Henry's Stock Market Musings

Why give banks more money if they are making a profit?

stockmarketmusings — Wed, 11 Mar 2009 20:06:45 +0000

Seems interesting that citicorp (and now chase) said they made money in january and february. Hope they don’t want more money from the tax payers or else saying they are making a profit might come back to bite them.

Is the stock market mentally ill?

stockmarketmusings — Wed, 11 Mar 2009 15:25:02 +0000

Sometimes, I think the stock market can be modeled as suffering from manic depression. How else to explain a 5% up move after days of down moves?

The move was caused by the CEO of a $1 stock company (citicorp) saying that they are making money since they don’t have to worry about billions of bad loans. This might backfire with people asking why give them more money if they say they are making money?

Housing Prices — Still Too High?

stockmarketmusings — Tue, 24 Feb 2009 16:57:00 +0000

Case/Shiller numbers came out today. The raw numbers are all based off “100″ in January 2000. So an index value of “200″ means that housing prices have doubled since 2000. Here is a link to the data page.

http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_csmahp/0,0,0,0,0,0,0,0,0,1,3,0,0,0,0,0.html

What’s amazing is that for the 10 city composite, prices are still 62% higher than 2000. Given that stock assets as represented by SP500, are back to 1997 levels, could housing get back to 1997 levels too? Based on Case/Shiller the 10 city composite was 80 in 1997. Could houses drop half in value from here?

Interest Rates Going Up

stockmarketmusings — Fri, 06 Feb 2009 15:32:59 +0000

I noticed that treasury rates are creeping up with very little concern. I’m concerned because there is going to be a whole ton of borrowing going on at the federal level and if rates are going up now; watch out. Example, 30 year is now at 3.7% and in december it was under 2.6%. I would NOT be a buyer of treasuries. There is a question about the amount of money in the world to buy all the debt we are going to issue — there might not be enough and if that is the case, rates will have to go.

I’ve also noticed that mortgage rates have been creeping up. Ziprealty shows the 30 year at 5.44%. Was under 5% a month ago. Lots of talk about the feds pushing this down to 4%.

Enough for now. Treasury sec talks in an hour about bank bailout. How come we can’t find banks that didn’t mess up and give them the money? How come the guys who screwed up get the money and get to keep their jobs? We joke about the soccer leagues for kids where everyone gets a trophy and nobody “loses”. Seems like that is how we run our banking system too. So much for the big tough guys.