The Wizard Of Was
The three little pigs and the big bad wolf (a fable)
Published in Brainstorm Northwest, November 2008
Once upon a time there was a happy community. In the community there lived a Wizard. Some called him the Maestro, others called him an Oracle. In any event, he was called on from time to time to make Big decisions. These decisions involved the land in which he and the little people lived. The Big decisions usually involved money but sometimes they involved how the money was priced, who got the money, and how those who received the money used it. Because these decisions were so Big, sooner or later they affected everyone in the land — not always for the better.
As it happened, the land fell on hard times because decisions made by the Wizard were wrong. Businesses were failing, and people were losing their jobs, savings and retirement accounts. The prices of companies were falling along with the price of just about everything else, except food and energy. (At an earlier time, the Wizard had said the food and energy didn’t count, so don’t pay attention to them.) […]
Bill Rutherford Quoted By CNNMoney.com
Dow sheds 486 points: Post-election worries about the weak economy are front and center.
by Alexandra Twin, CNNMoney.com senior writer
NEW YORK (CNNMoney.com) — Stocks fell sharply Wednesday, with the Dow sliding as much as 513 points, as Barack Obama’s historic victory gave way to renewed worries about the struggling economy.
The Dow Jones industrial average (INDU) lost 486 points or 5%. The blue-chip average lost as much as 513 points earlier. The Standard & Poor’s 500 (SPX) index lost 5.3% and the Nasdaq composite (COMP) gave up 5.5%.
Investors were taking a classic “buy the rumor, sell the news” response to President-elect Barack Obama’s victory over John McCain, said Bill Stone, chief investment strategist at PNC Financial Services Group. […]
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Market Update
Yesterday the market just had its second largest up day ever; up 889 points. This rise came in spite of historical lows in the consumer confidence index (backward looking and volatile) and a nationwide drop in home prices of 16.6% (a real threat to the economy). The Fed is yet to weigh in with a rate cut which will almost certainly happen today. In the meantime, the Fed has increased the money supply by 25% in the last three weeks, a truly astonishing number. The rally occurred toward the end of the day, with banks stocks getting a big lift in the last two minutes of trading. No doubt this was short covering and therefore not a sustainable rally. Volume was very heavy (a good sign).
I do not know if this is the market bottom, although the October 13 bottom has now been tested twice and held both times. I frankly expect at least one more test of the bottom, and of course any more BIG bad news could send the market lower. (There is plenty of bad news in the market valuation already, news that a few weeks ago would have been considered big bad news, but has now […]
How Could Mr. Right Have Been So Wrong?
Amid the financial meltdown, former Fed chairman Alan Greenspan is a rock star no more
by The Oregonian Editorial Board
He was a legend, the “maestro,” the man who knew how to pull the levers that others couldn’t even see, the man who uttered the market-crippling phrase “irrational exuberance,” who courted celebrity and married the television news reporter, whose absolute faith in free markets led many to declare him the greatest chairman of the Federal Reserve the country had ever known.
Now, with markets crashing and wealth evaporating around the world, he is regarded as the man who steered blindly into a storm, tacking when he should have jibed.
“Man, I loved Alan Greenspan,” lamented Portland economist and business consultant Bill Conerly this month on his Businomics blog, “but it turns out that he is to blame for today’s problems.”
Conerly says Greenspan and many others failed to see that the Fed’s policy of keeping interest rates low was fueling a housing bubble — a bubble that popped and has plunged the world into recession. […]
