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COLUMNISTS
TODAY'S STORIES
06.10.2008
Down, Down, Down

Everything went down today...and everywhere. Except oil which ended at $88 a barrel. Some suit visiting on NPR tried to explain why this was bad. It's not. The decline in crude is the only hopeful sign we've seen in months.  Some businesses may be encouraged to start up and invest again if the petroleum prices permits them to do so.

Well, that's not exactly right. The overstoked stock markets in China and Russia are also plummeting, and the Moscow bourse was forced to stop trading twice during the day. This should give us some confidence that these two government-manipulated exchanges are not immune to the forces that have affected Wall Street and the City. Take whatever joy that is available. But don't go haywire: This may be the last good news we get for the foreseeable future.

At about 2:30 this afternoon, the Dow industrials were down almost 800 points bringing the market to near-9500 and ending up below 10,000 for the first time in years. David Leonhardt argues in the Times on-line that the S & P 500 is a much more salient index than the Dow. It is heading downwards to half its high while the Dow is heading south by only a measly third. You want a calamity: you'll have one.

John Fuld, the CEO of Lehman Brothers, made his own calamity. But he cushioned it for himself and his partners by siphoning off millions and millions--no, tens of millions--as bonuses while asking the Fed for rescue from the very choppy waters into which he had pushed his bank. They got the bonuses. But the bank sunk from view.

But I did have some pity for him nonetheless. He was being questioned by Henry Waxman's House committee. Waxman was, as usual, being both pointed and courteous. But two loud mouths--I do not recall their names--put Fuld to the stocks. They wanted him to pillory himself. "Answer 'yes' or 'no'," they bellowed without giving him a second to respond.

Maybe tomorrow's markets will be stronger. I doubt it.

 

Posted: Monday, October 06, 2008 10:05 PM with 3 comment(s)

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aarong said:

Richard (Dick) Fuld.

October 7, 2008 9:40 AM

CRS9TNR said:

The markets are down to where they were 4-5 years ago.

And really the market only broke the 10,000 barrier 10 years ago.

For some reason, i believe a lot of the gains over the last 10 years in the market were illusory.  There have been big productivity gains from integrating automation and computing functions.  But those productivity gains are kind of lost as people do not find other productive work.

The tech run up of the late 1990's really was confusing.  Websites were replacing all kinds of industry but they put up walls that did not allow you to talk to anyone.  On-Line newspapers, shopping, banking and music.  But no 1-800 numbers or locations to visit.  Send an e-mail and we'll get back to you in 3 days.  Incredibly productive, but the people losing their jobs were scattered accross the US.

The housing boom of the early 2000's was equally confusing.  Why did everyone need such big houses, and so far away from the cities?  Complete new cities without sidewalks or downtowns.  Why would people pay so much money?

I think around 1998 we went off track.  Yes businesses made a lot of money outsourcing, and investing overseas, but America lost something.  Maybe as the market pulls back to 1998 levels, we can re-start and get a little closer to the people and our neightborhoods.

October 7, 2008 9:56 AM

teplukhin2you said:

Get local. Local banks, local newspapers, local businesses serving customers they know very well and can do business with face to face, on a handshake basis. These are the businesses that will thrive in an environment in which there is no confidence in unseen counterparties.

October 7, 2008 2:52 PM

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