the widely followed S&P; 500 closed at its lowest point since July 2006. It is obvious that …
Accurate Predictions
In the past, I have poked some fun at those making outlandish predictions, since in most cases the results are more or less based on nothing but luck. However, sometimes an individual can accurately analyze present economic conditions, especially if they are totally out of whack with reality, and come to logical conclusions as to what the likely outcome will …
Sunday Musings: The Shortest Bear Market
Whenever stock prices correct, or the major indexes slide into bear market territory, a number of predictions are bound to follow as to its duration. Random Roger wrote a tongue in cheek piece on that subject titled “The shortest bear market in history:” Wall Street traders and strategists alike are breathing a huge sigh of relief now that the bear …
Hedging
Prior to the last buy cycle coming to an end, I have addressed the fact that we have held on to two of our domestic mutual fund positions and hedged them against further downturns rather than selling them. Reader Tom had this comment: Thanks to you, I have been sitting comfortably on the sidelines after I lost my initial 7% …