Monday, September 15, 2008

Market Thoughts
  • The market is only down about 300 points at just before 9:00 pst, and it's off its lows. I was expecting a bigger blood bath. I would not have been surprised with a much larger sell-off.
  • AIG is off more than 70% and is trading below $4 per share. This is approaching bankruptcy levels. If the smart firms, like Lehman and Merrill, could not avoid bankruptcy or selling themselves, I can't see AIG, without the brain power of other Wall Street firms, surviving.
  • The ten-year Treasury is below 3.50%. This is going to help housing, especially since Freddie's and Fannie's problems seem to have been solved.
  • Oil is off about 4% to under $97 a barrell. This not only helps consmers, if price reductions stick, but will ease inflation pressure and allow the Fed flexibility in cutting interest rates.
  • Speaking of the Fed, it was not expected to cut rates this week, but the market is now pricing in a 33% chance of a rate cut.

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