Daily Investment Interpretations
August 18, 2008
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
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.