I spent way too much time today watching wiggly lines on stock market charts, which in the early afternoon resembled the path of a ball bouncing downstairs. I haven't watched it so closely in a long time, not since I was actively investing, I think. In the end, the Dow was down more than 4 points, bringing the 10,000 level within range in the next few days if this goes on. The NASDAQ looked to be down by about 4.5%. And this -- we're told -- is not as bad as it could have been without the AIG nationalization. The New York Times story on today's market opens: One of the most stunning government bailouts in American history failed on Wednesday to stem the runaway fears engulfing the global financial system. Indeed.
The specifics of the NYSE Most Actives list give a sense of things to come: That AIG is down 45.33% is no surprise. But it had a lot of company. (I don't know if I'm looking at the most final figures here.) Morgan Stanley down 24.22%; Citigroup down 10.92%; Wachovia down 20.76%; Lehman Brothers down 56.67%; Bank of America down 7.95%; Merrill Lynch down 12.71%; Goldman Sachs down 13.92%; Washington Mutual down 13.36%; JP Morgan Chase down 12.20%; Wells Fargo down 4.29% (which begins to look good in context); US Bankcorp of Delaware down 5.47%; American Express down 8.40%; Bank of New York Mellon Corp down 12.29%.
This is the financial industry disinvesting in itself, and instead plunging money into oil and gold: from CNN Money
"Oil jumped along with the gold market" prompted by the falling dollar and a flight to safer investments, said James Cordier, Portfolio manager of OptionSellers.com. "Right now it is market rotation - [money] coming out of the stock market and looking for a home. While oil has not been a good investment lately, some are willing to take a risk on it."
The other thing I watched today, which I at least think has an impact on all this, is the candidates reactions. Barack Obama's are pretty good, or at least reasonably credible. Obama has a new 2 minute ad directly addressing the issue of the economy. I also listened to a longer speech he gave this morning. McCain on the other hand seems completely at sea, seeming expecting that a reversal of his opinions on regulation will seem plausible at this juncture.
It looks to me like the market isn't buying it.
Meanwhile, Stephen Colbert's alien advisor Gorlock suggests we buy Washington Mutual. (It's 13% cheaper than it was last night. What a deal!)