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A New Year's Gift From The VIX
Tweet Share on Facebook December 31, 2008 CommentCooler heads are prevailing on the last trading day of the year.
Wall Street's "fear gauge," the VIX, looks like it might close below 40 for the first time in three months.
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The Shipping News
Tweet Share on Facebook December 31, 2008 CommentShipping stocks have been absolutely beaten up during 2008, but will 2009 be the year of the rebound?
Sensitive to both the global economic slowdown and the drop in energy prices, shippers may still be suffering. But keep them in mind as an early play when the economy (hopefully) recovers sometime in the New Year.
The WSJ looks at a nice run by DryShips and Eagle Bulk Shipping.
Andrea Kramer at Schaeffer's Research eyes Euroseas.
Bill Luby at the VIX and More blog says watch the Baltic Dry Index in 2009 for confirmation that shipping (and trade) are returning to more robust health.
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2009 Prediction Roundup
Tweet Share on Facebook December 30, 2008 Comment (23)It's prognostication week for market watchers as we limp toward the finish of a terrible year.
Predictions -- fun to read, but most often wrong -- are rarely as difficult to formulate as they are right now. Investors are struggling to assess a continually jarring mix of terrible economic data and the ongoing threat of undiscovered landmines placed throughout the financial sector during the last decade or so of easy credit. But that won't stop people from trying. Below, we take a quick look at what could be around the corner in 2009:
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Housing: Better Than Stocks In '08
Tweet Share on Facebook December 30, 2008 Comment (1)Did house-flippers in economically depressed areas like Detroit or overheated markets like Tampa still make better investments than your average index fund holding equity investor last year, provided they kept their payments up and their properties out of foreclosure? Maybe.
Today's Case-Shiller home price index was dismal again for October, with prices in 20 major cities falling 18 percent year-over-year. Some lowlights:
- Phoenix down 32.7 percent
- Las Vegas down 31.7 percent
- San Francisco down 31 percent
- Miami down 29 percent
- Los Angeles down 27.9 percent
- San Diego down 26.7 percent
- Detroit down 20.4 percent
- Tampa down 19.8 percent
- Washington down 18.7 percent
- Minneapolis down 16.3 percent
- Chicago, down 10.8 percent
- Atlanta down 10.5 percent
- Seattle down 10.2 percent
- Portland, down 10.1 percent
- New York down 7.5 percent
- Cleveland down 6.2 percent
- Boston down 6 percent
- Denver down 5.2 percent
- Charlotte down 4.4 percent
- Dallas down 3 percent
Still, those returns actually look appealing compared to stocks during the same period:
- Dow Jones industrial average down almost 33 percent
- Nasdaq down 39 percent
- S&P 500 down 36 percent
And yes, I know it's comparing apples and oranges, but if your new house in Dallas lost 3 percent while your neighbor's portfolio of small caps or international stocks sank like a stone, who made the smarter move?
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2008: Worst Market Since Hoover
Tweet Share on Facebook December 29, 2008 CommentWith just over two full trading days left, 2008 is on track to be the worst year for stocks since 1931 when Herbert Hoover was in office and the Great Depression raged.
The ongoing recession and global economic shock pummeled stocks this year, with the Dow Jones industrial average slumping 36.2 percent. That's the biggest drop since 1931 when the Great Depression sent stocks reeling 40.6 percent.
The AP also says the S&P 500 is headed for the biggest drop in the index's history and that paper losses in the broadest measure of U.S. stocks, the Dow Jones Wilshire 5000, totaled $7.3 trillion.
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A 2009 Prediction and a Telling IPO
Tweet Share on Facebook December 24, 2008 CommentAllThingsD's Kara Swisher predicts "the socializtion of everything" will be one of the big stories of 2009 in the Tech Ticker video bleow (also, she's a "Gossip Girl" fan).
On a related theme the IPO market gets a new entrant this week: TechCrunch says FriendFinder Networks (formerly Penthouse Media Group), which bills itself as "the world’s largest sex & swinger personals community," is planning a $460 million IPO. Socialization indeed.
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Sina: $1 Bil For Focus Media Assets
Tweet Share on Facebook December 22, 2008 CommentRemember Chinese Internet stocks? Think back on the heady days of 2007 when companies like Baidu were being heralded as the Google of the East...
Obviously, that was before the crash and even though Chinese shares suffered some of the worst damage of all during this global bear market, investors remain wary of that once-hot sector.
They still can't get a break today.
This morning Sina, a popular Chinese search engine, bought a big chunk of Focus Media, which specializes in digital outdoor advertising. Its shares promptly slumped more than 18 percent.
Oppenheimer's Jason Helfstein had this to say in a morning note, where he likes the deal but questions the lack of a shareholder vote:
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Even Odds On a Christmas Stock Market Rally
Tweet Share on Facebook December 22, 2008 Comment (1)Investors wishing for a slightly less-awful portfolio for Christmas have just a fifty-fifty shot despite the fact that December is traditionally a good month in markets, according to Merrill Lynch strategist Mary Ann Bartels. She writes:
... S&P data shows that, despite the fact that December and January are historically the two strongest months, investors should not count on a Christmas rally. Using the index’s behavior from the Friday before Christmas to the Friday after New Years as a guide, there have only 13 holiday rallies over the past 25 years. In the last eight years (2000-2007) there have been four rallies.
What to watch for:
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Credit Thaw Watch: TED Spread Back To Normal
Tweet Share on Facebook December 22, 2008 Comment (2)By one measure, it appears the Fed's whatever-it-takes policy towards backstopping the financial sector is inspiring some confidence among lenders. The TED spread has returned to levels not seen since the failure of Lehman Brothers.
The TED spread, a gauge of banks’ willingness to lend, slipped below 150 basis points for the first time since before the collapse of Lehman Brothers Holdings Inc. amid speculation U.S. borrowing costs near zero and promises of further government cash will help unfreeze credit.
Central banks are pumping money into the financial system to combat the worst economic slump since the Great Depression. Credit markets, which seized up after Lehman’s bankruptcy, remain locked amid almost $1 trillion in losses and writedowns tied to mortgage-related securities. The Federal Reserve cut its benchmark rate to as low as zero last week and said it will flood the economy with cash.
The TED spread may be better but it's still around 148 basis points, well above the 38-point spread it averaged in the year prior to the credit crisis' start in August 2007, Bloomberg notes. So it may not be exactly back to normal, but the improvement so far is welcome.
Related:
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Madoff's Red Flags
Tweet Share on Facebook December 18, 2008 Comment (4)It's been all over the place today, but you've got to read the Harry Markopolos' letter.
He once worked for a Madoff rival, and called Madoff Securities "the world's largest Ponzi Scheme" in a letter to the SEC.
In 2005.
Link is here from the WSJ.
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