The selling continues (where have you heard that before!). The market sold off again with continued concerns over the financial sector and the financial health of Fannie & Freddie, who together hold or guarantee over $5 trillion in mortgage assets, while their stock valuation has dropped to less than $20 billion! Crude Oil also hit a new all-time high of around $147 on Friday, Gold continues to move higher, and the Euro exchange rate is about to top $1.60. Batten down the hatches!
On Friday after the market closed,
regulators reported that they seized IndyMac Bank, making it the third biggest U.S. bank failure ever, and the fifth bank to fail this year! Meanwhile Lehman shares continue to plummet, along with most other financial companies.
Next week could be a volatile week! More earnings reports due (including Citi, Merrill, JP Morgan, CIT, Microsoft, Google, Coke, and some airlines), Options expiration on Friday, and more credit crisis issues (Fannie, Freddie, and others...), along with a few economic reports -be prepared.
The
DOW has lost a little over 3000 points since the market slide started last October. We are now officially in a bear market, with the market being down 20% from the peak (of course you didn't have to wait for the official 20% number before pulling out of the market -if you followed this blog you would have known long before!). Some investors are still waiting to find out if we are 'officially' in a recession too!
News Stories:
The $5 trillion messCrisis Deepens as Big Bank FailsU.S. Weighs Takeover of Two Mortgage GiantsFailure Is Not an Option For Fannie and FreddieFannie, Freddie insolvent, Poole tells BloombergLehman shares plunge againMerrill raids its rainy-day fundCiti sells German retail banking for $7.7 billionStocks face financial fears and a wall of earningsUS foreclosure filings surge 53 percent in JuneSix months, 343,000 lost homesMassive Debt Fueling What Looks Like a Long RecessionMemo to Washington: Let GM FailDow Jones in Euros -Almost 50% off from 2001Stocks and Indexes mentioned in this blog are for educational and illustration purposes only.In other news:
Beijing takes dog off the menu for OlympicsHere's an interesting excerpt from stockandnews.com:
"Luft adds that Brazil is already there in terms of energy independence. 90% of new cars sold this year in Brazil will be flex-fuel vehicles that cost an extra $100 to make but can run on any combination of gasoline and ethanol. [Brazil, as you know, being a proponent of sugar-based ethanol.]
Luft: “Lest anyone think that can’t be done in the United States, many of those new cars are being made by General Motors and Ford.”
Of course you won’t find any natural-gas vehicles on the road here, and Brazilian sugar-cane ethanol is impeded by a 54-cent-per-gallon import tariff, thanks to ethanol’s protectionists in Congress. "
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