Dow is Down, Down, Down

March got off to a dismal start. Last night, Asian markets began trading, all sharply to the downside. They were following a terrible Fri in NY, not to mention a terrible week. The thought that AIG would need even another bailout hurt markets, especially financials. AIG is an insurer for many financials, letting AIG drift away is not an option. There were many rumors about AIG selling 20% of 2 of its biggest subs as part of the bailout. Also, in Hong Kong, HSBC, another enormous global bank, was proposing a huge rights offering (at 40% below the last price) to shore up their sagging balance sheet. This AM, European markets sold off badly on rumors (among many problems) that eastern European countries might need bailouts. Can you spell "confusion?"

Dow futures were trading down 150 early this AM about where they are now (actually down 211). This takes them solidly below 7K, just another floor that didn't hold. Decliners lead advancers 7-1 & NAZ is down 35


S&P 500 FINANCIALS INDEX is below the record low reached 10 days ago:

Value 94.81

Change -6.34

% Change -6.3%

Dreary news on the largest financials (around the world) just keeps coming. As predicted, AIG announced the biggest corp loss in history - $61.7B for Q4. Guess what, they need another bailout!! One year ago this was a Dow stock selling for $51, with debt rated AAA. Today it's stock is up 6¢ to 48¢. Even though intentions are noble, there is not reason to expect this bailout will more successful than prior ones. Of course one year ago General Electric (GE), Dow stock, Dividend Aristocrat, AAA credit rating, was 35. Today it has a 7 handle, even the AAA seems to be withering away, as it's viewed as just another financial company in deep trouble.

•AIG Gets New Round of Government Aid as Insurer Reports $61.7 Billion Loss


In the financial disarray, all divs & yields are suspect (especially after GE made its div cut official). The Alerian MLP Index dropped 10½ taking it under 180, near its starting point this year. REITs & junk bond funds are weak while VIX shot up 3½ to 50.


Alerian MLP Index --- YTD




Dreary econmic news is even dragging oil & gold down:

CLJ09.NYM

..Crude Oil Apr 09

...40.75

... 4.01 .......(9.0%)

ZGH09.CBT

..Gold 100 oz. Mar 09

...931.50

... 10.00 .......(1.06%)

First the 8K floor held for 4 months. Now the 7K floor held for only 2 weeks. At times, chaos & confusion can bring buying opportunities. Presently it looks like such opportunities are way down the road.

•VIX Premium Shows Bear Market Lasting Two Years in U.S. as Traders `Panic'

Dow Jones Industrials --- YTD