A few bits of market recap...
There has been so much going on today in this turbulent time for financial markets that only a few random comments follow. Anything that captures it all would not allow me to tune in to the middle innings of the Mets game and see if their bullpen can finally work. The market was up today after what appeared to be furious retail selling in the morning. A few comments:
---The Fed's decision not to further lower rates as many in the market had predicted was perfect. In this environment lowering rates would have made no difference at all, at least on the positive side. It would be immaterial and completely irrelevant. It would also set the table for further dollar weakening which is the last thing that is needed. In fact in could be counterproductive to its supposed goal of combating inflation as weakening the dollar could exacerbate total inflation given the oil and food issues, albeit that they are considered non-core. Great decision by the Fed.
---Who the hell is Nouriel Roubini, the doomster NYU professor, to get all of this prime time attention. The punks at Fast Money on CNBC love this guy but he reminds me of Ravi Batra, the SMU professor who wrote the best seller of 1987 titled "The Great Depression of 1990" which was followed in 1988(all published by the reputable Simon and Schuster) "Surviving the Great Depression of 1990". Without being politically incorrect I would humbly suggest that these non native, non ethnic, but American educated professors do not understand the strain of optimism that underlies the best of the American psyche and that they exploit fear for personal gain and attention. Unfortunately that statement could apply to many pure Americans, even those at the highest levels. PC gods please absolve me.
---Two side by side video segments on Bloomberg tonight were, first, Bill Gross of Pimco saying that some government aided short term solution to the AIG issue was absolutely necessary and, second, Senator Richard Shelby of Alabama saying that there should be no goverment involvement at all. Who would one believe, the astute and successful manager of the world's largest bond fund even if he is talking his own book to some extent or a powerful political hack who is viewed as distasteful and untrustworthy even by many members of his own party.
---McCain is going haywire, today calling the financial crisis a result of "corruption", "reckless behavior" and "lack of regulation". One by one, the "corruption" charge sounds like Hillary and there is no one talking about any kind of fraud here. "Reckless behavior" is great in hindsight and that may well be a correct statement but where was McCain when the free markets were allowing this miracle of credit creation for all. "Lack of regulation" is the biggest stunner because McCain has always opposed any step up in regulation. He was a charter member of the Keating Five in the S&L debacle(barely avoiding being indicted) and he has always been thick as thieves with the Day family in Arizona, right wing free marketers in the extreme with Robert Day(Day is currently under investigation for insider trading of Societe Generale stock) who is head of Trust Company of the West and a long time Board member of Freeport McMoran(same if not more extreme) with Sandra Day O'Connor turning out surprisingly to be the anomaly in the family to the dismay of those who supported her Supreme Court appointment. McCain of course cannot say something like "I have no idea what the fuck is going on but I will appoint good people" but he shouldn't just outright lie about his entire history in the Senate.
---Good Morgan Stanley earnings this evening, continued decline in oil prices, lower inflation numbers, and some resolution of AIG possibly ahead, all maybe leading to some respite tomorrow. If the AIG solution almost totally wipes out shareholders and even some bondholders that would be a short term solution that is a politically expedient choice but in the long term could be a terrible market and economic choice.
---The Fed's decision not to further lower rates as many in the market had predicted was perfect. In this environment lowering rates would have made no difference at all, at least on the positive side. It would be immaterial and completely irrelevant. It would also set the table for further dollar weakening which is the last thing that is needed. In fact in could be counterproductive to its supposed goal of combating inflation as weakening the dollar could exacerbate total inflation given the oil and food issues, albeit that they are considered non-core. Great decision by the Fed.
---Who the hell is Nouriel Roubini, the doomster NYU professor, to get all of this prime time attention. The punks at Fast Money on CNBC love this guy but he reminds me of Ravi Batra, the SMU professor who wrote the best seller of 1987 titled "The Great Depression of 1990" which was followed in 1988(all published by the reputable Simon and Schuster) "Surviving the Great Depression of 1990". Without being politically incorrect I would humbly suggest that these non native, non ethnic, but American educated professors do not understand the strain of optimism that underlies the best of the American psyche and that they exploit fear for personal gain and attention. Unfortunately that statement could apply to many pure Americans, even those at the highest levels. PC gods please absolve me.
---Two side by side video segments on Bloomberg tonight were, first, Bill Gross of Pimco saying that some government aided short term solution to the AIG issue was absolutely necessary and, second, Senator Richard Shelby of Alabama saying that there should be no goverment involvement at all. Who would one believe, the astute and successful manager of the world's largest bond fund even if he is talking his own book to some extent or a powerful political hack who is viewed as distasteful and untrustworthy even by many members of his own party.
---McCain is going haywire, today calling the financial crisis a result of "corruption", "reckless behavior" and "lack of regulation". One by one, the "corruption" charge sounds like Hillary and there is no one talking about any kind of fraud here. "Reckless behavior" is great in hindsight and that may well be a correct statement but where was McCain when the free markets were allowing this miracle of credit creation for all. "Lack of regulation" is the biggest stunner because McCain has always opposed any step up in regulation. He was a charter member of the Keating Five in the S&L debacle(barely avoiding being indicted) and he has always been thick as thieves with the Day family in Arizona, right wing free marketers in the extreme with Robert Day(Day is currently under investigation for insider trading of Societe Generale stock) who is head of Trust Company of the West and a long time Board member of Freeport McMoran(same if not more extreme) with Sandra Day O'Connor turning out surprisingly to be the anomaly in the family to the dismay of those who supported her Supreme Court appointment. McCain of course cannot say something like "I have no idea what the fuck is going on but I will appoint good people" but he shouldn't just outright lie about his entire history in the Senate.
---Good Morgan Stanley earnings this evening, continued decline in oil prices, lower inflation numbers, and some resolution of AIG possibly ahead, all maybe leading to some respite tomorrow. If the AIG solution almost totally wipes out shareholders and even some bondholders that would be a short term solution that is a politically expedient choice but in the long term could be a terrible market and economic choice.
posted by John Borden at 7:28 PM
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