JAL Thoughted

Financial Journal for October 17 2008

Market Movers:

• Beige Book
• Recession worries
• Investigation’s open on failed institutions

Important Market Development Summaries:

• Feds launch probe of WaMu’s failure. Oct 15, 2008. CNNMoney.com.
  • Former Lehman Brothers CEO subpoenaed. Oct 17, 2008. CNNMoney.com. “Former Lehman Brothers CEO Richard Fuld has been subpoenaed in connection with three grand jury probes into the investment bank's bankruptcy.”
• Economic activity weak across U.S.: Fed Beige Book. Oct 15, 2008. Reuters.com. “Retailers saw consumers pull back… Capital spending decisions were being influenced by economic uncertainty… Conditions remained favorable to agriculture.”
  • Dow loses 733 after data feeds recession worry. Oct 15, 2008. Reuters.com. “Worst day since 1987 stock market crash. Dismal monthly U.S. retail sales set the tone for the session, dropping the most in more than three years, while a measure of New York state manufacturing hit its lowest level since the index started in 2001.”
  • Wall Street slips as recession worries nag. Oct 17, 2008. Reuters.com. “Stocks fell on Friday on weakness in manufacturing and financial stocks after bleak data on consumer confidence and construction, but the Dow still snapped a disastrous three-week losing streak with it best weekly gain in more than 5 years.”

Financial Journal for October 10 2008

Market Movers:

• Dow post worst retreat since 1937
• Oil drops
• Emerging markets
• Fed exercises most of its options

Important Market Development Summaries:

• Dow dives below 10,000 on credit, recession fears. Reuters.com. Oct 6, 2008
  • Stocks fall for 6^th session on recession fear. Reuters.com. Oct 8, 2008
  • Recession fear plunders Wall Street, Dow dives 678.91. Reuters.com. Oct 9, 2008
• Fed to Purchase Commercial Paper. WSJ.com. Oct 7, 2008

• • Central banks cut rates, but markets stay fearful. Reuters.com. Oct 8, 2008 “Central banks around the world cut interest rates in unison on Wednesday but the unprecedented move failed to help battered stocks, thaw credit markets or temper forecasts for a sharp global economic downturn.”
  • U.S. Treasury Considers Buying Stakes in Banks. WSJ.com. Oct 9, 2008
    • Paulson says U.S. planning to buy financial equity. Reuters.com. Oct 11, 2008. “Providing the first confirmation of the plan after a meeting of Group of Seven finance chiefs, Paulson said the equity purchases would be made alongside purchases of distressed assets as a way to recapitalize U.S. banks and other institutions reeling from soured mortgages and illiquid securities.”
  • FDIC limit officially raised to $250,000. CNNMoney.com. Oct 10, 2008
• Oil drops 6 percent to below $88 on demand concerns. Reuters.com. Oct 6, 2008

Financial Journal for October 3 2008

Market Movers:

• Congress swings between yes and no on bailout, market follows
• Wachovia begins talks with Citi
• Buffett invests $3 billion in GE

Important Market Development Summaries:

· Congressional Leaders Reach Agreement on Bank-Rescue Plan. Bloomberg.com. Sept 28, 2008.

o House rejects bailout package, 228-205; Stocks plunge. NYTimes.com. Sept 29, 2008.

§ Dow Drops 348 Points. BusinessWeek.com. Oct 2, 2008. “Weak economic reports spark concerns about a recession as investors also worry about Friday’s House vote on bailout package.”

· Stocks close down on recession fears. NPR.org. Oct 3, 2008. “U.S. stocks closed down on Friday, as fears the economy will not be able to avoid a recession overshadowed the effects of the $700 billion financial rescue package signed by President Bush.”

· GE announces $12 billion stock offering; Investment of #3 billion by Warren Buffett. Oct 1 2008.

