Daily Investment Interpretations

October 15, 2008

2008-10-15 (12:00 noon CDT): Wall Street pundit Michael Farr tells Marketwatch's Andrew O'Day that there will be more economic pain to come, but that Warren Buffett is buying again and that the bear is almost back in his cave: [audio] MarketWatch Morning Stock Talk: Farr: Buffett is buying, and so should you.
    Fed Chairman Ben Bernanke is telling Wall Street that although there will be an economic slowdown ahead, inflation pressures are moderating as commodity prices continue to fall (something which will take time to show up in trailing-month statistics). He is advising that inflation worries were overstated, and that we have avoided the errors that led to the Great Depression. The economy isn't a disaster. 

10-15 (9:00 a. m. CDT): A retrenchment following Monday's galloping high is to be expected, but that doesn't make it any easier to bear. All the news out there today is bad. This week will see a number of threatening economic and earnings reports. And of course, there's no guarantee that we've seen this year's lows. These are unprecedented stock market conditions. So what could make the markets go higher? News that the credit freeze is thawing. Balanced against this is the growing realization that this recession will be bad. Supposedly, some sort of recession is already priced into stocks, but there are recessions and there are recessions. The news is certainly stoking more fear and worry. At the same time, there are phenomenal bargains available right now that pay high dividends. We've been through a selling frenzy. But we'll see.