Daily Investment Interpretations

August 18, 2008

2008-8-18:  Oil closed under $113 a barrel today, at $112.87. The markets fell significantly, with the Nasdaq losing 35.54 to 2,316.98, the Dow dropping 180.61 to 11,479.39, and the S&P falling 19.6 points to 1,278.60. The VIX added 1.4 points to close at approximately 22. Concern today seemed to center around Fannie Mae and Freddie Mac, and further losses for Lehman Brothers. (Freddie Msc closed today at $4.39, down from $21 a share in June and $65 a year ago. It's looking ever more likely that the Federal Government will have to recapitalize Fannie Mae and Freddie Mac, wiping out the investors who still hold their stocks. Also, I believe I read that Freddie Mac's subordinated debt was cut from AAA to A- by one of the major credit ratings agencies.
    Two trenchant articles that deal with U. S. expenditures that might potentially generate U. S. budget problems are George Monbiot's, "The US missile defence system is the magic pudding that will never run out." in The Guardian, and Paul B. Farrell's, "Why we love 'America's Outrageous War Economy'" in Marketwatch.