Monday, September 15, 2008

Best of the Net - Monday September 15, 2008

Today was another disastrous day on Wall Street, and the pummeling is continuing in the overnight futures markets. It is never possible to tell how people will react to news, and that was the case last night. Today, investors decided not to "buy the news" and instead sold stocks like it was 2001. This is perhaps a pivotal sentiment change that suggests people are finally starting to understand that this credit crisis is not just cyclical, but secular. The media still have not figured this out yet and maintain that investors should "buy now because over the long-term stocks always go up." Never mentioned are the regular 15 year periods where stocks either move down or their value is eaten away by inflation. But I digress...

My thesis for a sentiment shift among investors is potentially playing out in real-time. If markets undergo another day of losses tomorrow (on a closing basis), I think it would be safe to say that investors no longer regard intervention by the Fed or Treasury particularly helpful. Standing in front of that are some potential rally catalysts. Before the market opens tomorrow, we will have Goldman Sachs releasing earnings, CPI numbers to mull over and a potential resolution to the AIG debacle. Later in the day, the Fed makes a decision on interest rates. If someone tells you they think they know what will happen tomorrow, run away. What we do know, is that S&P futures are pointing down 20 points overnight.

Kevin Depew took a moment to compare jellyfish to wall street firms. Curious yet? If so, read Five Things You Need To Know: It Was Fun While It Lasted

Lew Rockwell made a speech at a conference in Vancouver (that I regrettably missed, as it sold out) on The Social Imperative of Sound Money. This is a print version of the talk. It is well worth the read.

I also noticed that as of Friday, expected 3Q earnings have fallen yet again to -1.6% y/y. We'll see how Goldman's earnings tomorrow have an affect on estimates for the rest of the S&P.


Anonymous said...

Link Hogbrow here from the G&M comments gang.

I've bookmarked, thanx !

Matt Stiles said...

thanks for stopping by. Hope you enjoy the content.

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