Archive for June, 2008

  • The Constitution Stirs
    , June 26th, 2008 at 5:17 pm

    Finally.
    I live right by one of the largest police stations in DC, yet there was an armed robbery directly across the street a few days ago.
    For the record, until today, all handguns were banned in DC. Shotguns and rifles are allowed. You just have to keep them unloaded and disassembled.

  • The Dow is Now Down for the Millennium
    , June 26th, 2008 at 3:47 pm

    The Dow closed at 11,453.42 which means the index is now in the red for the millennium. The Dow closed December 31, 1999 at 11,497.12.
    Of course, that doesn’t include dividends. Over the last 8.5 years, dividends have added about 19.5% to the Dow’s total return.
    All 30 stocks were down today. In percentage terms, today was the third worst day for the Dow in the last five years. The 3.13% sell-off from three weeks ago was slightly worse. Today was the 10th 300+ point sell-off in the last twelve months.
    The Dow is now at its lowest close since 9/11/2006. The S&P 500 wasn’t down as much, and it’s still holding above its closing low from March 10 and March 17.
    For the millennium, the S&P 500 is off 12.7%.
    Here’s something you don’t see every day. On the NYSE, decliners led advancers by 11-to-2. But advancing volume and declining volume were roughly equal.
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  • GM Hits a 34-Year Low
    , June 26th, 2008 at 10:15 am

    Goldman cuts General Motors (GM) to Sell. The stock is down over 11% today.
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    Update: Make that a 53-year low.

  • First-Quarter GDP Revised Higher
    , June 26th, 2008 at 9:45 am

    The government slightly raised its estimate of first-quarter GDP growth from 0.9% to 1.0%.

    The figure was initially reported in April at an anemic 0.6 percent, fueling concerns that the U.S. economy may be slipping into recession. However, those concerns have subsided as fresh data showed healthier growth, particularly in consumer spending and exports.
    Consumer spending, which accounts for more than two-thirds of national economic activity, rose at a 1.1 percent rate in the quarter, slightly ahead of the preliminary estimate of 1 percent last month. Despite that upward revision, consumer spending posted its smallest gain since the second quarter of 2001, which was during the last recession.

    This the sixth time in the last eight quarters that GDP has come in below the long-term trend of 3%.

  • Count De Monet
    , June 25th, 2008 at 4:21 pm

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    At Christie’s, they were looking to sell Monet’s “Le Bassin aux Nymphéas” (above) for $36 million to $47 million. The winning bid was for $80.4 million.

  • No Change
    , June 25th, 2008 at 2:15 pm

    Here’s the Fed’s latest statement:

    The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.
    Recent information indicates that overall economic activity continues to expand, partly reflecting some firming in household spending. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and the rise in energy prices are likely to weigh on economic growth over the next few quarters.
    The Committee expects inflation to moderate later this year and next year. However, in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high.
    The substantial easing of monetary policy to date, combined with ongoing measures to foster market liquidity, should help to promote moderate growth over time. Although downside risks to growth remain, they appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased. The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability.
    Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh. Voting against was Richard W. Fisher, who preferred an increase in the target for the federal funds rate at this meeting.

    Ron Isana summed it up well by saying that this statement has nothing for everyone.
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  • Quote of the Day
    , June 25th, 2008 at 10:16 am

    The Oracle of Omaha speaks:

    Warren Buffett is in Toronto, fielding questions from a crowd of 300 executives. One asks what makes people want to sell their companies to him.
    The Berkshire Hathaway Inc. chief executive officer replies that he tells a prospective seller to think of the company as a work of art.
    “You can sell it to Berkshire, and we’ll put it in the Metropolitan Museum; it’ll have a wing all by itself; it’ll be there forever,” he says at the February meeting. “Or you can sell it to some porn shop operator, and he’ll take the painting and he’ll make the boobs a little bigger and he’ll stick it up in the window, and some other guy will come along in a raincoat, and he’ll buy it.”

  • Why Soccer Will Never Be Really Big Here
    , June 24th, 2008 at 2:39 pm

    I just looked at the numbers of the Euro 2008 tournament. So far, there have been 28 games. The team that scores first has gone 20-3-3! Two other games have been 0-0 ties. Remarkably, the Turks have won two of the tournament’s three come-from-behind victories.
    That’s one of the problems I have with soccer, come-from-behind wins are so rare. The U.S. is a country built on the idea of coming from behind to upset the champs.
    I admire the athleticism of the players, and I think it’s fascinating that most of them look like guys you could see walking down street (unlike a pro football or basketball player). But I’m sorry, there has to be more scoreboard action. If you score the first goal, you basically have the game wrapped up. Do they just run out the clock? In baseball, scoring the first is good, but it’s just a start.
    I’m curious what the equivalent start you need in baseball or football to have something close to a 20-3-3 record. My guess is that you need a 6-0 lead in baseball, and a 17-0 lead in football.

  • From Another Credit Crunch
    , June 24th, 2008 at 11:54 am

    The New York Times from November 1991:

    Is the credit crunch real? Are banks denying creditworthy businesses the loans they need to invest the economy out of the recession?
    The idea certainly appeals to the White House, which is in hot pursuit of a villain or three to explain why the stalled recovery is not the President’s fault. But many economists remain skeptical. The fall in the volume of bank loans, they point out, could be explained equally well by a recession-induced decline in the demand for credit.
    Or at least it could until now. Minds are bound to be changed by the release of the first serious analysis of the crunch hypothesis, by Ben Bernanke of Princeton University and Cara Lown of the New York Federal Reserve Bank. The study, to be published in the January issue of the Brookings Papers on Economic Activity, confirms that a scarcity of bank capital has indeed affected the supply of loans. But the two economists believe that the full weight has been felt only in the Northeast. And they say the impact on jobs and incomes may be smaller than anecdotes of businesses’ drying up for want of liquidity would suggest.

  • Have Lunch With Warren Buffett
    , June 24th, 2008 at 11:42 am

    For charity, you can have lunch with Warren Buffett. The current bid on eBay is $77,100.
    That’s less than two-thirds of one Berkshire share.