Before & after the excitement over the stimulus package being passed, stocks just keep sinking but Dow had established a fairly solid floor at 8K for a few months. That collapsed this week (after the stimulus package was approved). Bailout programs are not bringing stability to banks & the financial markets.
Dow Jones Industrials --- 6 months
S&P 500 FINANCIALS INDEX sank to another new low. The biggest banks are trading as if they were going to be taken over (wiping out stockholders' equity) tomorrow. Might be, since nobody knows what's going on. Citigroup (C) is under 2 & Bank of America (BAC) is in the low 3s (both Dow stocks)! The proposed bailout package to save homeowners who got in over their heads taking out mortgages while solvent ones have to struggle to keep current on their mortgages is not playing well anywhere. If it's any consolation, foreign banks aren't doing much better.
| Value 94.87 | Change -5.80 | % Change -5.8% |
MLPs have been a holdout in this year's market decline, until now. The Alerian MLP Index, down 8 to 184, is solidly below the 190-200 trading range it had become accustomed to. It may be heading back to the 155 lows set last Nov as they've lost whatever sex appeal they had. Now they're viewed as high yield securities, all are under suspicion.
Alerian MLP Index --- YTD
Other high yield securities are also getting clobbered. The Dow Jones REIT is flattish at 100, hardly worth bragging about at these depressed levels. Junk bond funds are selling off but the VIX is heading up on increased worries in the markets.
VIX --- YTD
You know things are bad when Berkshire Hathaway (BRK.A) gets dragged down in the financial crisis. But that's what's happening. Today it's down 3500 (5%). BRK.A has been a central banker for some of the biggest name financials. This year's decline shows concerns about their good health!
•Buffett's Berkshire Declines to Five-Year Low on Concern Over Derivatives
Berkshire Hathaway --- YTD
Markets won't be able to go up when confusion reigns!
No comments:
Post a Comment