· Wachovia begins early deal talks with Citi. Sept 26, 2008.

o Citigroup Purchases Wachovia Banking Operations. CBS5.com. Sept 29, 2008.

§ Wells Fargo, Citi spar over Wachovia sale. CBS3.com Oct 3, 2008.

Financial Journal for September 26 2008

Market Movers:

• WaMu goes bankrupt
• $700 billion bailout remains unsettled

Important Market Development Summaries:

• Wall Street closes mixed amid bailout concerns. MSNBC.MSN.com. Sept. 26, 2008.
  • “Financial markets remained on edge Friday after the Bush administration's proposal for a $700 billion banking bailout ran into opposition from Republican lawmakers.”
• “WaMu Fails; JPMOrgan Buys Most of Its Assets” Fox Business. Sept. 25, 2008.
  • After a wave of withdrawals, WaMu was forced to shutter its doors late Thursday night. Federal regulators seized it and most of its assets sold to JPMorgan.
    • Ahead of the Bell: WaMu seeks buyer report says. AP. Sept. 24, 2008.
      • Standard & Poor’s cuts WaMu rating to CCC from BB-.
• Bank of America and JP Morgan now first and second largest U.S. banks. Sept. 26, 2008.

Financial Journal for September 19 2008

Market Movers:

• AIG Bailout
• Mother-of-all Bailouts Announced
• Lehman Brothers files for ch.11 bankruptcy, Bank of America buys Merrill Lynch
• Fed funds rate stays unchanged at 2%

Important Market Development Summaries:

• Fed Takes Control of AIG With $85 Billion Bailout, Sept. 16^th 2008. Bloomberg.com:
  • Fed provides two-year loan and take 79.9 percent ownership.
    • This fails to calm investors and markets proceed to spiral downward.
• U.S. stocks surge on rescue report, September 18^th 2008. BBC.com:
  • Stocks rallied the most in six years on prospects the government will formulate a plan to shore up financial markets.
    • The mother-of-all bailouts set around $700 billion to buy troubled assets.
    • Ban on short-selling for 799 financial stocks is put in place. (Bloomberg.com, Sept. 19^th, 2008)
  • Six of the world’s top central banks released $180 billion to increase amount of credit available.

Financial Journal for September 12 2008

Market Movers:

• Fannie Mae and Freddie Mac
• Hurricane Ike
• OPEC

Important Market Development Summaries:

• U.S. seizes Fannie and Freddie – CNNMoney.com, Sept 7, 2008
  • Government now in charge of $5 trillion in home loans.
• Ike & OPEC Go Easy, Oil Falls 3% - IBD, Sept 10, 2008

· Washington Mutual Stock Falls on Investor Fears – NYT. Sept 11, 2008

o Largest Savings and Loan, -30%, $180 billion of mortgage-related loans w/9-14 billion in losses this year.

• Saudis Vow To Maintain Oil Output – NYT, Sept 11, 2008
  • Oil prices hovered from decline as market remained unclear on where supplies stood

Financial Journal for September 5 2008

Index: 8/29 Close; 9/5 Close; Change;

DJIA: 11,543.55; 11,220.96; -2.795%

NASDAQ: 2,367.52; 2,255.88; -4.715%

S&P: 1,282.38; 1,242.31; -3.159%

Market Movers:

1. Concern for health of economy pulls the Dow down 3% in one day
2. Beige book report is released
3. Oil moves down
4. Hurricane Gustav

Important Market Development Summaries:

New York Times (Sept. 2, 2008)

• Dow Jones moves more than 200 points after decline in oil prices
• Oil prices sink as Hurricane Gustav causes less damage than initially thought

Wall Street Journal (Sept. 4, 2008)

• Fed’s Beige Book reports slowing consumer spending worrying the market because it has not declined on “quarterly basis since 1990-91.”

CNNMoney.com (Sept. 5, 2008)

• Jobless rate soars to 6.1% at 605,000 job losses for 2008, highest in five years.