Pre-Market Report

The market has taken a sharp tumble in the past few days.  The S&P has closed at its lowest point since April 14, 1997. This brings the average Large Cap Growth manager and Multicap Growth manager down about 50% on the year.  (We are beating the markets)

The economic news is grim and the Fed believes the recession, which they now recognize, will last into the first half of next year.  Others think the recession will last longer.  Historically the market has turned up about six months in advance of the end of the recession.

Markets are also suffering a lack of confidence.  We have one president with his bags packed and another yet to assert himself.  Obama should act now, or face much tougher problems when he takes office. Treasury Secretary Paulson seems to have a new game plan each day, so it is no wonder that investors are confused.

Is this the end of the world as we know it?  Not likely.  Government regulation, and involvement in business will grow, but the economy will recover.  So far the government has thrown (literally) about 2 Trillion dollars at this problem.  We have seen some results-credit markets are starting to work again-but not all of the results. […]

November 21st, 2008|Categories: Comments from Bill|Tags: , , , , , , , |Comments Off on Pre-Market Report

It’s Uncle Sam’s Investment Club

U.S. government has become irreversibly involved in many businesses’ affairs

One day in the not-too distant past, seemingly eons ago, top executives of Lehman Brothers met with Federal Reserve and Treasury officials at the Federal Reserve offices in New York. At issue was what to do about Lehman. A top Lehman executive reportedly told government officials that Lehman had no idea of the amount of risk on their books in credit default swaps, and then said, “Neither do you.” It’s astonishing that a top official of a major investment bank would not know the amount of risk that the firm had on its books, but it simply reveals the state of affairs at the time. The Fed did not have any idea about the size or scope of the market, because Alan Greenspan had refused to regulate it even when advised to do so.

Even now, firms are still learning of the risk they have undertaken. This conversation may have been the basis for the decision by Treasury Secretary Hank Paulson to let Lehman file for bankruptcy. Paulson has said that Lehman did not have adequate collateral for a government loan. Based on subsequent events it probably is a decision that he would like back. […]

Bill Rutherford Quoted By CNNMoney.com

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. […]

Bill Rutherford Quoted In CNNMoney.com

Stocks rally on housing rescue

Dow surges 290 points as investors consider what the Fannie and Freddie bailout means for the broader economy.

by Alexandra Twin, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) — Stocks surged Monday, with the Dow gaining 290 points and the broader market also gaining as investors breathed a sigh of relief that the government has swooped in to bail out Fannie Mae and Freddie Mac.

The Dow Jones industrial average (INDU) added 290 points or 2.6%. The broader Standard & Poor’s 500 (SPX) index added 1.8%, paring its morning gains. The Nasdaq composite (COMP) added 0.6%, after climbing in the morning and then falling in the afternoon. […]