Archive for May, 2010

One wild day!

Thursday, May 6th, 2010

Oops . . . wrong bronco

I put this together at various times this afternoon.  As I hit publish, we’re down by 307.29 points . . . 1/3 of the drop at the worst point.

It’s almost impossible to believe, but the Dow Jones Industrial Average hit 9,867.13 today.  Here’s a look at the crazy aciton.  It almost feels good to be down just 400 450 300 425 460.  Wow!  It would be fascinating to watch were it not so terrifying.  Here’s a look at the minute-by-minute action–and the minutes count today.  The VIX index, which I highlighted on Friday, spiked by 60%+ to 40.71!

Unfortunately, we still have 32 minutes to go.

Here’s a look at the top stories.

We received a call from one of our key services today.  Here are their bullet points:

  • Markets factoring in worst
  • Quant fund selling produced the spike
  • Fears of banks being downgraded by 4-5 notches
  • Selling because of uncertainty

4:15 update

Supposedly, a trader screwed up a Procter & Gamble sell.  Instead of something like 100,000 shares (routine activity), the trader apparently entered something like 100 million shares.  That probably fired up some quant algorhithm somewhere.  Still, Apple was selling for less than $200 today.  It closed last night at $255.  It’s now at $246.25.

Wow!

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Europe’s Web of Debt – Zoiks!

Tuesday, May 4th, 2010

Here’s a fantastic infographic courtesy of (that means I copied and pasted it here) the The New York Times.  Click on it to go the Grey Lady’s website.  This is a risk to global markets that isn’t getting enough attention, in my opinion.

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Oil Spill Explained – YouTube video

Tuesday, May 4th, 2010

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British Petroleum’s Deepwater Horizon and Exxon’s Valdez

Monday, May 3rd, 2010

This post takes a look at BP relative to Exxon at the time of its Valdez disaster.  The fear du jour is that BP’s Deepwater Horizon problem is going to be worse than Exxon’s Valdez disaster (see bullet point 5, below), and from a look at the performance of BP relative to Exxon at the time of the alcohol-induced Valdez disaster, shown in the chart below, the market certainly shares that fear.

What I’ve done is plotted Exxon’s stock price in blue from the day before the Valdez spill.  I’ve overlaid BP’s stock performance using, as it’s starting point, the day of the explosion.  You can see that the market is expecting a far worse outcome for BP.  The vertical axis is measured relative to 100:  Exxon was down about 6% at its worst; BP is down by 16%.  (If nothing else, the DoJ headline below likely has some fat tails in terms of the potential liabilities involved.)

(more…)

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