Friday Market Action
After the dismal earnings reports out Thursday night from big boys like Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN), I saw quite a few headline jumpers proclaiming a drop in the indices were at hand Friday. I had warned Thursday night:
There are some thinking the MSFT and AMZN after hours release will hurt the market tomorrow. It will indeed, for about an hour. I fully expect another 1% day to the upside tomorrow, momentum is a strange thing.
So what happened?
S&P Daily Chart for July 24 2009:
From the above chart we can see that I was wrong as can be. The S&P was lower for FOUR hours as opposed to my estimate of one hour. The final walk higher was also a clear top line miss as the S&P only posted a measly 0.30% gain instead of the 1% expected.
Clearly I was wrong here. This goes to show you the dangers of playing a market like this one. Be careful out there.
Note: This should be dripping sarcasm.
When Two Tribes go to War, Money is All You Can Score
This section title was provided by the song "Two Tribes," by Frankie Goes To Hollywood.
I just came across this Yahoo Finance headline that had me laughing out loud:
Geithner, Bernanke at odds on consumer protection
You can read the article if you like, but the first thing I had in mind for the opening paragraph was a little different from the Yahoo article (My version):
Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke staked out opposing sides on the debate over consumer protection. Geithner feels that protecting the consumer could cause a systemic risk to banking profits and Bernanke feels strongly that ineffectual protection would at least give the consumer a feeling of hope. Geithner rejected this as too risky given that any possibility that banks would feel their ability to rip off the consumer was at risk could curtail lending.
Reason Number 4,098,234 Why the Banks Should Have Been Allowed to Fail
I think that we can debate the merits of using home equity as a source of funding for various things (college tuition, repairs, renovation) because there are valid reasons for using that money if done correctly. I understand what was done with it was way out of control, but I do think home equity is a resource that can be used by the responsible.
There can be no debate about a cash out refinance program based on your car. Taking out more debt on a rapidly depreciating asset is about as insane as you can get. There is no reason for this to be done, and no such loan program should even exist. Of course it does however:
Wells Fargo Offering Customers A Car-Equity Loan (NYSE:WFC)
Acquiring extra cash is tough these days. Trying to find a job probably won't help. Your credit card line's been cut and the idea of a home equity line is a joke.
How about that jalopy in the driveway?
No, we're not talking about cash for clunkers, we're talking about an auto equity loan.
Just head on over to Wells Fargo, which proudly advertises that it's one of the few banks still doing Cash Out Refinance Loans.
In other words, you can refi your car and get cash, just like they used to do with houses. And don't worry that you have no equity in your car... who does?
Read the whole piece for the full page ad that has soured me on writing any more market commentary today. Wells Fargo should be ashamed.