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Economic/Markets Highlights for Wednesday 10/15

By Larry Doyle on October 15, 2008 at 4:00 PM in Current Affairs, Economy

A few highlights in the midst of another 6-7% selloff in the equity markets.

–Fed Chairman Bernanke speaks without equivocation in stating that the economy is slowing dramatically. This is also highlighted in a Fed release known as the Beige Book which canvasses every Federal reserve district in the country. That report shows a slowing in housing, manufacturing, labor in every district.

–Oil specifically is giving up the ghost and is down app. 12% on the day. Be mindful that many hedge funds have had a strategy of long oil, short financial stocks. This trade worked in spades for the first 7 months of the year. The “no short selling” rule implemented in early September truly hurt a lot of hedge funds and clearly a lot of those funds are liquidating a lot of the “long oil” positions.

–Rates are down marginally on the day led by short term rates as Bernanke hinted that the Fed may have to cut rates again. The fed does not have much ammo left with the overnight rate at 1.5%.

–Highly respected economists Glenn Hubbard and Martin Feldstein calling for a further 10-15% decline in housing prices.

–Municipal bond

benny

It’ll take 2-3 years at a MINIMUM to recover from this crisis. Hopefully, the new president will not burden the treasury which will make the recovery much more difficult.
The Video That Ends Obama?

MOST DAMNING VIDEO YET…

http://canadafreepress.com/index.php/article/5411

BREAKING NEWS…

Obama gave Odinga $1 Million for his campaign…

http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=78035

See the actual documents there.

Where did he get this money? Campaign contributions?
http://edgeoforever.wordpress.com/ Not Your sweetie

Copying from Hillary – both candidates do it
http://edgeoforever.wordpress.com/2008/10/15/copying-from-hillary/
Bud White

Very interesting. It’s different to hear Bernanke compared to Greenspan. Perhaps different times but also different communication styles.
http://madamab.wordpress.com madamab

Wow, this is really bad. I’m so glad I moved my money away from stocks and bonds.

Yeesh.
LD

Munipal bond rates continue to increase and are at levels not seen since the mid 90s.

Retailers get crushed today along with credit card companies as markets realize the consumer is going to stop spending.
AF catfish

This might sound silly but how will Bernanke’s straight forward speaking style (as opposed to Greenspan’s convoluted encrypted messages) affect things – is it just a matter of getting used to the new guy?

I imagine now, he is correctly managing expectations downward. And if he didn’t do so we’d have a slow bleed affect that could dampen confidence over the long term.
LD

Jamie Dimon the CEO of JP Morgan Chase the strongest bank in the land says “the economy is going to get a lot worse…”
McHope

When will anyone report this connection to the public?
Northwest rain

Thank you for doing this — I’d like to see a daily column on Economic issues.

McCain seems to be someone who will be able to listen to different opinion about the economy — in fact he will probably seek to hear all view.

Obama — it knows it all already — and unless he is worshiped first he’s not about to listen.
joseyJ

Barack Obama, Hedge-fund Candidate
Clay Risen – The New Republic
May 11, 2007

Excerpt – (subscription only)
http://www.tnr.com/doc.mhtml?i=w070507&s=risen051107

But, even as Obama plays the people’s choice by building his war chest in two- and three-figure increments, he is also relying on a growing cadre of young, eye-poppingly rich hedge-fund and private-equity managers to keep him at the head of the money primary.

During the first quarter he nearly doubled Clinton’s take from private-equity firms–$85,350 against $47,900, according to the magazine Private Equity Hub–and, with $479,209, he placed first among candidates from both parties in giving from investment banks, many of which run their own hedge funds and private-equity operations (Rudy Giuliani, the runner-up, got $473,442).

These stars–what New York magazine calls the “baby bundlers”–are helping Obama tap into Wall Street’s fabulously rich elite. His most recent catch is the relatively gray-haired Paul Tudor Jones II (he’s 53). Head of the $15 billion Tudor Management hedge fund, Jones is holding a 500-guest event for the candidate at his Greenwich, Connecticut, mansion later this month.

