The Daily Graphic: Drill Baby, Drill is Over Baby, Over

Good story over at the New York Times on the slowdown in oil drilling and exploration as energy prices have fallen off the cliff over the past several months.

The Obama Effect: Dow Having Best Week Since November

O.K. – the above headline is just as stupid as the right wing bloggers’ headlines have been since January.  I just thought I’d throw one out there for our team.  The truth about the market this week, I fear, is that this merely a bear rally.  However, I’m intrigued by profitability in some of the biggest banks (so they say).  I’m troubled by China’s premier calling us (U.S.) out today.  It’s been a great week, but there’s still one helluva recession to slog through.

Anyone Else Sick of Lame Commentary on Why Stocks Are Down?

Okay, here’s the headline of the number one story on Bloomberg’s front page:

U.S. Stocks Decline on Buffett’s Remarks, World Bank Warnings About Economy

I’m not sure why they even posted the reporter’s story, they said it all right there in the headline.  Today after the stem cell press conference by President Obama, I took a gander at Google Finance’s front page.  Although the Dow showed down, you could tell there had been a spike up around 1 p.m. or so.  One of the stories in the feed was headed: “Shares Rocket on Stem Cell Announcement.”

This is getting stupid.  Or, how about the partisans who like to point out that the market is down since Obama took office.  Bubba Please!

I’m not an economist, I lost $8k one summer trying to “roll stocks,” and I suck at math.  But, I do get up every morning and pay attention to what’s going on in the world.  I read a lot.  I can tell you this – stocks are down because we’re in a helluva recession and they’re going down some more.  I said 7K for the Dow last fall and we’ve blown that.  At the time I based it on one thing and one thing only: Big Bad News.  I knew there would be more — and there’s more to come.

All of the official economic indicators seem to be still in freefall.  The latest interesting thing I’ve heard about large institutional investors and hedge funds is that they’re buying gold – not a lot, but some.  It doesn’t matter what Warren Buffett or Rush Limbaugh or Dalai Llama says on any given day.  We’re in this for awhile.

Final thought: One thing we don’t need is the media going all drama on us.  I personally would like to hear the Warren Buffetts and Timothy Geithners of the world talk us through this thing.  I also know these guys are going to clam up if every move they make is laid out over a chart of the DJIA.  We’re not hearing enough from financial wizards in or out of government.  I hope the media doesn’t turn them completely reticent.

Lunch Break: Dow Erases Yesterday’s Gains on GM, China News

• GM auditors worry about company’s future – Washington Post
• Wen boosts spending without adding to stimulus – The Guardian (U.K.)

Dow Closes Down 300

The Daily Graphic: Dow Returns to 2002 Low

Underlying chart from Google Finance.  Notations added with PowerPoint.

Brutal Week, Year for the Dow

• U.S. Stocks follow world markets down – Washington Post
• As stocks continue plunge, Dodd says it may be time for short-term nationalization – Bloomberg
• Economic concerns send global shares lower – New York Times
• B of A, Citi shares fall on nationalization talk – Reuters

How Many Right Wingers Talked About This On The Radio Tonight?

If the last two days didn’t prove that most of what is said about the U.S. stock market and politics on talk radio is bull, I don’t know what does.

Yesterday the conservatard radio jocks had a field day with the fact that the Dow shed over 300 points on President Barack Obama’s inaugural.  The market did, by some credible reports drop more yesterday than on any previous presidential transition day.  Big Deal.

Today, during Obama’s first full day in office, the Dow added nearly 300 points.  Being forever entertained by the likes of Savage and Levin, did I hear either one of them proclaim economic crisis over?  Hardly.  Did Obama get credit for the upswing? No.

The fact is, the ever swinging fortunes of the Dow are the greatest pegs of convenience for whenever the anti-Obama forces’ talking points for the day are bolstered by either a fortuitous swing one way or the other.  The Dow will continue to swing by hundreds of points on a weekly and sometimes daily basis until the last bunches of bad news are wrung from the economy.  The only thing the latest swings tell us is that the financial services sector is still sucking wind and Wall Street is gambling up and down with equal frenzy until there is a clear sign the credit crisis is past.

Today’s Market Reminds Obama There’s Lots of Work To Do

The Dow shed 332 points today, as financial stocks took yet another deserved beating.

The Royal Bank of Scotland announced its for 2008 may be more than $40 billion and in this global market, global economy and global recession, U.S. financial stocks lost value. From the Associated Press:

Financial stocks, many of them falling by double digit percentages, led a huge drop on Wall Street Tuesday that left the major indexes down more than 4 percent and the Dow Jones industrials down 332 points. Although traders on the floor of the New York Stock Exchange paused to watch the inauguration ceremony and Obama’s remarks, the transition of power didn’t erase investors’ intensifying concerns about struggling banks and their impact on the overall economy.

The market’s angst, which began with multibillion losses reported last week by Bank of America Corp. and Citigroup Inc., intensified after the Royal Bank of Scotland’s forecast that its losses for 2008 could top $41.3 billion.

The collapse in bank stocks was swift Tuesday: State Street Corp. plunged 59 percent, Citigroup fell 20 percent and Bank of America lost 29 percent. Royal Bank of Scotland fell 69 percent in New York trading.

