A Bad Anniversary

Today is the one-year anniversary of Lehman Brothers’ cataclysmic failure. In other words, this time last year, the you-know-what was hitting the fan.
Lehman announced it was done on a Sunday. Amazingly, the S&P 500 opened down only a point down on Monday, at 1,250. By the end of the day, the S&P had lost 58 points. Stock prices swung wildly the rest of the week. It wasn’t until October 7, 2008 that the S&P went below 1,000.

Profit-taking? Or Something Worse…

Yesterday’s headlines made it sound like the sky was falling after China’s Shanghai Index sold off 6.7%. There’s no doubt bulls are a bit nervous and bears are getting a bit bolder. That’s to be expected after a six month rally that’s been remarkable in that there have been no corrections.
 

China Leads Declines

Stocks are selling off around the world. And China is in the lead. The Shanghai Composite is down 23% since August 4. Former Morgan Stanley Asia economist Andy Xie says Chinese stocks have been in bubble mode and there are more declines to come.
 

AIG vs. Intel: Cash for Clunker Stocks Rolls On

The New York Times article is titled "AIG Rises, and Many Ask Why". After all, the company is 80% owned by the government, owes around $180 billion, is cash-flow negative and would be in even worse shape were it not for accounting changes that help it keep toxic mortgage assets unfairly valued. 

And to top it off, the company is actively seeking buyers for its best business units, which will impair its ability to earn its way back to health. 

Investing in the Future

There is a message to Detroit from Americans who participated in the Cash for Clunkers program: don’t make any more Ford Explorers, F-150s or Jeep Cherokees. These were the most traded-in clunkers. 

Actually, the F-150 truck is pretty useful, so maybe we can just lose the Explorers and Cherokees. 

Cash for Clunker Cars Ends, Cash for Clunker Stocks Going Strong

Yesterday, I mentioned that I thought the Cash for Clunkers was a pretty decent idea, as far as stimulus plans go. Rather than simply hand the automakers cash, the government came up with the Cash for Clunkers program that not only got some desperately needed extra cash in the automakers pockets and also took a few low-MPG cars off the streets. It also put cash into the hands of car dealers who have been struggling and a small percentage of that money into local economies.