Friday Outlook: Investors Finally Giving Bad Data Its Due

A Beautiful Mind?

Hollywood often is the gift that keeps on giving. Greg Newton tipped me off to Russell Crowe’s proposed bailout solution. While Crowe’s math was quite off, his reasoning from this interview in Wellington, NZ was fascinating. Wouldn’t this type of thinking fit in nicely with what passes for logic from the US Congress? The highlights follow:

"Um, so, here's the thing: They're looking for 700 billion dollars, right?" the NZPA quoted the actor during the interview.
He said: "Which is a good chunk of change, but have you noticed whenever you go to a bank, or whenever you talk to a government department about what you need, they'll never actually give you all of what you need?”
"So, I don't think we should do that for a start. But I was thinking if they wanna stimulate the economy, get people spending, let people look after their ... mortgage.”
"I think you take the first 300 million Americans, if that's the population at this point in time, give everyone a million bucks."
According to the 'Crowe Plan', the actual expense would be a staggering 300 trillion dollars - a figure that would provide Americans with just 1 measly dollar each. [ANI]

Okay, that’s enough picking on Russell Crowe since I’ll admit to some embarrassing math errors over the years.

Thursday’s market decline is the result of investors confronting economic reality. After all, the past few days and weeks are littered with an accumulation of poor economic data and corporate earnings. The obsession with the bailout bill is becoming tiresome. As important as it seems, whatever happens may be anticlimactic although I assume after yesterday there will be more, not less, pressure on House members. The bottom line is investors are finally focusing on the data.

Volume was normal and breadth… well, it was horrible.












Money remains tight and banks aren’t lending to one another as they hoard cash, as evidenced by the steep TED Spread [the difference between LIBOR lending rates and US T-Bills].

































































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