yo-yo'ing

What goes down must come back up - at least part of the way. After the Dow has its largest point drop ever (777 points), it recovered about 485 of those points today.

The NASDAQ after losing around 200 yesterday, made up around 100 and the S&P 500, which saw its largest % drop since October 1987, made up approximately half of what it lost yesterday.

This was all in response to the House of Representatives' rejection of the proposed $700B bail-out plan. The markets, both in the US and overseas saw this as grim news as already battered markets took it on the chin when the vote was announced.

After re-grouping overnight and buoyed by the lifting of Asian and European markets, the US markets rallied today on the hope that the political leaders will be able to come up with and agree on some type of plan to assist the US financial system in its recovery.

Meanwhile, Wachovia, which was supposed to buy up an investment bank, had to be rescued itself as it saw it's share price plunge 80% yesterday. Citigroup purchased Wachovia's banking operations for a low-ball bid.

Oil is still very volatile as the gyrations of the equity markets make oil either safe or unsafe to own depending on the day.

HF's invested or short in European bank names had to disclose their current short positions. Talk about pulling back the curtain. The managers must be cringing as their bets against companies are now available for all to see (and bet against).

In the wake of all this news, both political candidates are trying to catch their breath, get a handle on the complexity of the melt-down and attempt to not put their feet in the respective mouths.

Another super-manager, T. Boone disclosed his fund is down at least a cool $1B - probably more actually after the final figures for the quarter are calculated. Investors are running for the door as his bets on oil companies and oil prices were dead wrong.

Today is the last day of Q3 so today is the deadline for investors to put in their requests for redemptions. It will be interested to see what the fall-out will be as managers may have to liquidate losing positions in order to raise the cash to distribute to investors. Could mean more pain in the immediate future for some of these guys that are hanging on by a thread right now.

What else will the markets hold for the rest of the week? Some are saying that a new plan could be announced as soon as Thursday since the congress is on vaca for today and tomorrow due to the Jewish new year. Stay tuned.

Best of luck.

DJIA 10,850.66 +485.21

NASDAQ 2,082.33 +98.60

SP500 1,164.74 +58.32

more seizures and flailings

Oil back up. Wamu was seized by the Feds and the branches were sold off to JP Morgan/Chase - those guys are always around ready to pick up at fire sale prices the assets of failed banks. What else? Morgan Stanley and Goldman Sachs are becoming bank holding companies. So no more investment banks. At least the big bulge brackets ones. Lots of boutique investment banks still on the prowl for business. But pretty soon, one can open up a savings account at Goldman and get a credit card from Morgan Stanley -ok, maybe not that bad, but definitely a distinct change from the old guard pedigree both firm used to exude.

Markets continue to get hammered. The list of 800 stocks that are still on the "cannot short list" are still living to see another day of nothing but upward buying pressure.

First prez debate was last night. The two candidates battling it out on the economy. Bottom line, what they do isn't going to matter much, whomever gets elected. It's going to come down to how effectively the $700B bailout plan is managed by Paulson and The Big Ben.

Happy weekend.

DJIA
11,143.13

NASDAQ
2,183.34

SP500
1,213.01

oil on a monday

Oil had its largest one day move ever, rising approximately $24 at one point over Friday's close. This is mostly in response to the Fed's plan to spend $700B in the sub-prime mortgage bail-out and another $400B making sure that the country's money market funds stay on par. With the dollar and equities being hammered, hard assets are looking pretty good right about now.

wild week (cont.)

One of the craziest and wildest weeks in probably the last decade, right up there with the top of the NASDAQ tech bubble in spring of 2000. By comparable I mean the volatility and point swings but this craziness has the news events to go with it.

more headlines:

2 HUGE down days and 2 HUGE up days in the markets
SEC enacts two different sets of rules to curb short sellers
AIG gets purchased by the Fed
LEH assets get snatched up cheap by Barclays
Merrill get purchased by BAC
WAMU is actively looking for suitors and no one is stepping up
Oil is back up to $100 a barrel now

To paraphrase an interesting statement from a popular short-selling HF manager; it looks like our financial markets have created an environment that is defined by capitalism on the upside and socialism on the downside.

Also, no one has yet to come out and present any hard evidence that short selling caused the collapse of these financial institutions. It's the loose risk management controls and poor oversight by directors that got these companies into the problems they are now experiencing. The short sellers are merely bringing those faults to light and are happening to making money on the ideas as well. To punish the short sellers by restricting the number of companies available to short is preposterous. Also, how Cuomo plans on enforcing the naked short selling rules and rumor-mongering is any one's guess.

Happy Friday.

DJIA 11,388.44

NASDAQ 2,273.90

SP500 1,255.08

more events - so little time

So another busy week in the markets.

- oil is back down to $100 a barrel
- lehman brothers throws in the towel and files chapter 11
- atticus is down big time and rumors are they might close it up
- red kite, the has-been hot metals fund is done and out
- aig and wamu are both circling the drain in a strange sort of way
- paulson (the treasury guy) tries to not give his brother (lehman bros) a helping hand
- markets got pummeled once again as the perfect storm continues
- speaking of storms, Ike rocks houston, the soggy energy capital of the country

Happy weekend - what's left of it.

DJIA 11,421.99

NASDAQ 2,261.27

SP500 1,251.70

blood in the water

for a short week, it sure was a rough one for the bulls. The equity markets got whacked this week. The dollar continues its rally, commodities continue to free-fall and bad economic data keeps coming off the wire. Also rumors of some large HF's in trouble are causing people to dump positions that are very popular among the 2/20 crowd. Some very big funds are down some very big numbers at this point in the year. Guys that have great track records and sterling reputations are down 30% on $15 or $20 billion....that's a chunk of change that doesn't go unnoticed.

Happy Friday - happier for some than others.

DJIA 11,220.96

NASDAQ 2,255.88

SP500 1,242.31