The Week That Was
Nov 10, 2008
Posted by Jody Eisenman | Filed under Uncategorized
The Dow finished the week Friday with a 248 point gain. Despite this, the market basically started November the same way it finished September and October – with more losses. The markets lost about 4% for the week. Year to date, the Dow is now down about 32%, with the NASDAQ off almost 38%. The big news was the auto industry, which is clearly in deep trouble. Leaders of GM and Chrysler are asking the government for a massive bailout, well in excess of the $25 billion they received about a month ago. The unemployment rate hit 6,5%, the highest in 14 years. It should be pretty clear to everyone that the economy is in a recession. The only question is how long it will last.
I am going to post links and short summaries to several articles I saw that were interesting.
The first is an article in the Carolina Journal, which states that Democratic leaders are proposing to take IRA and 401K accounts out of the hands of individuals and into the hands of the Social Security Administration. Apparently, some leaders feel that some of the wealth in this country should be redistributed. Here is the link:
http://www.carolinajournal.com/exclusives/display_exclusive.html?id=5081
Next is an article about Nassim Taleb from the Seeking Alpha blog. For those who do not know him, Taleb is a trader who has written 2 excellent books about trading (The Black Swan, and Fooled by Randomness). I highly recommend both to anyone who trades securities. Taleb basically gambles on unforseen occurrences. I think this year would qualify. Here is the link:
http://seekingalpha.com/article/104974-nassim-taleb-renegade-trader-with-renegade-ideas-that-work
Finally, here is an article from Jim Cramer (the Mad Money guy) regarding why he is nervous right now. Basically, Cramer tells the story of 4 wealthy successful investors who made bad bets this year:http://www.thestreet.com:80/story/10446688/1/cramer-four-reasons-to-be-skittish.html?puc=_htmltscu
Of course, there are some analysts who are bullish. The vast majority fall into the category of “yes, things are bad, but we are oversold and it’s time to buy”. You can see several of these people almost every day on CNBC. Is this the bottom? It doesn’t feel like it to me, but then again, they don’t ring any bells to tell you its’ the bottom. Only time will tell.
