11.07.08
Home Market Timing Weekly Updates Weekly Update Archives|
11.07.08 Being laid low with a bad case of the flu, I am sharing one of my favorite stories of the week. Sy Harding has a good way with words. The extreme volatility certainly continued this week. The market suffered its biggest two-day loss since 1987 on Wednesday and Thursday, with the Dow losing 486 points on Wednesday and 443 points on Thursday. But it gained 305 points on Tuesday and 248 points on Friday. So it ended the week down 4.1%, giving back about a third of the previous week's big gain. After two weeks of heavy schedules of potential market-moving economic reports, next week is an unusually light week for reports, and the 3rd quarter earnings reporting period has pretty much ended. All eyes are on President-elect Obama's upcoming choices for key cabinet positions, particularly the replacement for retiring Treasury Secretary Paulson. As you know from some of my rantings over the last couple of years, I have not been impressed by Paulson, who left his position as Chairman and CEO of Goldman Sachs to become Treasury Secretary. Some impressive names as his replacement are in the rumor mill, including former Fed Chairman Paul Volcker. By the way, while my criticisms of Paulson were related to his belated awareness of the growing financial mess, and subsequent rushed actions, his prior influence in the watering down of regulations while Chairman of Goldman Sachs, already had me thinking poorly of him. For instance, in 2004, at the request of Wall Street firms, including Goldman Sachs, then headed by Paulson, the SEC agreed to release investment banks from the 'net capital rule', the requirement that Wall Street firms hold reserve capital that limited their leverage and risk exposure. As the New York Times reported at the time, "While other regulatory agencies criticized a blueprint by Mr. Paulson that proposed to release firms from the rule, and reduce the stature of the regulatory agencies, the SEC did not challenge the plan." And hello? Mr. Paulson was shocked to see the result of the leveraged risk that was allowed to mushroom out of control? And has had to commit $700 billion + of taxpayer risk to bail those firms out? Oh well, it's estimated that his personal net worth is approximately $700 million from his stint at Goldman. So he's all set. Thank you Sy Till next week |
