A nice video put together by PBS that offers super perspective and some good behind-the-scene moments during the financial crisis over the past year. Includes interviews with many of the players and journalists who covered the story. Here’s an excerpt from the PBS website:
“On Thursday, Sept. 18, 2008, the astonished leadership of the U.S. Congress was told in a private session by the chairman of the Federal Reserve that the American economy was in grave danger of a complete meltdown within a matter of days. “There was literally a pause in that room where the oxygen left,” says Sen. Christopher Dodd (D-Conn.). ”
The stock market keeps sinking lower. as measured by the Dow Jones Industrial Average, it closed Friday at 7,365 and change.And with a big selloff in General Electric’s stock price, there are now five DJIA components trading in the single digits – GE, Citigroup, BankAmerica, General Motors and Alcoa. And Intel and American Express are jsut a few bucks away from breaching that $10 level. A number of funds don’t like to own stocks in the single-digits, so, that can put more pressure on these stocks as they approach that level.
In the mortgage-backed securities business, there is garbage and then the real garbage. Standard & Poor’s just downgraded 213 tranches of various residential mortgage backed securities, many of which had been Triple-A rated and were now being downgraded to junk. You have to wonder how you go from AAA to junk with no steps in between… Anyway, one issuer, CWABS, had a tranche downgraded to junk because 74% of the mortgages collateralizing this particular class of security were delinquent. That’s three out of every four of those mortgages have gone belly up. And who is CWABS? a special purpose vehicle created by CountryWide Mortgage.
Went to the dentist for my semi-annual checkup and asked him if his business was affected at all by the weaker economy. He said the fourth quarter was the worst he has ever had in the business. People who need a cap or bridge would instead settle for just a replaced filling because they can’t afford the work to be done. And with many companies cutting back on healthcare benefits, it makes matters worse. People are waiting longer to schedule checkups. But he has noticed things slowly picking up in the first two months of this year. A recovery underway or a dead-tooth bounce?
The economy is so bad and the financial markets are in such distress that these really weird anomalies are cropping up from time to time. Like this one – the Sunday New York Times costs you $4. You can buy a share of NYT for $3.70. Some would argue buying the actual paper is a better deal. And here’s another: If I have a Citigroup debit card and use it at another bank’s ATM, that will cost me $3 per transaction. To buy Citi stock, you now would pay about $2 a share. Or you can buy a four-pack of GE 3-way light bulbs for about $12. GE’s stock now trades for around $9.40 a share.
