Daily Investment Interpretations

Thursday, March 20, 2009

2009-3-20:  The markets took another tumble today, dropping a bit less than 2%. The NASDAQ was ablated by 26.21 (-1.77%) to 1,467. The Dow delinquesced 122.42 points (-1.65%) to 7,278, and the S&P 500 shed 15.50 (-1.98%) to end the day at 769. Oil closed at $51.06, while Gold fell slightly to $956.20. The VIX climbed 2.21 to 45.89.
The chart below, shows how this current "Great Recession's" Dow Jones Index compares to the Dow during the Great Depression. Of course, we won't really know what's going to happen next until it happens. Heroic efforts are being made by government officials to avert a replay of the 1930's. 

   Paul Krugman has returned from "Yurp": Permanent Link to Iím baaaack. He asks, "Anything happen while I was away?" Hm-m-m. What's your take on that? 
    In his Permanent Link to AIG, he concludes, "
This administration, elected on the promise of change, has already managed, in an astonishingly short time, to create the impression that itís owned by the wheeler-dealers. And that leaves it with no ability to counter crude populism.
    In Permanent Link to Our failure proves our point, he tees off on a couple of authors of an article in The Financial Times who cite
U. S. "government failure effectively to prosecute the war in Iraq" as evidence that governments shouldn't try to solve problems with economies. Dr. Krugman refers them to "this report, titled Ties to GOP Trumped Know-How Among Staff Sent to Rebuild Iraq". The entry ends with "(bangs head on table)".
    In Permanent Link to The Great Recession versus the Great Depression, he presents the following chart:

He concludes: "
At first, the current recession didnít hit industrial production all that hard. But the pace accelerated dramatically last fall, so that at this point weíre sort of experiencing half a Great Depression. Thatís pretty bad."
    One financial site has it that Treasury Secretary Geithner is on "death watch" tonight, and is soon to be replaced.
    In Playing the odds, Mark Hulbert observes that in the 60-day trading period following the kind of better-than-9-to-1 up days we've had in the last two weeks, stocks yield an average annualized return of 18.3%, vs. 4.3% in the absence of such 9-to1 up signals. The last two weeks have seen three better-than-9-to-1 up days.