Daily Investment Interpretations

November 14, 2008

2008-11-14:  In another wild roller-coaster day, the stock markets sagged by about 4½ %. The NASDAQ was underwater all day, never breaking the surface. It closed down 79.85 points (-5%) at 1,517. The Dow backed up 337.94 points (-3.82%) to end the day and the week at about 8,500. The S&P 500 divested itself of 38 points (-4.17%) to close at 873--33 points above its 840 low. Oil went to about $57, and gold rose to $742.50. The VIX escalated to 66.31. 
    Dr. Paul Krugman published an article today entitled, Depression Economics Returns For me, his most important statements were that he doesn't expect another Great Depression, and that although he isn't sure, he doesn't expect the unemployment rate to reach the 10.7% level of the 1982 recession. He thinks governments will have to lead us out of this through massive fiscal stimulation; he hopes they will be bold enough to undertake the requisite deficit spending.
    Warren Buffett is continuing to buy stocks. Ben Bernanke said today that some conditions are improving. (Last spring, he said that inflation wasn't an imminent threat. I questioned that at the time, but he was right and I was wrong. All of a sudden, prices began to fall.)
    Mark Hulbert offered this: Hulbert on irrational exuberance.
    Peter Brimelow presented this: Aden sisters still jumpy.
    These observations are important in terms of our investment planning.