The event will mark Obama’s entry into the hedge-fund winners’ circle: Greenwich, the toniest of New York exurbs, is home to more than 100 hedge funds–and, as one observer told the Financial Times, “The whole of Greenwich is backing Obama.”
doc99

The drop in oil prices may ultimately crush El Gordo Chavez. I wonder if we’ll be inundated with 1800Joe4Oil Ads this winter.
joseyJ

Compare Obama-Odinga to the media’s outrage in 2004 when Kerry said he’d talked with world leaders and they wanted HIM to win.
Ohhhh the OUTRAGE – then!
KXT

I find it laughable that Obama who spent over $100 million of a non profit organistaion givign money to his black liberation church, Bill Ayers wife project and other left wing minority charter schools, that he is the best person for the economy. Has Americans lost their mind? How in the world can Obama be better on the economy than John MCcain? Look at the way Obama spent the money when he was on the Board of the Annenberg Challenge and the WOODs Foundation. I cannot believe the rise of the anti-American left has taken over the democratic party and is a heartbeat away from political power. At a time when America is hurting, the radical left is happy. OBama rise in this election has been funded by America hating foreigners and Anti American left wing liberals who want to see Obama win. Obama campaign has refused to release the names of his donors giving less than $500 to his campaign.

Anyone notice that as soon as the polls had Obama over 50%, the stock market plunge to new lows. WHen the race was almost tie, the stock market was doing fine. It seems whenever the MSM show polls of Obama winning, the stock market dips. I think many people are taking their money out of the market because they know an Obama presidency means higher capital gains. The market is fearful of an Obama presidency with a democrat control congress. The stock market will do better when John McCain poll ratings get better.

Whenever there is a republican control congress the stock market does well. WHenever there is a democratic control congress the stock market tanks. Even if the president is democrat and the congress is republican control, the stock market does well. I think investors are taking their money out of the market because they know Obama will increase the capital gains tax. The fear of a democrat president and demcorat congress is scaring investors. Ever since the DEMS took over congress in 2006, the stock marke thas been up and down.

For the first 2 years of Bill CLinton term there was no growth under a democrat congress. For the next 6 years of Bill Clinton reign under a republican control congress, there was good economic growth. Vote for divided government.

Are you better off than you were 2 years ago? It’s the CAPITAL GAINS STUPID!!!!!!!!

WHen this election is over, it will be the largest case of election fraud in American history. The American election system has been hijacked by foreigners and the radical anti AMerican lef. Obama is a pawn in their campaign to bring America to her knees. I hope patriotic Americans will wake up soon and take back their country. No foreigner should be allowed to influence your democracy as has been down in 2008. I fear for a world where AMerican dominance is replaced by an Eastern imperial power.
Cubs in 08

…in 2108

Americans for Tax Reform

http://www.atr.org/index.html

Enter your 401 balance, and the calculator on this site will show you how much it will GAIN with McCAIN and FALL with ObaMAO.
ChooChooMagoo

I agree with NW rain – More post on the Economy please! A daily post on economic issue would be great. Yesterdays’s

The economy – What lies ahead

was fantastic. Not just for the election politics, but because our economic health has a very real and direct impact on our national security – as unfortunately, we (the general citizenry) are starting to learn way too late and oh so painfully.
Republitarian-No-Troll

I’m scared of an Obama presidency (not to mention being scared of the present market declines). I have been selling anticipating a higher cap gains rate under “that one”.

Cash and gold for me! Though I do have PLENTY of stock exposure too.

It’s going to be a rough 4 years no matter who wins. A poisoned chalice is what Bush hands the next guy. It’s just that Obama will make the next 4 years MUCH rougher IMO.

Good luck all! Great post! NoQ rocks!
typical.white.person

Chart of the Day

Hold on tight!

Foreclosures are on the rise.

Better yet, simply walk away. It’s better to rent than own.