The shrinking value of bank stocks means the financial industry accounts for less than 10 percent of the Standard & Poor’s 500 index for the first time since 1992. At the end of 2006, banks made up 22 percent of the stock market benchmark.

Bank Failures in the Hundreds a Possibilty in 2009

Eatin’ my lunch, reading up on my economic news, and this caused me to spray yogurt on my monitor:

But banks will fail, and at numbers large enough to cause alarm.

“I do think some of the actions taken by both the Fed and Treasury will limit the failure, especially at the larger banks, that we have seen in the late ’80s or early ’90s,” Mustascio said. “But to think we’re not going to see more failures in 2009 is probably naive.”

The US saw 40 banks fail in 2008 and the number is expected to multiply this year into the hundreds.

While banks have been allowed relatively liberal access to the TARP funds, some are still burdened by huge losses suffered in the collapse of the subprime mortgage market as well as credit issues fed by consumer weakness during the recession.

That little gem comes courtesy of a CNBC story on the problems with the stock prices of Bank of America and Citi.  It came at the end of the story

Ohio Sunday Papers | Sunday, January 4, 2009

• Insight: How Bad? 5 Economists Answer Questions About Recession, Ohio Economy – Columbus Dispatch

Editor’s Note: Just when you think the Dispatch editorial staff is still on vacation, they came up with this interesting piece in Sunday’s Insight section.  Let’s hear it for localizing a national story and doing it from a broad perspective.  The economists include a liberal, conservative, a federal reserve staffer, and private sector expertise.  Check it out.

• After the Flames: The Story of the 1969 Cuyahoga River Fire – The Plain Dealer
• Killings rip apart city’s fabric – Cincinnati Enquirer
• Cuyahoga sheriff lays off some, rewards family friends with raises – The Plain Dealer
• Op-Ed, Thomas Suddes: Suddes’ Crystal Ball
• Op-Ed, Joe Hallett: Brown, Strickland optimistic on economy turning corner – Columbus Dispatch
• Editorial: That Sinking Feeling – Toledo Blade
• Strickland, Governors call for $1 trillion in aid to states – The Plain Dealer
• Measure takes aim at sexual slavery – Toledo Blade
• Plans afoot for coal to liquid fuel plant in Wellsville – Youngstown Vindicator
• New Ohio legislature begins Monday – Dayton Daily News
• Ohio AG’s Washington Office closing – The Plain Dealer
• Columbia Gas, state reach deal on gorge – Columbus Dispatch
• Fewer truckers needed as economy gears down – Columbus Dispatch
• Fighting off the bear market – Columbus Dispatch
• Dick Feagler talks about 45-year career – The Plain Dealer
• Consumer advocates see bright spot in 2009 – The Plain Dealer
• Most important Ohio legislation passed in 2008 – The Plain Dealer
• Editorial: Husted made his mark – The Plain Dealer
• Editorial: Husted won’t just warm senate seat – Dayton Daily News
• BGSU to lay off 43 salaried workers – Toledo Blade

U.S. and World Markets Poised for Another Rocky Week

Hong Market Plunges Most Since 1989 Tiananmen Crackdown
– Bloomberg

Global markets continue slide, U.S. futures off 4%
- New York Times

‘Dr. Doom’ doesn’t see things getting better yet – Times of London

Grim GDP figures shows U.K. on verge of recession
– Times of London

Forecasters race to call the bottom
– New York Times

Last night, CBS News’ 60 Minutes ran another great, explanatory piece on how the investment class nearly ruined our economy. Check it out below:

Watch CBS Videos Online

For an explanation of credit default swaps go here.

News Roundup – U.S. Economy Continues to Tank, AIG, Stock Market, WaMu, Who’s Next?

Market Drops 450 more points today despite Bridge Loan to Nowhere

O.k – before I roll out the clips, one bit of personal opinion. Two questions. If the Fed’s $85 billion infusion of our money into AIG also means that “we” the taxpayers own 80 percent of the insurer, when can I expect my shares? Second, how many conservative, wild west, 100% free marketers are breathing a sigh of relief tonight that the government is saving one of their sacred institutions? Hypocrites. Is it time to let the market take out the trash in the financial markets? Only if we reasonably regulate to ensure we’re not here again in 15 or 20 years. Isn’t it just great how the so-called ‘Country First’ patriots of the Republican Party have presided over the darkest days for the U.S. economy since the 1920s and 30s …

• Worst crisis since ’30s with no end in sight – Wall Street Journal

• Bailout fails to stem global stock slump – New York Times
• Regulators try to change rules to match need – New York Times
• Morgan Stanley considers merger with Wachovia – New York Times
• Washington Mutual puts itself up for auction – New York Times
• Abroad, bailout seen as free market detour – New York Times
• Banks rush to do deals as Wall Street crisis deepens – Reuters
• Wall Street crisis refocuses U.S. election – Reuters
• Lloyds pulls HBOS chestnuts out of fire for 12 Bn Pounds – The Guardian
• Fear stalks banks – Times of London
• UK unemployment rises to 9 year high – Times of London
• After bailouts, Fed asks Treasury for money – Washington Post
• Russia moves to bolster its banking sector – Washington Post