Category Archives: stocks

Stocks: Unruffled

This is what napalm in the morning smells like, this is the sound of a primal scream: Dow down 38 points, or 0.35%; S&P 500 down 13 points, or 1.1%; Bank of America up $1.16 a share, or 3.4%. If … Continue reading

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News Doesn’t Move Markets, Goldman Sachs Edition

Above is a five-day chart of the Goldman Sachs share price. The first arrow shows what happened when Goldman announced it was becoming a bank holding company; the second arrow shows what happened when Berkshire Hathaway announced it was putting … Continue reading

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The Bumpy Ride Ahead

Dealbreaker has a most germane chart of what happened when Pakistan banned short selling: a brief and large rally, followed by a slow and devastating collapse. Could the same thing happen with the US stock market? Absolutely, yes. Banning short-selling … Continue reading

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Why is the Dow Outperforming?

Here’s a chart of how the Dow and the S&P have performed over the course of September to date. I chose the time frame because it was basically the period in which AIG, a Dow component, imploded. The point of … Continue reading

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Stocks: Still Down on the Week

Whee! Isn’t this fun? Stocks are "skyrocketing" today, after "soaring" yesterday — the Dow’s up 700 points from where it closed on Wednesday. Let’s not tell anybody that at its current level of 11,316 it’s actually lower than where it … Continue reading

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A World Without Shorts

The SEC has now implemented its short-selling ban: it’s on 799 financial stocks, which, interestingly, do not include XLF, the biggest ETF for financial stocks. In theory, if you wanted to short a given stock in the XLF basket, you … Continue reading

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Banning Terrorism

I have a nasty feeling that Christopher Cox watches Jim Cramer. Today, Cramer started waxing conspiratorial about the dastardly types who would be so unpatriotic as to sell investment-bank stocks: "It could be financial terrorism. What a great way to … Continue reading

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A Frazzled Market

I have no idea whether or not the government is going to set up the bailout fund to end all bailout funds — a new RTC which would essentially become one big "bad bank", precluding the need for entities like … Continue reading

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Volatility Datapoint of the Day

It doesn’t actually particularly matter which this stock this is. The point is that when the intraday range of stock values is larger than the difference between a stock’s 52-week low and its 52-week high, you know that trying to … Continue reading

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Idiotic Idea of the Day, SEC Edition

So far, America’s technocrats have held up reasonably well in the face of the hurricane-force winds buffetting the world’s financial system. You can (and many do) quibble with some of the decisions made by Ben Bernanke, Tim Geithner, and Hank … Continue reading

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Morgan Stanley in the Crosshairs

Why is the stock market down this morning? Haven’t we just averted catastrophe? Shouldn’t the fears — and shorts — of earlier this week be unwound? Madlen Read of the AP reports: Stocks skidded again Wednesday, with anxieties about the … Continue reading

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Horatio, Market Analyst

Where to turn in days like these? Paul Wilmott had a great idea and cracked open his copy of Hamlet: And let me speak to the yet unknowing world How these things came about. So shall you hear Of carnal, … Continue reading

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Girding for a Tumultuous Tuesday

Yesterday I said that in order to turn this market around, we’d need to see either (a) a deal to buy Lehman Brothers, or (b) a convincing recapitalization of AIG. The latter seems as far away as ever, but the … Continue reading

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Surveying the Carnage

When the Dow falls 500 points in a day, you know that’s going to lead the news everywhere both tonight and tomorrow morning. So, being a natural contrarian, my first reaction was to put today’s action in the "not nearly … Continue reading

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Watching the Lehman Fireworks

I’m thinking it was maybe a good thing that I was off the grid for most of today; it meant I haven’t been able to get caught up in all the Lehman Brothers hysteria. Of course, there’s lots of speculation … Continue reading

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Lehman’s Volatility

On Friday, before the Frannie bailout was announced, Lehman Brothers closed at $16.20 a share. On Monday morning, it opened at $17.62: a healthy pop. Within an hour of the open, however, it had sunk all the way down to … Continue reading

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Adventures in Tech Support, LSE Edition

And you thought your company’s tech support was bad. Just check out the London Stock Exchange’s incident communication website for this morning: At 9:15 London time, connectivity was "suspended" and no orders could be entered or deleted. Fifty minutes later, … Continue reading

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Too Many Shorts

CEOs often worry that if there are lots of shorts, that’s bad for their stock price. Meanwhile, the likes of John Hempton worry that a lot of short interest could be very good for the stock price. Me, I think … Continue reading

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Cut Short

Many corporate executives, and a fair few politicians, like to rail against evil short-sellers. Large investors, by contrast, tend not to, even if they’re long-only. Part of the reason is that they actually like short-sellers. For one thing, they can … Continue reading

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How to Stop Stocks from Falling

Last month the Pakistani Small Investors Association made a "demand that all stock prices be frozen at current levels". Ask, it seems, and you shall receive: The Board of Directors of the Karachi Stock Exchange has decreed that although stock … Continue reading

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Ignore Stock Market Volatility

Jim Surowiecki has a great line this week, in his column on stock-market volatility: For now we’re stuck in a Yeatsian market: the best lack all conviction, while the worst are full of passionate intensity. The sentiment here is spot-on. … Continue reading

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The Crazy Lehman Share Price

Lehman Brothers looks as though it’s going to sell its asset management arm, Neuberger Berman, for a sorely-needed $10 billion or so. That’s got to be good news for the stock, right? No: Lehman shares are down more than 10% … Continue reading

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How Does Barrons Move the Market?

Seeking Alpha (twice), Colin Barr, Stacy-Marie Ishmael, and many others have blamed today’s price action in Fannie and Freddie — they’re down about 20% apiece, albeit from a very low level — on an article which appeared over the weekend … Continue reading

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Another Reason to Ignore Earnings Estimates

Baruch thinks that sell-side analysts deliberately game the earnings-expectations system: Analysts with buy ratings on a stock will have lower earnings numbers going into quarters than their peers, so they don’t inadvertently raise the average of published sell side expectations, … Continue reading

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When Markets Break

How do you know that markets are broken? Sometimes it’s the presence of a clean arbitrage like that in Thomson Reuters shares. But there’s a much bigger weirdness going on right now: as John Carney reports, the spread on long-dated … Continue reading

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