Wow!

Posted by: Michael Mandel on September 15

Fannie, Freddie, Lehman, Merrill, AIG?…

D**n…that’s the only thing I can say. I knew that the global financial system was stressed, but I expected the break to come in China, not here.

More later.

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Reader Comments

Kartik

September 15, 2008 01:41 PM

We are either at, or very close to a bottom.

Buy today :
IWN
XLF

Mark

September 15, 2008 02:23 PM

Wow! you are so proven wrong. too bad... i will still read your innovation article, but i will stop building you a shrine. maybe i should go long on china!

LAO

September 15, 2008 02:54 PM

Good point. If you're referring to the way Chinese stocks are apparently held up to a large extent by Chinese companies investing in one another, that is something that has been easy to forget with the distraction of Wall Street meltdowns. If current U.S. woes sufficiently disrupt the culture of conspicuous consumption, that market could crumble in a hurry, couldn't it? It seems that it could institute the much discussed decoupling of the two economies. Or did I miss something?

Brandon W

September 15, 2008 04:55 PM

No "wow" here. Not surprised a bit.

AIG may fail overnight. Friday is a Quadruple Witching day. Will the Dow be under 10,000 by the end of the week? I think it could be.

I'm telling you... Great Depression II. Been saying it for a while now.

By the way, Mike et al.... you want to watch this video from distinguished law scholar Elizabeth Warren, who teaches contract law, bankruptcy, and commercial law at Harvard Law School. She is an outspoken critic of America's credit economy, which she has linked to the continuing rise in bankruptcy among the middle-class.
http://www.youtube.com/watch?v=akVL7QY0S8A&NR=1

Tom

September 15, 2008 11:13 PM

So what is it that we need most now, is it intelligence or patients...perhaps they are the same.

Dr.dan

September 16, 2008 11:49 AM

Its surprising ...how smart ppl come to dumb decisions.

Mike sometimes does this.

Kartik does this all the time. Look at his buy calls.

Mike Mandel

September 16, 2008 01:31 PM

Kartik

I kind of feel the same.

Kartik

September 16, 2008 02:38 PM

"Kartik does this all the time. Look at his buy calls."

er....show me evidence of a buy call I made that was terribly wrong.

Guess what, you can't.

Dominic

September 16, 2008 04:43 PM

Mike

Give some credits to the "pessimists" here...(I hate to belong to that camp...but at the moment, even with the best of intentions, I cannot really see the light at the end of the tunnel).
Interesting your podcast about innovation economy....you talk about the crucial question, IMHO, in that survey..where the companies are spending their R&D dollars?? That is the key...

Kartik

Your unshakeable optimism, despite the economic fundamentals, is admirable...but your continuous wrong calling of the bottom is getting old...really...
Mike said it right about a month ago...we need to shed few trillion of dollars of excessive consumption..there is not way around it...

Joe Cushing

September 16, 2008 05:40 PM

Brandon.

What percentage of your portfolio is short equities and commodities? Are you putting your money where your mouth is? If I had a time machine, I'd go back to the day before Black Tuesday to short short short stocks. If you are so sure about this depression thing, how much money did you put on it? Do you own put options?

Kartik

September 16, 2008 05:43 PM

"Your unshakeable optimism, despite the economic fundamentals, is admirable...but your continuous wrong calling of the bottom is getting old...really..."

er.... when have I called a bottom?

Also, when did I dispute a particular fundamental?

Making imaginary things up isn't worthwhile after the 3rd grade, you know.

Joe Cushing

September 16, 2008 05:46 PM

Dr. Dan,

I don't think it is a bad time to buy. It depends on your goals of course. It's a great time to start a 401k or an IRA. It's not such a good time to buy stock for a short investment, but when do we ever say to buy stocks for a short investment? When you look 10 years out from now, your investments will look a lot better than 10 years out from October 2007. Most bear markets last about 400 or so days. We are almost a year into ours--if you start counting when the market first went south. Remember that stocks will start to come back BEFORE the economy does--just when we think thing are at their worst.

LAO

September 16, 2008 11:18 PM

Double Wow -- now AIG. Especially sobering are the stories that explain how letting AIG fail could bring down financial systems across the globe.

Mike Reardon

September 17, 2008 02:33 AM

By the consent of all parties concerned the US is now a sovereign investment fund. Its not socialism its creative capitalism were your Government financial agencies can restructure and recapitalize private assets and return them into the market.

Dominic

September 17, 2008 02:37 AM

Kartik

Too bad this blog doesn't have the search function.
If I remember correctly, you called the bottom after mid summer or so...

Brandon W

September 17, 2008 06:58 AM

All I can do is laugh. $85 billion more dollars of debt, taken on by Americans, to "rescue" AIG?

And Wall Street will cheer.

I never, ever again want to hear anyone on Wall Street claim to be honest, real free market-ers. You're pathetic.

You're all so severely opposed to things like self-funding, government-sponsored health care coverage which would help real people in a real way... but you go begging to the government to take on hundreds of billions (trillions?) in debt to save your rich, so-called-capitalist butts. You're pathetic.

No. You're not for free markets. You're not for "capitalism". You're not for creative destruction. You're only proponents as long as it makes you filthy rich. When your gambles turn on you... here you are at the welfare office, begging for handouts. You're pathetic.

So stop sitting on CNBC with Kudlow and being so smug. You're pathetic. And for whatever this does to stabilize markets for a week or two or six, this whole mess is far, FAR from over.

Brandon W

September 17, 2008 07:22 AM

Joe,
Wall Street is a criminal gambling racket. All the "creative" trading tactics like short-selling are among the most egregious. Even the mafia isn't that bad... just TRY selling them something you don't actually own.

I decided about 2 years ago to quit being involved in that racket and sold all my stocks. I also knew the market was at a peak at that point, so I took that opportunity to get out. I now only put money into direct, private investments.

Kartik

September 17, 2008 04:02 PM

"If I remember correctly, you called the bottom after mid summer or so... "

I most certainly did not.

I have said the stock market bottom was 1160 for the S&P500, and it looks like that is right.

Kartik

September 17, 2008 04:27 PM

"I now only put money into direct, private investments."

Why are you immune to getting scammed with those? If anything, the chances may be higher.

In the stock market, you can at least do ETFs, which remove the 'fraud' aspect of what may be happening with a single company.

I agree that a company like AIG must be allowed to fail, even if it is 'big'. Only then will the rest of the big companies act more responsibly.

robert alino

September 20, 2008 11:59 PM

Kartik
You're pathetic.By the consent of all parties concerned the US is now a sovereign investment fund. Its not socialism its creative capitalism were your Government financial agencies can restructure and recapitalize private assets and return them into the market.tiffany jewellery
tiffany Bracelet
Tiffany Ring,besides,In the stock market, you can at least do ETFs, which remove the 'fraud' aspect of what may be happening with a single company.

Thank you for your interest. This blog is no longer active.

 

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Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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